SUSTAINABLE DEVELOPMENT

Introduction

The following socio‐economic study that sets forth a proposed system was prepared in conformity with the aims of the European Fisheries Commissioner, publicly disseminated during her 19 January 2010 confirmation hearing at the European Parliament in Strasbourg, to (i) reduce ; (ii) reduce industrial overcapacity; (iii) increase fisheries revenues and profits; (iv) include rather than exclude fishers who represent all types of vessels such as trawlers, mid‐size vessels and coastal boats, as each type of vessel serves a unique purpose in the diverse European territory; (v) develop employment stability and optimal capitalisation throughout the entire succession of fisheries industry sectors, especially including the fish harvesting and processing sectors; (vi) address the needs of multi‐species and single species fisheries; and (vii) modify the allocation of the €4.3 billion annual European Union fishing subsidies to conform to the current requirements of the fisheries industry.

In addition, the fisheries reform proposal (a) addresses the socio‐economic needs of those excluded from future participation in the fisheries industry through a provision enabling such individuals once reliant upon for gainful employment to benefit through education, re‐training, employment opportunities and other social benefits, (b) contains a provision for supplementary fisheries regulation enforcement, and (c) provides a mechanism for the replacement of nets damaged by marine mammals, all of which can be funded by the private sector as part of the reform program and do not require public sector funds.

It is hoped that the provisions contained in the following proposal will generate ideas and discussions among government officials and stakeholders which will further the development of sustainable fisheries management systems for the benefit of the fisheries industry and the renewable natural resources on which the entire industry is reliant for its long term future.

March 2011

Constantine Alexander and C.J. Alexander, MBA, JD Korthi Bay GR‐84502 Andros Tel.: +30‐697‐393‐7087 E‐mail: [email protected]

Mr. Alexander, who is a former consultant to the Commission of the European Union in Brussels and a Natura 2000 Ambassador, and Dr. Alexander have been retained by the Andros Island Municipality in the Cyclades, Greece, as consultants at the recommendation of the Fishermen’s Union of the Southern Aegean to contribute to the development of sustainable fisheries and the rehabilitation of marine resources. SUSTAINABLE FISHERIES DEVELOPMENT

SUSTAINABLE FISHERIES DEVELOPMENT

Table of Contents

Page

Sustainable Fisheries Development 1

Reasons for Sustainable Fisheries Management Innovation 1

Sustainable Fisheries Management Innovation 2

The Program 4

Fisheries Management Evolution 4

A Vital Missing Component of Fisheries Management 4

Requirements of A Well‐Managed 5

Catch Share Conforms to EU Fisheries Aims 6

Catch Share Program Framework 8

Origin 8

Guaranteed Fishing Rights 9

Share Allocation 9

Share Value Corresponds to Fishery Value 10

Transferability of Shares 10

Program Management 10

Single, Multi Species Fisheries Application 11

Improved Fishery Business Planning 11

Penalties for Exceeding Total Allowable Catch 11

Maximising Long Term Fisheries Value 12

Improved Product Quality, Consistency of Supply 12

Financial Interests Aligned with 13

Government Perspective and Program Rationale 13

Restraints on Catch Share Program Growth 14

Issue Re: Privatisation of Public Resource 14

C. Alexander & C.J. Alexander © SUSTAINABLE FISHERIES DEVELOPMENT

Results of Catch Share Programs 15

Specific Proven Results 15

Diverse Aims and Management Tools 17

Preferred Market Access 19

Wide Range of Actions Funded 20

Distinction Between Share Holders and Union Members 20

Socio‐Economic Impacts of the Program 21

Catch Share Program Mitigation Measures 21

Public Sector Mitigation Measures 23

Economic Adjustments Enhance Industry Stability 24

Common Problems 25

Aspire to Manage Abundance, Not Scarcity 25

Case Studies 26

US/British Columbia Fisheries 26

New Zealand Deepwater Fisheries 30

Gulf of Mexico Red Snapper Fishery 33

Icelandic Fisheries 35

Danish Fisheries 40

C. Alexander & C.J. Alexander © SUSTAINABLE FISHERIES DEVELOPMENT

SUSTAINABLE FISHERIES DEVELOPMENT

Reasons for Sustainable Fisheries Management Innovation

Marine have served as a cradle of evolutionary life since their inception. These indispensable creations of nature have also provided nutritious and adequate sustenance for all of its interdependent inhabitants. Equally as important, marine ecosystems have also generated valuable sources of food for mankind who has relatively recently in history come to rely upon wild fish and other marine resources for much more than mere sustenance.

Fishing has evolved into a worldwide industry that modernly employs 200 million people and generates US$400 billion in revenues annually through the yearly harvest of approximately 120 million tonnes of fish, of which 70 million tonnes are reported and 50 million tonnes are estimated by researchers at the University of British Columbia to be unreported; however, as the industry has grown, those who control or contribute to the extraction of these natural resources have neglected and, in some cases, abused the reproductive capacity of the natural resources through resource extraction quantities and methods, many of which are permitted under modern fisheries management measures that have caused a number of formerly productive marine ecosystems to become barren to the dismay of many in the industry.

Despite various efforts to sustainably manage marine resources, more than 75% of the world’s are now fully exploited, overexploited or depleted according to the United Nations Food and Agriculture Organisation. In the European Union, 87% of the commercial fish stocks have been seriously depleted and overexploited under ineffective fisheries management policies, which means that fisheries management systems employed throughout most of the world have failed to manage the natural resources on which the future of the industry rests. Long‐standing fisheries management policies have routinely neglected decades of scientific recommendations to refrain from overfishing, and they have failed to recognise the value of which are indispensable to the production of marine food resources but have been severely damaged by certain types of fishing gear such as bottom trawlers. As a result, the European Commission has acknowledged the need to:

• reduce overfishing, illegal fishing, and industrial fishing overcapacity;

• improve the protection of marine habitats during fisheries activities and delegate more natural resource management responsibility to the fishers who are entirely dependent on productive marine ecosystems;

• increase fisheries revenues, profits and employment stability; and

• include social provisions for education and re‐training of fishers who discontinue fishery employment.

C. Alexander & C.J. Alexander 1 SUSTAINABLE FISHERIES DEVELOPMENT

Around the world, as fish stocks have been depleted at an alarming rate, the global has exceeded 6.8 billion people and basic food requirements are growing rapidly. As the world population is expected to reach 8‐10.5 billion by the middle of the 21st century, sustainable fisheries must be developed in order to ensure the provision of reliable marine food sources in the future, and these food supplies are dependent on the existence of healthy and productive ecosystems from which we can derive our future nutritional needs.

Sustainable Fisheries Management Innovation

Since the 1970s, a sustainable fisheries management system known as the Catch Share Program has been successfully implemented in multi as well as single species fisheries that utilise various types of fishing gear at depths down to 1,500 metres and more in vessels ranging in size from industrial capacity to artisanal in at least 35 countries including New Zealand, Australia, Canada, the U.S., Iceland, the United Kingdom, Norway, Sweden, Finland, Denmark, Latvia, Lithuania, Estonia, the Netherlands, Belgium, Portugal, Germany, Italy, Malta, Poland, Japan, South Africa, Namibia, Argentina, Peru, Chile, Vanuatu, Fiji, the Philippines, the Solomon Islands, Papua New Guinea, Bangladesh, Grenada, the Cook Islands and Mexico.

Iceland, which is heavily reliant on fisheries accounting for up to 40% of its export revenues in recent years, established the Catch Share Program fisheries management system into permanent law throughout the entire country in 1990 following more than a decade of impressive trials.

The Catch Share Program is now used in almost one third of U.S. fisheries, and the National Oceanic and Atmospheric Administration, which is the federal agency having jurisdiction over all U.S. fisheries that generate more than $4.1 billion in revenue annually, recommended to the U.S. Congress that the Catch Share Program be implemented nation‐wide based on the program’s financial success and satisfaction among stakeholders.

In 2007, the value of Danish landings was in excess of US$450 million, 90% of which were under Catch Share Programs known as Individual Transferable Quota fishery management systems – 55% in pelagic and 35% in demersal fisheries.

The Catch Share fisheries management is a system whereby an assessed regional fishery consisting of commercially valuable species is divided into shares which are customarily allocated to those who have been actively fishing in the region for their livelihoods. These shares may be allocated in exchange for a fee that is relative to the value of the rights conferred, depending on the share allocation requirements established by the regional fisheries management group. Regardless of whether or not a fee is charged, each share represents guaranteed access and the right to harvest a fixed percentage of the Total Allowable Catch each and every year. Shares are transferable by sale, bequest, lease, assignment and other permitted means depending on the regional Catch Share Program rules. Social benefit shares can be allocated without any charge to a responsible organisation or institution in order that the income generated from the annual sale of the harvested fish can be used for re‐training,

C. Alexander & C.J. Alexander 2 SUSTAINABLE FISHERIES DEVELOPMENT education and community economic development and investment for the benefit of those who are impacted by the conversion of the former fisheries management system to the Catch Share Program, as in former fishing‐dependent Alaskan Inuit communities.

The share value directly corresponds to the fishery value which is determined by the health, reproductive capacity and volume of the targeted species’ . As the share holders are financially motivated under the Catch Share Program to incorporate natural resource conservation measures into their fishery operations to enhance the investment potential of their shares, the health, condition and population of the fish in the fishery improve which, in turn, increases the share value along with the prospects for increasing the Total Allowable Catch, fisheries revenues, profitability and long‐term of the business.

The Catch Share Program also provides (i) effective fisheries regulation enforcement as a supplement to Coast Guard patrols and (ii) program rules enforcement with on‐board observers and dock monitors to compile fish landing data. The enforcement cost is paid by the program management from the management fee that is usually assessed as a percentage (e.g. 2‐3%) of the ex‐vessel, or dockside, value of landed fish brought in by the share holders and supplemented by fees such as share transfer fees.

The Catch Share Program that has been successfully implemented over various periods of time for decades has resulted in: increased fishery revenues and profits; decreased expenses; the use of more selective fishing gear; reduced bycatch; improved fisheries regulation enforcement; periodic scientific fishery assessments paid by the program for the assessment of the condition of the fish biomass and marine habitats as well as for the calculation of share values, annual Total Allowable Catches, and a baseline for damages in the event of an oil spill or other marine environmental damage; improved safety at sea; fish stock biomass and marine habitat rehabilitation; share transferability to accommodate the business needs of the fishermen share holders; the avoidance of share ownership concentration or monopoly; and the prospect of share value appreciation for fishers as a welcome counterpoint to annual boat value depreciation.

The valuable food, pharmaceutical, medical innovation, energy, coastal protection and water filtration resources provided by our oceans may be difficult to quantify but they are by no means infinite. Through fisheries management innovation, ever‐advancing scientific knowledge and modern technology, we now have the ability to ensure a secure future for the vast array of these resources, many of which still hold undiscovered value for humanity. Reforming our fisheries management so that fishers can equitably benefit from the ecosystems over which they are responsible as caretakers through reasonably reliable annual fisheries revenue and long term share value appreciation will contribute to the restoration of our oceans that can become bountiful once again with due care.

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THE CATCH SHARE PROGRAM

Fisheries Management Evolution

Human societies around the world have endeavoured to control fishing methods for centuries. Historically, various rules of fishing have been legally enshrined or informally recognised among different cultures around the world in furtherance of traditional spiritual beliefs, food supply, labour management as well as marine resource conservation. For example, during each fishing expedition, the traditional Maori of New Zealand return the first fish that is caught back to the sea as an offering to Tangaroa, the god of the sea, and, as a rule, they never take more than they can eat. In England, two fishermen were sentenced to death in 1583 for illegally using metal chains on their beam trawls which ironically are standard issue today. According to tradition in Fiji, when the village chief dies, a portion of the community’s fishing ground is set aside as a prohibited fishing area as a symbol of respect for the chief. After 100 days, the area is re‐opened and a feast with fish harvested from the re‐opened area is held in honour of the chief. The supernatural power attributed to the chief by the community residents will be measured by the abundance and size of the fish catch. Today in Fiji, as in many island nations, there are ancient fishing traditions that are consistent with modern fishery management methods, such as longer fishing area closures, to obtain results that comport with the national culture and economy.

As the meaning, methods and results of fishing practices have evolved, so too have fisheries management measures with the principal aim of providing food on a regular basis from finite natural resources using labour and technology long recognised to have far reaching effects on the economies of nations and the lives of those who depend on fish for their survival.

The principal aim of fisheries management measures, however, has clearly not been realised and the disappointing results are primarily due to overfishing. Overfishing is attributed to many factors, including the overcapacity of fishing fleets, fish catches that far exceed legal quotas, the underreporting of catches, the use of illegal methods such as dynamite fishing and spotter planes to indicate where schools of valuable fish are located, fishing during the closed season and in prohibited locations, fishing during the spawning season, large subsidies used to expand fishery capacity, improved fisheries technology providing access to previously inaccessible oceanic areas, and management measures routinely instituted in disregard of accredited scientific advice.

