Many property rights systems have developed on an ad hoc basis, with amendments being made to laws as problems arise and are brought to the attention of policy-makers, either by industry representation or by court decision. In Canada, for example, IQ programmes developed piecemeal, in conjunction with industry. All that was needed was a legislative framework which enabled the declaration of a TAC and which did not specifically prohibit the development of fleet shares of this TAC. The shift to a more entrenched form of property right then took place as a measure of transferability was enabled by legislation.[96]
However, fisheries rights systems cannot operate in a complete legislative vacuum. A legislative framework, however brief, is needed to provide authority for collecting fees and rents, requiring reports and enforcement. If fisheries rights are property the nature of which is defined by statute, as courts have held, then a defining statute must be in place. This legislation must be carefully drawn. As the Australian Austral Fisheries Case has demonstrated:
management systems now have to be planned with an eye to potential legal challenge in which the courts will scrutinise the arrangements and strike down those which are contrary to the legislation or that do not meet requirements of fairness and equity.[97]
Ideally, the scheme for a property rights or quasi-property rights system should be worked out thoroughly in advance of implementation by all stakeholders, present or potential: policy-makers, fisheries mangers and economists, planners, industry representation, environmental interests and relevant local and community groups. At this stage, it would be advisable also to have input from lawyers to ensure that the scheme stays on the legal tracks. Many lessons can be learned and much litigation can be avoided if pitfalls are foreseen and taken care of at this stage. But even if the scheme has been worked out in the comparative absence of legal advice, or has developed with little planning, the legislative drafter should be mindful of the complex issues that arise when property concepts are introduced into fishing rights. Complete insulation from litigation, however, is probably an impossible goal, when it is recalled that fisheries rights have the potential to become extremely valuable property, so that the costs of litigation are a small price to pay for the possibility of acquiring initial or additional allocations of quota.
This Part will give an indication of the issues involved in legislating for fisheries rights, including some matters which managers and policy-makers may not have fully addressed in their enthusiasm to launch their grand new scheme; or the programme may have been already implemented in part at least, and the drafter is now being called upon to implement some aspect which is considered necessary in order to further development. Many matters may already be addressed fully or in part by existing fisheries laws. But mainly because of the property nature of fisheries rights, such matters should be revisited in the process of preparing legislation. The case law on fisheries rights shows that, because of their exclusionary and comparatively permanent nature, bitter court battles may be fought by rejected quota applicants and by those claiming rights over quotas once issued. These legal challenges take many forms, and some grounds strike deep to the heart of fundamental legal and constitutional issues.
Once the policy decision has been taken regarding the establishment of a ITQ, quasi-ITQ or other fisheries rights system in national fisheries, fisheries managers and lawyers must determine whether, how and to what extent, it should be entrenched in fisheries legislation. This Part assumes that the system to be introduced has already been devised, at least in outline, and the legislative drafter is now being called upon to implement it into law. It is not intended here, however, to present a single model "fisheries rights law". Quite apart from the variations in management decisions taken as to the nature and properties of the right, each country has its own style of legislating, of combining and separating statutes; their fisheries laws and management practices are at different stages of development; and there are significant differences in their approaches to legislative intervention of any kind.[98]
Some examples of the variations in legislative approaches:
Include everything in an Act of Parliament (New Zealand). This was possible because New Zealand is a small unitary state without a rigid Constitution, comparatively isolated from its fishing neighbours, and the intention was to establish permanent ITQs which would be as close to private property as possible. The drawback of this approach is its rigidity - any alterations (such as those necessitated by the recognition of Maori treaty rights) required parliamentary enactment. The continuance of the previous fisheries legislation and the phased commencement of the new ITQ legislation has also led to considerable confusion about the state of the law.
Certain essential matters are included in the governing statute, and detail is left to subordinate legislation (regulations) or management plans. Commonly accepted essentials are: management matters; the setting of TAC; the holders of licences or fisheries rights if they are unlinked from licences; the appropriate transferability provisions; and enforcement provisions. This allows for far greater flexibility than the New Zealand approach, but it requires a fairly high degree of advance planning. Iceland’s legislation falls somewhere between this and the New Zealand approach. If management plans are to be relied upon, the governing statute must ensure that they have legal effect.
A considerable amount of literature has already addressed the components of a property rights system in fisheries which policy-makers must take into account. Anderson[99] enumerates these as:
Burke suggests the following matters for inclusion in legislation:
This Part uses a combination of these approaches, augmented by consideration of matters noted in Part II in legislation already promulgated for fisheries property rights and issues raised in case law. Additionally, from the point of view of the legal planners involved in the implementation of a fisheries property rights system, there are a number of threshold or process issues which must be addressed first. Consideration must be given to:
Components of legislation are discussed in the following framework:
1. Process Matters
2. Fishing Management
3. Holding and Allocation of Rights
4. Nature and Characteristics of the Right
5. Management Structures
6. Fees and Charges.
As pointed out above, all that is needed for the commencement of an IQ system is legislation that does not specifically prohibit it. The enabling of the declaration of a TAC, whether specific or indirect, is a fundamental factor. Some form of licence or permit issuing system is of course necessary, but it assumed that this already exists in national fisheries legislation. The existing law must be scrutinised carefully to decide whether new legislation is required or simply some measure of amendment to the existing law. This depends on a combination of factors such as:
Essentially, it is the extent of the property nature of the quota system decided upon which dictates the need for amendment to existing law. For example, if the existing law provides for periodically renewable licences, and does not provide for transferability, then alterations to the law will be required.[102] If the quota is to have a property or quasi-property nature, then thought must be given to all the incidents of property in existing jurisprudence, and possible problems must be anticipated and provided for.[103] It is also advisable in most situations for legislation to enable, but not mandate, a fisheries rights system.
Drafting practice in each jurisdiction will also dictate the structure of the new law. This may range from a comprehensive and detailed Act of Parliament such as New Zealand’s, to a simple framework law which relies on regulations to provide detail, or even a system where the issuing of quotas is simply enabled in specific management plans. The Icelandic Law Concerning the Management of Fisheries establishes an entire ITQ regime in 23 succinct articles, including formality provisions.
Most states today conform to the marine zone framework established by LOSC, namely that of sovereignty over a territorial sea, which usually extends 12 nm. from the territorial baselines, and sovereign rights (and duties) over a 200 nm. EEZ. However, the internal apportioning of marine jurisdiction can assume significance in a federal or colonial situation. Harper’s Case involved inter alia a challenge to the right of the State of Tasmania in Australia to limit the taking of abalone in tidal waters. The Commonwealth High Court decided that the Commonwealth Coastal Waters (State Title) Act 1980 extended state rights to the seabed beneath the waters which became Tasmanian waters by virtue of that Act. Moreover, by arrangement between the state and the Commonwealth under the Commonwealth Fisheries Act 1952, the state was entitled to issue licences and charge fees in the nature of a royalty for the right to take abalone. Canada avoided such problems by leaving all legislative power with the federal legislature, with provinces able to negotiate legislative intervention where required, and only transferring proprietary rights and administrative responsibilities for resources to the provinces.[104] The USA permits state regulation of state fishing vessels outside state waters (defined under federal law) provided state laws are consistent with federal regulations and relevant management plans. Management and administration, including the issuing of licences and permits, may also be delegated to states or arrangements may be drawn up.
The matter of apportionment of powers and responsibilities can also assume significant proportions where a colony or territory is involved. The relative rights of a governing state and a colony or territory to legislate in respect of the surrounding seas and the fishing activity carried on in those seas must be examined carefully. It is likely however that this issue has been already addressed in basic fisheries law. The apportionment of powers between federal and state/provincial governments, or a colony and its governing power, can also assume practical significance when it comes to drawing up legislation for the issue of licences and quotas, and the levying of fees, royalties and cost recovery measures.
The question of territorial jurisdiction assumes particular significance when management units are developed, particularly in the case of migratory or straddling fishstocks. What may work out well for management purposes may cause considerable problems for the drafters of the law.
The problem is aggravated when the principles of the national legal system conflict with a non-Western legal system where ownership or use-rights over rivers, lakes, beaches, reefs and their resources is traditionally vested in individuals or more commonly, kin groups such as clans or tribes. The success or otherwise of traditional rights claims will depend on the extent of the historical background to and constitutional recognition of traditional laws and rights, which varies widely throughout the world.[105] The recent recognition of native title in Australia, for example, included the recognition of Aboriginal rights in waters and seabed as well as land, but stopped short of recognising these rights as exclusionary.[106]
A common approach to accommodating traditional rights in respect of fishing grounds and fishing activities in a fisheries rights system is to include legally recognised traditional groupings, such as the Maori iwi in New Zealand, in the quota allocation process. Another approach is to reserve an inshore zone, such as 3 nautical miles, which is conceivably within the range of traditional fishing effort, for traditional fishing and to exclude outside commercial fishing from that zone. The success of this depends on the range of traditional fishing vessels: where the vessels are capable of ranging further afield, as in Morocco and Indonesia, a more complex set of zones determined by breadth or vessel capacity (or both) and origin must be established.[107] In this area, possibly more than any other, current internal arrangements must be carefully scrutinised and possible future conflicts foreseen.
It is advisable, if it has not already been done, to insert in the preamble, long title or objects of the governing Act a reference to the conservation and management principles and objectives governing the legislative regime. Among other things, this can serve as a useful guide to those called upon to construe the statute, in cases where unpopular or controversial management measures are being taken, such as closure of a fishery, or reduction in or cancellation of quotas.
The wording used may echo and amplify that used in LOSC.
Examples:
New Zealand Fisheries Act 19968. Purpose
(1) The purpose of this Act is to provide for the utilisation of fisheries resources while ensuring sustainability.
(2) In this Act:
"Ensuring sustainability" means
(a) Maintaining the potential of fisheries resources to meet the reasonably foreseeable needs of future generations; and
(b) Avoiding, remedying, or mitigating any adverse effects of fishing on the aquatic environment:
"Utilisation" means conserving, using, enhancing, and developing fisheries resources to enable people to provide for their social, economic, and cultural well-being.
9. Environmental principles
All persons exercising or performing functions, duties, or powers under this Act, in relation to the utilisation of fisheries resources or ensuring sustainability, shall take into account the following environmental principles:
(a) Associated or dependent species should be maintained above a level that ensures their long-term viability:
(b) Biological diversity of the aquatic environment should be maintained:
(c) Habitat of particular significance for fisheries management should be protected.
