WHAT ARE PROPERTY RIGHTS? - Chairman: Peter Millington, Fisheries Western Australia, Perth

Are ITQs Property Rights? Definition, Discipline and Discourse - R. Connor
The Legal Nature of Australian Fishing Licences - Are they Property Rights? - B. McFarlane
Rights Based Systems: Sovereignty and Property - C. Jensen
Property Rights in Relation to Fishing Licences in Australia from a Legal Perspective - D. Fitzpatrick
Balancing Security and Flexibility in Granting a Right to Catch Fish - B. Wylynko and L. McIntosh
ITQs - New Zealand and United States: Allocation Formula and Legal Challenges - W.J. Nielander and M.S. Sullivan
Fishing Rights: a Multidimensional Perspective - N. Taylor-Moore
Rights-based Fisheries Management in New South Wales, Australia - A. Goulstone
The Closure of the Port Phillip Bay Scallop Fishery - S. McCormack and R. McLoughlin

Are ITQs Property Rights? Definition, Discipline and Discourse - R. Connor

R. Connor
Centre for Resource and Environmental Studies
The Australian National University, Canberra, ACT 0200, Australia
<rconnor@cres.anu.edu.au>

1. INTRODUCTION

Individual transferable quota (itq) has existed for two decades now as a mature management concept. in the last ten years concern has been focused on the issue of whether ITQs (and variations known as IFQs, IVQs, etc.) should be considered property rights or whether this possibility should be specifically legislated against. The tone of the language relating to fishing quota instruments varies among implementing jurisdictions as do the legal implications of the various regimes for fishers and regulators.

In the US, where federal fisheries legislation now reflects the outcome of a major policy debate on this issue, the legal characterisation of quotas is as revocable privileges. In Australia, Statutory Fishing Rights have been created and in New Zealand, explicit property rights language is used for ITQs.

For those considering the introduction of quota-based management, the situation can appear confusing. Arguments from either side often seem to come from completely different bases with little cross-acknowledgment, except in opposition. Different fisheries can require specific management system design, but this accounts for little of the variation observed in the characterisation of the instrument at the generic, national level. There is a correlation in the three jurisdictions mentioned between the definition of ITQs and provisions in their respective constitutions regarding compensation for appropriation of property rights, but much remains different.

This paper examines the normative assumptions behind the contesting views of ITQs, and how extreme positions are created by the contestors. I use the device of a simple discourse analysis to characterise a few influential positions in the debate. I then attempt a conceptual mapping of the policy terrain, using the discourses as directional forces, and consider management alternatives and potential social, economic and ecological outcomes.

The first part of this paper recounts the legal and economic views of what constitutes property. Second, a characterisation is made of five positions on the spectrum of opinions on what ITQs are, or should be with respect to property rights. Three distinctive discourses that shape these positions and policy outcomes in fisheries management are outlined. The fourth section deploys the discourses as forces influencing policy instrument choice and management outcomes. This device is used to explore how competitive tensions between the discourses can create dichotomies and polarise debate on fisheries policy. An alternative conceptual model is suggested that may allow for more inclusive debate of sustainable fisheries management policy. Finally, conclusions are drawn on the struggle to define rights in fishing and on the requirements for a more unified policy discourse.

2. PROPERTY RIGHTS

Two key informing disciplines in the property rights debate are economics and law. Barzel (1997:3) distinguishes legal and economic property rights. "Economic rights are the end (that is, what people seek), whereas legal rights are a means to achieve the end. ... Legal rights play a primarily supporting role - a very prominent one, however, for they are easier to observe than economic rights."

This is an economist's view. It asserts that property rights are about defining and protecting economic interests; it seems a reasonable position. Although property rights can be used to protect what might be argued to be non-economic values, a majority of economists do not admit that non-economic values exist. For resources, rights are used to allocate their beneficial use to individuals or groups, excluding others. Property can be vested in the state, defined groups, or individuals. But what are the attributes of property?

From a legal view:

i. Property is a right not a thing. It is not something waiting to be discovered, but is a socially constructed convention supported by institutions of social choice such as the courts and legislative statute. However, rights can be submerged or ignored. This can happen due to the lack of examination of established doctrine - as in the case of indigenous land rights. In a sense, such rights exist, waiting to be discovered, are implicit in historical use, and in the precedent, logic and principles of the legal system, await recognition.

ii. Property is a bundle of rights or interests in an asset to use it and manage it. Where these are not held by the same individual, they can take a range of forms. These property interests have a long history in common law in relation to land, as freehold, leasehold, easements, usufruct, profit à prendre, rights of fishery in land (rivers and lakes), water appropriation, etc. However, there is little common law development with respect to sea fisheries in the western tradition due to principles established both by the Romans and later in the Magna Carta that prescribed open access (Scott 1988).

iii. Rights can be established and supported locally without official sanction, only to be fully recognised when tested by argument and precedent in the courts. The courts will use a range of criteria to make a judgement on whether property rights

iv. pertain, such as the ability to benefit by ownership, and the ability to capture changes in asset value, particularly by sale.

v. Rights can also be established or extinguished by statute. Statute and common law may come into conflict and the Courts will decide which will be dominant. The way Courts ultimately decide can be influenced by the make-up of the bench and the moral or philosophical inclination of judges. Hence the interpretation of the law is both normative and empirical as is the construction of legislation.

¹ Stockdale & Anor v Alesios & Ors [1999] VSCA 128 (25 August 1999).

² Yanner v Eaton [1999] HCA 53 (7 October 1999).

i. Property rights are analytical and prescriptive. The economist analyses the impacts of the dimensions of property rights and how they are defined in terms of economic incentives and outcomes. These dimensions include exclusivity, transferability, divisibility, duration, flexibility and quality of title (Scott 1988). Where such dimensions are restricted, rights are said to be attenuated. Each dimension has its effect, but limited or uncertain duration is a key feature of concern in the definition of ITQs.

ii. The concept of the economic externality is critical and the existence of externalities⁴ is taken to be evidence of incomplete property rights. By incomplete, what is meant is that not everything is included in the total set of property interests. If they were, the owners would defend their property against the imposition of costs by others, forcing them to internalise those costs. Unfortunately, in fisheries and their associated ecosystems, this is impossible (because of the difficulty in specification) except in the limit where a single owner controls all. In this case, defending the whole system means excluding others, or policing their behaviour to minimise costs imposed, which is in itself very costly. This is the situation the coastal state faces in being sovereign over resources.

iii. Property rights theorists propose that rights systems emerge and evolve when resources become scarce (Demsetz 1967) and economic scarcity is indicated by a positive value. However, the transaction costs of establishing systems of rights can be considerable, particularly where the resource users are dispersed and heterogeneous. When the benefits of establishing rights exceed the transaction costs of doing so, things should start to happen, as long as the costs can be shared appropriately. The activity undertaken by potential beneficiaries to have rights established has been called contracting (Libecap 1989). Critical aspects of contracting for rights are carried out in the law courts, in seeking judgements on how disputes over resources should be settled between claimants and whether particular interests comprise proprietary rights. Where litigation over resources increases, the development of property rights can be predicted.

iv. Economists recognise that property comprises of a bundle of rights. For example, in common pool resources such as fisheries, there may exist rights to beneficial use; a right to determine who has access; a right to decide management rules; and a right to alienate the whole bundle (Schlager and Ostrom 1992). These can be, and often are, split up and vested in different individuals or groups. It is asserted that for the full beneficial effect of property rights in defining economic interests to be accrued, all the sticks in the bundle must be held by a single owner (Edwards 1994). In most, if not all, cases of individual rights in fisheries resources, some of these rights are retained by the state or other social governance institution and the right to alienate the bundle is socially proscribed.

v. Most, if not all, economic property rights are attenuated to some degree, either by law (eg planning or licence rules), or by uncertainty about parameters, that is the rights are too costly to measure, police, enforce or exchange (Barzel 1997).