These factors have contributed to the dramatic decline of commercial fish stocks which have not been given the opportunity to reproduce at a rate that is equal to or greater than the rate at which these finite marine resources are being extracted from the sea.

A Vital Missing Component of Fisheries Management

Long‐standing fisheries management systems have endeavoured to employ time, volume and spatial controls in an effort to reign in overfishing and reverse the decline in fish stocks that is

C. Alexander & C.J. Alexander 4 SUSTAINABLE FISHERIES DEVELOPMENT even occurring in what were once considered the remotest and deepest parts of our seas; however, one vital component that has been missing from traditional fisheries management is a management tool that aligns fishermen’s economic incentives with marine conservation of natural resources on which fishermen’s income and long term employment are entirely based.

Under many of the traditional, fragmented global fisheries management systems, fishermen compete for a total allowable catch of certain commercially valuable species for which limits have been established. This causes fishermen to compete with one another in a race to catch as many fish as they can, as fast as they can, before the total catch limit is reached, often in disregard of stock depletion rates and spawning seasons that are crucial to fish species reproduction. This system results in increasingly shorter fishing seasons, industry overcapitalisation in which there are more boats and harvesting capability than available fish, higher rates of fishing gear loss, marine habitat damage and excessive non‐commercial as well as prohibited bycatch. As fish stocks decline, fishers are required to expend increasing amounts of capital and fishing effort in order to capture dwindling numbers of fish while incurring increased safety risks in the process. All too often, this system results in too many fish brought to market at one time, thus reducing the dockside market value to fishermen and the coastal fishing communities that are dependent on the success of this economic sector.

The industry has also been negatively impacted by the results of traditional fisheries management and has been unable to achieve optimal capitalisation, profitability and employment stability because the industry is required to process a disproportionately high volume of fish in the period of time corresponding to the shortened fishing seasons. This results in inefficient business peaks and troughs characterised by periodic excess capacity, overcapitalisation and unstable employment.

Incorporating the financial incentive to rehabilitate and protect the marine habitats and biodiversity on which commercial fishery productivity is based into the fishery management system has already proven to be a vital missing component of long‐standing fishery management systems and a management tool that will safeguard the future of the industry.

Requirements of A Well Managed Fishery

A well‐managed fishery industry needs:

1. a scientifically determined, fully enforced limit on the total number of fish caught and landed to ensure the long term sustainability of commercially valuable fish that are indispensable to fishery employment;

2. mitigation of bycatch ‐ the unintentional capture of non‐targeted fish species, cetaceans, pinnipeds, marine turtles, seabirds, invertebrates and other as well as the capture of non‐conforming specimens of targeted species prohibited from being caught during fisheries operations – in order to stem the loss of biodiversity and

C. Alexander & C.J. Alexander 5 SUSTAINABLE FISHERIES DEVELOPMENT

increase the biomass of juvenile specimens of targeted species, which collectively are essential for healthy, balanced and productive fisheries and marine ecosystems;

3. conservation of important marine habitats, especially those habitats that nurture fish reproduction and growth;

4. a registry of fishing vessels that are permitted to harvest certain natural marine resources and which are equipped with a system of automatic tracking and vessel identification to facilitate the exposure of illegal fishing vessels that undermine the economic profitability of the legal fisheries; and

5. adequate enforcement of fishing regulations to deter illegal fishing, unreported fishing and unregulated fishing which adversely impact the maintenance of sustainable fish populations on which widespread fishery industry employment depends.

The Catch Share Program provides a financial incentive and self‐funding mechanism to successfully incorporate these components in a well‐managed fishery. The Catch Share Program also inures to the sustainability of the very marine resources upon which fisheries depend and has been tested and proven to be successful since the 1970s.

Catch Share Conforms to EU Fisheries Aims

The Catch Share Program is a sustainable fisheries management system that has been successfully implemented in multi‐species as well as single species fisheries that utilise various types of fishing gear at depths down to 1,500 metres and more in vessels ranging in size from industrial capacity to artisanal in at least 35 countries around the world with an extremely wide range of marine biological, topographical and weather conditions including New Zealand, Australia, Canada, the U.S., Iceland, the United Kingdom, Norway, Sweden, Finland, Denmark, Latvia, Lithuania, Estonia, the Netherlands, Belgium, Portugal, Germany, Italy, Malta, Poland, Japan, South Africa, Namibia, Argentina, Peru, Chile, Vanuatu, Fiji, the Philippines, the Solomon Islands, Papua New Guinea, Bangladesh, Grenada, the Cook Islands and Mexico.

The Catch Share Program framework, to which the individual needs of any given fishing region can be supplemented, conforms to the aims of the Commission of the European Union which were publicly disseminated by the European Fisheries Commissioner on 19 January 2010 at the European Parliament in Strasbourg. The current aims of the European Commission are to:

1. reduce overfishing;

2. reduce industrial overcapacity;

3. increase fisheries revenues and profits;

C. Alexander & C.J. Alexander 6 SUSTAINABLE FISHERIES DEVELOPMENT

4. include rather than exclude fishers who represent all different types of vessels, such as trawlers, mid‐size vessels, coastal and boats, because each type of vessel serves a unique purpose in the diverse European marine territory;

5. develop employment stability and optimal capitalisation throughout the entire succession of fisheries industry sectors, especially including the fish harvesting and processing sectors;

6. address the needs of multi‐species and single species fisheries; and

7. modify the allocation of the €4.3 billion annual European Union fishing subsidies to conform to the current requirements, rather than the former outdated needs, of the fisheries industry.

In addition to satisfying the European Commission aims that are relevant to the criteria for a well‐managed, industry, the Catch Share fisheries management system provides supplemental benefits which:

• ensure supplementary and reliable fisheries regulation monitoring and enforcement funded by the Catch Share Program and not funded by the strained coffers of the public sector,

• include an available management tool to address the long‐standing concern of fishers whose nets are verifiably damaged by marine mammals that feed on fish caught in nets by making replacement nets available from the fishery management funds generated by the Catch Share Program and not the public sector,

• through periodic scientific fishery assessments as an inherent part of the fisheries management system, provide an evidentiary basis for the determination of credible financial and ecological damages that could be the subject of claims by commercial fisheries and/or public authorities in the event of an occurrence (e.g. oil spill) that harms the marine environment located within the fisheries management system,

• address the socio‐economic needs of those excluded from future participation in the fishery industry through a provision enabling such individuals once reliant upon commercial fishing for gainful employment to benefit through education, re‐training, employment opportunities and other social benefits funded by the private sector as part of the reform program and not funded by the public sector, and

• provide a basic operational and financial framework that may be consistently applied in a variety of European and other international fisheries while at the same time allowing for the addition of supplementary provisions tailored to the needs of each local or regional marine area by the regional management authority.

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As various nations and stakeholders around the world contemplate the future of the global fisheries industry which has been in a steady state of decline for more than a half century, it is hoped that the provisions, benefits and proven success of the Catch Share Program will generate ideas and discussions among government officials and stakeholders associated with unsuccessful fisheries management systems that will lead to the eventual development of a cohesive and sustainable multi‐national fisheries management system for the benefit of the global fisheries industry as well as the renewable natural marine resources on which the entire industry is reliant for its long term future.

Catch Share Program Framework

Origin

Beginning in the 1970s, a new approach to managing fisheries emerged most notably in Iceland, New Zealand and Australia through the development of the Catch Share Program, to which tailor‐made provisions that suit regional fishery industry needs are customarily incorporated. These early Catch Share programs were originally designed to improve economic performance following commercial fish stock depletions that threatened the fishing sectors of these nations’ economies.

Although the early programs were not initially focused on marine conservation, routine fish stock assessments conducted during the course of these programs revealed environmental benefits resulting from the program management. These assessments also highlighted the extent of the dependence of fishery value upon the conservation of natural habitats and marine ecosystems that are responsible for the production and development of the fishers’ products. Since then, marine habitat and biodiversity conservation has been recognised by many managers in the fishery industry as an important factor in fish stock recoveries and biomass development for the economic benefit of the fisheries.

After initial successes in Australia, New Zealand and Iceland, Catch Share Programs began to spread to other fisheries locations including Canada and the . The U.S. launched Catch Share Programs in 1990 and is currently accelerating the development of this fisheries management system. By December 2009, the U.S. had developed programs for 13 different commercial fisheries, with 5 new programs launched between January 2010 and January 2011, collectively accounting for almost one third of the total U.S. commercial fisheries value that was reported to be worth US$4.1 billion in dockside value in 2009. The successful results of these established programs have inspired the ongoing development of additional Catch Share programs for other U.S. fisheries, such as the Gulf of Mexico reef fish and king mackerel fisheries. On 10 December 2009, the U.S. National Oceanic and Atmospheric Administration, which is the agency responsible for the entire nation’s marine fisheries, released for public review and comment a draft proposal for a new national marine fisheries policy encouraging the use of Catch Share Programs which received bi‐partisan political support.

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The Catch Share Program is currently implemented in at least 35 countries throughout the Northern and Southern hemispheres in disparate locations hosting a wide range of marine biological, topographical and weather conditions such as New Zealand, Australia, Canada, the U.S., Iceland, the United Kingdom, Norway, Sweden, Finland, Denmark, Latvia, Lithuania, Estonia, the Netherlands, Belgium, Portugal, Germany, Italy, Malta, Poland, Japan, South Africa, Namibia, Argentina, Peru, Chile, Vanuatu, Fiji, the Philippines, the Solomon Islands, Papua New Guinea, Bangladesh, Grenada, the Cook Islands and Mexico.

Within many of these countries, use of the Catch Share Program has expanded as evidence of the program’s marine rehabilitation and fish stock enhancement capacities have demonstrated. For example, Denmark introduced the Catch Share Program earlier in 2003 under the name of the Individual Transferable Quota system for the Danish herring (Clupea harengus) fishery. Based on successful trials, the Danish extended the program in 2007 to include demersal fisheries and additional pelagic species such as mackerel (Scomber scombrus), horse mackerel (Trachurus trachurus), sprat (Sprattus sprattus), pout (Trisopterus esmarki), sandeel (Ammodytes marinus) and blue whiting (Micromesistius poutassou). Danish fisheries are comprised of various vessel types ranging from industrial size to small skiffs that utilise a wide range of fishing gear in the , the Skagerrak, the Kattegat and the Baltic Sea thus demonstrating the adaptability of the Catch Share fishery management system to a variety of species, fishing depths, locations and weather as well as sea conditions. By 2007, the value of Danish landings was in excess of US$450 million, 90% of which were under Catch Share Programs – 55% in pelagic and 35% in demersal fisheries.

Guaranteed Fishing Rights

A major benefit to fishermen under the Catch Share Program fisheries management system is the guaranteed right to access and land a fixed percentage of the total annual allowable catch in a prescribed fishery. This percentage is calculated by dividing the total allowable catch in a fishery into a number of shares. This guarantee under the Catch Share Program offers share‐ holding fishers, regardless of their size, the right to equitable and guaranteed participation in the fishery which does not exist under traditional fishery management systems.

Share Allocation

These shares are allocated by the regional governing authority having jurisdiction over fisheries to individual fishermen, cooperatives and/or fishing associations operating from registered fishing vessels. The allocations may be made in exchange for a fee that is relative to the value of the rights conferred or, in the alternative, at little or no cost to the initial recipients. The allocation of shares is usually based on historical participation in the fishery and may include considerations such as a record of compliance with fishery regulations, length of time in the business, fishery dependence, proficiency, and/or business infrastructure.

Some Catch Share Programs have been designed to allocate shares for the socio‐economic benefit of those who do not receive initial share allocations but have been historically

C. Alexander & C.J. Alexander 9 SUSTAINABLE FISHERIES DEVELOPMENT dependent upon fishing (e.g. native Inuit communities), which is discussed under Socio‐ Economic Impacts of the Program.

Share allocations do not only occur at the launch of the Catch Share Program. New shares may be allocated periodically throughout the program for various reasons. One reason may arise if the fishery biomass has expanded significantly and the program management decides to issue new shares rather than increase the Total Allowable Catch (TAC) for existing share holders or allow the biomass expansion to continue without the issuance of new shares or an increase in TAC.

Share Value Corresponds to Fishery Value

The value of the shares directly corresponds to the value of the fishery which is determined by the health, reproductive capacity and volume of the targeted species biomass which must be periodically assessed by accredited scientific experts. As the biomass increases, the share value increases along with the prospects for increasing the annual total allowable catch, boat yields, fishery revenues and profitability.

Transferability of Shares

Catch Share Programs are designed to be inclusive rather than exclusive by facilitating the permanent transfer of shares as well as the short‐term transfer of share holder rights through share sales, assignments, leases and other measures to allow new participants in the fishery and to accommodate business needs that arise due to unexpected vessel repairs, share holder illness and other causes.

Shares are usually actively traded on the open market. In the case of the Icelandic Catch Share Program management which officially began on a trial basis in 1984 and became permanent law in 1990, the Ministry of Fisheries and Agriculture reported that 85% of the initial allocated shares had been transferred by 2008 demonstrating the free market access to Catch Share fisheries and repudiating the claim by critics that Catch Share Programs promote exclusivity.