10. Information principles
All persons exercising or performing functions, duties, or powers under this Act, in relation to the utilisation of fisheries resources or ensuring sustainability, shall take into account the following information principles:
(a) Decisions should be based on the best available information:
(b) Decision makers should consider any uncertainty in the information available in any case:
(c) Decision makers should be cautious when information is uncertain, unreliable, or inadequate:
(d) The absence of, or any uncertainty in, any information should not be used as a reason for postponing or failing to take any measure to achieve the purpose of this Act.
Commonwealth of Australia Fisheries Management Act 19913 Objectives
(1) The following objectives must be pursued by the Minister in the administration of this Act and by AFMA in the performance of its functions:
...
(b) ensuring that the exploitation of fisheries resources and the carrying on of any related activities are conducted in a manner consistent with the principles of ecologically sustainable development and the exercise of the precautionary principle, in particular the need to have regard to the impact of fishing activities on non-target species and the long term sustainability of the marine environment; and
...
(2) In addition to the objectives mentioned in subsection (1), or in section 78 of this Act, the Minister, AFMA and Joint Authorities are to have regard to the objectives of:
(a) ensuring, through proper conservation and management measures, that the living resources of the AFZ are not endangered by over-exploitation; and
(b) achieving the optimum utilisation of the living resources of the AFZ; but must ensure, as far as practicable, that measures adopted in pursuit of those objectives must not be inconsistent with the preservation, conservation and protection of all species of whales.
3 Objects of Act
(1) The objects of this Act are to conserve, develop and share the fishery resources of the State for the benefit of present and future generations.
(2) In particular, the objects of this Act include:
(a) to conserve fish stocks and key fish habitats, and
(b) to conserve threatened species, populations and ecological communities of fish and marine vegetation, and
(c) to promote ecologically sustainable development, including the conservation of biological diversity,
New South Wales Fisheries Management Act 1994
Even if a reference to conservation and management principles has already been included in a previous Act being amended to provide for fisheries rights, it is advisable to revisit and update it. The lengthy and detailed amendments to the USA Magnuson Fishery Conservation and Management Act effected by the 1996 Sustainable Fisheries Act provide an elaborate example of such revision.
Management planning is essential for the process of setting TACs, upon which quota rights are based. Responsibility for planning may be undertaken in various ways. The USA manages its fisheries through 8 Regional Fishery Management Councils appointed by statute. The Australian Commonwealth established AFMA, which is tasked with the preparation and supervision of management plans. In New Zealand, there is no provision for management plans as such in the Act, instead the Minister declares quota management stocks and the quota management areas for those stocks.
This process highlights the essentials of management planning: to delineate the parameters of the plan. As well as fishstocks, determination of area and method of fishing may also be necessary. Area allocation may be employed to particularly good effect in sedentary fisheries.
For example:
Management planning should be enabled in the governing legislation, even if it is not termed as such, as in the New Zealand Act. It should not be limited, but should enable any appropriate management unit divisions. The process of making and notifying a management plan should be spelt out. If the provisions of a management plan are to be relied on to have the force of law, then the governing statute should make it clear, by indicia appropriate to the jurisdiction, that the plan is intended to serve the role of subordinate legislation.[111]
Here is an example from the Australian Fisheries Management Act 1991:
17 Plans of management
(1) Subject to subsection (1A), AFMA must, in writing, after consultation with such persons engaged in fishing as appear to AFMA to be appropriate and after giving due consideration to any representations mentioned in subsection (3), determine plans of management for all fisheries.
(1A) If, in all the circumstances, AFMA is of the view that a plan of management is not warranted for a particular fishery, AFMA may make a determination accordingly, including in the determination its reasons for making the determination.
(1B) A determination under subsection (1) must be notified:
(a) in the Gazette; and
(b) to all persons and organisations listed in the register established under section 17A, at their addresses as shown on the register.
(2) Before determining a plan of management for a fishery, AFMA must prepare a draft of the plan and, by public notice:
(a) state that it intends to determine a plan of management in respect of the fishery; and
(b) invite interested persons to make representations in connection with the draft plan by a date specified in the notice, not being less than one month after the date of publication of the notice in the Gazette; and
(c) specify:
(i) an address from which copies of the draft plan may be obtained; and
(ii) an address to which representations may be forwarded.(2A) In addition to issuing a public notice under subsection (2) and before determining a plan of management for a fishery, AFMA must notify the persons and organisations listed in the register established under section 17A, at their addresses as shown on the register, of the terms of the public notice.
(3) A person may, not later than the date specified in the notice, make representations to AFMA in connection with the draft plan.
(4) In this section, a reference to public notice is a reference to notice published:
(a) in the Gazette; and
(b) in each State and Territory, in a newspaper circulating throughout that State or Territory; and
(c) in such other newspaper or publication (if any) that appears to AFMA to be appropriate in the circumstances.
(5) A plan of management for a fishery is to set out:
(a) the objectives of the plan of management; and
(b) measures by which the objectives are to be attained; and
(c) performance criteria against which the measures taken may be assessed.
(5A) The measures to be set out under paragraph (5)(b) in a plan of management for a fishery include:
(a) providing for AFMA, after such consultations (if any) as are set out in the plan of management, to direct that fishing is not to be engaged in the fishery, or a particular part of the fishery, during a particular period or periods; and
(b) providing for holders of fishing concessions in respect of the fishery to be notified of the direction; and
(c) obliging those holders to comply with the direction.
(5B) A direction under paragraph (5A)(a) in relation to a part of a fishery may identify the part concerned in any way or ways, including by reference to a particular area, a particular species or type of fish, a particular kind or quantity of fishing equipment, a particular method of fishing, or any combination of the above.
(6) Without limiting the operation of subsection (5), a plan of management for a fishery may:
(a) determine the method or methods by which the fishing capacity of the fishery or a part of the fishery is to be measured, which may be or include, but are not limited to, a method based on a particular area, a particular species or type or a particular quantity of fish, a particular kind, size or quantity of fishing equipment, a particular number of boats, a particular period of fishing, or any combination of the above; and
(aa) determine, or provide for AFMA to determine, the fishing capacity, measured by that method or those methods, permitted for the fishery or a part of the fishery in respect of a particular period or periods; and
(b) provide for the management of the fishery by means of a system of statutory fishing rights, and other fishing concessions; and
(c) contain a description of the fishery by reference to area, fish species, fishing methods to be employed or any other matter; and
(d) subject to section 28, formulate procedures to be followed for selecting persons to whom fishing concessions are to be granted including, in the case of fishing rights:
(i) the holding of an auction; or
(ii) the calling of tenders; or
(iii) the conducting of a ballot; and(e) specify the kind and quantity of equipment that may be used in the fishery; and
(f) specify the circumstances in which a statutory fishing right may authorise fishing by or from a foreign boat; and
(g) impose obligations on the holders of fishing concessions; and
(h) prohibit or regulate recreational fishing in the fishery; and
(i) prohibit or regulate fishing for scientific research purposes in the fishery.
(6A) Paragraph (6)(aa) authorises the making of a determination in respect of the fishing capacity of a fishery or a part of a fishery that has the effect that no fishing capacity is permitted for the fishery or that part of the fishery in respect of a particular period or periods.
(6B) A direction given by AFMA under paragraph (5A)(a) or a determination made by AFMA under paragraph (6)(aa) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
(6C) If a plan of management for a fishery provides for the management of the fishery by means of a system that consists of or includes statutory fishing rights, the plan:
(a) may oblige a person who holds, in respect of the fishery, a fishing concession of a particular kind or fishing concessions of particular kinds also to hold, in respect of the fishery, a fishing concession of another kind or fishing concessions of other kinds, as stated in the plan; and
(b) without limiting the generality of paragraph (a), may oblige a person who holds, in respect of the fishery, a fishing right of a particular kind or fishing rights of particular kinds also to hold, in respect of the fishery, a fishing right of another kind or fishing rights of other kinds, as stated in the plan; and
(c) in respect of each kind of fishing right that a person holds in respect of the fishery-may do either or both of the following:
(i) oblige the person to hold not fewer than such number of fishing rights of that kind as is stated in the plan or worked out using a formula so stated;
(ii) oblige the person not to hold more than such number of fishing rights of that kind as is stated in the plan or worked out using a formula so stated.
(6D) A plan of management for a fishery must contain provisions for the incidental catch of non-target commercial and other species to be reduced to a minimum.
(7) A plan of management for a fishery must:
(a) if the plan makes provision in relation to the management of the fishery by means of a system of statutory fishing rights -provide for registration of persons who are to be eligible for the grant of fishing rights and specify the conditions relevant to such registration; and
(b) contain a statement of any right of review that a person has in relation to such registration or the grant, or refusal to make a grant, of a fishing concession.
(8) A plan of management may make provision in relation to a matter by applying, adopting or incorporating, with or without modification:
(a) a provision of any Act or any regulation made under an Act, or of any other determination, as in force at a particular time or as in force from time to time; or
(b) any matter contained in any other instrument or writing as in force or existing at the time when the determination takes effect.
(9) A plan of management has no effect to the extent that it is inconsistent with a provision of this Act.
(10) While a plan of management is in force for a fishery, AFMA must perform its functions, and exercise its powers, under this Act in relation to the fishery in accordance with the plan of management.
(11) AFMA may, by writing under its common seal, delegate any powers conferred on it under a plan of management in accordance with paragraph (5A)(a) or (6)(aa) to the Managing Director of AFMA, but to no other person.
This is a comprehensive provision which ensures that public consultation takes place. Whether or not to go to these lengths in the main statute is a matter for policy decision. By contrast, the New Zealand legislation provides that after the initial declarations of quota management areas, they may only be altered by Act of Parliament.
Management plans should be given legal effect in the governing statute, especially if they are to be relied on for determination of many of the characteristics of the fishery rights, or their provisions should be formalised by regulation.
Northern Territory (Australia): Fisheries Act 1996:
27. MANAGEMENT PLANS ENFORCEABLE AS REGULATIONS
(1) Every provision of an operative management plan shall have the force and effect of a regulation in force under this Act.
(2) In the event of an inconsistency between a provision of an operative management plan and the Regulations or a notice given under section 28, the provision of the plan shall prevail to the extent of the inconsistency.
(3) Where a word or phrase used in a fishery management plan or a notice under section 28 is not defined by this Act or the plan but is defined by the Regulations, it shall have the meaning it has under the Regulations in relation to the management plan or the notice, as the case may be.
Queensland: Fisheries Act 1994:
42. Regulation may make provision about management plan matters
(1) Anything that may be declared by a management plan may also be declared by regulation.
(2) A regulation may also make provision about anything else about which provision may be made by a management plan.
(3) If there is an inconsistency between a regulation and a management plan, the regulation prevails to the extent of the inconsistency.
