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Three Methods to Evaluate ITQ-Based Self-Governance in New Zealand Fisheries Management and Their Application to the Bluff Oyster Fishery

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Three Methods to Evaluate ITQ-Based Self-Governance in New Zealand Fisheries Management and Their Application to the Bluff Oyster Fishery Lincoln University Digital Thesis Copyright Statement The digital copy of this thesis is protected by the Copyright Act 1994 (New Zealand). This thesis may be consulted by you, provided you comply with the provisions of the Act and the following conditions of use: you will use the copy only for the purposes of research or private study you will recognise the author's right to be identified as the author of the thesis and due acknowledgement will be made to the author where appropriate you will obtain the author's permission before publishing any material from the thesis. Three methods to evaluate ITQ-based self-governance in New Zealand fisheries management and their application to the Bluff oyster fishery A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University by Yu Wen Yang Lincoln University 2011 Abstract of a thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy Abstract Three methods to evaluate ITQ-based self-governance in New Zealand fisheries management and their application to the Bluff oyster fishery by Yu Wen Yang Fisheries economists consider ITQ-based self-governance to be the future of fisheries management. In theory, this management regime is argued to have a positive impact on fisheries performance. To evaluate its merits, researchers often use individual unstructured case studies– there is a lack of theoretical framework to guide systematic assessments. As a result, those case studies are often too descriptive to separate the contribution of self- governance from ITQs, which is itself an effective fisheries management tool. Furthermore, the lack of theoretical framework makes it difficult to analyse data and synthesise findings. The lack of rigorous research to date, calls for systematic approaches to examine self- governance regimes and to enable better-informed judgement whether the merits of ITQ- based self-governance are being realised. This thesis has developed three methods to systematically evaluate ITQ-based self- governance from a New Zealand perspective. In the first method, a new bio-economic model is used to project a fishery’s stock status and the fishing industry’s profitability. By applying a Bayesian statistics approach in the biological sub-model and a system dynamics approach in the economic sub-model, this method is able to identify the contribution of self-governance to the value of ITQs. The second method is the Minimum Information Management System (MIMS). MIM theory is a relatively new concept to fisheries management that suggests that fish quota prices can reflect the overall status of fisheries. The theory provides a way to assess the value of self- governance because not only is it theoretically sound but also simple to apply. However, the application of MIMS is limited due largely to a number of prerequisites about the quota ii system to which it can be applied. Despite the prerequisites, the theory can become a good tool to evaluate self-governance in New Zealand due to the country’s high quality quota systems. The last approach is the Indicator System (IS). Indicators have been used extensively to study the sustainability of fisheries resources. However, there is a lack of a set of indicators for self- governance in fisheries management. From the natural resource management literature, discussion has led to an indicator system and a new reference points system designed specifically to examine the merits of ITQ-based self-governance. The self-governed Bluff oyster fishery is analysed as a case study to test the practicality of the three methods and to discover the impact of self-governance to the fishery’s management. The analysis yields results that shed some light on ITQ-based self-governance. First, supporting the theoretical literature, the self-governance regime promotes economic efficiency in the fishery. In addition, ITQ-based self-governance adds value to fish stock management because of the positive relationship between profitability and stock abundance in the Bluff oyster fishery. Finally, unlike most arguments in both the theoretical and empirical literature, this thesis finds that self-governance does little for fishing environment management. This thesis contributes to the body of literature of ITQs and self-governance in two ways. Theoretically, this thesis develops and adopts three methods that can be used to systematically evaluate the merits of ITQ-based self-governance. Empirically, by applying the three methods to the Bluff oyster fishery, this thesis facilitates a deeper understanding of the dynamics of self-governance in a real fishery. Furthermore, based on the findings in the Bluff oyster fishery, this thesis is able to offer a number of policy implications for New Zealand’s fisheries management. To a certain extent, New Zealand has promoted fisheries self-governance. Being able to evaluate the performance of self-governance is valuable to policy makers in that it enables them to determine if self- governance can elevate the performance of fisheries above the level achievable by the ITQ programme under the Quota Management System (QMS). Keywords: Bio-economic model, Bluff oyster fishery, Fisheries, Indicators, Individual Transferable Quota, Minimum Information Management System, New Zealand, Quota Management System, Quota Owner Association, Self-governance. iii Acknowledgements Three years of Ph.D study is impossible to complete without the guidance, support, help and love from the wonderful people in my life. This section is dedicated to these people, who contributed to this research in various ways. My most sincere thanks go to my supervisors: Prof. Ross Cullen, whose expertise and dedication to the field of natural resource economics and experience in thesis supervision was invaluable to me; Dr. Ian Macdonald, whose fresh mind and logical thinking challenged me in every possible way; and Dr. Ed Hearnshaw, who helped me to see the keys in completing a Ph.D thesis, from structure and content to presentation and grammar. My gratitude goes to staff at various organisations who offered expert opinions and data for this thesis. My deep thanks to you, Allen Frazer, Mark Geytenbeek, Phillip Clark, Graeme Bremner, Robert Liberona, Eugene Rees and Barry Webster from the Ministry of Fisheries; Dan Fu, Alistair Dunn and Keith Michael from the National Institute for Water and Atmospheric Research; Graeme Wright and David Skeggs from the Bluff Oyster Management Company; Lynne Mackie, Jo Laban and Stephen Oakley from Statistics New Zealand; Grant Davies from Fish Serve; Philippe Lallemand from Seafood Industry Council; and Prof. Gordon Munro and Prof. Trond Bjørndal from the University of Portsmouth. I owe a huge thanks to my friends, Mark and Denies Wells and Jayne Moyle, who always had faith in me and brought the best out in me; Mary Haropoulou, who comforted me with tender beef and sweet deserts; and Sabrina Mohd Rashid, whose window shopping trips and coffee chats made my emotional roller coaster rides less lonely. I am also grateful to Christopher Gan, Lise Morton, Samantha Liew, Fay Lu, Yong Feng Peng, Pablo Ahumada, Bruce Kirkman and Li Qing Zhu, whose friendship warmed my heart. My deepest appreciation goes to Feng Ba, who generously supported me. My airhead friend Garreth Jay, thanks for the laughter and tears mate! To my wonderful parents: thank you for never putting any pressure on me, always being supportive and always standing firmly by my side. Sorry mum for forgetting to call sometimes (a lot of times as you might correct), and your friendly reminding texts did not always work either. Most importantly, thank you God, in the multitude of my anxieties within me, Your comforts delight my soul (Psalm, 94:19). iv Table of Contents Abstract ..................................................................................................................................... ii Acknowledgements .................................................................................................................. iv Table of Contents ...................................................................................................................... v List of Tables .......................................................................................................................... viii List of Figures .......................................................................................................................... ix List of Abbreviations ................................................................................................................ x Chapter 1 Introduction ............................................................................................................ 1 1.1 Fisheries problems and management evolution: from input controls to property rights .. 2 1.2 Self-governance and ITQ-based self-governance ............................................................. 5 1.3 Methods used to empirically evaluate ITQ-based self-governance .................................. 8 1.4 New Zealand and the Bluff oyster fishery ........................................................................ 9 1.5 Research objective and questions.................................................................................... 11 1.6 Organisation of the thesis ................................................................................................ 12 Chapter 2 A critique of property rights for fisheries management ..................................
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