Program Management

Share owners pay for the full cost of the management of their fisheries on a proportionate basis. Two vital components of the program management are regular scientific assessment of the fishery to establish total allowable catch limits and enforcement of program regulations, including observers on boats and monitors at landing locations. Fees allocated to program management, often referred to as cost recovery fees, can be derived from various sources such as the assessment of a percentage (e.g. 2‐3%) of the ex‐vessel (dockside) value of the fish landed by the share holder or the assessment of a transfer fee when shares are sold or share holder rights are transferred on a short term basis.

The theory behind the assessment of a percentage of the dockside value of the fish landed by the share holder is likened to companies that pay royalties when they harvest timber or extract

C. Alexander & C.J. Alexander 10 SUSTAINABLE FISHERIES DEVELOPMENT minerals by mining on public land. Royalties or fees are paid in proportion to the quantity of the public resource extracted. One important responsibility under public resource management is ensuring the continuing existence, rather than permitting the depletion, of the resource on which the entire industry is based. As fisheries represent a renewable resource extraction industry, fisheries under the Catch Share Program also pay for the management and enforcement costs associated with the responsible and sustainable extraction of the renewable public marine resource that has commercial value.

Enforcement of the Catch Share Program regulations by the program management does not supplant or obviate the need for the enforcement of national maritime laws by government agencies, the responsibilities of which are distinct and complementary rather than conflicting.

Single and Multi‐Species Fisheries Application

The Catch Share Program can be implemented in single as well as multi‐species fisheries for which the governmental authority having jurisdiction establishes catch limits for the protection of natural marine resources to prevent their depletion or extinction.

Worldwide, there are more single species than multi‐species Catch Share Programs; however, there are far more species under multi‐species programs than under single species programs.

Most fisheries encounter multiple, biologically‐distinct fish stocks. Many Catch Share fisheries distinguish between different stocks and successfully account for this by establishing stock‐ specific catch limits and quota allocations. This provides managers with a greater ability to ensure the sustainability of each stock. The spatial range for a Catch Share Program can be customised and is usually related to species and stock boundaries determined to a great extent by the marine habitats and ecosystems which the relevant fish stocks inhabit.

Improved Fishery Business Planning

The program allows the fishermen to know in advance exactly how much fish they are permitted to take in a given season or period of time. As the share owners are guaranteed the right to harvest a percentage of the total allowable catch each year, they have a direct financial stake in the health, maintenance and value of the current and future fishery which, along with program penalties, motivates fishermen to adhere to and not exceed annual catch limits.

Reassured by their right to secure a percentage of the total allowable catch, fishermen in the program do not need to undertake excessive risks by racing to catch fish. This program allows them the opportunity to better plan their fishing schedules in response to weather, market, employment, natural resource and individual business conditions.

Penalties for Exceeding Total Allowable Catch

Under the Catch Share Program, if fishermen were to exceed their share of the catch, which would likely be disclosed by program monitoring and enforcement, they may be required to

C. Alexander & C.J. Alexander 11 SUSTAINABLE FISHERIES DEVELOPMENT purchase an additional quota on the market to compensate for the amount by which their catch exceeded their quota. If additional quotas were unavailable, they may have to pay heavy financial penalties and/or lose their access privileges for this infraction.

One of the most distinguishing features of this unique fisheries management system, which embodies a new and more reliable dimension of enforcement that does not exist under traditional fisheries management, is that fishermen become active partners in enforcement to protect their share values as opposed to being just bystanders.

Maximising Long Term Fisheries Value

With a direct stake in the overall health of the fishery, the fishermen shift their incentives from maximising short term volume to maximising long term value. It is widely known that under traditional fishery management schemes, the entire annual quota of permissible fish catches is usually landed in a short period of time leading to a temporary oversupply of fish and resulting low prices. The alternative Catch Share Program method of fisheries management, whereby there is a limited number of fishermen with unimpeded access to fish their share of the overall quota, allows fishermen to more effectively and safely plan their season, optimise the amount of gear deployed, reduce the amount of lost fishing gear and , deliver better quality fish during more months of the year at a price corresponding to market demands, and remain on shore during unsafe conditions. These benefits contribute to increased revenues and improved production as well as cost efficiency which impact annual profits, share values and the overall fishery value.

Improved Product Quality and Consistency of Supply

The assurance of access to a given quantity of catch each year allows share owners to focus on market needs and consumer preferences which centre on a quality product available throughout much of the year. Improved product quality and consistency of supply traditionally generate higher market returns. These features are more readily achieved under Catch Share Programs and, therefore, offer share owners an advantage over competitors in traditional fishery management systems that produce cyclical supplies of a product.

Contrary to traditional fishery management systems that unwittingly promote a race for fish and generate an annual glut of fish harvests and landings, the Catch Share Program facilitates more regularised landings throughout an expanded fishing season. This results in increased fish quality and increased processing product recovery, which is the percentage of fish used in the final product, as a result of better handling. Under this program, more fish remain intact, and there is less product crushing, bruising, spoilage and dismemberment associated with many traditional fisheries management plans that require expedited handling of excessive volumes of fish in unreasonably short periods of time. The result is improved product quality affecting product value and price that factor into the earnings of share owners and the value of a fishery.

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Financial Interests Aligned with Marine Conservation

If the fish population in a fishery is allowed to recover and therefore increases, there will be more commercially available fish which renders the fishery more valuable for each of the share owners. As a result, the shares increase in value, giving fishermen a continuing financial interest in preserving the health and reproductive capacity of the targeted commercial wildlife and the marine ecosystems within which they are nurtured. If the conservation status of the fishery remains static or declines, the share values will reflect this marine condition to the financial detriment of the fishers who own these shares.

Share owners in the program need healthy, sustainable fisheries in order for their shares to appreciate in value much like shareholders of a company need the business to excel so that their company share values increase. Landing and discarding an unsustainably high rate of unmarketable species, purchasing excess fishing gear to accommodate an abbreviated fishing season and devoting unnecessary time in deploying the excess fishing gear are expensive to fishermen, and these additional costs can be avoided under the Catch Share Program. As costs directly relate to the profitability and value of a fishery, these avoidable expenditures become an important consideration when selecting a fisheries management system.

Government Perspective and Program Rationale

The Icelandic government perspective and legislative intent underlying the nation’s fisheries resource management conversion to the Catch Share Program model are representative of the shared aims and concerns of many of the other national governments that implement various forms of the program.

In 1975, the Icelandic government spearheaded a new approach to fisheries management when it first allocated fish catch quotas for lobster, shrimp, shellfish, capelin and herring on an experimental basis at a time when the impacts of overfished Icelandic fish stocks began to have a noticeable effect on the Icelandic economy. Fish catch quotas, with each quota specified as an unchangeable percentage of the annual total allowable catch of a fishery which is variable depending on the fish stock population, were allocated on the basis of historical fisheries participation. The government subsequently compared the fisheries management effectiveness of this new quota allocation system with the previous “effort restriction system” in which fishermen with permits were restricted to fishing on certain days with certain catch limits imposed. As a result, the “effort restriction system” was abolished in 1990 in favour of a permanent Catch Share system “to lay a foundation for efficiency and rational utilisation of fish stocks so that maximum returns might be derived from the country’s fisheries resources for the benefit of the community as a whole”. Enacting legislation decreeing the structure and permanence of the new Catch Share system was deemed necessary for industry decisions on investments and other long term considerations. Periodic government evaluations based on fish stock assessments, fisheries agreements with other states, fish processing efficiency, fishing

C. Alexander & C.J. Alexander 13 SUSTAINABLE FISHERIES DEVELOPMENT industry performance and profitability concluded that the Catch Share system was to be continued. (For further information, please refer to the Icelandic Fisheries Case Study.)

Restraints on Catch Share Program Growth

By May, 2009, 2% of the world’s fisheries operated under Catch Share Programs; however, with the establishment and ongoing development of new programs, such as in the U.S., this figure is rapidly rising. Despite the tangible benefits experienced by fishermen in Catch Share Programs, certain issues must be adequately addressed in the framework of each individual program to facilitate the program’s government approval and community support. These issues primarily concern the method of allocating initial shares, the mitigation of socio‐economic impacts associated with conversion of a fishery from unsuccessful but long‐standing traditional fisheries management to a Catch Share Program management, the longevity of the rights to the fishing quota and share owner restrictions.

Experience has demonstrated from the evolution of early Catch Share Programs that these concerns can largely be addressed by program rules that (i) promote inclusive rather than exclusive share allocation methods, (ii) prevent concentration of share ownership by placing a limit or cap on ownership; (iii) facilitate share transfers, short term share holder rights and inclusive fishery participation through buying, selling, quota leasing and other provisions; and (iv) create community development programs by distributing shares directly to communities that are most affected by a fisheries management conversion to a Catch Share system, thus enabling the most affected residents to benefit from the annual cash earnings derived from the communities’ fish catch quota for education, re‐training, new employment and local investments.

Issue Re: Public Resource Privatisation

To those who assert that some Catch Share Programs constitute the privatisation of a public resource, the assertion becomes arguable under the broader issue of whether the private sector harvest, consumption, use and/or other exploitation of natural terrestrial and marine public resources under government custody and control (e.g. logging, mineral extraction, livestock grazing) constitute a legitimate transfer from public/government control or ownership to private enterprise and for which adequate compensation has been made.

In response to critics who claim that share allocations under many Catch Share Programs are permanent and deprive the state of a public asset, one government (Iceland) has argued that the guaranteed possession of the right to the annual fishing harvest under Catch Share Programs that remain unchanged from year to year (a) is not inviolable and can be cancelled or changed by law [based on Iceland Supreme Court Case No. 12/2000, page 1534, in re: Vatneyri] and (b) constitutes a legitimate right to the extraction of a natural renewable public resource over which the government has management authority and control in exchange for commensurate compensation to the government as representative of the public that collectively owns the public resource. Denmark has adopted a similar position with the issuance

C. Alexander & C.J. Alexander 14 SUSTAINABLE FISHERIES DEVELOPMENT of shares that have no expiration date and offer guaranteed harvest rights and a percentage of the annual Total Allowable Catch but which are subject to revocation by the government upon 8 years’ prior notice.

Results of Catch Share Programs

Catch Share Programs have been implemented following failures with traditional open access and limited access approaches which inevitably led to overcapitalisation, overcapacity and overfishing. The results of Catch Share Programs have been documented in reports of studies conducted in single and multiple species fisheries in the Northern and Southern Hemispheres that utilise a range of fishing gear types at various depths to target certain fish or other seafood species.

From a global perspective, researchers from the University of California, Santa Barbara and University of Hawaii compiled a global database of 11,135 fisheries including information about the management of each fishery and catch statistics for the period covering 1950‐2003. They evaluated the performance of 121 worldwide Catch Share Program fisheries against the results of traditional fishery management systems. In the September 2008 report “Can Catch Shares Prevent Fisheries Collapse?”, the researchers concluded that when a fishery had relied on traditional methods, such as seasonal limits or overall catch restrictions, and then subsequently converted to the Catch Share fisheries management system, the conversion did not just slow the fishery’s decline, but, instead, the new management system stopped and usually reversed the decline as marine resource conservation became increasingly apparent. The report states in pertinent part that the “implementation of Catch Shares halts, and even reverses, the global trend towards widespread [fisheries] collapse”. Dr. Christopher Costello, the lead author, noted that the security provided to a from his ownership of a guaranteed percentage of the annual total allowable catch changes the dynamics of fishing where “profits are driven by sustainable fish populations”.

The socio‐economic results derived from Catch Share Programs are delineated under Specific Proven Results while detailed results from the conversion of certain global fisheries to Catch Share Programs, including performance measures and statistics related to full time employment, revenues, profits, boat yields, discards, bycatch, fishing season extensions, human safety indices, fishing gear deployment and other gauges, are cited in representative Case Studies from both hemispheres.

Specific Proven Results

The results of well‐designed Catch Share Programs have conclusively demonstrated that:

1. compliance with total allowable catch regulations improved as more fish catches were recorded within the required limits and, in some cases, the catches were as much as 5%‐ 10% below the limits imposed;

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2. monitoring was improved which provided a more accurate assessment of catches and bycatch;

3. the precision with which fish populations and stock biomass were estimated noticeably improved, leading to the establishment of more accurate sustainable catch limits;

4. bycatch of non‐commercial species was significantly reduced, in some cases by up to 50% such as in the Alaska sablefish fishery, and discards of commercial species that are prohibited from being landed were reduced, in some cases by more than 40%;

5. natural habitat damage was noticeably reduced;

6. higher quality fish resulted from better handling;

7. fishing safety improved, in some cases by more than 100%, based on indices of vessels lost, lives lost, search/rescue missions deployed and recorded safety violations;

8. profits increased as expenditures were better managed while revenues per boat generally increased due to higher and better quality targeted yields and higher dockside prices resulting from more regularized rather than cyclical landings;

9. a higher percentage of fishermen were employed full time and worked under generally improved working conditions; and

10. active fishing seasons expanded from “racing” periods (such as the Alaskan crab fishery that was reduced to 2‐3 days of non‐stop fishing per year before the Catch Share Program) to longer seasons that have eliminated the “boom and bust” cycle of fish deliveries which, in turn, has stabilised market prices.