Tasmania: Living Marine Resources Management Act 1995:
PART 4 - LICENCES, QUOTAS AND AGREEMENTS
SECT 76 Management plan prevails
(1) Any provision of a management plan which is inconsistent with any provision of this Part prevails over the latter provision to the extent of that inconsistency.
Again, existing provisions in law for the making of management plans should be revisited and updated where this becomes necessary, as was the case with the USA Sustainable Fisheries Act.
Article 61 of LOSC requires each coastal state to "determine the allowable catch of the living resources in its exclusive economic zone". Apart from this requirement of international law, the determination of Total Allowable Catch for a commercially exploited fishstock is crucial to the operation of a quota system in respect of that stock. It follows then that the process of determining TAC and the frequency of the determination should be included in the governing statute and not left to subordinate legislation. As it is a state function, it usually falls to the Minister as state representative to perform the formal declaration. TACs for most fisheries are usually calculated annually, although in some fisheries they may be calculated by fishing season. The setting of TAC should adhere to the precautionary principle and take cognisance of the best scientific data available.
Examples:
Iceland Law Concerning the Management of the Fisheries 1991:
Article 3
Having received recommendations from the Icelandic Institute for Marine Research, the Minister of the Fisheries shall determine through an ordinance the total catch permitted to be caught over a certain period of time - or a season - from the various stocks of marine resources around Iceland. These regulations only apply to those species or stocks where limits on catch are though to be necessary. Fishing permits shall according to this legislation be based on the total catch permitted.
New Zealand Fisheries Act 1996
13. Total allowable catch
(1) Subject to this section, the Minister shall, by notice in the Gazette, set in respect of the quota management area relating to each quota management stock a total allowable catch for that stock, and that total allowable catch shall continue to apply in each fishing year for that stock unless varied under this section.
(2) The Minister shall set a total allowable catch that:
(a) Maintains the stock at or above a level that can produce the maximum sustainable yield, having regard to the interdependence of stocks; or
(b) Enables the level of any stock whose current level is below that which can produce maximum sustainable yield to be altered
(i) In a way and at a rate that will result in the stock being restored to or above a level that can produce the maximum sustainable yield, having regard to the interdependence of stocks and any environmental conditions affecting the stock; and
(ii) Within a period appropriate to the stock and its biological characteristics; or
(c) Enables the level of any stock whose current level is above that which can produce the maximum sustainable yield to be altered in a way and at a rate that will result in the stock moving towards or above a level that can produce the maximum sustainable yield, having regard to the interdependence of stocks.
(3) In considering the way in which and rate at which a stock is moved towards or above a level that can produce maximum sustainable yield under paragraph (b) or paragraph (c) of subsection (2) of this section, the Minister shall have regard to such social, cultural, and economic factors as he or she considers relevant.
By contrast, the NSW Fisheries Management Act at sections 26-34 provides for an elaborate but effective process whereby a Total Allowable Catch Setting and Review Committee is established, with independence from Ministerial direction and control, and provisions for public consultation before TACs are determined. The determination is then gazetted by the Minister.
The steps from TAC to individual quota determination depend in part on the way in which fisheries are divided. In Morocco, the cephalopod fleet is divided into three: freezer, coastal and artisanal. The TAC is likewise divided into three fixed fleet allocations (FACs). Individual quotas are then expressed as a percentage of the appropriate FAC.
New Zealand calculates TACs for each fishery to cover all resource extraction including Maori and recreational fishing. From this, a Total Allowable Commercial Catch (TACC) is extracted, and ITQs are determined as percentages of the TACC. Based on the annual TACC, quota holders are allocated an Annual Catch Entitlement (ACE) expressed (usually) in tonnages.
Where a proportion of catch quota is to be reserved for community or indigenous groups, or for recreational fishing, this must be deducted from the TAC before individual quotas are determined. The exact proportion is often a matter of estimation only.
Before instituting a fisheries rights system, the possible holders must be defined. Traditional fishing licences are usually issued in respect of the vessel where one is used in the fishery. But with the move to fisheries rights, the tendency is to vest the right in a person, legal or natural, although in some fisheries (British Columbia in Canada, for example) IVQs are issued. Any existing licensing system which is to be continued must be reviewed for possible conflicts, embellishment etc. Social, economic, geographical and political factors may come into play here.
The range of holders may be determined by inclusionary or exclusionary factors, or a combination of both.
Inclusionary factors and community-based fisheries
The most straightforward system is one in which rights are held by individuals, legal or natural persons. The system becomes more complicated when local fishing communities or traditional rights-holders are to receive special consideration. Community-based fisheries management is taking place worldwide, with communities organising themselves alone, or in various degrees of collaboration with governments, non governmental organisations and international agencies. The initiatives take many forms, ranging from the promotion of long existing community management practices, resources tenure systems and indigenous knowledge, to the creation of new institutions and new partnerships between local groups, NGOs and the state.[112] In Morocco’s artisanal fishery, quotas are to be allocated to village/local collectives.[113] In New Zealand, a proportion of quota is reserved for indigenous Maoris. The community-based management system of Nova Scotia in Canada is based purely on geography.[114]
However, there is often one characteristic underpinning these initiatives and this is the relative weakness of the legal basis. Legal insecurity and uncertainty is likely to arise where legal regimes do not allow local people to establish enforceable legal rights to the resources on which they depend, or to play a meaningful role in the planning and managing of such resources. state-centred approaches have on the one hand undermined traditional community-based fisheries management and on the other hand driven local people and progressive government officials to look into new "community" rights-based fisheries management systems.[115] Community-based fishing may be seen as the next step forward in the development of property rights in fisheries.[116]
In each of these situations, internal management procedures must be devised, if they do not already exist. This is where the drafter must take cognisance of existing management structures, incorporated or otherwise recognised in domestic law. If no such structure exists, it must be created. There are several ways of doing this:[117]
laws may recognize local ownership (or other substantial property rights) over fisheries resources based on historical or traditional claims. An example of this is Samoa, where local council by-laws entrench traditional management and conservation practices.
laws may provide mechanisms for site specific delegation to local people (often fishers) of some measure of management responsibility over state land and fisheries resources, either on an indefinite basis or for a definite period. A compromise is sought between state level concerns in fisheries management for efficiency, and local level concerns for self-governance, self-regulation and active participation. Examples of this are Japan, and Nova Scotia in Canada.
laws may enhance decentralization. Depending on the level of decentralization this may result in an effective and meaningful local people/community-based participation in the management of the fisheries resources which support the community. It is not however merely a simple matter of delegation to a local authority. Partnership arrangements must be made in which the Government, community of local users (fishers), external entities (NGOs, research institutes) and other interested parties (tourism, boat owners) share responsibility and authority in the decision making over the management of the fishery
While it is impossible to present legal models for the formal recognition of authorities for community-based fisheries, due to the great diversity of social groupings and the differing legal recognition of traditional rights, it is nevertheless possible to set out some basic matters that must be addressed:
It must also be remembered that reservation of quota for traditional groups is not as straightforward a process as it may seem at first glance. Traditional fishing communities are eager to embrace many aspects of new fishing and gear technology, marketing processes and so on, which soon puts them on a par with non-traditional fishers. Traditional and artisanal groupings may need careful definition using criteria such as the technique used and the use (domestic consumption, traditional ceremonial etc) to which the catch is put, as well as consideration of membership qualifications to the group, if they are not already clearly defined by law or by internal group processes.[118]
Exclusionary factors
The commonest exclusionary factor is that of citizenship. The exclusion of non-citizens may not necessarily be total - New Zealand for example has put a cap on the percentage of quota which may be held by non-citizens, and included it in the Act. Where local, community or indigenous groups are being protected or promoted, rights may be drawn up specifically to exclude anyone classed as outsiders to those groups. Exclusion of outsiders, however defined, assumes greater significance in offshore fisheries, particularly those targeting migratory species and straddling stocks. In the latter case, regard may need to be taken of bilateral, multilateral, regional and international fishing agreements.
Another technique used to inhibit the accumulation of quota in the hands of non-fishing entrepreneurs is to attach conditions to quotas or licences which prevent non-fishers from acquiring them, or to restrict holders to those already involved in a particular part of the industry concerned (e.g. separating fishing from processing rights). In these situations, however, there is a danger that the criteria and conditions employed are impossible to monitor: for example, a condition that the quota-holder must be aboard the vessel at all times while it is fishing.
If there is to be some sort of limitation on accumulation of quota, or ban on certain persons (such as non-citizens) acquiring quota, then it is advisable to put this into the governing statute. If flexibility is required to allow for changing circumstances, the principle can be written into the Act and the proportions, or the details of excluded or included classes, can be left to subordinate legislation such as regulations or gazettal notices. Alternatively, reliance can be placed on general anti-trust legislation where it exists.
Other holding methods
Not all quotas are held by legal or natural persons, or by groups. For example, the IVQs of British Columbia, in Canada are attached to licensed vessels. In such a situation, if the quota system is to be written into legislation, the terminology used will need to reflect, or at least enable, this process. This was not done in British Columbia, where, in keeping with Canadian practice, few of the quota systems were included in legislation. In British Columbia the licences themselves are made transferable under the Fisheries Act 1996.
Once the parameters of entitlement to hold have been determined, the process of allocation must be established. The initial allocation of quotas can be a highly contentious matter. Many court challenges to initial allocation have ended up in final appellate courts, where the fundamental legal principles underlying the property nature of fisheries rights have been analysed. The degree of contention increases proportionately with the level of value placed on fisheries rights as property.
There are many methods of conducting the initial allocation, for example:
The allocation method selected will depend in part on whether there is an oversupply of applicants for a limited amount of quota. Where there is only a limited number of operators already in the industry, and fleet reduction is not an issue, distribution in equal shares is possible. This is usually done by issuing quota to all existing licence-holders.
In other cases, it will probably be necessary to set out the procedures clearly in legislation, although this can be subordinate legislation or a management plan which has been given the force of law by governing legislation.
The most straightforward and arbitrary process is that of lottery. To bring in a considerable measure of income, auctions or sealed tenders can be used. This does not necessarily require predetermination of those entitled to bid. It does however favour those who are better able to afford high bids and disadvantages smaller operators. It also fails to protect those already in the industry.
Thus, in the Australian Fisheries Management Act 1991, we find:
24 Notice of intention to grant fishing rights
(1) AFMA may, by public notice, declare that it intends to grant a fishing right or fishing rights specified in the notice in relation to fishing in a specified managed fishery.
...