³ Professor Anthony Scott has for many years, and again at this conference, demonstrated that economists do study the legal view of property rights, but it is the specificity of legal consideration of circumstances in case law to which I refer here.

⁴ Externalities are costs or benefits to others that are not bourne by the firm or individual generating them and thus not counted by them. Economic efficiency (optimal allocation of scarce resources) cannot be achieved when these costs or benefits are not taken into account in the decision to carry out the economic activity in question. Negative externalities (costs imposed on others) will encourage more of the economic activity to occur than is socially optimal, and thus more of the externality will be generated.

However, questions may be asked as to whether social goals are always served by striving for unattainable perfectly defined and complete property rights. The normative basis of much advocacy of the economic model is that economic growth is good. Property rights allow increases in economic activity and surpluses, and this drives growth. In the age of full exploitation and sustainability, the growth model is again being questioned as the only alternative, and the purported need to squeeze the last dollar from each activity is ever more under scrutiny for uncounted costs of change, and trade-offs with other (non-market) values. This can lead to social resistance to the introduction of ITQs, and a contest to "frame" the discussion or constrain the implementation of ITQs through definition.

3. CONCEPTIONS OF ITQs

3.1 Fully privatised fisheries model

ITQs are a first step towards fully privatised fisheries, whereby certain stocks of fish, or large parts of ocean habitat, become private property including their full management rights. Some government role may remain to ensure residual public interests are protected.

3.2 Property rights in fishing model

ITQs should be defined as full and unattenuated (as far as possible) property rights - permanent, transferable, divisible, subject to registration of third party interests, etc. They should be subject to compensation when appropriate but not for changes in TACs or other sustainability management actions. ITQs are rights in fishing, rather than in the fish themselves and ownership of fish stocks is vested in the state (e.g. the current model in New Zealand)⁵.

⁵ There is room for a practical implementation between items as in the definitions given in Sections 3.1 and 3.2. This is the current goal for the New Zealand quota management system: the sole ownership corporation model, where quota holders become shareholders in management companies based on individual species, stocks, or quota management areas.

ITQs are a fishing licence endorsed so the holder can take a specified amount, or share, of available fish. The licence and the quota may transferred, sometimes independently and the quota may be divided. But the licence with quota is subject to revocation for breaches of conditions without compensation (as in the Australian Commonwealth⁶).

⁶ The South East Trawl Fishery (SETF) the only fishery under Commonwealth jurisdiction to which ITQs had been introduced in the first seven years empowering legislation in 1991 using this model initially. The legislation provides for more secure Statutory Fishing Rights (SFRs), but these are conditional on a management plan being agreed under specific requirements. This occurred for the SETF during 1998 and the process of allocating SFRs to replace endorsed permits commenced. SFRs are potentially more secure, with language in the Act referring to absolute ownership. However, the word "property" has been studiously avoided in policy and legislation and provision for discretionary revocation exists in the legislation. The statutory rights model would sit between those described in Sections 2 and 3.

ITQs are revocable privileges granted by the responsible agent of the state to use a resource that rightly belongs to the general public. Such resources are held only in trust by the government and can not be alienated⁷ (e.g. USA federal system).

⁷ These conceptions of ITQs that explicitly guard against the development of property rights tend not to consider the "bundle" analysis (Schlager and Ostrom 1992). They attempt to maintain a position that any form of private interest created in fishing comprises alienation of a trust resource. The explicit nature of the statutory construction of ITQs as non-property, seems to indicate a belief that the characteristics of property are in fact exhibited by ITQs, so that without such language they would be in danger of being declared to be property by the courts.

ITQs should not exist at all. They are an instrument of neo-liberal progressive ideology that endangers the fabric of both community and ecology. They commodify both labour and natural resources and recast human relations in socially negative ways. They entrench patriarchal dominance in fishing by vesting resource capital in existing male participants, thus locking out women. They are opposed by the "independent fisherman" to whom open access is a precious tradition.

4. EXPLAINING THE DIVERSITY OF VIEWS

Is this diversity of definitions of ITQs a problem? For those considering the application of ITQs, there is plenty of scope for confusion about how a framework should be structured and enabled. Second, the duration and security of rights is an essential issue for stakeholders and their incentives to invest in sustainable use. And last, this diversity may be symptomatic of something more basic going on beneath the surface. So how is the diversity to be explained? A first reaction might be that each fishery has its own problems and different answers are needed. But these policies are mainly set at the national level. For example, Canada uses a diverse range of quasi-property rights instruments in its fisheries, but there is political proscription of property rights language in the policy system. This explanation does not offer much light.

A second possible explanation lies in the legal implications and constraints on governments. Two legal issues are "constitutional takings" clauses and the "public trust doctrine". Many tensions exist within the above conceptions of ITQs and their practical implementations, particularly in the sections 3 and 4 models. Much effort has been taken to avoid calling ITQs property rights in these models and the policy action is to attempt to guard against property rights emerging in the common law where they might become recognised. This could amount to derogation or even extinguishment, of common law rights. This statutory action is ostensively to avoid the issue created by the takings clause of the 5^th Amendment to the US Constitution, and an adapted version of that clause used in section 51(xxxi) of the Australian Constitution that invokes compensation for the appropriation of property. However, the circumstances that might lead to this are rare particularly with proportional quotas⁸. In the Australian case, even with careful wording and definition, and before the mandated statutory rights were effected, the Commonwealth Government was compensating fishers for changes in the initial ITQ allocation formula for the South East Trawl Fishery. Further payments were made, 5 years after the event, for adversely affecting the value of licences by moving from tradable vessel capacity units to ITQs (Trebeck et al. 1996).

⁸ I query the circumstances under which the state's wish to use the power of uncompensated revocation could be justified. Under proportional quota, TACs can be adjusted as required to protect fish stocks. In Australia's South East Trawl Fishery, the TAC for gemfish was dropped from 3000t in 1988 to zero in 1993 following a stock collapse. Quota owners retain their share of the fishery as before and their tonnage entitlement will be restored as the fishery recovers. In the Port Phillip Bay scallop fishery, where ITQs are not applied, the cancellation of all licences and closure of the fishery was a result not of problems with the stock, but of competing values for use of the Bay's waters for navigation and recreation. Not only were licence holders compensated for the full market value of their licences, but if the state had not introduced specific legislation limiting their liability, findings from subsequent legal challenges strongly suggest that claims for compensation for total economic losses would have been upheld (supra note 2).

5. SUPPORTING DISCOURSES

5.1 Nature of discourses

If these legal arguments are not satisfying, how else to explain the diversity of views in relation to ITQs? In this section, I look at accounts of cause and effect that contribute to fisheries policy. This "discourse analysis" is too brief to provide firm explanatory links, but it offers a way to think about the policy dynamic that can provide insight into how such diversity in positions can arise, and whether this is a problem.