Catch Share Programs are designed to prevent overfishing and, instead, develop sustainable fishing practices for the long term. These beneficial programs have also been shown to aid in rebuilding the populations of depleted fish species. Studies have revealed that Catch Share Program fisheries generally deployed less fishing gear, in some cases by 20%, to catch the same quantity of fish as non‐Catch Share Program fisheries. In addition, less fishing gear was lost resulting in a savings to fishermen as well as a reduction in ghost fishing gear that continues to entrap and drown marine life for years after its loss. For example, in the Alaska fishery, ghost fishing gear was reduced by 80% following the establishment of the Catch Share Program in 1995.

As the program focuses on maximum sustainable yields and optimum share values, share owners have become more motivated to learn about conservation measures, such as fishery closures, and invest in improved fishing gear that maximises fishing efficiency and minimises bycatch.

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As the health of a fishery improves from reduced habitat damage, reduced due to lower bycatch rates and increased stock biomass which corresponds to increased fishery yields, the realisation of sustainable fisheries characterised by stable employment and environmental conservation develops as a result of the improved care with which the fishery is treated by those whose long term future is connected with committed program implementation.

Conversely, however, the share owners will directly bear the economic as well as social costs of the potential loss of fishing privileges, financial penalties and reduced future opportunities in the event and to the extent that fishers exceed their limits, damage the environment or fail in any other way to conform to the program aims and requirements on which healthy fish reproduction for the entire group of share owners depends.

Diverse Aims and Management Tools

While improved economic performance is a universal aim of fisheries, different fisheries may also include a variety of additional aims, management tools or other considerations in the design of their programs. Some fisheries may want to ensure a diversity of fleet structure and capability (e.g. off‐shore fish processing) or preserve the current owner‐operator fleet structure and variety, while others may want to invest in community development (see Catch Share Program Mitigation Measures), promote the sustainability of their fishery products or expand the number and types of participants in a limited share program.

One example of a Catch Share Program management tool that can be tailored to specific fisheries or regions is a program provision that could replace nets that are damaged by marine mammals that feed on fish caught in nets. Fisheries in the Aegean Sea are among those adversely affected by this persistent problem. A Catch Share fishery management system can provide that the financial contribution of share holders to the program management (which is usually based on a very small percentage of the dockside price of the landed fish along with share transfer and share rights transfer fees) will be calculated to include an allocation of funds held in a reserve account specifically for the replacement of nets that are verified as damaged by marine mammals such as dolphins and seals. Offering replacement nets, rather than cash, funded by the fisheries management program for verified cases by a management authority that can secure a “best price” for such nets would reduce the marine mammal/fishers conflicts that have contributed to the decline in the conservation status of many threatened marine mammal species such as the Mediterranean monk seal (Monachus monachus) and short‐beaked common dolphin (Delphinus delphis). As this program provision would be managed by the local/regional fisheries management program authority rather than a national agency, the verification of marine mammal net damage and net replacement could be processed faster and more efficiently than if a complainant were to apply to a national authority for any available restitution.

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Another available Catch Share management tool is one designed to promote the fisheries’ products to wholesalers, retailers and consumers by capitalising on and advertising the responsible means that are used to achieve the sustainability of the fishery. For example, according to the New Zealand Seafood Industry Council Ltd., “in 2007 the Minister of Fisheries allocated more than $4 million to securing sustainability certification for New Zealand’s entire fisheries. This demonstrates the government’s high level of confidence in the Quota Management System [i.e. Catch Share Program] and the long term sustainability of our fisheries.” This action supports the shareholders who in turn, through their fishery transactions, financially support the Catch Share Program management.

New participants can be introduced into the Catch Share Program by several management methods relating to share transfers between existing owners, or between existing owners and new buyers, or the allocation of new shares from a reserve account. Another method of expanding program participants can be created through the reductions of discarded, non‐ conforming commercially targeted fish that are prohibited from being landed. This uncaught biomass in a Catch Share Program, which is lost to a fishery in excessive quantities in many traditional fishery management systems, may become available for allocation to new program participants by the Catch Share Program management. As an alternative, this uncaught biomass, the amount of which is subject to reasonable estimation, may instead be allocated back to the existing shareholders or it may be determined that the retention of this biomass in the fishery will promote faster species rehabilitation and growth in the sector, thus improving the market value of the fishery and the fishery shares.

In the case of the New Zealand rock lobster fishery, fishermen aimed to improve biomass over the long term by voluntarily reducing short term catch quotas. Fishermen reduced their catch level to 50% of historic levels which was also 15% below the scientifically recommended total allowable catch level. This decision by the share owners resulted in a doubling of rock lobster biomass within ten years and consequently increased the fishery profitability, fishery value and value of the program shares which are directly related.

Catch Share Programs can be designed to meet the needs of individual fisheries through other management tools, including innovative share allocations that may be limited to active fishermen or open to other participants; share trading rules that can limit ownership concentration yet facilitate reasonable transfers; monitoring; enforcement of total allowable catches, the unlawful catch of non‐conforming (e.g. under‐sized) target species and landing regulations; and community support instruments such as share allocations to residents in need.

Certain well‐managed Catch Share Program fisheries utilise biomass and ecosystem protection tools such as sustainable fisheries certification requirements, and time, seasonal (e.g. spawning season) and/or area based closures. Bycatch management in many programs often specifies the type of fishing gear to be employed (for example, to allow turtles, sharks and other large marine animals to escape) or the conditions under which the gear can be used. These strategies are undermined when fishermen are pressured to catch as many fish as they can as fast as they can

C. Alexander & C.J. Alexander 18 SUSTAINABLE FISHERIES DEVELOPMENT in fisheries without a Catch Share Program. In the Catch Share Program, however, by aligning financial incentives with conservation techniques and employing bycatch quotas, discards have generally been reduced by more than 40% in many fisheries which facilitates the development of the stock biomass and rehabilitation of fisheries that had previously suffered under traditional management systems.

Catch Share Programs may contain provisions related to the right to assign part or all of the fish catch quotas to facilitate the transferability and full implementation of share quotas, program participation (rather than exclusion) and business planning. For example, in some Catch Share Programs, it is permissible for one to pay a share owner for the temporary right to harvest and land a limited amount of the quota belonging to the share owner, often on a marginally costed basis. The share owner may be motivated to enter into such an agreement for any one of a variety reasons such as unexpected illness, emergency vessel repairs or the possible sub‐optimal fish production and/or cost efficiency of his or her business which may alternatively be possessed by another party to whom harvest rights are assigned, whereupon both have an opportunity to profit from the assignee’s harvest of a part of the share owner’s catch quota without the share owner’s sacrifice of his or her shares.

Preferred Market Access

With growing consumer awareness, environmental leads to preferred market access. Catch Share Programs with sustainable fisheries certification requirements, certifying that the fish were captured using sustainable methods, are increasingly benefitting from the growing demand by consumers and retailers for sustainably caught fish, demonstrating the value that can be created by a demand‐side mechanism that elicits participation and support from consumers. This program component, when used, enhances environmental stewardship on the part of share owners and offers the potential for even greater economic share value as consumer awareness expands concerning sustainable fisheries and their contribution to fisheries and marine habitat rehabilitation.

As an example of the impact of the demand‐side mechanism, since 2011, all wild‐caught fish and seafood available for sale at more than 4,500 retail stores belonging to members of the Dutch Association of Food Retailers, including Albert Heijn, Laurus, C1000, Super Unie and Super de Boer, that serve 16 million consumers in the Netherlands are supplied by sustainable fisheries that are certified to the Marine Stewardship Council environmental standards. This decision reflects the growing social responsibility demonstrated by consumers and recognised by retailers which sends a strong message to the global fisheries sector that products from certified, responsible fisheries will have increasingly preferred market access.

On 31 August 2009, the Danish Fishermen’s Association announced that by 2012, all fish and seafood from Danish fisheries will be certified by the standards established by the Marine Stewardship Council. As 90% of the Danish‐landed fisheries value in 2007 was derived from Catch Share Programs, this announcement reflects increasing recognition by fishery industry

C. Alexander & C.J. Alexander 19 SUSTAINABLE FISHERIES DEVELOPMENT producers that wholesale and retail purchase decisions in support of sustainable fisheries are fast becoming an important guide to the fishing gear and methods selected by fishermen who are being held increasingly accountable for their actions which can denigrate or contribute to the rehabilitation and conservation of our marine environment.

In another example, many successful United Kingdom retailers such as Sainsbury’s, Marks and Spencer and Prêt a Manger sandwich chain purchase their tuna exclusively from sustainable tuna fisheries that specifically employ the rod and line fishing method rather than alternative, higher yield fishing methods that also capture an unsustainable level of non‐targeted species. In 2010, the American retailer Whole Foods Market, which began partnering with the Marine Stewardship Council in 1999, launched its Wild Caught Seafood Ranking System which is a rating system to inform consumers about the seafood harvest sustainability practices concerning the seafood in each package that is being rated and sold by the market. These retail decisions were prompted by the growing demand of consumers who source their seafood purchases and want to conserve marine resources and the environment.

Globally, between April 2008 through March 2009, the world market for eco‐labelled grew by more than 50%, attaining a retail value of US$1.5 billion and demonstrating the growing demand for products derived from sustainable fisheries management and practices.

The Catch Share Program framework is well equipped to capitalise on the growing concept of creating and managing sustainable fisheries to satisfy consumer demands and protect the environment from which the fishery industry products originate, both of which contribute to higher fishery values and biodiversity maintenance that satisfy economic needs and social responsibility tenets.

Wide Range of Actions Funded

Catch Share Programs fund a wide range of actions that are not available in traditional fisheries management. The organisation of share owners into a single cooperative management system allows the owners to collectively engage in a range of beneficial actions that improve resource management such as detailed, independent fisheries research; strategic and fisheries planning; dispute resolution; and the promotion of relations with other (non‐share owner) stakeholders who have an interest in these fisheries. The Catch Share Program management can provide and maintain a direct dialogue with government officials at all levels, especially as the share owners and the government have a common aim to develop profitable and sustainable fisheries with as much full time, stable employment as possible.

Distinction Between Share Holders and Union Members

Some have inquired whether membership in a fishery union provides the same benefits as share ownership in a Catch Share Program, thus rendering Catch Share Programs redundant in locations with fishery union representation. The rights, responsibilities and roles of share owners are distinguishable in several ways from the rights, responsibilities and roles of union

C. Alexander & C.J. Alexander 20 SUSTAINABLE FISHERIES DEVELOPMENT members who are not share owners. Union members traditionally (i) remain as competitors in harvesting fish whereas share owners no longer have to compete with each other in fishing; (ii) do not collectively self‐impose and enforce specific management measures that are consistent with and supplement national fishery regulations, enhance the fishery value, permit the conservation and growth of fish stocks, and contribute to the protection of marine habitats and biodiversity; (iii) possess temporary, non‐ownership access rights to fish subject to the availability of annual total allowable catches rather than guaranteed and transferrable fishing rights to a fixed percentage of the total allowable catch; and (iv) do not directly fund a regular, independent procurement and analysis of extensive scientific data to assess stock biomass, age, growth rates, boundaries, available yields, habitat/ecosystem conditions and recommended sustainable catch limits.

Socio‐Economic Impacts of Program

The negative, socio‐economic impacts of a conversion from a traditional, fisheries management system to a Catch Share Program are manifested in the overall reduction of fishing crew positions, reduced capitalisation of the fishery through the elimination of fishing boats and gear as well as modifications to the capacity and equipment of remaining fishing boats, employment restructuring within the fish processing sector, alterations in the provision and transport of relevant supplies used in the industry, and the elimination of poorly managed and inefficient fishery related operations. These impacts, however, can be significantly mitigated by the private sector through the Catch Share Program itself and the public sector.

Catch Share Program Mitigation Measures

A well designed Catch Share Program is one that embodies measures within its framework to mitigate the social and economic impacts of a fishery conversion from a traditional fishery management system to a Catch Share Program, provided that these measures relate to the specific history and culture of the affected communities. Tailor‐ made, these mitigation measures then have a realistic prospect for assisting those individuals and businesses most affected by the conversion.

Some Catch Share Programs assess fees during auctions of additional share quotas or levies on capital gains derived from the transfer of shares that have appreciated in value as two potential sources of funds used to mitigate the financial impact on those whose jobs were made redundant following the conversion of a fishery management system to a Catch Share Program. One Catch Share Program was structured in a way to provide loans to former regional fishermen for the purposes of professional re‐training or developing a new business.

A recent trend, however, reflects the modern design of a Catch Share Program to include broader, long term community development measures. Some of these measures in established Catch Share Programs have been proven to generate short as well as medium term benefits through the creation of educational as well as employment

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opportunities and investment in the construction and maintenance of fisheries infrastructure. The implementation of these measures also facilitates community acceptance and support of the Catch Share Program and reduces the inevitable resistance that arises from social and economic changes. Since these Catch Share Programs are relatively new, long term benefits are not yet capable of assessment.