25 Contents of notice
AFMA must, in a notice under section 24:
(a) describe the fishing activities that will be authorised by the fishing right or fishing rights; and
(b) specify the way in which the grant is to be made and, if the grant is to be made otherwise than by auction, tender or ballot, give full particulars of the procedures to be followed for selecting a person to whom the grant will be made available under section 29; and
(c) set out the conditions (if any) that are to be satisfied by persons applying under section 26 for registration as eligible persons for the grant before they may be so registered; and
(d) if an auction is to be held, specify the lowest bid that will be a qualifying bid for the purposes of subsection 29(1); and
(e) specify:
(i) the fees (if any) payable by persons applying for registration; and
(ii) the period (if any) for which the fishing right will be in force unless it is sooner cancelled or otherwise ceases to apply or have effect; and
(iii) if the grant is to be made otherwise than by auction or by calling tenders - the amount (if any) that is the amount of charge on the grant for the purposes of the Statutory Fishing Rights Charge Act 1991; and
...
27 Tenders for fishing rights
(1) This section applies where, under a plan of management, tenders are to be called in respect of the grant of a fishing right or fishing rights.
(2) An application for registration must be accompanied by a tender made in accordance with subsection (3).
(3) The tender must:
(a) specify the amount that the applicant is willing to pay to the Commonwealth for the grant; and
(b) be enclosed in a sealed, opaque envelope on which is written only:
(i) the name and address of the applicant; and
(ii) words identifying the grant to which the tender relates.(4) AFMA must take reasonable steps to ensure that the envelope containing the tender is kept in such a way as to prevent premature disclosure of the amount specified in the tender and, in particular, must take reasonable steps to ensure that the envelope is not interfered with until it is opened in accordance with the regulations.
28 Prescribed procedures for grant of fishing rights
(1) Where a grant of a fishing right is required to be made by auction, tender or ballot the regulations must prescribe the procedures to be followed for selecting the person to whom the grant will be made available under section 29.
...
29 Grant made available to highest bidder etc.
(1) Where an auction has been held in respect of the grant of a fishing right, the grant is available to the person who made the highest qualifying bid for the grant at the auction.
(2) Where tenders have been called, or a ballot conducted, in respect of the grant of a fishing right, the grant is available to the person ranked highest on the precedence list prepared for the purposes of the grant.
(3) Where subsections (1) and (2) do not apply in relation to a grant of a fishing right, the grant is available to the person selected in accordance with the procedures specified for that purpose in the plan of management relating to the grant.
...
To reward those who have already shown commitment to the industry, catch history, vessel/gear specifications or a more general criterion such as previous commitment to the industry can be used. Of these, catch history is the most commonly used criterion, though experience has proved that, no matter how carefully drawn, the process is complex, fraught with ambiguities and likely to lead to challenges. A decision to rely on catch history, if developed over several years, can lead to operators deliberately building up fleet effort in order to qualify for allocation. On the other hand, it can reward operators who have honestly reported catch over the determinant years.
The New Zealand provisions for allocation on the basis of catch history are very detailed. The example set out below from the NZ Fisheries Act 1996 is not the entirety of the provisions relating to allocation.
Provisional Catch History
30. Provisional catch history to be mechanism for allocation of quota
(1) Except as provided in subsection (2) of this section, provisional catch history is the mechanism by which quota shall be allocated under this Part of this Act.
...
31. Manner of calculating provisional catch history
...For the purposes of allocating quota, provisional catch history shall be calculated, - -
(a) In the case of any stock controlled exclusively, as at the date of the publication of the relevant notice made under section 18 of this Act, by means of an individual catch entitlement, in accordance with section 40 of this Act:
(b) In the case of any other stock, in accordance with section 34 of this Act.
Calculation of Provisional Catch History if No Individual Catch Entitlement
32. Criteria of eligibility to receive provisional catch history for quota management stock - -
(1) If a stock is declared by notice under section 18 of this Act to be subject to the quota management system but the stock was not, immediately before the date of the publication of the notice, controlled by means of individual catch entitlements, a person is eligible to receive provisional catch history for the stock if the person-
(a) Either,-
(i) In the case of a stock that is a controlled fishery under the Fisheries Act 1983 immediately before the stock was declared to be subject to the quota management system, at any time during any qualifying year held a controlled fishery licence for the stock and a fishing permit issued under section 63 of that Act; or
(ii) Was issued a fishing permit under section 2 (2) of the Fisheries Amendment Act 1994; or
(iii) In the case of a stock that is a species of tuna, held, at any time during any applicable qualifying year, a fishing permit issued under section 63 of the Fisheries Act 1983 or section 91 of this Act that authorised the holder to take the stock; or
(iv) In any other case, held, at any time during any applicable qualifying year, a fishing permit issued under section 63 of the Fisheries Act 1983 for any species of fish, aquatic life, or seaweed; and
(b) In any case, is not an overseas person or, if an overseas person, is exempt under section 56 of this Act or has been granted permission to hold provisional catch history or quota under section 57 of this Act; - -
and has provided the chief executive with eligible returns for the stock for the applicable qualifying year or qualifying years.
(2) For the purposes of this Part of this Act, an eligible return is a lawfully completed catch landing return or a catch effort landing return as referred to in the Fisheries (Reporting) Regulations 1990 that, - -
(a) In the case of any stock referred to in subparagraph (ii) or subparagraph (iii) of subsection (1) (a) of this section, was given to the chief executive on or before the 15th day after the close of each applicable qualifying year; or
(b) In any other case, was given to the chief executive on or before the 15th day of October 1994.
33. Qualifying years
For the purposes of this Part of this Act, the qualifying year or qualifying years are, - -
(a) In the case of a person eligible to receive provisional catch history under section 32 (1) (a) (ii) of this Act, the first consecutive 12 months after the 30th day of September 1992 in which the person was authorised to take fish, aquatic life, or seaweed:
(b) In the case of a person eligible to receive provisional catch history under section 32 (1) (a) (iii) of this Act, such fishing year or fishing years as the Minister may from time to time set for the purpose by notice in the Gazette:
(c) In any other case, the fishing years commencing respectively on the 1st day of October 1990 and the 1st day of October 1991.
34. Calculation of provisional catch history
(1) The provisional catch history of a person is, - -
(a) If the qualifying year is the one referred to in section 33 (a) of this Act and the person is eligible to receive provisional catch history under section 32 (1) (a) (ii) of this Act for any stock, the total weight of eligible catch reported in the person's eligible returns:
(b) If the qualifying year or years are set under section 33 (b) of this Act and the person is eligible to receive provisional catch history under section 32 (1) (a) (iii) of this Act for any stock, the total weight of eligible catch reported in the person's eligible returns in respect of the period of 12 consecutive months within the qualifying years relating to the person, which period shall be - -
(i) Chosen by the person in accordance with section 35 (3) (c) (iv) or section 35 (4) (b) of this Act; or
(ii) If the person has not made such a choice, chosen by the chief executive in accordance with section 35 (1) (d) of this Act:
(c) In the case of any other person who is eligible to receive provisional catch history under paragraph (a) (i) or paragraph (a) (iv) of section 32(1) of this Act, the total weight of eligible catch reported in the person's eligible returns in respect of a period of 12 consecutive months within the qualifying years relating to the person, which period shall be - -
(i) Chosen by the person in accordance with section 35 (3) (c) (iv) or section 35 (4) (b) of this Act; or
(ii) If the person has not made such a choice, chosen by the chief executive in accordance with section 35 (1) (d) of this Act.
(2) For the purposes of this Part and Part XV of this Act, the term ´´eligible catch'' means the total weight of all the catch of the relevant stock lawfully taken and lawfully reported as landed or otherwise lawfully disposed of by a person eligible to receive provisional catch history under section 32 of this Act during the applicable qualifying years; and also includes fish, aquatic life, or seaweed of that stock reported as taken and used as bait; but does not include - -
(a) Fish, aquatic life, or seaweed seized by a fishery officer under section 80 of the Fisheries Act 1983 or section 207 of this Act, if the fish, aquatic life, or seaweed (or the proceeds of sale thereof) were forfeit to the Crown:
(b) Fish, aquatic life, or seaweed, other than southern bluefin tuna, taken outside New Zealand fisheries waters (even though such fish, aquatic life, or seaweed may be deemed to have been taken within New Zealand fisheries waters by the operation of this Act or the Fisheries Act 1983):
(c) Fish, aquatic life, or seaweed (other than fish, aquatic life or seaweed taken by persons granted fishing permits under section 2 (2) of the Fisheries Amendment Act 1994) taken under a special permit granted under this Act or under section 64 of the Fisheries Act 1983.
...
37. Transfer of provisional catch history
(1) Provisional catch history in respect of any stock, other than a stock to which section 40 of this Act applies, may be transferred only if - -
(a) The transferor is not eligible to receive quota for the stock; and
(b) The transferee is a current fishing permit holder; and
(c) Any appeal against the amount of provisional catch history for the stock allocated to the transferor has been finally determined or withdrawn; and
(d) The transfer takes effect during the transfer period and the Registrar of Quota has been notified on the approved form of the transfer during that period; and
(e) The transfer is for an amount of provisional catch history expressed in whole kilograms.
New Zealand Fisheries Act 1996
The making of provision for exceptional cases where failure to conform to exact catch history requirements through circumstances beyond the operator’s control also presents problems. The New Zealand Act allowed discretion to the Minister to adjust allocation in the case of unfairness to a person who had shown "commitment to, and dependence on, the taking of fish...", and the generality of this provision led to a considerable number of appeals over allocations.
In order to reduce the litigation load, it is advisable to establish by legislation an appeals tribunal, such as the Quota Appeal Authority of New Zealand or the Share Management Fisheries Appeal Panel of NSW. Recourse may also be provided in the legislation to an existing appellate tribunal such as the Australian Administrative Appeals Tribunal.
Nielander and Sullivan suggest that, in order to minimize legal challenges:
Subsequent allocation procedures (where, for example, increased quota is to be issued) can be done on a pro rata basis, unless new entrants into the industry are to be catered for.
Even in a fully developed ITQ system such as those of New Zealand, New South Wales and Iceland, one of the limits on allocation and holding is the requirement that a fisher must also hold a fishing licence or permit. Initial allocation is frequently carried out on the basis of prior licence-holding, but the licensing system does not then expire. This separate requirement of a licence or permit to fish then becomes a limitation on the transferability of quota. A non-licence holder is less inclined to purchase valuable quota unless he is intending to speculate in it or lease it to a licensed fisher. It is, however, possible to conceive of a system where no licence or permit is required, and qualifications on quota holders such as citizenship or accumulation limits are checked upon registration.