"A discourse is a shared way of apprehending the world. Embedded in language, it enables those who subscribe to it to interpret bits of information and put them together into coherent stories or accounts. Each discourse rests on assumptions, judgements, and contentions that provide the basic terms for analysis, debates, agreements, and disagreements... The way a discourse views the world is not easily comprehended by those who subscribe to other discourses. However,... interchange across discourse boundaries can occur, however difficult it may seem." (Dryzek 1997)

5.2 Economic rationalism

While the law is the arbiter of truth in what constitutes property rights, it is the insights of economics from which the ITQ debate arises (Gordon 1954, Moloney and Pearse 1979, Scott 1955, Scott 1979, Scott 1988, Scott 1989) and it is one set of economic ideas that drives the agenda toward the top of the discourses rated in Section 5.1. The apex to which economic rationalist arguments on the environment converge is to privatize everything - water, air, fish, etc. - and allow markets to allocate resources to their highest valued use. At this extreme, these ideals are clearly unachievable. However, economic rationalists advocate the development of institutional frameworks that bring one as close as possible to the ideal, namely, property rights and markets.

The logic of rationalist arguments can be compelling. One of the key concepts on which it rests is the idea of incentive compatibility, whereby institutions (particularly property rights and markets) should be constructed so as to provide incentives to economic actors to behave in ways that, in aggregate, fulfil the policy goals of society. This is Adam Smith's "invisible hand" principle, and is surely worth applying where it can be made to work. But, it does require society to have agreed goals first. Economic rationalism defines the single social goal as a bigger economic pie, which makes things easy, and the more the economy grows and the greater the efficiency the more there will be for everyone. Distributional issues are excluded as non-economic problems⁹. The natural relationship recognised by economic rationalism is competition (Dryzek 1997).

⁹ Different original distributions of resources result in differing efficient configurations of economic activity. Welfare economics explores the issues of which particular distribution might maximise social welfare, and recognises the fact that efficiency gains are not necessarily gains in social welfare. This issue is conveniently neglected by economic rationalists (Perman et al. 1996).

5.3 Administrative rationalism

Those who determine what gets decided and implemented as ITQ policy are the administrative and policy bureaucrats and government fisheries managers. Many have disciplinary backgrounds in economics or natural sciences, many others are career bureaucrats whose expertise is in machinery of government, program administration, etc. This is the natural home of the discourse of administrative rationality, which argues that complex social problem solving can only be achieved through problem reduction and disaggregation and the application of expertise-based hierarchy. The motivation of this discourse is of public interest. It philosophically opposes dispersed decision making such as market mechanisms. It believes in the legitimacy of administrative power and that the strengthened hand of government is what is required to deal with environmental problems. Based on the use of specialised expertise-based planning and decision making, administrative rationality also opposes discursive democratic mechanisms such as those based on the co-management. Bureaucratic hierarchies are not conducive to the free flow of information, and misunderstandings and duplication are common. The natural relationship recognised is that people should be subordinate to the state (ibid.).

Administrative rationalists are in a a bind in the tug of war between social stability and economic progress. The tendency is to defend the administrative state by attempting to retain control. As ITQs threaten to disperse some of that control to stakeholders, administrative rationalists would initially oppose them. Where ITQs become inevitable, the discourse would support conditioning of the instrument so as to retain a measure of administrative power. Administrative rationalism reveals its interests in retaining control in comments such as: "..the replacement, alteration or revocation of licences is integral to flexible administration. If licences are declared to be proprietary by the courts in Australia, the power to replace, alter or revoke them will be greatly impaired, as will the flexibility and long-term competitiveness of Australia's fishing industry" (McCamish 1995). This latter conclusion is precisely the opposite to that of the economic rationalist who advocates increased legal security of rights for the same reasons.

The administrative rationalist's position aligns to some extent with the interests of small-scale producers, but an inherent part of the small independent producers outlook is to hold the administrative state in contempt. Conflict with a range of stakeholders is inevitable for subscribers to this discourse. Where it holds sway in management agencies, a siege mentality may be discernible.

5.4 Social justice

The forces opposing privatisation are poised at the other end of the spectrum. On one hand, the anthropological and sociological critique of ITQs by academic authors, for example Davis (1996), Davis and Bailey (1996), Jentoft et al. (1998), McCay (1995a), Munk-Madsen (1998) Palsson (1998) Palsson and Helgason (1995), speak on behalf of concerns for social justice and equity, gender relations, and express concern over the extension of corporate control at the expense of small-scale local interests. This is a socially conservative position valuing stability of social relations over increased consumption and growth. This position reflects concern that, under ITQs, fisheries access will become controlled by the captains of industry, not the captains of fishing boats.

Allied with these concerns are small-scale producers who, often have a firm belief in the natural order and social justice of open-access regimes. In the USA this is supported by elements of Jeffersonian philosophy of a republic of independent producers, and the common law public trust doctrine (Macinko 1993, McCay 1995b). In Iceland it is supported by the constitution, which protects a right to work for all citizens. With fishing such a common source of employment in that country as to be almost synonymous with work, the denial of a citizen's right to fish by exclusion through a property rights regime is contentious and legally problematic. The motivation of the social justice discourse is the threat to local stability and social relations posed by the globalising economy and the rationale is to defend these values. The mechanisms used are community organisation for collective action and various forms of political action. The natural relationships recognised are community and self reliance.

It is important to note that the discourse that one subscribes to is not determined by the nature of one's employment, although there may be correlations. Not every bureaucrat is an administrative rationalist, and there are quite a few economic rationalists in government bureaucracies. In many sections of government there are also subscribers to a discourse of social justice. The relative strength of these discourses and others depends on the situation both within the policy system and in society at large. This has in turn been shaped by their histories. Further, the discourses described here are only a sample of the many active in fisheries policy debates.

6. MAPPING THE POLICY LANDSCAPE

6.1 Policy terrain

Figure 1 which can be constructed as a kind of conceptual experiment offers an aid to understanding how this sampling of discourses might contribute to policies on ITQs.

Assume a policy object P exists, with a mass proportional to the number of administrative rationalists in the policy system. This gives the system some inertia. Now a force (blue) can be applied to the policy object toward the right, by the discourse of economic rationalism. To the left a countervailing force, red, for social justice can be applied. To complete the map co-ordinate system, there is a green vertical axis, for "ecological rationality", a concept which the reader may define.

There are four quadrants towards which the policy object may move, depending on the definition of rights resulting from the contest between the forces. Social justice and economic rationality forces determine the horizontal position. But what are the requirements to move, e.g. into the upper right-hand quadrant. These include: property rights, good information, low transaction costs, and a low ratio of the discount rate to the growth rate of the stock. These factors contribute to good efficiency and ecological beneficial outcomes. But good social justice outcomes should be possible in combination with private rights too, as has been demonstrated, e.g. with Maori fishing rights in New Zealand. Perhaps another dimension to the diagram is needed?

If some of the necessary conditions were to fail badly, the end result might be in the lower right hand of the quadrant. This could happen with a species like orange roughy while other species under the same management regime remain in the top right quadrant. Where there is significant uncertainty over stock status or biology, or the degree of compliance of other fishers, or where high discount rates and low biomass growth rates imply economic losses from stock conservation, over-fishing may occur for economically rational reasons. This would not necessarily be worse for ecological rationality than the lower left quadrant, which represents the open access result. Here, fishers are free to exploit at will, unencumbered by government interference. This cannot be called an economically rational outcome, despite individual actors' decisions being rational. However, a sense of social equity can be maintained as whatever benefits there are in fishing are available to all. However, ITQs are not the only threat to the stability of this situation and declining incomes relative to the rest of the economy are a feature of this quadrant. There is also a continuing threat to ecological sustainability from open access, accentuated by technological developments that lower fishing costs.