One private sector example is the Alaska Community Development Quota (CDQ) program launched in 1992 to mitigate socio‐economic losses resulting from the fisheries’ conversion to Catch Share Programs. The CDQ successfully established a viable presence in the capital‐intensive Bering Sea fisheries for those who were disenfranchised by the conversion. To achieve this, the CDQ allocates a 7.5% quota of the annual total allowable catches in the Bering Sea fisheries to certain affected Alaskan communities that have historically been heavily reliant upon fishing. The CDQ program requires the earnings from the harvest of this quota to be invested in fisheries‐related industries, fisheries infrastructure and education. Since the Bering Sea fisheries are highly industrialised and in order to maximise earnings from the allocated fish quota given by the program, the communities entered into partnerships with established corporations to participate in the annual fisheries.

The CDQ program, which is now a permanent program, first allocated a quota of pollock to the designated participating communities. This was followed by halibut, sablefish, crab and groundfish species, including Pacific and other flat fish, as the region’s Catch Share Programs expanded. There are stringent requirements to be met by the share owners including weighing catch at‐sea, data reporting and the presence of on‐ board observers.

A performance evaluation of this CDQ program demonstrated that each of the six groups into which the participating communities were divided, targeted and improved job creation and training for their residents. In addition, the residents viewed the program as providing their communities with more control over their own destinies.

One noteworthy criticism of the CDQ program was the restriction on earnings investment in fisheries‐related development which can, in some cases, defeat a general community development aim of expanding educational and economic opportunities to more diverse economic sectors in order to reduce a disproportionately high reliance on any one sector, such as the fishing sector.

In addition, while this CDQ program was praised for having addressed the needs of economic development in its required measures, the program reportedly missed an opportunity to educate the communities about the need for stakeholders to ensure the economic sustainability of their investment earnings through the conservation of the natural resources on which the fisheries and their investment earnings entirely depend.

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Another criticism of the CDQ program was the lack of consistent, open communication between the community representatives and the residents themselves. The performance evaluation noted that there were insufficient mechanisms capable of providing substantial input by the residents concerning the application of the earnings investment criteria, means and methods as well as other features of the community development program governance. These deficiencies can be overcome by amending the Catch Share Program provisions as noted by the performance evaluators.

Overall, however, evaluations of this and other community development programs within Catch Share fishery management systems have been positive due to the private sector safety net provided to many individuals who otherwise would have had to rely upon regional, government‐funded employment and financial support services during and perhaps for some time after the fishery management transition to one or more Catch Share Programs. The safety net is provided by direct participation in education and employment training as well as a permanent stake in the value and earnings of the fisheries rather than social subsidies without alternative employment opportunities to those most affected. Equally important is that these particular community development programs have the potential to raise public awareness of the need for marine conservation, are known to develop public support for Catch Share Programs, and allow the continuation of the important role that fishing plays in a fishing community’s history, culture and traditions.

Public Sector Mitigation Measures

Public sector assistance to mitigate the impacts of conversion to Catch Share Programs can be accomplished by allocating a portion of the global US$30‐35 billion of annual fishing subsidies, of which €4.3 billion (Euros) represent annual European Union subsidies, into accounts that would serve as compensation for the elimination of any fishing licences that would no longer be re‐issued due to the allocation of Catch Share Program shares, the decommissioning of previously used fishing boats and gear, required adjustments to seafood processing industry employment and capitalisation, the offer of early retirement and employment retraining.

Re‐directing a portion of these subsidies away from the current policies of expanding and upgrading fishing capacity that lead to overfishing and toward mitigating the social and economic impacts of down‐sizing the would not financially impact the subsidy payors because the amount of these subsidies has regularly been politically supported, approved, budgeted and paid. The subsidy recipients as well as the amount, aims and targets of the subsidy payments would have to be adjusted to conform to the retirement and retraining of certain industry workers and the removal of capital assets; however, the over‐arching and long‐standing aim of the fishing subsidies, which has been to financially assist fishermen and other fishery industry workers, would remain unchanged.

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In this way, the long overdue restructure of worldwide fisheries subsidies can contribute to production efficiency and mitigate natural resource damage in an economic sector that no longer corresponds to the original industry framework for which the subsidies were initially designed decades ago.

Economic Adjustments Enhance Industry Stability

Conversion from a traditional fisheries management system to a Catch Share Program has been proven to stimulate enhanced fishery industry stability in the long term. Within the seafood production industry, fishers represent the first in a long succession of industry workers whose jobs range from seafood harvesting through processing, inspection, packing, transportation, fuel and ice provision, seafood sales and preparation as well as wharf services and maintenance.

During recent decades, as fishers have increasingly raced for fish among dwindling fish stocks and many commercial fishing seasons have been reduced from months to just weeks or even days, many businesses such as onshore and offshore seafood processing plants have increased their capitalisation and processing capacity to accommodate the sporadic gluts of fish which are landed and require expedient processing in a short period of time. Many of these enterprises have, therefore, not been able to provide secure employment during most of the year but, instead, have had to rely on part time or short term personnel, which has created instability and uncertainty in this particular labour market.

Under Catch Share Programs, the length of various fishing seasons has extended, and landings have become more stabilised with a more manageable volume in each landing, thus reducing the amount of required processing capacity at any one time by as much as one half in certain fisheries. If Catch Share Programs were introduced, adjustments would be required for these overcapitalised businesses in order to ensure that the business infrastructure and labour resources correspond to the expected changes in seafood delivery volumes and landing schedules. It is inescapable that these adjustments will inflict losses upon some and create opportunities for others; however, once they are made, the lengthened fishing seasons, expected seasonal volumes, expanded landing and delivery schedules and increased full time employment hours can provide more employment stability and security in the industry as illustrated in the Case Studies.

For fishery industry businesses that have not required seasonal overcapitalisation, adjustments to accommodate the projected volume and landing periods of fish and other seafood under Catch Share Programs can be made with less difficulty and business disruption yet with the same prospect for enhanced employment stability.

Economists have recognised that the initial employment loss and re‐organisation associated with a fishery’s conversion to a Catch Share Program are counter‐balanced by the creation of more full time employment positions with enhanced stability and security for those jobs that remain. In the U.S./British Columbia Fisheries Case Study, the jobs that remained following conversion transitioned into stable positions with much better working conditions and little or

C. Alexander & C.J. Alexander 24 SUSTAINABLE FISHERIES DEVELOPMENT no change in total working hours in the fisheries. The improved working conditions under Catch Share Programs have been reflected in the reduced pressure associated with intense competition to maximise fish capture volumes in the shortest possible time period, reduced sleep deprivation, reduced risk of injury and death, and reduced physical stress from a decrease in the intensity of the extended hours of activity previously associated with the former race for fish.

The decline in global commercial fish stocks over the past two decades has in itself contributed to a significant loss of fishing industry employment positions. In Greece, for example, the number of fishermen employed in the industry between 1997 and 2006 declined by 34%. The decline in U.S. Pacific Northwest stocks from overfishing eliminated 72,000 fisheries jobs, and the collapse of the Newfoundland cod industry precipitated the loss of 41,000 jobs and the loss of $350 million to the New England economy alone. As a result of continuing, world‐ wide fisheries mismanagement, socio‐economic losses are unfortunately expected to continue due to unabated overfishing practices irrespective of any conversion to Catch Share Programs; therefore, the prospect of employment losses associated with the establishment of Catch Share Programs cannot serve as a justifiable deterrent to their implementation.

Common Problems

Some of the most common problems associated with Catch Share Programs are under‐reporting landing weights, mis‐labeling species, highgrading (in which sub‐optimal fish permitted to be landed are returned to the ocean where they usually die thus reducing the biomass and reproductive capacity of the targeted species), landing at a location other than the location given in the landing notice and landing in advance of the expected arrival which impact the program monitoring and enforcement. Illegal fishing continues to be cited as an external problem that requires active cooperation between share owners and government agencies, including port authorities and the coast guard.

Aspire to Manage Abundance, Not Scarcity

A growing number of experts support the wider introduction of the Catch Share Program as a successful model upon which to base a sustainable fisheries policy that would ensure more responsible management of natural marine resources on the part of fishers by aligning the fishers’ financial incentives with natural resource conservation and management.

The Catch Share Program is consistent with the World Bank advocacy of the removal of open and easy access to finite natural fish resources, the strengthening of fishing rights for fishers and fishing communities to provide incentives for fish stock sustainability and good environmental stewardship, the reduction of fishing subsidies that lead to overcapacity, the engagement of public support to develop a sustainable , the creation of social safety nets through training for alternative livelihoods and better enforcement of fisheries regulations to reduce illegal fishing and unreported fishing as well as overfishing.

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Under the Catch Share Program, many threatened, commercially valuable fish species have an improved opportunity to recover for the benefit of world , the global fishery economy and biodiversity protection. It should be our aspiration to manage abundance, not scarcity.

Case Studies

Internationally, fishery management programs structured under a Catch Share Program framework exist under various names such as Individual Transferable Quota (ITQ) Programs and Limited Access Privilege Programs (LAPPs).

Although the names and Catch Share Program management tools may vary somewhat to suit different regions and fisheries, common elements shared by Catch Share Programs designed to reduce overfishing include: (i) the allocation of shares, each of which represents a guaranteed right to a percentage of the annual total allowable catch of a commercial fishery with share value based on the value of the fishery; (ii) regular, independent scientific assessment of the fish stock population, growth rates and boundaries as well as the fishery’s marine habitats and ecosystems; (iii) scientific calculation and establishment of annual total allowable catches that will maximise long term, sustainable yields rather than short term profits; (iv) monitoring and enforcement of program regulations funded by program cost recovery fees, and (v) protection of the natural marine resources on which the share owners’ investments and livelihoods depend.

The following case studies of Northern and Southern Hemisphere fisheries provide an insight into the specific performance measures and socio‐economic benefits associated with Catch Share Programs.

US/British Columbia Fisheries Case Study

Ten Limited Access Privilege Programs (LAPPs) were assessed and compared with fishery performance during the five year period preceding the implementation of this type of Catch Share Program in each of the following 10 fisheries: the British Columbia sablefish, halibut and groundfish trawl fisheries; the Alaska king crab, pollock, sablefish and halibut fisheries; South Atlantic wreckfish fishery; Pacific whiting fishery; and Mid‐Atlantic surf clam and ocean quahog fishery.

Reason for Case Study Selection

This particular case study was selected because it demonstrates the potential adaptability and achievable performance of Catch Share Programs in a variety of fisheries. These US/British Columbia fisheries represent diversity in value, gear type and multiple versus single species

C. Alexander & C.J. Alexander 26 SUSTAINABLE FISHERIES DEVELOPMENT management. Collectively, these fisheries had an annual ex‐vessel value of $965 million in 2004. Gear types used in these fisheries were nearly evenly distributed among dredges, midwater and bottom trawls, traps and longlines. Seventy percent of the fisheries were single species and 30% of the fisheries were multi‐species.

Problems Prompted Fisheries Conversion

Problems in the fisheries prompted conversion of the fisheries management system to the Catch Share Program. During the five year period preceding the launch of the Catch Share Programs in these fisheries, the race for fish caused the overcapitalisation of fishing fleets by an average of 26% resulting in fleet overcapacity as well as substantially shorter fishing seasons that were reduced from an average of 77 to 27 days per year. During this time, economic problems were largely manifested by an average 21% decline in boat yields and an average 11% decline in revenue per boat. Environmental concerns grew as fishermen consistently exceeded total allowable catches by an average of 3% and exceeded the total allowable catch at least 50% of the time leading up to the launch of the Catch Share Programs.

Added to the foregoing problems during this 5 year period, discard rates increased an average of 23% adversely impacting the stock biomass, targeted species reproduction rates and the productivity of marine ecosystems. Social problems became more evident with reports of significant cheating by fishermen, and the safety indices declined by an average of 20% because fishermen were more willing to risk the safety of their crews by fishing in adverse weather and ocean conditions. In the Alaska halibut and sablefish fisheries, for example, the search and rescue missions increased from 25 to 33 per year. Full time employment opportunities declined an average of 65% during this period as full time employment rates in these fisheries dropped from an average of 35% to only 12%, contributing to widespread socio‐economic uncertainty in the affected communities.

Fisheries Results Following Conversion

Following the conversion of these 10 fisheries to Catch Share Programs known in the region as Limited Access Privilege Programs (LAPPs), on average, fleet capacity was reduced by 46% thus better aligning fleet capitalisation, capacity and corresponding expenditures with the new extended fishing seasons; the fisheries seasons expanded from an average of 27 to 202 days per year; boat yields rose an average of 74% and the safety indices improved 150%. As an example of one safety index, the search and rescue missions in the Alaska halibut and sablefish fisheries dropped from 33 to fewer than 10 per year. The percentage of full time employment in these fisheries rose from an average of 12% to 84% which benefitted the communities reliant upon stable employment as well as the employed individuals, especially in their increased ability to secure mortgages and other credit instruments previously unavailable during periods of temporary or part time employment.