The constitutional and doctrinal problems in some jurisdictions of creating property in fisheries rights and indeed in fishing licences generally have been discussed in Part II above. Social policy considerations may also inhibit (or on the other hand promote) the creation of a right of a proprietary nature. It is as well then for legal advisers to determine, well in advance of the preparation of law, just what is the nature of the right to be created, and how best to go about this. There are various approaches that can be taken:
recognise the right as permanent property, and provide some other measure of allowable catch which is capable of variation (New Zealand). New Zealand also provides for preferential treatment in future management plans for quota-holders whose rights are extinguished by the abolition of a management plan.
declare in the governing statute that the right is or is not property (Iceland - a declaration that it is not)
create a "special" property-right while declaring in the statute that fisheries resources in the natural environment belong to the state (Uruguay)
issue permits and class them as revocable privileges(USA)
declare that no compensation is payable in the case of extinguishment (Australia, USA)
rely on the courts to find that any property nature of a fishing right is an incident of crown sovereignty rather than a proprietary right under private law (Australia, in Harper’s Case); or that the right is not fully indefeasible and does not confer any benefit on any one party (Australia, in Davey’s Case)
provide for payment of a specified kind in the case of cancellation for management purposes (Victoria, Australia)
Statutory declarations that fisheries rights are not property (as was done in Iceland and Uruguay) nevertheless give rise to their own problems. Australia attempted to do this, and named the rights Statutory Fishing Rights, but it was eventually recognised that the creation of property in SFRs would not give rise to any real problems at law.[120] In Iceland however, the clear declaration that there is no ownership in fishing permits has left a situation of some uncertainty. Declarations are often subject to court reinterpretation. However, experience has shown that the distinction that courts have drawn between "public" and "proprietary" rights, and the reliance on the terms of the statute for the quality of the property-right it creates, are often sufficient to ensure that fisheries rights will rarely be considered full privatised property, to the detriment of the state and the general public.
The extent of the property nature of fisheries rights can be measured by the strength of the four essential characteristics by which economists judge them: transferability, durability, security and exclusivity. To ensure that fisheries rights will be considered as property, it would be as well to ensure that these characteristics are present in some significant measure. Conversely, to lessen the likelihood that the fisheries rights have a property nature, they should lack, or only possess a limited degree of, some or all of the characteristics.
Transferability
Transferability is the key defining feature of property rights in quotas. It is the ability to transfer and accumulate quota that gives it its value, creates a market in quotas and initiates the process of transformation of a right into a property right. It is the process by which all are potentially included in the industry. The acknowledgement of the demand for some measure of transferability of quota often marks the point where legislative intervention is required to formalise a developing fisheries rights system.[121]
"Traditional" fishing licences were and still are issued for short and finite periods, and whether they pertained to a holder or a vessel, they are not usually transferable. This is in large part a monitoring and control measure, although in the case of a licence attached to a vessel, this creates a logical absurdity as it is not the vessel that transgresses, it is the operator.
Transferability of quota can be achieved gradually, as in the case of Lake Winnipeg where the licences to which the quota was attached were first made transferable within families only, and subsequently became almost completely transferable subject only to residency (area) and experience requirements. Or transferability can be implemented fully from the outset, as in New Zealand and Iceland.
There are many variations in transferability. Fisheries rights may be:
The fully transferable right is an ideal rather than a reality. Some limits are usually imposed, such as:
The various restrictions and limitations on transfer suggested above must be clearly spelt out in legislation or enabled in management plans or regulations that have the force of law. Transferability may be expressed positively, as is usual in a strong property rights system. Where the protection of certain groups is of concern, it may be expressed negatively, as in Namibia. Strong restrictions are usually imposed where certain groups such as disadvantaged nationals, indigenous populations, or local regions or groups dependent on fishing are to be protected; foreigners, absentee owners or certain vessel or gear types are to be excluded; or fleet reduction or stringent management measures to protect an endangered fishery are necessary.
Because some limits, however minimal, are usually imposed on transfers, prior approval is usually required. Iceland has gone so far as to create a Quota Exchange to facilitate trading in quotas. In other countries, quota-brokering has become part of the transfer process.
The process of control over transfers is usually undertaken by the state, via its fishing management authority. Where quotas are held by communities, however, the process of holding by and transfer to individuals may be left to the group to determine, without formal recognition in legislation. The incorporation of traditional rights, which may rely on the fundamental principle of attachment to specific land and waters, into an ITQ system can create serious problems vis-à-vis the transferability of rights.[122]
The Australian Fisheries Management Act provides an example of a transferability provision:
48 Power of holder of fishing right to deal with fishing right
(1) Except where a condition of a fishing right provides otherwise, a holder of a fishing right may, subject only to any rights appearing in the Register to be vested in another person and to section 49, deal with the fishing right as its absolute owner and give good discharges for any consideration for any such dealing.
(2) Subsection (1) only protects a person who deals with such a holder as a purchaser in good faith for value and without notice of any fraud on the part of the holder.
(3) Equities in relation to a fishing right may be enforced against the holder of the fishing right except to the prejudice of a person protected by subsection (2).
49 Approval of AFMA etc. to dealing required in certain circumstances
(1) A person must not transfer the ownership of a fishing right unless AFMA has, in writing, given its approval to the transfer.
(2) AFMA may only refuse to give an approval for the purposes of subsection (1) if the transfer would be contrary to the requirements of the relevant plan of management or a condition of the fishing right.
(3) A purported dealing in contravention of subsection (1) has no effect.
A common limitation on transferability of fisheries rights is the provision of an upper limit or cap on accumulation of quota, to prevent monopolisation of the fishery by any one enterprise. Caps are usually imposed on a fishery-specific basis, as circumstances require. The drawbacks of capping are that the provisions are usually difficult to enforce, requiring a considerable amount of information particularly where companies are involved; and from a fisheries management point of view, they may serve to keep more efficient operators out of the fishery.
Being fishery-specific, aggregation limits may be placed in regulations or management plans. New Zealand, however, has opted to include them in the governing Act:
59. Aggregation limits
(1) Notwithstanding the provisions of this Act relating to the transfer of quota, no person shall be entitled to own:
(a) A number of quota shares for any one species the total quota weight equivalent of which is more than 45 percent of the combined total allowable commercial catches for every stock of that species (which species shall be a species named in the Fifth Schedule to this Act):
(b) More than 10 000 000 quota shares (10 percent of the total allowable commercial catch) for spiny rock lobster in any one quota management area:
(c) More than 20 000 000 quota shares (20 percent of the total allowable commercial catch) for paua in any one quota management area:
(d) In the case of bluenose (Hyperoglyphe antarctica), a number of quota shares for that species the quota weight equivalent of which is more than 20 percent of the combined total allowable commercial catches for every stock of that species:
(e) In any other case, a number of quota shares for any one species the total quota weight equivalent of which is more than 35 percent of the combined total allowable commercial catches for every stock of that species.
(2) Subject to subsection (5) of this section, nothing in subsection (1) of this section prevents any person being allocated more than the permitted number of quota shares; but, except as may be permitted by any consent granted under section 60 of this Act, no such person may acquire any more such quota.
(3) Nothing in subsection (1) of this section prevents any person, after an alteration of a quota management area under section 25 of this Act, being allocated more than the permitted number of quota shares; but, except as may be permitted by any consent granted under section 60 of this Act, no such person may acquire any more such quota.
(4) Nothing in subsection (1) of this section prevents any person who has quota shares transferred to that person under section 22 or section 23 or section 52 of this Act from holding those shares; but, except as may be permitted by any consent granted under section 60 of this Act, no such person may acquire any more such quota.
(5) If any person acquires any provisional catch history other than by allocation for any stock, the person is not entitled to be allocated any quota in respect of that provisional catch history to the extent that the allocation of such quota would result in the person being in breach of this section, and such provisional catch history shall be cancelled.
(6) For the purposes of this section, the term ´´person'' includes a person associated with that person.
(7) The Governor-General may, by Order in Council made on the recommendation of the Minister, following consultation with such persons or organisations who are representative of those classes of persons the Minister considers have an interest in this section, add the name of any new species to, or delete the name of any existing species from, the Fifth Schedule to this Act.
(8) Subsection (1) of this section does not apply to the Chatham Islands Enterprise Trust or to the Crown.
(9) The Minister shall, on or before the 1st day of January 2000, review the aggregation limits set by subsection (1) of this section, prepare a report containing the result of that review, and lay a copy of the report before the House of Representatives.
60. Minister may consent to persons holding quota in excess of aggregation limits
(1) Notwithstanding section 59 of this Act, the Minister may from time to time, after consultation with such persons or organisations the Minister considers are representative of those classes of persons having an interest in this section, by notice in the Gazette, consent to any named person holding:
(a) In the case of spiny rock lobster, up to a specified number of quota shares exceeding 10 000 000 for any one quota management area:
(b) In the case of paua, up to a specified number of quota shares exceeding 20 000 000 for any one quota management area:
(c) In any other case, quota shares for any one species having a combined quota weight equivalent less than or equal to a specified percentage of the combined total allowable commercial catches for all stocks of that species (which percentage is greater than the percentage specified in section 59 (1) of this Act for the stock concerned).
(2) Any consent under subsection (1) of this section may be given subject to such conditions as the Minister may impose, including any limit on the number of quota shares for any particular stock, and may be given for any specified year or years or generally.
(3) The Minister shall, in considering whether to grant any consent under subsection (1) of this section, consider:
(a) The willingness and ability of other members of the New Zealand fishing industry to acquire quota of the relevant species:
(b) The likely effect of the granting or withholding of the consent on:
(i) The development of any new or existing stock or species:
(ii) Other quota owners or commercial fishers:
(iii) The processing and marketing of that stock or species:
(iv) The ability of the applicant to take any other stock or species:
(v) The efficiency of the New Zealand fishing industry or any person engaged in the New Zealand fishing industry:(c) Such other matters as the Minister considers relevant.
(4) The Minister shall not grant any consent under subsection (1) of this section in any case if quota shares have been acquired by any person in excess of the then permitted number of shares before the consent is obtained.
61. Quota held in excess of aggregation limits to be forfeit
(1) If the chief executive believes on reasonable grounds that any person has acquired any quota in breach of section 59 of this Act or any consent given by the Minister under section 60 of this Act, the chief executive:
(a) May direct that a caveat be registered in the appropriate register under Part VIII of this Act in respect of all quota owned by that person; and
(b) Shall notify in writing the owner that quota acquired in breach of section 59 of this Act or any consent given by the Minister under section 60 of this Act shall be forfeit to the Crown without compensation unless, within 60 working days after the date specified in the notice, the owner applies to the High Court for a declaration as to whether that quota was acquired in breach of section 59 of this Act or any consent given by the Minister under section 60 of this Act.