Figure 1: Mapping the policy terrain

The upper left hand quadrant is the domain that values social justice and stability, but can offer enhancement of both economic and ecologically desirable outcomes in comparison to open access through common property systems and various co-management arrangements. Co-management is a concept with broad application and does not necessarily involve privilege of social stability values over economic efficiency. However, it does offer a basis on which to develop solutions that embed local group values where they might be threatened by completely individualised rights. In general, action in this quadrant of the map is a trade-off of potential efficiency gains to be more certain about the future of both social and ecological stability. This in no way excludes the use of property rights, individual or group held, well defined or otherwise. Management is likely to involve a mix of instruments, with fewer critical assumptions than apply in the upper right quadrant.

6.2 Property rights and social goals

Although the model suggests that social justice and economic efficiency are diametrically opposed, in reality individual rights can be combined with other group-based institutional arrangements to achieve policy goals. For example, within the near comprehensive ITQ management system in New Zealand, the remote Chatham Islands community maintains group ownership of some fishing quota through a trust. The quota is leased to community members and trust income is used for community infrastructure projects. Some dispute over what trust income should be spent on has arisen in this case, which is inevitable. Of course, it helps to have a set of social goals for which a consensus can be found and structure and process are required to build and maintain institutions at the community level.

The force exerted by particular discourses on policy direction will depend on circumstances and may be amplified or attenuated by such factors as the history of policy, agency rivalry, or policy fashion. In New Zealand, ITQs were introduced in a policy atmosphere of economic liberalisation in all economic sectors unleashed by the change of government in 1984. Regardless of the origins and foundation of ITQs, or the nature and history of the problems they were aimed at addressing, in New Zealand in the mid-1980s, if a policy proposal involved property rights, markets, and promises of reduced government regulation, it would have taken a great deal to stop. The nature of the New Zealand political system, having a unicameral parliament and (at that time) a two party system with enforced voting on party lines, gave strong and direct power to executive government to implement policy. In this environment, the social justice discourse was virtually drowned out by calls to leave it to the market. The small boat sector had certainly had some influence on policies under quota, but this has diminished with time. Few small communities were heavily dependent on fishing and little study has been made of resource dependency such as it is (Fairgray 1985 is the exception).

In the case of the Chathams, the government wanted desperately to stop the long standing direct subsidisation of the Islands' infrastructure. Endowment of the community with quota assets was seen as a means to reduce this ongoing and, in the prevailing ethos, rather distasteful liability. Hence the broader interests of economic rationalism assisted the local community to establish a means of protecting and allocating access of their own members to the fishery within the ITQ framework. The settlement of Maori fisheries claims in New Zealand is another example of the potential compatibility of individual rights and group interests, and one where the property rights nature of ITQs became the means to the final settlement of 150 year old social justice grievances of the indigenous people. Maori quota assets are currently managed for the benefit of all Maori people and will in the near future be allocated to 78 tribal (iwi) authorities to manage locally in their own interest.

6.3 Stability versus progress

As Seth Macinko (1993) has pointed out, the ideological struggle between small-scale producers and progressive capitalism is not new. He traces it through the development of the public trust doctrine in fisheries cases in the US in the 1820s. Neither is it confined to fishing. The industrial revolution made modern farming, forestry and fishing productive and efficient. In fishing this has allowed expansion to global ecological boundaries. But progress waits for no one and global competitiveness is now overtaking older industrial structures and production methods. The same spectre of decline now faces small-scale enterprises in these three primary industries around the world particularly in the industrialised western democracies. In the globalising economy, inefficiency is punished without mercy. Other producers with lower costs will seize markets, and industries producing substitutes for fish, such as chicken, pork and beef, have adjusted to reduce costs and increase productivity. Without the development of more effective institutions for managing fisheries, things will only get worse.

But traditions, employment and community are highly valued. The individualisation of fishing access rights without accompanying development of institutions for local collective action make small producers and their communities more vulnerable. Economy of scale and market power of large corporates will enable them to pick off individuals one by one as they hit a tough patch and sell their quota to get by. Internal conflict is promoted within communities as certain individuals become the legal holders of what have been seen as community assets. Resistance to enclosure does not solve the fisheries problem, but the concerns are real and understandable. The upper left hand quadrant of the policy map is where solutions for fisheries dependent communities need to be worked out. This does not preclude the use of ITQs, or other fishing rights, but it mandates the development of mechanisms that are able to provide local control of the trade-offs between stability and the advantages of change. Local co-management systems surely can work within wider system of individual rights, given support to develop the necessary institutions for collective action.

6.4 Interaction and interdependence

The world is interconnected and this is nowhere more apparent than in attempting to share fisheries across disparate value systems. Future social outcomes for small communities are less predictable under progressive management, but certainty over access for individual firms is increased under a property rights prescription. It is more difficult to predict reductions in biological uncertainty. ITQ systems create a stronger demand for information for the setting of TACs because of the value of rights, and incentives for stakeholders to pay for more research information are created by their ability to capture increases in the value of rights. However, this does not protect against the situation where, even with perfect information, the economic optimum would be achieved by mining the resource (Clark 1973). In this case appropriate decisions are vulnerable to the uncertainty surrounding fish stock assessments. Dryzek (1992) is not the first political scientist to comment to the effect that the "capitalist market imprisons both liberal democracy and the administrative state by ruling out any significant actions that would hinder business profitability". In this context it means one better be sure of one's ground before crossing the industry by reducing TACs. This may seem extreme, but an element of truth must be acknowledged, even if it is just to defuse the claim that ITQs magically create power for industry over governments - it exists in all economic sectors.

Could science and economics project us universally into the upper right-hand quadrant of the policy map even if social justice issues were ignored? There are serious doubts about such an assumption. The collapse of the northern cod stocks of Newfoundland and Labrador, one of the most productive, long standing, continuously harvested commercial fisheries on the planet has become a classic case of the failure of conventional science-based fisheries management (Finlayson and McCay 1998). Given that Canada and the US share the highest average living standards in the world and are arguably the best placed countries to bring modern scientific management and institutional change to bear on fisheries, this situation does not bode well.

However, it is institutional development, not science, that must bring about change, and the better definition of rights undoubtedly has an important role to play, whatever the social outcome desired. Hence the question is, if the conceptual model used here an adequate representation of the issues? The diagram is not far wrong in terms of the way people think. We have been raised in an era of the red and blue forces slogging it out for supremacy. But I propose that the model, although useful in thinking about the issues, is really the flat earth model. It places social equity and economic efficiency, justice and progress, in opposition. This may be a common way of thinking about the issues, or it may be a way of ignoring them. Few deny the need to include the efficiency criterion in fisheries policy, and if this means that social equity cannot be considered, then it will be ignored. On the other hand, where social issues dominate the political landscape, as for example in Atlantic Canada, it is difficult for property rights and efficiency issues to be admitted to the debate. Another dimension is needed in the framework when thinking about sustainable fisheries management. That might enable the opportunity for win-win-win outcomes instead of the best being a win-win-lose.