Additional benefits included a 20% reduction in gear deployment; reduced gear loss and ghost fishing; more widespread testing and acquisition of improved fishing gear attributable to

C. Alexander & C.J. Alexander 27 SUSTAINABLE FISHERIES DEVELOPMENT increased fisheries profitability along with the share owners’ incentive to maximise long term revenues and share value through ecosystem conservation; and an average 51% reduction in discards of non‐commercial and prohibited bycatch. For example, discards decreased 80% in the British Columbia halibut fishery and 50% in the Pacific whiting fishery. There was an approximate 50% decrease in non‐commercial bycatch in the Alaska sablefish fishery. The Alaska pollock fishery experienced a nearly 50% decrease in salmon and crab discards and a 25% decrease in overall non‐commercial bycatch.

One universally sensitive issue in the industry concerns the extent to which fishermen violate total allowable catch limits which contributes to overfishing. The size and frequency of total allowable catch overages in these assessed fisheries were significantly reduced following the fisheries management conversions. These reductions were attributed to improved monitoring and enforcement of fishing regulations. Prior to the implementation of the LAPPs, the average overages in these fisheries ranged between 5‐10%; however, for several years the British Columbia groundfish and sablefish fisheries as well as the Alaska sablefish fishery vastly exceeded their total allowable catch limits by as much as 20%‐60%. For ten years following the conversions to LAPPs, the total average catches for all of the assessed fisheries were 5%‐10% below the catch limits, and the aforementioned groundfish and sablefish fisheries that had significantly exceeded their catch limits before the management conversions, subsequently harvested catches that were as much as 5%‐20% below the total allowable catch limits.

Reductions in total allowable catch overages and discards are very important economic issues because they result in uncaught biomass available for retention within the fishery to rebuild stock or for allocation by fishery managers to existing share owners and/or new participants.

Economic Indicators Registered Improvement

Following the fisheries’ conversion to Catch Share Programs known as the Limited Access Privilege Programs (LAPPs), economic indicators registered the following improvements:

• the average decrease in trawl time, boat trips and fishing gear deployed produced increased efficiency;

• the longer season eliminated the need for boats to sustain a grueling pace while at sea;

• higher product prices resulted from slowing the fisheries production season that ensured year round availability of more fresh fish and required fewer fish to be frozen;

• product quality improved from better handling; and

• processing product recovery, which is the percentage of fish used in the finished product, increased.

These factors resulted in an average 80% increase in revenues per boat. In addition to these significant improvements in economic indicators, the fisheries also experienced:

C. Alexander & C.J. Alexander 28 SUSTAINABLE FISHERIES DEVELOPMENT

(a) clear gains in environmental conditions attributed to management tools that included fishery closures and the establishment of marine protected areas to allow fish stock recovery through undisturbed juvenile maturation into adulthood and fish reproduction by spawning stock;

(b) effective monitoring that enforced fishery allocations, landing regulations, fishery closures and total allowable catches;

(c) a reduction in non‐commercial and prohibited bycatch attributable to measures including enforced limits on bycatch that improved the health and productivity of marine ecosystems; and

(d) Marine Stewardship Council certification in 43% of the fisheries (e.g. Alaskan halibut, sablefish and pollock fisheries) that created market‐demand incentives for fishermen to follow sustainable practices.

Study Conclusions, Fisherman Observations

It is interesting to note the contrast between the initial reaction of many Alaska halibut fishermen to the proposed concept of a Catch Share Program prior to its establishment and their opinion of the program following its establishment as expressed by Alaskan fisherman Rob Wurm, who readily admitted that “We fought against the [Catch Share] program right up until the time it passed, but, to my surprise, it really has worked well. It has created a lot of stability, stopped the race for fish and changed the fishing environment in ways that have made it safer and allowed us to avoid bycatch.”

The case study authors concurred with this opinion and concluded in pertinent part that “overall, the fisheries experienced major economic improvements after LAPP implementation, clear gains in environmental conditions, and a mixture of changes in social conditions. Environmentally, compliance with total allowable catch increased, discards decreased, and decreased across the board. Improved fishing practices also allowed better management of biomass, ecosystem health and commercial landings. Socially, there were both positive and negative effects. Positive effects included increased safety and a higher percentage of fishermen employed full time. Negative effects included community, processor and job losses.”

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New Zealand Deepwater Fisheries Case Study

Reason for Case Study Selection

This particular fisheries case study is cited because it sets forth specific details of one facet of the share owners’ management strategy through the regulation and implementation of specific fishing methods and gear to ensure the long term preservation and further development of the natural marine resources on which their earnings and investments are based and to which the asset value of their investments correlate.

New Zealand Deepwater Fisheries Management

In 1986, a comprehensive Catch Share Program known as the Quota Management System was introduced in New Zealand to rebuild, conserve and restructure deepwater fisheries using (i) management tools designed to produce the maximum sustainable yields, (ii) a custodial approach to the utilisation of New Zealand fishery resources and (iii) active involvement by industry members in the management of these resources.

Individual Transferable Quotas (ITQs), granting the right to catch a specified percentage of the total allowable catch each year in perpetuity, were proportionately allocated to fishing companies with a history in the fisheries which became share owners of New Zealand’s deepwater orange roughy and oreos fisheries. The owners later combined their interests into one company – The Orange Roughy Management Company Ltd. (ORMC) – specifically to maximise the value of their deepwater fisheries through sustainable management. The company provides a cooperative capability for their fisheries management and, in the process, has unified a group of former competitors who must now work together to strengthen the value of their property rights. By 2003, the fisheries had developed into a US$67 million annual business. Inherent in the ORMC management framework is the maxim that cooperation must replace competition for the fishery industry to reach its maximum potential.

One means by which the share owners have endeavoured to maximise the long term value of their fisheries is to ensure a continuing supply of consistent, high quality products believing that “long term consistency of supply only results from sustainably managed fisheries”.

Management Measures

Between 1994 and 2004, ORMC share owners invested approximately NZ$30 million in independent scientific research to improve the value of their fisheries.

Based on scientific recommendations, ORMC share owners have geographically spread out their catches to avoid of any areas, closed certain areas to allow for stock rebuilding, avoided fishing in certain areas associated with important fish reproduction and juvenile maturation such as that characteristically have an elevation in excess of 1,000

C. Alexander & C.J. Alexander 30 SUSTAINABLE FISHERIES DEVELOPMENT metres, and reduced fishing pressure by using fewer vessels through cooperative catching arrangements. The company contracts research to identify stock mixes, determine age and growth parameters of commercial deepwater species, undertake modeling, obtain biological samples from commercial catches and assess the condition of deepwater ecosystems and habitats.

In particular, stock assessment reviews are routinely undertaken at least every 2‐3 years by New Zealand scientists often in collaboration with international scientists from Canada, Australia and the United States. The stock assessment process is public, transparent and subject to peer review. The Ministry of Fisheries publishes the outcome of stock assessments annually and summaries are available on its website.

ORMC reported that the use of contracts between and among share owners, the management company and government concerning relevant subjects, such as the procedures governing the procurement of natural resources as well as the establishment of and adherence to total allowable catches, eliminates many of the uncertainties and counter‐productive practices often associated with traditional fishery management schemes. One example of these contracts symbolising the New Zealand fisheries’ recognition of the precautionary principle is an agreement between ORMC and the New Zealand Minister of Fisheries that share owners will voluntarily limit their catches to a specified amount within a 12 nautical mile radius of any geographic feature in order to reduce the fishing impact on any new resource before the long term, productive capacity of the geologic feature can be assessed. ORMC is also currently working with the New Zealand Ministry of Fisheries and other stakeholders in the development of a management strategy for benthic fauna protection in crucial areas such as deepwater seamounts.

Low Impact Gear and Methods

The ORMC shareholders have acknowledged the need to protect non‐targeted marine flora and fauna species within the ecosystems that are crucial to the existence and further development of their fisheries. To accomplish this, share owners report that they have focused on gear investments and fishing methods that maximise harvesting efficiency, reduce expenditures and allegedly minimise habitat disturbance.

For example, unlike most gear, orange roughy trawl nets used by the share owners are relatively small with a vertical opening of 6 metres and a horizontal opening of 18‐25 metres. The trawl gear is rigged to ensure as little contact with the seabed as possible in order to reduce drag and optimise fuel consumption. The vessels are equipped with 3 dimensional charting software that provides details of seabed structure, modern echo‐sounders and gear‐mounted sensors that provide real‐time information on trawl geometry, performance and position relative to the vessel. GPS facilitates the precise location of features and trawl track lines. This equipment is deemed to be necessary to the share owners because trawling is generally conducted along known tracks to minimise exploratory fishing over previously untrawled

C. Alexander & C.J. Alexander 31 SUSTAINABLE FISHERIES DEVELOPMENT landscape in order to preserve as much of the natural seabed, including hills and trenches, as possible.

Fishing methods reflect the long term fisheries resources management strategies of this Catch Share Program. For example, by 2007 within the New Zealand , only 10% of the deepwater habitat at depths of 750‐1,500 metres where orange roughy are found had ever been trawled at any one time. Under relatively recent policies, 19 defined hill and areas were closed to trawling by regulation to protect benthic biodiversity.

In February 2006, the fishing industry proposed the closure of large seabed areas to to protect marine habitats, including corals, and maintain benthic biodiversity. The areas were selected because they represent almost the entire range of benthic habitats, especially in the deep water, and several were identified as pristine areas that had not been impacted by trawling activities. In response to this proposal, the New Zealand government adopted the Benthic Protection Area Initiative in April 2007 which, among other provisions, closed 32% of the New Zealand EEZ seabed to bottom trawling. This was cited by the ORMC as an example of the extent to which the fishing industry is becoming increasingly aware of the need to align its financial incentives with marine conservation to achieve its highest aims.

Future scientific assessments of the fishery biomass and marine habitat condition will reveal whether the ORMC fishing practices and gear are successful in contributing to the amelioration of the environmental degradation that resulted from fishery practices that preceded the establishment of the Individual Transferable Quota system under the Catch Share Programs.

Conclusion of Fisheries Management

ORMC reported that the current and potential future values of property rights in these fisheries have provided the necessary incentive for competing share owners to cooperate by sharing information and resources. With each share owner guaranteed the right to fish a predetermined quantity and assured of the abundance and availability of the targeted species from reliable scientific data provided by the management system, there is no longer any concern about losing potential catch to competitors.

ORMC also revealed that cooperative fishing among these share owners who want to increase the long term value and sustainability of the fishery has also led to the establishment of much‐ needed fishery closures that are allowing diminished stocks to rebuild. This New Zealand Individual Transferable Quota (ITQ) Catch Share Program has resulted in increased revenue, profits and share value for share owners; decreased fishing expenditures; and the delivery of premium quality products to markets throughout the year.

According to ORMC, statistics after 1994 revealed that the orange roughy fishery managed by ORMC became the largest, oldest and most efficiently managed orange roughy fishery in the world based on standard economic criteria with 13,000 tonnes per year established as the annual available yield for 2003‐2008.

C. Alexander & C.J. Alexander 32 SUSTAINABLE FISHERIES DEVELOPMENT

Gulf of Mexico Red Snapper Fishery Case Study

Reason for Case Study Selection

This Catch Share Program is cited because the success of this and other U.S. Catch Share Programs resulted in the establishment of another Gulf of Mexico Catch Share Program on 1 January 2010 for the commercial grouper and tilefish fisheries to reduce overcapacity and improve profitability and working conditions for commercial fishermen of these species. At the time, the Gulf of Mexico Fisheries Management Council was considering expanding the Gulf Catch Share Program to include all reef fish and king mackerel while the National Oceanic and Atmospheric Administration (NOAA), which oversees the entire U.S. marine fisheries industry worth US$4.1 billion in dockside value in 2009, released a draft proposal on 10 December 2009 for a national marine fisheries management system encouraging the use of Catch Share Programs which earned bipartisan political support.

Gulf Red Snapper Fishery History

The first red snapper stock assessment in the Gulf of Mexico in 1988 revealed that the species had been seriously overfished. It is important to note that female red snappers first reach their serious reproductive potential at approximately age 15 and they continue to increase their reproductive capacity until the approximate age of 40 years. Since overfishing the species in this region had been prevalent for some decades, many of the females that would have been at their reproductive peak in the early 2000s had previously been extracted from the Gulf in unsustainably high quantities. In addition to this factor, as recently as 1990, the entire Allowable Biological Catch quota for red snapper in the Gulf of Mexico was routinely harvested as bycatch by the Gulf shrimp trawler industry. As a result of these and other problems, the conservation status of the red snapper species was very seriously threatened at this time from commercial and recreational overfishing and, the red snapper fishery was recommended for complete closure. The complete closure was never ordered; however, various time, spatial and fishing volume restrictions were imposed without any success in a futile effort to reverse the species’ population decline and restore it to a commercially viable level.