(2) Any caveat directed to be registered under subsection (1) (a) of this section shall remain on the register until removed by direction of the chief executive or order of a court pursuant to any proceedings referred to in subsection (1) (b) of this section.
(3) If any person whose quota has been caveated under subsection (1) of this section fails to apply to the High Court under that subsection or the High Court declares the quota to have been acquired in breach of section 59 of this Act or any consent given by the Minister under section 60 of this Act, then any quota held in breach of those sections (which quota shall be the quota acquired most recently in time) shall be forfeit to the Crown without compensation.
(4) Any quota forfeit to the Crown under subsection (3) of this section shall be dealt with in accordance with section 62 of this Act.
New Zealand Fisheries Act 1996
Some measure of aggregation may often be a good idea if a major goal of management is to reduce vessel numbers. In addition to maxima, minimum levels of quota may also be imposed to this end.
Durability
Together with transferability, the durability of fisheries rights is one of the main determinants of their property nature. All quotas seem to be issued for periods longer than merely one year or fishing season, and some are explicitly issued in perpetuity. Management and, sometimes, political considerations play a large part in determining the extent of durability of fisheries rights. The greater the durability, it is argued, the more security is provided to encourage investment in the industry, and rights-holders will have greater incentive to take a long-term view of the sound management of the fishery. This argument is one of the mainstays of the movement towards fisheries rights, and hence the rights are rarely issued for short periods.
New Zealand ITQs are granted in perpetuity, the only restraint on their use is the existence or otherwise of commercial catch to be harvested. Political reasons may cause rights to be issued for lesser terms, as in Namibia where the performance of rights-holders and the advancement of disadvantaged groups were to be reviewed after some years of operation; or the property nature of the rights is de-emphasised through a lessening of their durability, as in the USA and to a lesser extent Australia, where rights may expire when the fishery is closed or its management plan is cancelled. Rights may also be issued for a limited time to permit evaluation of the quota programme, for example, the NSW Fisheries Management Act 1994:
73 Duration of shareholding
(1) Shares in a share management fishery are to be issued initially for a period of 10 years (calculated from the commencement of the management plan for the fishery).
(2) If during that 10-year period (or any subsequent period for which the shares are renewed) a fishery review is not conducted and a new management plan is not made under this Part, the shares are taken to be renewed, at the end of their current period, for a further period of 10 years.
(3) If during that 10-year period (or any subsequent period for which the shares are renewed) a fishery review is conducted and a new management plan is made under this Part, the shares are taken to be renewed (from the date the new plan commences) for a further period of 10 years and the balance of the current period is terminated.
In Australia, SFRs are not totally permanent:
(3) A fishing right is granted subject to the following conditions:
(a) the holder of the fishing right must comply with any obligations imposed by, or imposed by AFMA under, the relevant plan of management on the holder of such a fishing right;
(b) the fishing right will cease to have effect if the plan of management for the fishery to which the fishing right relates is revoked under subsection 20(3);
(c) the fishing right may, under subsection 75(7), cease to have effect or, under subsection 79(3), cease to apply to a fishery;
(d) the fishing right may be cancelled under section 39;
(e) no compensation is payable because the fishing right is cancelled, ceases to have effect or ceases to apply to a fishery.
Australia: Fisheries Management Act 1991
Security
Security of title is achieved in legislation by a register. Fisheries legislation should already provide for the keeping of registers of licences and permits, and the maintenance of a register alone does not increase the security aspect of fisheries rights over that of ordinary fishing licences. But a quota register may contain special features. The New Zealand system has two registers, a Quota Register and an Annual Catch Entitlement Register. And a register of quotas may go further. If quota rights are valuable property, then the matter of the extent of registration of interests arises. It is argued that to attain true value, the right should be capable of being used as collateral for lending purposes.[123] To achieve this end, it should be possible to register mortgages, liens and other interests in the register.
The New Zealand register provisions are comprehensive:
124. Registers
(1) The chief executive shall keep, in respect of each quota management stock, -
(a) A register to be called the Quota Register:
(b) A register to be called the Annual Catch Entitlement Register; and there shall be separate Annual Catch Entitlement Registers for each fishing year.(2) The registers may be kept in the form of information stored by means of a computer.
(3) The registers may be kept in conjunction with any other register required to be kept under this Act.
(4) The Crown owns all information contained in any Quota Register or Annual Catch Entitlement Register that is required by this Act to be contained in that register.
(5) Without limiting anything in section 297 of this Act, regulations under that section may provide for the operation of the registers under this section, including the electronic transmission of documents and information for the purposes of notifying any matter and inspection of the register.
...
126. Registrar to have use of seal
(1) Each Registrar shall have and use a seal of office bearing the impression of the New Zealand Coat of Arms and having inscribed in the margin the words ´´Registrar of Quota, New Zealand'' or ´´Registrar of Annual Catch Entitlement, New Zealand'', as the case may be.
(2) Every document bearing the imprint of the Registrar's seal of office, and purporting to be signed or issued by the Registrar or a Deputy Registrar shall, in the absence of proof to the contrary, be deemed to be signed or issued by or under the direction of the Registrar.
127. Matters to be shown in Quota Register
(1) Each Quota Register shall contain the following particulars (if applicable) for each stock to which that Quota Register relates:
(a) The total allowable catch:
(b) The total allowable commercial catch:
(c) The individual transferable quota allocated to each person:
(d) Every registered transfer of individual transferable quota (whether by operation of law or otherwise) and every registered transfer of provisional individual transferable quota by operation of law, and -
(i) The names of the transferor and the transferee; and
(ii) The number of quota shares transferred; and
(iii) The time and date of the registration of the transfer:(e) The provisional individual transferable quota allocated to each person:
(f) The provisional catch history allocated to each person:
(g) Every registered transfer of provisional catch history (whether by operation of law or otherwise), and -
(i) The names of the transferor and the transferee; and
(ii) The amount in kilograms of provisional catch history transferred; and
(iii) The time and date of the registration of the transfer:(h) Every increase and every decrease of the number of quota shares held by any person that results from the transfer by the Crown of any quota by virtue of the operation of section 22 or section 23 or section 52 of this Act:
(i) The aggregate holding of each kind of quota and provisional catch history held by each person:
(j) Every caveat registered in respect of any quota shares under section 159 of this Act, and -
(i) The names of the caveator and the quota owner over whose quota shares the caveat is registered; and
(ii) The time and date of the registration of the caveat; and
(iii) The number of quota shares over which the caveat is registered; and
(iv) The type of caveat being imposed; and
(v) The date (if any) on which the caveat will lapse; and
(vi) The date on which the caveat is withdrawn:(k) Every mortgage registered under section 159 of this Act, and -
(i) The names of the mortgagor and the mortgagee; and
(ii) The time and date of the registration of the mortgage; and
(iii) The number of quota shares secured by the mortgage; and
(iv) Every variation of the terms of the mortgage; and
(v) The time and date of discharge of the mortgage:(l) Every memorial registered under this Act, and the reason for the memorial:
(m) Every forfeiture of quota or provisional catch history under this Act, including -
(i) The time and date of the registration of the resulting transfer to the Crown of the quota or provisional catch history; and
(ii) The number of quota shares or kilograms of provisional catch history transferred to the Crown:
(n) Such other matters as may be required by regulations made under section 297 of this Act.
(2) Each Quota Register shall contain the last known postal address of the quota owner and persons having a registered interest in the quota.
(3) Each Quota Register shall contain corrections made under section 165 of this Act and the time and date of the corrections.
128. Matters to be shown in Annual Catch Entitlement Register
(1) Each Annual Catch Entitlement Register shall, in respect of the year to which it applies, contain the following particulars (if applicable) in respect of the stock to which it relates:
(a) Every annual catch entitlement held by any person at any time:
(b) The amount of annual catch entitlement that is generated or created, and held by any person:
(c) Every registered transfer of annual catch entitlement (whether by operation of law or otherwise), and -
(i) The names of the transferor and the transferee; and
(ii) The amount (in kilograms) of annual catch entitlement transferred; and
(iii) The time and date of registration:(d) Every transfer of annual catch entitlement received for registration under section 133 of this Act that is to be effective on and from the first day of the next fishing year, and -
(i) The names of the transferor and the transferee; and
(ii) The amount (in kilograms) of annual catch entitlement to be transferred; and
(iii) The time and date of the Registrar's receipt of the transfer document:(e) Every caveat registered in respect of the annual catch entitlement under section 159 of this Act, and -
(i) The names of the caveator and the annual catch entitlement owner over whose annual catch entitlement the caveat is registered; and
(ii) The time and date of the registration of the caveat; and
(iii) The amount (in kilograms) of annual catch entitlement over which the caveat is registered; and
(iv) The type of caveat being imposed; and
(v) The date (if any) on which the caveat will lapse; and
(vi) The date on which the caveat is withdrawn:
(f) Every forfeiture of annual catch entitlement under this Act, including -
(i) The time and date of the registration of the resulting transfer to the Crown of the annual catch entitlement; and
(ii) The amount (in kilograms) of annual catch entitlement transferred to the Crown:
(g) All reported catch of the stock taken in the year to which the register relates and notified by the chief executive under section 80(11) of this Act:
(h) Such other matters as may be required by regulations made under section 297 of this Act.
(2) Each Annual Catch Entitlement Register shall contain the last known postal address of the annual catch entitlement owner and persons having a registered interest in the annual catch entitlement.
(3) Each Annual Catch Entitlement Register shall contain corrections made under section 165 of this Act and the time and date of the corrections.
129. Registers to be open for inspection
(1) The registers kept under this Part of this Act are public registers for the purposes of the Privacy Act 1993, and, subject to section 130 of this Act, shall be open for inspection on payment of the prescribed fee (if any) during ordinary office hours; and the Registrar shall, on request and on payment of a reasonable charge, supply to any person copies of all or part of a register.
(2) The Crown is not liable in damages for any loss or damage resulting from any inaccuracy in any search of a register or a correct search of an inaccurate entry in a register, including any search by, or on behalf of, the Registrar.
(3) If a Registrar is satisfied, on the application of any person, that the disclosure of that person's address (as entered in any register) would be prejudicial to the personal safety of that person or his or her family, the Registrar may direct that such information shall not be available for inspection or otherwise disclosed.
...
155. Transactions not effectual until registered
No transaction has any effect for the purpose of this Act until it is registered in accordance with this Part of this Act.