Figure 2: Another dimension to fisheries management

Figure 2 offers the potential to imagine win-win-win outcomes; it offers a new space for solutions that accommodate economic and ecological and social issues. Some imagination, or at least a suspension of disbelief, may be required to accept that this is possible. Many will cling to the cherished flat earth models on which their beliefs and careers in fishing, advocacy, management, discipline or politics have been built. We need to accept that the development of institutions to sustainably manage fisheries lags behind the current rate of their exploitation. This requires some humility, the acknowledgment of both the immense complexities of fishery systems and pervasive uncertainty in science, economics and politics. Pretending to have a universal answer will only set back the process of searching for real solutions to unique sets of local conditions.

7. CONCLUSIONS

Discourse analysis has provided some purchase on the forces underlying the fact that different jurisdictions define ITQs differently. In some contexts this amounts to a take-no-prisoners ideological contest. The potential win-lose outcomes are unlikely to be sustainable in the long-term and governments trying to hedge their positions by undermining security of rights in fishing as property may well be making things worse. The answer to management problems in particular fisheries is more likely to be found at the local level, if strongly protected property rights are able to be used when required as part of a mix of management instruments, neither hamstrung by, nor universally imposed from, the national level.

So, are ITQs property rights? There is no doubt that pressure is mounting for rights systems for fisheries management to evolve. This threatens certain established interests and values, which are represented in discourses with the policy debate. These discourses compete to frame the issues and define the terms, with ITQs being one of the bones to fight over. Given the lack of institutional development at the community level for the defence of group values in an environment of better-defined individualised exclusive access rights, resistance to enclosure is understandable. In many cases however the pressure for change will intensify and new property interests specific to fisheries are likely to evolve and gain recognition in law. Statutory definitions may inhibit and constrain specific conditions of rights, but this may be analogous to attempting to constrain fishing effort by prohibiting or regulating one technology. "Rights creep" may come to seriously challenge attempts by administrative rationalists and social justice advocates to stem the tide of property rights contracting.

The fisheries policy community must work diligently to create a more general discourse, a discussion, language and a shared way of apprehending the world that is inclusive of all voices. Leaving it to the market, the experts or the people alone can not cope with the complexity of the issues of modern fisheries management. All the human resources available are needed if a sustainable future is to be secured. The problem for fisheries policy makers is how to specify, or encourage, the development of institutions in a way that creates incentives to both protect resources from overexploitation and to use them more efficiently, but does not undermine other values that have co-evolved with fisheries systems. To move in this win-win-win space, policy makers must integrate economic theory and empirical evidence, specific social, economic and biological conditions, what is possible in statute and likely to be supported by the common law, and the cultural conditions and political realities of their constituencies. This complexity places high demands on policy systems and it is unlikely that traditional, centralised, administrative bureaucracies will cope with problem solving under these conditions. Decentralisation of decision making is required and this is the logic behind both market-based allocation systems and co-management models. Expertise and high level co-ordination are still required. Output controls will not stop being information demanding, but pervasive and irreducible uncertainty need to be more widely acknowledged, and flexibility, resilience and precaution built into management systems.

Expertise is also required in new areas. Institutional design, in structure and process even more than in the rules themselves, requires broadly informed expertise that takes in its purview more than just one disciplinary outlook. Serious attempts at long term social learning with such strategies as adaptive management need to be more widely applied. Skills in facilitation and communication are required to enable stakeholders to work through and resolve issues in ways that provide incentive and are supported by existing institutionals. The fear of a future in which rights in fishing are defined needs to be dissipated through identification and reduction of threats to existing values. Some values will inevitably be given up, but this should be the choice of the holders of those values.

Enlarging the product of our ecologically bounded economy is a broadly embraced imperative, but distributional issues loom ever larger in modern society, both within and between nations. Each deserves our attention, and the challenge is to develop the win-win-win institutional solutions that will take fisheries management into new positive policy spaces in the 21^st century.

8. LITERATURE CITED

Barzel, Y. 1997. Economic Analysis of Property Rights. Political Economy of Institutions and Decisions. Cambridge.

Clark, C.W. 1973. The economics of over-exploitation. Science, 181: 630-634.

Davis, A. 1996. Barbed wire and bandwagons: A comment on ITQ fisheries management. Reviews in Fish Biology and Fisheries, 6(1): 97-107.

Davis, A. and C. Bailey 1996. Common in Custom Uncommon in Advantage: Common Property, Local Elites, and Alternative Approaches to Fisheries Management. Society and Natural Resources, 9: 251-265.

Demsetz, H. 1967. Toward a Theory of Property Rights. American Economic Review, 57(2): 347-359.

Dryzek, J.S. 1992. Ecology and Discursive Democracy: Beyond Liberal Capitalism and the Administrative State. Capitalism, Nature, Socialism, 3(2): 18-42.

Dryzek, J.S. 1997. The Politics of the Earth: Environmental Discourses. Oxford University Press.

Edwards, S. 1994. Ownership of Renewable Ocean Reasources. Marine Resource Economics, 9: 253-273.

Fairgray, J.D.M. 1985. ITQ implications study: first report, Northland fishing communities 1984. FMP Series No. 13, New Zealand Fisheries Management Division.

Finlayson, A.C. and B.J. McCay 1998. Crossing the Threshold of Ecosystem Resilience: The Commercial Extinction of Northern Cod. In: C. Folke and F. Berkes (Editors), Linking Social and Ecological Systems: Institutional Learning for Resilience. Cambridge University Press.

Gordon, H.S. 1954. The Economic Theory of a Common-Property Resource: The Fishery. Journal of Political Economy, 62(2): 124-142.

Jentoft, S., B.J. McCay and D.C. Wilson 1998. Social theory and fisheries co-management. Marine Policy, 22(4-5): 423-436.

Libecap, G.D. 1989. Contracting for property rights. Cambridge University Press, Cambridge.

Macinko, S. 1993. Public or private?: United States commercial fisheries management and the public trust doctrine, reciprocal challenges. Natural Resources Journal, 33(Fall 1993): 919-955.

McCamish, C. 1995. Fisheries Management Act 1991: Are ITQs Property? The Federal Law Review, 22.

McCay, B.J. 1995a. Social and Ecological Implications of ITQs: An Overview. Ocean and Coastal Management, 28(1-3): 3-22.

McCay, B.J. 1995b. "That's Not Right": Resistance to Enclosure in Newfoundland Fisheries, Meetings of the International Association for the Study of Common Property, May 24-28 1995, Bodo, Norway.

Moloney, D.G. and P.H. Pearse 1979. Quantitative rights as an instrument for regulating commercial fisheries. Journal of the Fisheries Research Board of Canada, 36: 859-866.

Munk-Madsen, E. 1998. The Norwegian Fishing Quota System: Another Patriarchal Construction? Society & Natural Resources, 11: 229-240.

North, D. 1990. Institutions, Institutional Change, and Economic Performance. CUP, Cambridge.

Palsson, G. 1998. The vitual aquarium: Commodity fiction and cod fishing. Ecological Economics, 24(2-3): 275-288.

Palsson, G. and Helgason, A. 1995. Figuring fish and measuring men: The individual transferable quota system in the Icelandic cod fishery. Ocean and Coastal Management, 28(1-3): 117-146.

Perman, R., Y. Ma and J. McGilvray 1996. Natural Resource & Environmental Economics. Addison Wesley Longman, London and New York, 396 pp.

Schlager, E. and E. Ostrom 1992. Property-Rights Regimes and Natural Resources: A Conceptual Analysis. Land Economics, 68(3): 249-62.