Fishery Industry Response

Based on this lack of success from traditional fisheries management, a Catch Share Program was finally established in January 2007 by the Gulf of Mexico Fisheries Management Council as part of its Fisheries Management Plan for Reef Fish Resources at the same time that commercial catch quotas were reduced by nearly half from the previous year because the fishery continued to teeter on the brink of collapse.

The program aims included the elimination of fishing overcapacity, improvement in the management of natural marine resources and a reduction in the myriad problems associated

C. Alexander & C.J. Alexander 33 SUSTAINABLE FISHERIES DEVELOPMENT with an annual competitive race among too many fishermen to catch a dwindling supply of fish. At the time the program was launched, the participants were hopeful that:

• the program would increase the flexibility of fishing operations;

• develop cost effective and enforceable management of the fishery;

• reduce bycatch;

• eliminate catches that exceed fishing quotas;

• improve safety at sea; and

• optimise socio‐economic and biological benefits from the fishery.

Catch Share Program Results

According to the annual report published in early 2009 following the second year of the Gulf of Mexico red snapper Catch Share Program, annual limits on the total allowable catches were exceeded in 9 of the 17 years preceding the Catch Share Program, representing a violation rate of 52% for this period. By contrast in the first 2 years of the Catch Share Program, reported landings were below the established quotas while the management and enforcement of the fishery improved thus ensuring greater reliability of the reported data. Improved compliance with fishing quotas was reported to benefit the red snapper population by reducing its mortality rate.

Dockside red snapper prices increased 17% during the first two years of the program which benefited fishermen and dealers at a time when quotas were being reduced to improve the conservation status of the species.

An official stock assessment of the Gulf red snapper fishery revealed that the conservation status of the species improved during the 2 year period following the fisheries management conversion to the Catch Share Program. This improvement directly impacts fishery value, share value and fishery profitability. During the second year of the program, the average and median prices paid per share increased by 21% and 37%, respectively, in reported share transfer transactions.

Also during the second program year, fishing vessels reported 16% fewer days spent away from port than in the first year of the program reflecting increased efficiency of operations and equipment.

Fishermen have benefitted from the increased flexibility of when and where they choose to fish as well as how much they catch. For 15 years preceding the Catch Share Program, the commercial red snapper fishermen were limited to 10 days of fishing each month with catch limits imposed on each fishing trip. Under the new program, there are no limitations on maximum catches per trip or the days in which fishermen choose to fish.

C. Alexander & C.J. Alexander 34 SUSTAINABLE FISHERIES DEVELOPMENT

According to the annual report, problems within the program concern compliance issues such as the mislabeling of species, under‐reporting of landings and landing notifications which did not have corresponding landing transactions and vice versa. These problems have reportedly been addressed in new program administration amendments that took effect January 2010.

According to David Krebs who has been professionally fishing red snapper in the gulf since 1969 and owned 6% of the gulf’s annual red snapper catch in 2009, the new system “is truly a success story. It’s the most versatile tool that allows a fisherman to fish when the market needs the fish”.

Icelandic Fisheries Case Study: Innovation, Development and Success

Reason for Case Study Selection

This case study was selected in order to illuminate the fisheries management experience and rationale of a national government that has historically been reliant upon fisheries which account for as much as 40% of its export revenues in recent years and has also been closely associated with a European Union Member State – i.e. Denmark, under which Iceland was officially ruled until 1944 ‐ and thus its cultural, legislative and economic governance is not unrelated to that of several European nations, especially as Iceland is a member of the Council of Europe, Council of the Baltic Sea States and NATO to which Denmark is also a member.

The Icelandic Minister of Fisheries and Agriculture published a written report in April 2008 that included a discussion of (i) the reasons underlying the government’s conversion from traditional fisheries management to the Catch Share Program for certain commercially exploitable marine species, (ii) the evolution and development of this conversion, (iii) the pertinent government legislation and provisions governing Catch Share fisheries management, (iv) the issue of potential employment discrimination against those individuals who were not allocated a quota of the total allowable catch of certain species, along with Iceland Supreme Court dicta on the subject, and (v) the issue of whether the Catch Share system introduces the privatisation of public resources, along with Iceland Supreme Court dicta on the subject.

Failure of Traditional Fisheries Management

In 1975, Iceland’s territorial waters were extended to 200 nautical miles. That same year, the Icelandic Marine Research Institute published a report which revealed that the cod stock had been seriously overexploited and that fisheries needed to be significantly curtailed. In response to these events, the Minister of Fisheries became authorised under Act No. 81/1976 to establish a maximum allowable catch for every species of fish in their territorial waters in an effort to better manage Iceland’s natural marine resources on which a significant part of the country’s long term economy is based.

C. Alexander & C.J. Alexander 35 SUSTAINABLE FISHERIES DEVELOPMENT

In 1977, general restrictions on were first established on the basis of recommendations from the Marine Research Institute pursuant to Government Act No. 271/1977. From 1977 to 1983, Iceland’s fishery management method consisted primarily of restrictions on fishing effort and became known as “scrape day system” or “skrapdagakerfi”. According to Einar Kristinn Gudfinnsson, Icelandic Minister of Fisheries and Agriculture, in the report entitled “Response to ‘Views, adopted by the Human Rights Committee on 24 October 2007 concerning Communication No. 1306/2004’” dated 6 June 2008 (“Report”), “At that point [in 1983] it appeared clear that this [traditional fisheries management] system would not come anywhere close to achieving its objective, which was primarily to prevent overfishing. The Icelandic had grown substantially which led to the depletion of those stocks which had not been subject to any limitations on fishing effort. By then, it was also clear that the cod stock was in such a poor state that the fishing effort would need to be reduced still further.”

Rationale for Conversion to Catch Share Program

The failure of traditional fisheries management prompted the Icelandic government’s conversion to the Catch Share Program.

According to Einar Kristinn Gudfinnsson, Icelandic Minister of Fisheries and Agriculture, in the report entitled “Response to ‘Views, adopted by the Human Rights Committee on 24 October 2007 concerning Communication No. 1306/2004’” dated 6 June 2008 (“Report”), “Following extensive consultations with the Ministry of Fisheries and stakeholders in the fishing industry, the decision was made to adopt a radically changed approach to managing fisheries of demersal species. A system of fisheries management was adopted which was based on the issue of catch quotas to individual vessels on the basis of catch experience, a catch quota system.” Initially this Catch Share system was enacted on a trial basis for one year in 1984 under Act No. 82/1983. Under Article 10 of this official Catch Share system legislation, the Minister of Fisheries was empowered to issue regulations determining the total allowable catch for individual fish stocks and also the division of this catch among qualifying vessels. The allocation of harvest rights was predicated upon the historically inclusive principle that “the party concerned must have enjoyed such rights” during the preceding relevant period selected by the Ministry.

Due to initial positive results, this Fisheries Management Act, as it became known, was then extended three times with amendments until the current Fisheries Management Act based on the Catch Share system became a permanent law in 1990 under Act No. 38/1990.

The Report went on to state that “It should be noted that the allocation of quotas had been employed to a considerable extent since the 1970’s regarding catches of lobster, shrimp, shellfish, capelin, and herring for which a quota system had been established in 1975. As a result, there has been a long‐standing tradition in Iceland of restricting access to fishing grounds and fish stocks, including methods similar to those used subsequently following the adoption of the quota system into law in 1984.”

C. Alexander & C.J. Alexander 36 SUSTAINABLE FISHERIES DEVELOPMENT

The time period between 1984 when the Catch Share system was formally introduced and 1990 when the Catch Share fisheries management system became a permanent law for Icelandic fisheries represented 6 years during which the Icelandic fisheries management system consisted of a duo‐system comprised of fishing effort restrictions and Catch Share quotas which “was done partly to accommodate those who had a poor catch experience in the reference years on which the catch quotas were based”.

This duo system, however, ultimately failed to produce the most efficient fishery industry in Iceland. With the enactment of the Fisheries Management Act No. 38/1990, the Catch Share fisheries management system was made permanent and the fishing effort restriction system was completely abolished because the Ministry determined that “the results of applying [the effort restriction system] concurrently with the catch quota system were considered to have been poor”.

Legislative Intent of Catch Share Management

The Icelandic government report entitled “Response to ‘Views, adopted by the Human Rights Committee on 24 October 2007 concerning Communication No. 1306/2004’” dated 6 June 2008 (“Report”), discussed the Icelandic legislative intent underlying the conversion to a national fisheries management system based entirely on the Catch Share Program. “In the legislative bill, the purpose of the new legislation was said to be to establish general principles for the future arrangement of fisheries management and lay a foundation for efficiency and rational utilisation of the fish stocks so that maximum returns might be derived from the country’s fisheries resources for the benefit of the community as a whole.”

The Report went on to emphasise that “One of the reasons cited in support of the permanence of the legislation was that this would provide the necessary basis for decisions on investments and other long‐term considerations.”

Iceland’s Catch Share Management System

Under the recommendation of the Marine Research Institute, the Minister of Fisheries is responsible for the regular establishment of the total allowable catch for a designated period or fishing season from the individual exploitable marine stocks in Icelandic waters for which catch limits are considered to be necessary. Harvest rights are calculated on the basis of this amount and fishing quotas are allocated to share owners by the government based on certain criteria related to past fishing history.

The Icelandic State Treasury collects from each share owner a limited charge for the issue of a quota based on the estimated value of the rights issued. The quota share of each individual vessel is to remain unchanged from year to year; however, the variable annual total allowable catch offers the vessel owners with their fixed percentage of harvest rights in the total allowable catch the opportunity to enhance their yields, revenues and profitability in relation to any enhanced fishery value which is determined primarily by the health, reproductive capacity and

C. Alexander & C.J. Alexander 37 SUSTAINABLE FISHERIES DEVELOPMENT volume of the fish stock biomass which is regularly assessed. The quota share of a vessel can be transferred in its entirety or in part through a temporary assignment of harvest rights or an outright sale of the quota share. As evidence of the open market transferability of the shares in response to critics who assert that initial share allocations prevent others from participating in the Catch Share fisheries, the Report stated that, as of 2008, 85% of the original harvest rights had been transferred to other parties in the open market.

With regard to the perennial, unchanging quota share of each individual vessel, the Icelandic Supreme Court noted that “Catch entitlements are only permanent in the sense that they cannot be cancelled or changed except by law” and thus are not inviolable. [Iceland Supreme Court, Case No. 12/2000, page 1534, in re: Vatneyri]

The Minister of Fisheries was also authorised under this act to make natural resource conservation decisions from time to time concerning the permissibility of fisheries using specific types of fishing gear, fisheries using certain types of fishing vessels and fisheries in specific areas which would require special fishing permits in addition to the general fishing permit.

While various amendments have been made to this legislation since 1990,the essential Catch Share Program components have remained unaltered; however, to create a more inclusive rather than exclusive fisheries management system and to avoid a concentration of quota share in any one entity, Act No. 27/1998 was enacted which set a maximum limit on the permitted quota of individual share owners for the purpose, among other things, of promoting a more diversified ownership of shares by fishers, fisheries companies and other enterprises in the fishing industry.

Government Report of Catch Share Results

The Icelandic government report entitled “Response to ‘Views, adopted by the Human Rights Committee on 24 October 2007 concerning Communication No. 1306/2004’” dated 6 June 2008 (“Report”) stated that a national fisheries management review committee concluded in 1993 that “the Catch Shares quota system that had been developing since 1984 should be continued as this system led to the greatest efficiency in the fishing industry. The conclusions of the committee were based on an extensive study of all aspects of the issue, including biological and economic aspects, the condition of the fish stocks, trade, fisheries agreements with other states, the Icelandic fishing fleet, fish processing activities on land, and the performance of the fishing industry, in addition to comparisons with the changing fisheries management systems of various other countries.”

Quota Share vs. Gainful Employment Right

One issue that has been raised in Iceland is whether the quota share system constitutes an unconstitutional restriction on the Icelandic right to individual gainful employment.

C. Alexander & C.J. Alexander 38 SUSTAINABLE FISHERIES DEVELOPMENT

At the turn of the last century, a significant judgment was rendered by the Icelandic Supreme Court concerning the constitutionality and legality of the new Catch Share Program fisheries management system in the context of potential gainful employment discrimination by the government against fishers who did not own boats. The issue was whether the Icelandic government precluded the complainant, who did not own a fishing vessel, from practising his gainful occupation of fishing when the government allocated share quotas to registered vessels (rather than to individual parties or entities) that were in possession of a fishing permit during a certain time period preceding the share allocations. The Supreme Court observed that the complainant was not precluded from practising his occupation and engaging in gainful fishing employment as he was able to obtaining fishing permits for the harvest of fish species outside of the quota system and for which total allowable catches had not been established. In addition, the complainant was free to participate in the catch quota system as a potential assignee or purchaser of the legal harvest rights of catch quota owners. The Court also noted that for many years people have derived their employment from fishing based on the issuance of lawful permission which had routinely been subject to restrictions and conditions, and no new employment rights were established with the introduction of the catch quota system. The Court, therefore, declared on 6 April 2000 that the system of catch entitlements does not violate the Icelandic Constitution and is not inconsistent with “the considerations of equality that must be taken into account in limiting freedom of employment”. [Iceland Supreme Court, Case No. 12/2000, page 1534, in re: Vatneyri]

Privatisation of Public Resources Issue

The issue of whether the Catch Share fisheries management system automatically invokes a privatisation of public property was discussed by the Ministry of Fisheries in the Icelandic government report entitled “Response to ‘Views, adopted by the Human Rights Committee on 24 October 2007 concerning Communication No. 1306/2004’” dated 6 June 2008 (“Report”).