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159. Registration procedure
On receipt of an application that complies with section 157 of this Act and is completed to the satisfaction of the relevant Registrar, that Registrar shall -
(a) Record in the appropriate register the particulars set out in the instrument required by this Act to be registered and the time at which the particulars are so recorded; and
(b) Issue, within 2 days (which days are days on which the register is open) after the date of registration, a registration notice as to the particulars recorded under paragraph (a) of this section; and
(c) Forward the registration notice to the person who presented the instrument for registration and forward duplicates of the notice to each of the other parties to the transaction; and
(d) If a caveat is registered over any quota shares, give notice of the registration of the caveat to the owner (if not otherwise notified) and any mortgagee of those shares and to any other caveator of those shares; and
(e) If a caveat is registered over any annual catch entitlement, give notice of the registration of the caveat to the owner (if not otherwise notified) and any other caveator of that annual catch entitlement.
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163. Chief executive may transfer quota or annual catch entitlement
(1) The power of the chief executive to transfer any quota shares or annual catch entitlement to the Crown or any other person as a consequence of - -
(a) A reduction in the total allowable commercial catch under section 22 of this Act or an increase in the total allowable commercial catch under section 23 of this Act; or
(b) The determination of any appeal under section 51 of this Act or the resolution of any dispute under section 38 of this Act; or
(c) Any forfeiture to the Crown of any quota shares or annual catch entitlement - may be exercised notwithstanding the existence of any mortgage or caveat over any quota shares or annual catch entitlement.
(2) The Registrar shall make on the register any entry necessary to show that any quota shares or annual catch entitlement have been transferred in accordance with this section, and alter any relevant mortgage or caveat accordingly.
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168. Guarantee of ownership rights
(1) The production of a certified copy in hard copy form signed by or on behalf of the Registrar or a Deputy Registrar, and sealed with the Registrar's seal, of a record in any register kept under this Part of this Act as to the ownership of any individual transferable quota, shall be held in every court of law or equity and for all purposes to be conclusive proof that the owner shown in the certified copy was, as at the time of the issue of the certified copy, owner of the quota to which the certified copy relates.
(2) Subsection (1) of this section does not apply in respect of any action brought by any person deprived of rights in relation to any quota or of any rights as mortgagee of any quota, by fraud, as against -
(a) The person registered as owner of the quota through fraud; or
(b) A person deriving otherwise than as a transferee bona fide for value from, or through, a person registered as owner of the quota through fraud.
(3) Subsection (1) of this section does not apply in respect of provisional individual transferable quota, annual catch entitlement, or provisional catch history.
The Act includes many other provisions regarding registers. It creates a very detailed system of registration, designed to ensure the maximum security for quota holders.
NSW, which operates a share system of fisheries rights, has similar but somewhat simpler provisions in its Fisheries Management Act 1994 -
89 Establishment and keeping of Share Register
(1) The Director is required to establish and keep a Share Management Fisheries Register (the Share Register).
(2) The Share Register may be kept wholly or partly by means of a computer.
(3) If the Share Register is kept wholly or partly by means of a computer:
(a) references in this Act to an entry in the Share Register are to be read as including references to a record of particulars kept by means of the computer and comprising the Share Register or part of the Share Register, and
(b) references in this Act to particulars being registered, or entered in the Share Register, are to be read as including references to the keeping of a record of those particulars as part of the Share Register by means of the computer, and
(c) references in this Act to the rectification of the Share Register are to be read as including references to the rectification of the record of particulars kept by means of the computer and comprising the Share Register or part of the Share Register.
90 Registration of shares
(1) The Director must register any shares in a share management fishery issued by the Minister by entering in the Share Register the following particulars:
(a) the name of the person to whom the shares are issued,
(b) the number of shares issued,
(c) the share management fishery for which the shares are issued,
(d) the period for which the shares are issued,
(e) such other particulars (if any) as are prescribed by the regulations.
(2) The Director must register any renewal of shares in a share management fishery by entering in the Share Register the following particulars:
(a) the fact that the shares have been renewed,
(b) the period for which the shares are renewed,
(c) such other particulars (if any) as are prescribed by the regulations.
91 Registration of dealings in shares
(1) A transaction that purports to have the effect of transferring, assigning, transmitting, mortgaging or otherwise creating an interest in a share in any share management fishery does not have that effect until it is registered in the Share Register.
(2) A party to such a transaction may make an application to the Director for the transaction to be registered.
(3) Such an application must be in a form approved by the Director and must be accompanied:
(a) by the document that embodies the transaction, and
(b) by a document setting out such particulars (if any) as are prescribed by the regulations for the purposes of this paragraph, and
(c) by duplicates of the documents referred to in paragraphs (a) and (b), and
(d) by such fee (if any) as is prescribed by the regulations.
(4) When such an application is made to the Director, the Director must:
(a) register the transaction by entering in the Share Register particulars of the name of the person acquiring the interest and a description of the transaction, and
(b) endorse on the document relating to the transaction and the duplicate of that document the fact of the entry having been made, together with the date and time of the making of the entry.
(5) When those entries in the Share Register have been made:
(a) the duplicate of the document relating to the transaction is to be retained by the Director and made available for inspection in accordance with this Division, and
(b) the original document is to be returned to the person who made the application for registration.
(6) The Director is not to register a dealing in a share in any share management fishery if the dealing would result in a shareholder acquiring more shares in the fishery than is permitted by this Act or if the dealing would otherwise contravene this Act.
92 Trusts not registrable
(1) The Director is taken not to have notice of any kind of trust relating to shares in a share management fishery.
(2) Notice of any such trust must not be registered by the Director.
93 Power of holder to deal with shares
(1) The holder of any share in a share management fishery may, subject to this Part, deal with the share as its absolute owner and give good discharges for any consideration for any such dealing.
(2) Subsection (1):
(a) is subject to any rights appearing in the Share Register to belong to another person, and
(b) only protects a person who deals with the holder of the share as a purchaser in good faith for value and without notice of any fraud on the part of the holder.
(3) Equities in relation to a share in a share management fishery may be enforced against the holder of the right except to the prejudice of a person protected by subsection (2).
94 Surrender of shares to be noted in Share Register
If a share in a share management fishery is surrendered, the Director must make an entry in the Share Register to that effect.
95 Cancellation or forfeiture of shares to be noted in Share Register
(1) If a share in a share management fishery is cancelled, forfeited or otherwise ceases to have effect, the Director must make an entry in the Share Register to that effect and cancel the registration of the share.
(2) If, because of a decision made by the Minister or a court, an entry made by the Director under subsection (1) is no longer correct, the Director must rectify the Share Register.
(3) If:
(a) the Director makes an entry in the Share Register under subsection (1), or rectifies the Share Register under subsection (2), concerning a share, and
(b) a person other than the holder of the share has an interest in the share, and
(c) the interest is one in relation to which a transaction has been registered under section 91 (Registration of dealings in shares), the Director must give the person written notice of the entry or rectification.
96 Director not concerned as to the effect of documents lodged for registration
The Director is not concerned with the effect in law of any document lodged under section 91 (Registration of dealings in shares) and the registration of the transaction concerned does not give to the document any effect that it would not have if this Division had not been enacted.
97 Inspection of the Share Register and registered documents
(1) On payment by a person of the prescribed fee (if any), the Director must, during the ordinary business hours of the Director's office, make available for inspection the Share Register and all copies of registered documents retained by the Director in accordance with section 91 (Registration of dealings in shares).
(2) If the Share Register is kept wholly or partly by means of a computer, this section is taken to be complied with by providing a computer print-out or providing access to a computer terminal that can be used to view the Share Register.
98 Evidentiary provisions
(1) The Share Register is evidence of any particulars registered in it.
(2) If the Share Register is wholly or partly kept by means of a computer, a document issued by the Director producing in writing particulars included in the Share Register, or the part kept by means of a computer, is admissible in legal proceedings as evidence of those particulars.
(3) A copy of the Share Register or an entry in the Share Register is, if purporting to be signed by the Director, admissible in evidence in legal proceedings as if the copy were the original.
(4) A copy of a document, or part of a document, retained by the Director under section 91 (Registration of dealings in shares) is, if purporting to be signed by the Director, admissible in evidence in legal proceedings as if the copy were the original.
(5) The Director must, on application made by a person in a form approved by the Director, provide the person with a document or copy that is admissible in legal proceedings because of this section.
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100 Exculpation for liability for anything done under this Division
The Minister, the Director and other persons employed in the administration of this Division are not liable in any civil proceedings for anything done or omitted to be done in good faith in the exercise or purported exercise of any function imposed or conferred by this Division.
101 Offences under the Division
A person must not:
(a) make, or cause to be made or concur in making, an entry in the Share Register knowing it to be false or misleading in a material respect, or
(b) produce or tender in legal proceedings a document knowing that it falsely purports to be an instrument (or copy of an instrument) lodged with the Director under this Division or a copy of the Share Register or of an entry in the Share Register.
Maximum penalty: 50 penalty units.
It is also possible to issue a Certificate of Title analogous to that used in the Torrens land registration system, to guarantee optimum security. This has been recommended but does not so far appear to have been enacted in any jurisdiction.
Exclusivity
Exclusivity is the factor that assures fishers much the same control over their resource as a farmer has over his land and its produce. So long as fishers do not own the resource until it is harvested, the race for fish will continue.
The exclusive nature of fisheries rights differs from that of mere fishing licences. The issue by the state of any form of fishing permit is a guarantee that the right may be held and managed without outside interference from private individuals, whether or not they themselves are quota-holders. This is prevented by the monitoring and enforcement procedures and offences established by the state in its legislation.[124] But a licensing system does not protect licensed fishers from each other, as they "race for fish".
In a quota system, the quota right has a higher degree of exclusivity than a mere licence. But this is not absolute. Quota-holders hold rights in common with all other quota-holders, and must be guaranteed protection not only from the unlicensed, but also from any of their counterparts who may be inclined to exceed their share. New and improved data collection, monitoring and enforcement controls are therefore required.[125] Burke and Brander note that New Zealand experienced a significant increase in quota-busting, misreporting, high-grading and bycatch problems with the introduction of ITQs, and they suggest that an effective monitoring and enforcement programme be developed before implementation of ITQs, which does not simply load new requirements on top of existing regulations.[126]
In addition to the pre-existing offences of unlicensed fishing, fishing contrary to licence conditions, misreporting etc, new offences need to be created, such as:
The creation of new offences relating to fisheries rights also brings with it a new dimension to liability. In addition to the "traditional" owner, operator, crew and agent liability, liability may now be incurred by the quota- or shareholder, who may be a different person again. It is also at the point of creating property rights in quotas that many jurisdictions are moving towards providing administrative rather than criminal procedures against transgressors, if they have not already done so in fisheries or in other fields.