Scott, A. 1955. The fishery: the objectives of sole ownership. Journal of Political Economy, 63: 116-124.

Scott, A. 1979. Development of Economic Theory on Fisheries Regulation. Journal of the Fisheries Research Board of Canada, 36: 725-741.

Scott, A. 1988. Development of Property in the Fishery. Marine Resource Economics, 5: 289-331.

Scott, A. 1989. Evolution of Individual Transferable Quotas as a Distinct Class of Property Right. In: Campbell and Waugh (Editors), The Economics of Fisheries Management in the Pacific Island Region. ACIAR.

Slade, D.C., R.K. Kehoe and J.K. Stahl 1997. Putting the public trust doctrine to work. Coastal States Organisation.

Trebeck, D., T. Battaglene, M. Exel, O. Harasymiw, and G. Hewitt 1996. Report of the South East Fishery Adjustment Working Group, To the Minister for Resources and Energy, Canberra.

The Legal Nature of Australian Fishing Licences - Are they Property Rights? - B. McFarlane

B. McFarlane
Piper Alderman Lawyers
GPO Box 65, Adelaide, SA 5001 Australia
<bmcfarlane@piper-alderman.com.au>

1. INTRODUCTION

In order to determine the legal nature of the rights that fishers currently enjoy, it is necessary to consider what rights the State itself has in relation to fish stocks and fisheries. The term "State" here includes the Commonwealth and the Northern Territory. The State's rights in this area will vary depending on the geographic location of the fishery and the source of their rights. The focus of this paper is licensing in sea fisheries.

The paper examines the nature of an Australian fishing licence. It attempts to determine whether the licence is a property right, a right with some of the legal characteristics of property, or whether it is some different, and perhaps lesser, form of interest. Case law seems to cloud, rather than clarify the issue.

In the majority of instances, fishing licences are creatures of statute and are therefore susceptible to change. However, there are some rights to fish which are recognised at common law. For example, the right to take fish in inland waters can be subject to a profit à prendre. However, does such a concept extend to wild sea fisheries? An attempt is made to reconcile the common law and statutory rights to take fish and to determine if, in fact, Australian fishing licences are a property right.

2. THE RIGHT TO FISH STOCKS IN AUSTRALIAN STATES¹

¹ Unless otherwise specified, the term State(s) includes the Northern Territory.

² Blackstone, Commentaries (18th ed), Bk. 1 pp. 111-112.

³ Ibid.

Given the comments of Blackstone, it can be argued that the English common law position with respect to fish and fisheries would, at least initially, have been in force in each of the Australian colonies. Was there an English common law right to take wild fish or to own wild fish?

Prior to the Magna Carta, there seems to be no doubt that at common law the public had a right to fish in the tidal reaches of all rivers and estuaries, and the sea and arms of the sea within the territorial waters of the kingdom⁴. The exceptions to this principle were where the Crown, or some subject, had acquired a proprietary interest exclusive of the public right, or where Parliament had restricted the common law rights of the public. Following the Magna Carta, the public right could only be excluded or modified by an act of the legislature⁵.

⁴ See, for example, a discussion by the Privy Council of the origin of the right in A-G for British Columbia v A-G for Canada [1914] AC 153 at 169. For a discussion of what constitutes the territorial waters of the kingdom, see n10 and following.

⁵ Ibid at 170. See also Harper v Minister for Sea Fisheries (1989) 168 CLR 314 at 330 which confirms that because it is a public and not a proprietary right, it is amenable to abrogation or regulation by a competent legislature.

⁶ Halsbury's Laws of England (4th ed), Vol 18 para 652.

⁷ New South Wales and Victoria 1855, Tasmania and South Australia 1856, Queensland 1859 and Western Australia 1890. This process was achieved by means of the various letters patent for each State granted by Great Britain. At that stage the Northern Territory was annexed to South Australia. It did not become a State in its own right and after Federation its legislative capacity was controlled by the Commonwealth as one of its Territories.

⁸ The following Acts or their predecessors: The Constitution Act 1902(NSW), The Constitution Act 1975(Vic.), The Constitution Act 1934(Tas.), together with the Australian Constitutions Act (No.2) 1850 (Imp), The Constitution Act 1934(SA), The Constitution Act 1867(Qld.), and The Constitution Acts 1899 (WA).

One of the specific powers transferred to the Commonwealth dealt with fishing. The Constitution vested power in the Commonwealth to make laws for:-

"... peace, order and good Government of the Commonwealth with respect to:

(x) Fisheries in Australian waters beyond Territorial Limits".⁹

⁹ Section 51(x). There is some evidence in the convention papers that some States identified specific fisheries over which they wished to retain legislative competence.

3. THE STATES' TERRITORIAL LIMITS

As a matter of Customary International Law, a State retains sovereign rights in relation to waters of the sea that are waters of, or within any, bay, gulf, estuary, river, creek, inlet, port or harbour within the limits of the State. This customary position was confirmed by the United Nations Convention on the Law of the Sea "UNCLOS", which refers to these maritime areas as internal waters.¹⁰ Australia is a signatory to that convention and has ratified its position, so that the convention's provisions apply to all Australian States and Territories.¹¹

¹⁰ United Nations Convention on The Law of the Sea UN Doc. A/CONF.62/122, 21 ILM 1261(1982) Part 11 Article 7 which states "waters on the landward side of the baseline of the territorial sea form part of the internal waters of the state".

¹¹ Although the Convention was entered into in 1982, it didn't come into force until 16 November 1994.

"It is by this Act declared and enacted that the sovereignty in respect of the territorial sea, and in respect of the air space over it and in respect of its bed and sub-soil, is vested in and exercised by the Crown in right of the Commonwealth".¹³

¹² But did that claim of sovereignty amount to a claim of ownership or property in the sea? In Mabo No2 (Mabo and Others v The State of Queensland (1992) 175 CLR 1) the High Court found that it did not.

¹³ Seas and Submerged Lands Act 1973 (Cth) at Section 6. The territorial sea extends 12 nautical miles to sea from the low water line along the coast, except where it follows baselines deliniating the internal waters of a State or the internal waters of the Commonwealth.

¹⁴ Ibid - Sections 10 and 11 respectively.

i. the low watermark constituted the seaward boundary of the States

ii. the jurisdiction of the Commonwealth extended over fisheries both in the territorial sea and on the continental shelf, and

iii. the Commonwealth derived the power to legislate over off-shore areas from Section 51 (XXIX) of the Constitution.¹⁶

¹⁵ New South Wales -v- The Commonwealth (1976) 135 CLR 337.

¹⁶ The external affairs power.

¹⁷ For example Pearce -v- Florenca (1976) 135 CLR 507 at pp 513-521 and Robinson -v- The Western Australian Museum (1977) 130 CLR 283.

¹⁸ For example A Raptis & Son v The State of South Australia [1976-1977] 138 CLR 346.

¹⁹ This was collectively known as the "Offshore Constitutional settlement" (the "OCS").