The Fisheries Management Act No. 38/1990 recites in pertinent part that “The allocation of harvest rights provided for by this Act endows individual parties neither with the right of ownership nor irrevocable jurisdiction over harvest rights”, notwithstanding the fact that the harvestable quota share does not change from year to year under current governmental fisheries management provisions. The Ministry stated in the Report that the legislative intent underlying the Fisheries Management Act as amended was that “the resources of the country should be used for the benefit of the nation as a whole … as confirmed inter alia in the Supreme Court judgment … for 2000 page 1534” in which the court opined that: “Thus, catch entitlements are only permanent in the sense that they cannot be cancelled or changed except by law. Through the exercise of its powers, Parliament may thus lay down rules in further detail on the right to fish, make this right subject to conditions, or collect for it a higher charge than now done, on account of a change in the views governing use of the utilised stocks of ocean life which are a common property of the Icelandic nation”.

C. Alexander & C.J. Alexander 39 SUSTAINABLE FISHERIES DEVELOPMENT

The underlying factors ‐ primarily consisting of overfishing, declining fish stocks and revenues, fishery industry overcapacity and long term national economic and labour impacts of declining fishery biomass – that prompted Iceland’s conversion to the Catch Share fisheries management system exist in other national fisheries around the world, including Europe’s national fisheries. As at least 35 countries have already spearheaded the experimental conversion to Catch Share Programs in many of their fisheries and are further developing this management system, so too can other nations profit from this valuable history and adapt the system to meet the needs of their own national policies and citizens for the long term conservation of fisheries employment and the natural marine resources on which this employment is ultimately and entirely dependent.

Danish Fisheries Case Study

Reason for Case Study Selection

The Danish fisheries industry case is noteworthy because, along with other proven Catch Share Program benefits, it demonstrates the variety of management tools such as Fishpools and Catch Quota Management that can be used by the program management in concert with private fishing cooperatives to: improve share holder profitability and share investment value; ensure enforcement of fishing rules; reduce discards, especially in multi‐species fisheries when the allowable quota for one or a few of the species has been reached; facilitate business planning; and utilise catches that exceed an individual’s share quota allowance without resorting to discards through the use of active market share trading and leasing.

National Fishery Industry Problems

For 2 decades following the mid‐1980s, the Danish government attempted to reduce fishery capacity and overfishing through vessel decommissioning, policies limiting vessel entry as well as vessel investments, and regulations limiting fishing mortality such as by restricting the number of days at sea.

From 1989 to 2006, 1,272 vessels were removed at a total public cost of 1.4 billion Danish kroner (US$245.3 million). According to the government, this reduced gross tonnage but did not produce a corresponding increase in fishing efficiency nor did the decommissioning contribute to the rehabilitation of marine habitats or fish stocks.

From 1994‐2002 overall catches and catch rates steadily declined providing evidence that the fleet reduction program and other government policies aimed at reducing overfishing and restoring depleted fish stocks were unsuccessful, the modified fisheries management system did not provide enhanced catch opportunities for the remaining fishermen, and the vessel decommissioning did not eliminate the causal factors that led to Danish fishing overcapacity.

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Danish Government Response

In response to the continuing decline in their fishery industry despite national attempts to improve the economic sector and foster the rehabilitation of depleted fish stocks, the Danish government converted their long‐standing fisheries management system for certain fisheries to a Catch Share Program framework. By 2007, the government had developed Individual Transferable Quota (ITQ) programs for pelagic and demersal fisheries in order to achieve the following aims:

• balance fleet capacity with fishing opportunities;

• create economic growth in the fishing sector to establish a viable economic sector for the long term;

• reduce discards by removing excess capacity and also providing a means for re‐ allocation of catches that exceed share quotas using private market trading and leasing of share quota belonging to share holders;

• benefit the coastal fisheries on which many Danish communities are dependent; and

• provide opportunities, especially for young fishermen, to enter the industry.

Denmark introduced the Catch Share Program in 2003 under the name of Individual Transferable Quota system for the Danish herring (Clupea harengus) fishery. Based on successful trials, the Danish extended the program in 2007 to include demersal fisheries under an ITQ‐ Demersal Program and additional pelagic species under the ITQ‐Pelagic Program such as mackerel (Scomber scombrus), horse mackerel (Trachurus trachurus), sprat (Sprattus sprattus), pout (Trisopterus esmarki), sandeel (Ammodytes marinus) and blue whiting (Micromesistius poutassou). The ITQ‐Demersal Program includes the lobster fishery and the stocks of Atlantic cod (Gadus morhua), saithe (Pollachius virens), plaice (Pleuronectes platessa), haddock (Melanogrammus aeglefinus), European hake (Merluccius merluccius), whiting (Merlangius merlangus), Dover sole (Solea solea), turbot (Psetta maxima) and monkfish (Lophius piscatorius). In addition to the marine areas associated with these species, a number of fishing areas are further sub‐divided into zones based on designations under the auspices of the International Council for the Exploration of the Sea (ICES).

These Danish programs are consistent with fisheries management provisions under the authority of the European Commission, in which catch limits for certain species are established within defined areas of the European Union in order to achieve maximum sustainable yields for European fisheries. By this method, catch limits are allocated to the relevant EU Member States, such as Denmark, according to a fixed percentage. These annual Member State quotas are transferrable among other EU Member States provided that the Commission is given prior notice.

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Danish fisheries are comprised of various vessel types ranging from industrial size ships to small skiffs that utilise a wide range of fishing gear in the North Sea, the Skagerrak, the Kattegat and the Baltic Sea which are areas in which the European Commission also limits the days‐at‐sea and the total kilowatt hours per year in the industry.

In 2007, the value of Danish landings exceeded US$450 million, 90% of which were under ITQ (Catch Share) Programs – 55% in pelagic and 35% in demersal fisheries.

Danish Catch Share Programs

Under the two Danish Individual Transferable Quota (ITQ) Catch Share Programs – the ITQ‐ Pelagic Program and the ITQ‐Demersal Program, individual registered fishermen who derive more than 60% of their earnings from fishing are eligible to receive shares for use on a registered fishing vessel. This aims to ensure that only active fishermen can use the quotas on active fishing vessels thereby enabling benefits from the operations to accrue to the fishing communities in which the fishermen are based.

Initial shares were allocated on the basis of a weighted catch history for 2003, 2004 and 2005 using 20%, 30% and 50% weights for each of the 3 years, respectively. An appeals process that allowed potentially disenfranchised fishermen to explain an atypical catch period due to factors such as illness or vessel damage was considered by the government to be an important component in the effort to incorporate fairness during the initial share allocations.

Shares have no expiration date but can be revoked upon 8 years’ prior notice. (This provision relates to the issue of whether the government is granting a a public resource right in perpetuity and privatising a public resource.) Each year, an allocation of the maximum landing weights for species is made to each share holder based on the total allowable catches for the species which can vary from year to year based on scientific recommendations.

The concentration of shares is limited which, along with share transferability, avoids exclusivity and promotes the practice of inclusiveness among eligible fishermen; however, the share ownership limits are higher for the industrial and the pelagic fishery where large holdings are more prevalent and the limits are lower in the demersal fishery where business operations are usually smaller and tied to local communities.

Danish coastal fishery share holders must remain in this sector for a minimum of 3 years, operate on registered vessels that are under 17 metres in length, and engage in a majority of fishing trips that are less than 3 days in duration to receive the coastal fishery share holder status and corresponding benefits that include a supplemental quota for sole and cod. As a fixed quota (e.g. 10%) is allocated to coastal fisheries for certain species and since eligible fishermen and their vessels can voluntarily enter this sector, the allocation that each fisherman receives depends on the number of operators in this fishery. The individual coastal fishery share holder quota allocations can, however, be modified. While coastal fishermen are prohibited from transferring their quota outside of the coastal fishery, they are allowed to transfer shares

C. Alexander & C.J. Alexander 42 SUSTAINABLE FISHERIES DEVELOPMENT among their own coastal fishery members or they can purchase additional quota from the non‐ coastal fishery sector. This ensures that the coastal fishery share quotas do not fall below a fixed minimum amount thereby ensuring coastal fishery representation that could be increased through share transfers and leases.

The Danish ITQ Programs require all landed fish to be deducted from participants’ shares. In a separate action, Denmark introduced a pilot program entitled Catch Quota Management, which has been used in the U.K., Sweden, Germany and the Netherlands, to achieve a complete accounting of all catches and landings through the use of electronic logbook registration, on‐ board cameras, and a monitoring system using electronic sensors. The 2008/2009 results revealed that, as a result of this new program, fishermen fish more selectively to reduce discards and increase long term earnings rather than maximise short term profits by catching and then releasing lower value fish, many of which fail to survive following release and would have supported commercial fisheries if they had not been captured by virtue of their inherent contributions to marine ecosystems.

In Britain and Denmark, the Catch Quota Management trials included a provision which required a multi‐species fishery to stop fishing as soon as the quota for any one of the species was reached. This motivated the fishermen to plan, select and innovate fishing practices and gear to fish selectively in order to optimise catches of each species of a multi‐species fishery. To the extent that the fishermen are unable to achieve the precise quota limitations, the flexible ITQ Catch Share Programs permit trading or leasing of quota that increases the potential profitability as well as efficiency of each unit of fishing effort, eliminates or reduces a potential waste of natural marine resources and accommodates the fishermen’s need to refrain from exceeding (or endeavouring to reach, as the case may be) strictly enforced catch quotas.

Three methods for introducing new participants, including young fishermen new to the business and fishermen who did not initially receive a quota allocation, were implemented under the Danish ITQ system:

1. Shares are transferable and, as a result, can be purchased by new entrants;

2. the Fishfund was established to set aside shares for new participants who make an investment in the fishery such as purchasing a fishing vessel; and

3. new entrants are allowed to join a Fishpool and can access the pooled quota for a fee.

A Fishpool is a privately established cooperative that coordinates and facilitates short term transfers and annual leases between share holders. Each Fishpool is managed by a “pool master’ who must be approved by and registered with the Danish Directorate of Fisheries, and each Fishpool is responsible for ensuring that aggregate member landings do not exceed total quota shares. Since the inception of the ITQ system in Denmark, there have been at least 11 Danish Fishpools in operation through which up to 80% of the share quota has been the subject of short term share transfer transactions. A main feature of the Fishpools is that members are not

C. Alexander & C.J. Alexander 43 SUSTAINABLE FISHERIES DEVELOPMENT permitted to discard fish due to lack of quota as long as the pool has quota for that species. Fishermen who exceed their quota can endeavour to lease their excess quota through the Fishpool upon their return to the harbour. The result has been a substantial reduction in discards.

Fishpools use an on‐line system accessible at www.puljefiskeri.dk to conduct trades which, together with private brokerages, provide an efficient market (in which the government does not participate) for the benefit of all share holders and their annual quotas.

In the interest of transparency, all share allocations and trading are published on the Danish Directorate of Fisheries’ webpage.

Program Results

Although statistical data gathering and analysis from the newly‐established ITQ Programs are continuing, initial data revealed that Danish fisheries capacity was reduced by 25% without the use of public funds for decommissioning. Profits increased from 9‐20% and fishermen doubled their investments in value‐added efforts rather than in catch maximisation technology which was largely responsible for fueling the former “race for fish”. Each year following the introduction of coastal fishery sector ITQ provisions, the coastal fishermen produced landings that exceeded the historical average. The coastal fisheries increased their shares from the initial allocation thereby revealing the stakeholder satisfaction with the fisheries management conversion.

In its support of market access development for sustainable fisheries, the Danish government is investing in fish tracing technology, full documentation of total catches through camera and sensor monitoring, and the establishment of a complete database to facilitate sustainable fishery certification and to supply retailers with all relevant data and documentation in preparation for the Danish fisheries’ certification of sustainability in 2012.

On 31 August 2009, the Danish Fishermen’s Association announced that by 2012, all fish and seafood from Danish fisheries will be certified by the standards established by the Marine Stewardship Council. As 90% of the Danish‐landed fisheries value in 2007 was derived from Catch Share Programs, this announcement reflects increasing recognition by fishery industry producers that wholesale and retail purchase decisions in support of sustainable fisheries are fast becoming an important guide to the fishing gear and methods selected by fishermen who are being held increasingly accountable for their actions which can denigrate or contribute to the rehabilitation and conservation of our marine environment.

Constantine Alexander & C. J. Alexander, MBA, JD Korthi Bay GR‐84502 Andros Tel.: +30‐697‐393‐7087 E‐mail: [email protected]

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