The exclusive nature of fisheries rights, however strongly they may manifest various property characteristics, does not guarantee freedom from interference to the holding by the state. The very nature of fishing rights as creatures of statute means that the state can interfere, at least to the extent provided by the statute, and further when it is considered that the state may vary the terms of the governing legislation at any time (subject only to any obligation of just compensation for deprivation of property). State interference can extend to alteration, suspension and cancellation of quotas, for management purposes or for breach of laws or conditions, or of the management plan which provides for them. The termination of fisheries rights, or of the licences with which they are held, is also a function of their durability, and is linked to considerations of just compensation.
Suspension and cancellation may take place for two basic reasons:
Consideration must be given to the consequences of alteration to management plans and the various methods of cancelling quota. Options include:
Where quota is linked to and a characteristic of the fishing licence under which it is held, it usually expires with the termination of the licence or the management plan. Where termination is due to the termination of the management plan, the legislation may state clearly that no compensation is payable, as in the USA where IFQs are not considered property, but privileges which may be withdrawn; or the legislation may provide for compensation, in itself or under subordinate legislation, as in various of the Australian states, which mainly treat quotas as an attribute of licences. NSW has much the same provision for compensation:
44 Omission of share management fishery
(1) This section has effect if the description of a share management fishery is omitted from Schedule 1, including an omission for the purpose of redefining an existing share management fishery.
(2) When the description of the fishery is omitted, all shares in the fishery are cancelled.
(3) If the description of the fishery is omitted after the commencement of the management plan for the fishery, the holders of the cancelled shares are entitled to compensation from the State for the market value before the cancellation of the shares they held.
(4) The amount of compensation payable is to be determined by agreement between the Minister and the person entitled to compensation. If the amount of compensation is not agreed, it is to be determined by the Valuer-General.
(5) A person entitled to compensation may agree to accept instead shares in another share management fishery which replaces the omitted fishery wholly or partly.
(6) A person who is dissatisfied with the amount of compensation offered to the person under this section or with any delay in the payment of compensation may appeal to the Land and Environment Court.
(7) The regulations may make provision for or with respect to the payment of compensation in accordance with this section.
NSW Fisheries Management Act 1994
But in NSW, quota shares have a more strongly property nature. Forfeited shares still exist as property which may be sold by the Minister, and the proceeds are treated as government revenue.
In Australian Commonwealth fisheries, where a management plan is revoked, SFRs cease to have effect and no compensation is payable, although holders have preference for rights under any new plan.
In New Zealand, where ITQs have the strongest property nature, they exist in perpetuity. The catch entitlement they give rise to can however be reduced to zero if the TACC is reduced to zero. The Crown may hold ITQs, as for example if they are forfeited for infringement of the law, and it may reallocate any quota shares it holds in the case of a reduction in TACC. Where a TACC is increased, the Crown may allocate its shares or deduct a set number of shares from all quota holders and reallocate them, to new eligible entrants.
Prior to the introduction of a fisheries rights system, there will already be some form of fisheries management structure in place, be it line department, other governmental agency, or government-owned incorporated company. However, fisheries rights bring an increased level of need for a wide range of administrative functions, such as:
There are various approaches that may be taken within the socio-political context. The USA has established regional Councils, which manage all federal fisheries. Iceland has established a special enforcement agency with monitoring facilities at all landing ports. Legal recognition may be given to community management boards. Customary management groupings may need to be included in the quota allocation and hence in the administrative processes. There may be a desire to shift towards greater privatisation of management. Industry involvement may be enhanced by formalising the consultative process. The relationship of the managing authority to research bodies must be considered.
All or any of these matters may require enabling by new or amending legislation. Of particular concern to the drafter is the delegated legislation-making power, and any increase in powers given to enforcement officers. Prosecutorial functions should also be reviewed.
Before fisheries rights, charges for the privilege of commercial fishing in national waters usually took the form of licence fees, which in some cases provided income directly to the management authority,[127] and various primary produce and export taxes, which effected revenue to the state. But the matter becomes more complex with the introduction of a fisheries rights system, particularly if the system is comprehensive and covers a variety of fisheries. Costs of administration, data collection and collation, research, monitoring and enforcement may well increase significantly.
Charges may be made in various ways:
Charges for initial allocation of rights may be made where the allocation has been carried out by a process other than auction or tender. Setting these too high, however, may discourage the acceptance of a fisheries rights system where this is being newly implemented.
Resource rents bring problems with the setting of levels: too low may create problems with maintaining fishery rights in the face of the rights of other water users, as for irrigation by inland waters, recreational fishing, tourism etc;[128] on the other hand, high resource rents could destroy the incentive to invest.
More importantly from the legal viewpoint is the fact that the charging of resource rents can give rise to questions about the state’s right to claim "ownership" of the resource and the consequent right to extract a rent. This was the case in New Zealand,[129] and eventually a cost recovery system was relied upon. Resource rental was achieved by reliance upon the general taxation system.
Royalties calculated on net revenue bring with them a degree of flexibility. They may be seen as a form of tax, and care must be taken with the state’s powers to impose taxes. Provisions must be harmonised with the general taxation system.
An example of a simple and effective cost-recovery and resource-rent system comes from NSW:
Division 7 Management charges and community contributions
76 Management charges
(1) The Minister may, subject to this section, determine the management charges payable by the holders of shares in a share management fishery for each fishing period during which the commercial fishing licences of the holders (or their nominees) are endorsed to take fish in that fishery.
(2) The management charge is to be such amount as the Minister considers necessary to meet the costs of management for that fishery, being costs of management that are attributed to industry by the management plan for the fishery.
(3) The management charge is not to exceed the amount prescribed by the management plan for the fishery.
(4) The management charge is payable by shareholders in proportion to their shareholding.
(5) The management plan may authorise the payment of management charges by instalments. If an instalment is not paid by the due date, the balance then becomes due and payable (together with any interest for late payment prescribed by the management plan).
(6) Until the commencement of the management plan for a fishery, the Minister may (after consultation with the Management Advisory Committee for the fishery) determine the matters required by this section to be determined by the plan.
77 Community contribution by shareholders for access to fishery
(1) Shareholders in a share management fishery are required to make a periodic contribution for their right of access to the fishery (a community contribution).
(2) The community contribution is payable after the commencement of, and in accordance with, the management plan for the fishery.
(3) The community contribution is to be credited to the Consolidated Fund.
(4) The community contribution is to be based on the size of the shareholding in the fishery.
(5) The rate of the community contribution, method of its payment and other matters concerning its payment are to be prescribed by the management plan, and not otherwise.
(6) The management plan for the fishery may exempt a shareholder from making the community contribution (or reduce any such contribution) if the full rights to take fish in the fishery in accordance with the shareholding have not been exercised during the relevant period.
(7) The Treasurer's concurrence is required before any provisions relating to community contributions are inserted in a management plan.
It is also possible to exact a form of tax upon quota transfers. Transfer taxes can operate to inhibit profiteering, but constraining transfers in this manner can diminish the efficiency of the system. Again, care must be taken with the state’s right to impose taxes.
Finally, the drafters involved in preparing the appropriate laws to manage a fisheries rights system must be prepared for a process of ongoing change and consequent amendment. Experience in various countries has shown that this is the way that successful fisheries rights systems have developed. This is not because nobody knows how to draft laws for such a system. It is because system requirements themselves are continually evolving. An industry initially opposed to change gradually becomes aware of the benefits it brings them, and is more ready to cooperate and even initial desirable changes. As measures initially established to protect threatened fishstocks gradually prove successful, some stringent controls may be relaxed. On the other hand, more controls may need to be imposed in different ways. Political considerations may require new measures for the protection of disadvantaged and indigenous groups. And most importantly for the drafter, judicial decisions and interpretations of the new regime frequently call for amendment, sometimes quite radical, to the scheme as it was initially devised.
In saying this, however, it must be recalled that any major overhaul to a fisheries rights system carries with it the possibility of undermining the security and predictability associated with the system. The more the fisheries right is capable of being viewed as property, the more a guarantee of security will be required. Hence it is important to give careful consideration to the exact nature of the right to be created, and the consequences of that creation.
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[96] Burke And Brander (2000)
pp. 158 and 159. [97] Palmer (2000) p. 70. [98] This has been noted even for such comparatively straightforward legislative processes as the implementation into national legislation of international agreements: see Edeson, Freestone and Gudmundsdottir (2001) p. ix. [99] Anderson (2000) pp. 26 ff. [100] Burke (2000) p. 60. [101] These matters have been expanded from Palmer (2000) p. 66. [102] This was the Lake Winnipeg IQ experience described in Gislason (2000a). [103] Situations such as death, divorce, mortgaging etc. must be foreseen. [104] Gislason (2000a) p. 121. [105] For an example see the discussion in Cassidy (2000). [106] Majority decision in The Commonwealth v. Yannir; Yannir v. Northern Territory of Australia HCA 2001 [107] Indonesia provides an example of a complex system of zones determined by all these factors plus provincial boundaries. The system is fraught with conflict. [108] Cacaud (2000). [109] Gisalson (2000) p. 121. [110] Peacock and Hansen (2000) p. 161. [111] For discussion of management plans as delegated legislation, and the indicia observed in the Act, see the Australian Austral Fisheries Case. It should be noted however that courts are reluctant to strike down delegated legislation except in extreme cases of unreasonableness. [112] Pomeroy (1999). [113] Cacaud (2000). [114] Peacock & Hansen (2000) p. 163. [115] Lindsay (1998). [116] Scott (2000b) p. 116. [117] Adapted from Lería & Van Houtte (2000). [118] Feral (2001). [119] Nielander & Sullivan (2000a) p. 69. [120] Palmer (2000) p. 66. [121] This was the experience in the Lake Winnipeg fisheries, for example. [122] Roberts & Tanna (2000) p. 298. [123] Decisions in this regard are the domain of fisheries management and policy-making. See for example the arguments for and against in Ford (2000) at 293. [124] The "trespassory rules" which are an essential element of a property institution by the legal view of property. [125] Edwards (2000) p. 78; Nielander & Sullivan (2000b). [126] Burke & Brander (2000) p. 159. [127] Harper’s Case in Tasmania held that, even though fees may on occasion be seen as taxes or duties of excise, the fee for fishing is a quid pro quo to compensate the public, through laws, for abrogation of the traditional right to fish. [128] Gislason (2000) p. 125. [129] Edwards (2000) p. 86. |