By reference to particular articles in the UNCLOS, specific zones were established:

i. the adjacent territorial sea (or State territorial sea or Coastal waters), which extends 3 nautical miles from the baseline established in accordance with the provisions of UNCLOS.²⁰ The normal baseline used for establishing the breadths of the territorial sea is the low water line along the coast.²¹ This coincides with the definition of the States' boundaries used by the Commonwealth in the Seas and Submerged Lands Act

1973 (Cth). The States were given concurrent power to legislate with respect to this area.²² They were also given limited title to the sea-bed in these coastal waters.²³

ii. the territorial sea, which is now 12 nautical miles seaward from that baseline, having been extended from the original 3 nautical miles. The States' powers remain limited to the coastal waters

iii. the contiguous zone is the area between 12 nautical miles and 24 nautical miles seaward from the baseline from which the breadth of the adjacent territorial sea is measured²⁴

iv. the exclusive economic zone (EEZ) extends for a distance of 200 nautical miles from the baselines which establish the territorial sea.²⁵ It vests sovereign rights to the coastal State for the purposes of exploring and exploiting natural resources in the waters super adjacent to the sea-bed, on the sea-bed and below the sea-bed²⁶

v. the continental shelf is the area between 12 nautical miles and 200 nautical miles seaward from the territorial sea baseline and any areas of physical continental shelf beyond 200 nautical miles. Australia has the right to explore and exploit the living and non-living resources of the shelf.

²⁰ Supra n 10 at Part II, Territorial Sea and Contiguous Zones, Articles 5 and 7.

²¹ Infra n22 s1 and s4. It specifically excludes any area resulting from an increase in the width of the Territorial Sea (s4 (2)). The Coastal Waters of a State is defined to mean:

"That part of the territorial sea 3 nautical miles seaward from the baseline AND any sea that is on the landward side of any part of the territorial sea of Australia and is within the adjacent area in respect of the State but is not within the limits of the State".

²² Coastal Waters (State Powers) Act 1980 (Cth) No. 75 of 1980. The State is also given power to legislate for areas outside coastal waters where there is an arrangement with the Commonwealth in place. Those powers include power to make laws with respect to fisheries, as if the waters were within the limits of the State (section 5(a)). A recent example of a State exercising a power to legislate in this in-shore area is the declaration by the Government of South Australia of the Head of the Great Australian Bight as a conservation zone dedicated to the preservation of the Southern Right Whale.

²³ Coastal Waters (State Titles) Act 1980 (Cth) No. 77 of 1980. The Act gave to the States the same right and title to the property in the sea-bed beneath the coastal waters of the State and the same rights in respect of the space (including the space occupied by water above that sea-bed), as would belong to the State if that sea-bed were the sea-bed beneath waters of the sea within the limits of the State. However, the grant did not extend to complete sovereignty.

²⁴ Its relevance is that it allows Australia to exercise the control necessary to take enforcement measures for breaches of such things as customs, immigration and sanitary laws.

²⁵ Supra n 10 at Article 51.

²⁶ In addition, UNCLOS specifically deals with a whole range of other rights and responsibilities in this area.

²⁷ Supra n10.

²⁸ Seas and Submerged Lands Act 1973 Section 14.

Sovereignty has been referred to as "a legal, categorical and absolute condition. A territory either has sovereignty, or it does not have sovereignty. There is no halfway point for the sovereign conditions. A demonstrated capacity for self-government remains central for sovereign Statehood. Sovereignty is therefore a property of States. It reflects effective control over territory and independence from other States"^.29

²⁹ International Environmental Law and World Order Guru Swammy, Palmer & Weston 1994 West Publishing Co St Paul Minneapolis at p396.

"By 'exercising de facto administrative control' or 'exercising effective administrative control', I understand exercising all the functions of a sovereign government, in maintaining law and order, instituting and maintaining Courts of justice, adopting or imposing laws regulating the relations of the inhabitants of the territory to one and another and to the government. It necessarily implies the ownership and control of property whether for military or civil purposes, including vessels, whether lawships or merchantships. In those circumstances it seems to me that the recognition of the government as possessing all those attributes in a territory or not subordinate to any other government in that territory is to recognise it as sovereign, and for the purpose of international law as a foreign sovereign State".³⁰

³⁰ The Arantzazu Mendi [1939] AC 256 at 263-265, per Lord Atkin.

"The acquisition of territory is chiefly the province of international law; the acquisition of property is chiefly the province of the common law. The distinction between the Crown's title to territory and the Crown's ownership of land within a territory is made as well by the common law as by international law".³¹

³¹ Supra n 12 at 44.

"There is a broad distinction between proprietary rights and legislative jurisdiction."

What rights do the States claim over the natural resources? All States have traditionally asserted the right of ownership of their minerals and some other terrestial resources. Recently, every State in Australia has confirmed ownership of their natural resources in their respective Native Titles Acts³². But what is included within the term natural resources? Butterworths Australian Legal Dictionary gives one definition of natural resources:

"The stock of naturally occurring, as opposed to manmade, tangible and intangible substances which are capable of exploitation for commercial purposes. Examples are timber, land, oil, gas, minerals and mineral ores, coal, lakes and submerged lands. It includes native features of benefit for health, welfare and wellbeing such as parks and heritage items. The United Nations General Assembly has established a regulatory regime for the use of natural resources and recognise that States and peoples have permanent sovereignty over natural resources: GA RES 1803 (XVII). Resolution is accepted as customary international law: for example Texaco Overseas Petroleum Co & California Asiatic Oil Co v Libya (1977) 53 ILR 389."³³

³² Native Title Act 1994 (ACT) - Section 11, Native Title Act 1993 (Cth) - Section 212, Native Title (NSW) Act 1994 - Section 17, Native Title (Qld) Act 1993 - Section 17, Native Title (SA) Act 1994 - Section 39, Native Title (Tas) Act 1994 - Section 13, Land Titles Validation Act 1994 (Vic) - Section 14 and Titles Validation Act 1995 - Section 13

³³ Butterworths Australian Legal Dictionary.

"The principle that, under international law, people and nations have the right to own and control their natural wealth and resources; GA RES 1803 (XVII). Permanent sovereignty over natural resources is a basic constituent of the right to self-determination. The utilisation, development and naturalisation of natural resources must be pursuant to the national development and well being of the people and international economic co-operation must be based on respect for the sovereign right to natural resources; GA RES 1803 (XVII).

Article 56[1][a] of the United Nations Convention on the Law of the Sea confirms that in the exclusive economic zone (200 nautical miles seaward) the coastal state has sovereign rights to explore and exploit, conserve and manage the natural resources, whether living or non-living, of the waters superjacent to the seabed".

A search of Australian Legislation relevant to offshore areas suggests that the only definition of natural resources contained in any legislation is in Part I Section 5 of the Quarantine Act 1998. That provision defines natural resources as "the mineral and other non-living resources of the seabed and its subsoil". This seems to suggest that, at least at some levels, the term is limited. The only judicial comment on the subject appears to support that position.

7. THE STATE FISHERIES LEGISLATION

But does it include fish? Except for Tasmania and Victoria, none of the other States, the Northern Territory or Commonwealth Fisheries legislation have asserted a claim to ownership of the living marine resources. Tasmania made this claim in 1995 in their living marine resource legislation.³⁴ Under Section 9 of that Act it asserts:

"(1) All living marine resources present in waters referred to in Section 5(1)(a), (b) and (c) are owned by the State."³⁵

³⁴ Living Marine Resources Management Act 1995 Tasmania. Victoria asserts ownership of all wild fish, fauna and flora found in Victorian waters (s10(1) of Fisheries Act 1995 (Vic)). Consistent with the common law position, it then passes that ownership to any person who lawfully catches any wild fish (s10(2)).

³⁵ Ibid Section 9.

The waters referred to in Section 5 are as follows:

"(1) State waters are:

(a) Any waters of the territorial sea of Australia that are:

(i) within 3 nautical miles of the baseline by reference to which the territorial limits of Australia are defined for the purposes of international law; and

(ii) adjacent to the State; and

(b) Any marine of tidal waters that are on the landward side of that baseline and are adjacent to the State, except inland waters; and

(c) Any land which is swept by those waters to the highest landward extent."

8. THE CONCEPT OF PROPERTY

What then of the term "property"? It appears from the above that neither the States (apart from Tasmania and Victoria) or the Commonwealth claimed property in the wild fish stocks as they did with such things as minerals and forests. Rather they merely asserted a right to legislate with respect to the resource.

Earlier in this paper I identified that at common law there were only limited rights to ownership of wild animals and that the common law treated fish as analogous to wild animals. It was also recognised that the Crown did not assert ownership of the fish while they were in the wild. In effect they belonged to no one until they were caught and reduced into the possession of someone. At that point they became the property of that person.

A recent example of the difficulty with the Crown asserting "property" in wild things is the Queensland Fauna Act, the terms of which were considered by the High Court of Australia in Yanner v Eaton³⁶. That case involved the prosecution of an Aboriginal person for taking a protected species (crocodile) under the legislation. The defendant claimed that he was exercising traditional native title rights and accordingly, was not subject to the legislation.

³⁶ Yanner v Eaton [1999] 166 ALR 258.

The concept of 'property' is elusive and I do not propose anything more here than a brief overview for the purposes of clarification. Usually Property is treated as a "bundle of rights". But even this may have its limits as an analytical tool or accurate description, and it may be, as Professor Gray has said, that "the ultimate fact about property is that it does not really exist; it is merely illusion".³⁷ So too, identifying the apparent circularity of reasoning, from the availability of specific performance and protection of property rights in a chattel to the conclusion that the rights protected are proprietary, may illustrate some of the limits to the use of "property" as an analytical tool. No doubt the examples could be multiplied.

³⁷ Ibid at 9.

³⁸ Ibid.

³⁹ Ibid see Gleeson CJ, Gaudron, Kirby and Hayne JJ at pp8-13.

"We are also tending to limit the idea of discovery and occupation by making res nullius (e.g.: wild game) into res publicae and to justify a more stringent relationship of individual use of res communes (eg: of the use of running water for irrigation or for power) by declaring that they are the property of State or are 'owned by the State in trust for the people'. It should be said, however, that while in form our Courts and legislature seem thus to have reduced everything but the air and the high seas to ownership, in fact the so-called state of ownership of res communes and res nullius is only a sort of guardianship for social purposes. It is imperium, not dominium. The State as a corporation does not own a river as it owns the furniture in the State house. It does not own wild game as it owns the cash in the vaults of the Treasury. What is meant is that conservation of important social resources requires regulation of the use of res communes to eliminate friction and prevent waste, and requires limitation of the times when, places where, and persons by who res nullius may be acquired in order to prevent their extermination. Our modern way of putting it is only an incident of the 19^th Century dogma that everything must be owned.⁴¹

⁴⁰ Pound Introductions of the Philosophy of Law (rev ed) (1954).

⁴¹ Ibid at 111.

"Under the licensing system, the general public is deprived of the right of unfettered exploitation of the Tasmanian abalone fisheries. What was formally in the public domain is converted into the exclusive but controlled preserve of those who hold licences. The right of commercial exploitation of a public resource for personal profit has become a privilege confined to those who hold commercial licences. This privilege can be compared to a profit à prendre. In truth, however, it is an entitlement of a new kind created as part of a system for preserving of limited public natural resource in a society which is coming to recognise that, insofar as such resources are concerned, to fail to protect may destroy and to preserve the right of everyone to take what he or she will may eventually deprive that right of all content.

In that context, the commercial licence fee is properly to be seen as the price exacted by the public, through its laws, for the appropriation of a limited public natural resource to the commercial exploitation of those who, by their own choice, require or attain commercial licences".⁴²

⁴² At 325.

"If the right to fish for abalone were created in diminition of proprietary rights of the owner of the seabed and without the owner's consent, some question as to the validity of the law might have arisen, that a legislature of a State may not be competent to create proprietary rights over property beyond the boundaries of the State and to which the State has no title. That problem does not arise in this case, however, for the management of the fishery in accordance with Tasmania law, is arranged between the Commonwealth and Tasmania. If title be needed to support the fishing rights conferred on the abalone licenceholders, the arrangement made under the Act and the Commonwealth Act testifies to the consent of the Crown in right of the Commonwealth and of Tasmania to the creation of those right."⁴³

⁴³ Ibid at 335.

9. FISHERIES "PROPERTY" CASES

Although there have been a number of cases to which reference is often made as a basis of saying that the courts have accepted that fishing licences are property, it is submitted that those cases really do not take the matter to any conclusion. Rather they tend to use an analysis which is purposive. That is, the courts have analysed it within the confines of the particular case. The cases have therefore tended to confuse rather than assist with a clear understanding of the issue. Perhaps the High Court in Harper was close to the mark when it noted:

"This privilege can be compared to a profit à prendre. In truth, however, it is an entitlement of a new kind created as part of a system for preserving of limited public natural resource in a society which is coming to recognise that, insofar as such resources are concerned, to fail to protect may destroy and to preserve the right of everyone to take what he or she will may eventually deprive that right of all content".⁴⁴

⁴⁴ Supra n 43.

⁴⁵ Minister of State for the Army v Dalziel (1944) 68 CLR

⁴⁶ Pennington - V- McGovern - SA Abalone, Fitti - v - Minister for Primary Industries, Davey - v- Minister for Primary Industries, Bienke - v- Minister for Primary Industries - Cth Prawn, Kelly - v- Kelly - SA Abalone, Austell - v- Commissioner of State Taxation - WA Rock Lobster, Pike - v- Duncan - Vic Scallops and Harper - v- Minister for Sea Fisheries - Tas Abalone.

⁴⁷ Edwards and Deep Sea Arc Pty Ltd -v- Olsen & Ors (1996) 67 SASR 266e.

⁴⁸ Provided there is no statutory provisions to the contrary.

⁴⁹ Pennington -v- McGovern (1987) 45 SASR 27e.

10. WHAT THEN DO FISHERS HAVE?

As a fundamental principle of property law, you cannot give more than you have got. That means that if you have a limited form of title, you cannot grant to any other person any greater form of title than that which you currently have. For example, in pure property law terms, a person who holds a lease for a fixed term of years cannot grant to another person a lease of a greater number of years. The reason that issue is raised is because the State, in terms of fisheries, can only grant licenses which are consistent with their own title.

It is also clear that there are no common law rights which underpin fishing licences. Rather they derive all their authority from the statute that grants them. The nearest property concept that describes the right to take fish resources by way of a licence is that of a profit à prendre, although the concept is one which relates to land or something related to land. For example, the right to take wood or soil from the land. It is acknowledged that fish in inland waters are also capable of being the subject of a profit. However, the concept requires that the thing to be taken be capable of being "owned" at the time of the taking, and that it be in some way related to the land. Therefore, for these and other reasons, a profit is unlikely to assist in the analysis.

At present a licence holder appears to have the right to:

i. take fish from a defined region using defined equipment
ii. sell the fish taken
iii. have the licence renewed (arguably), and
iv. sell or transfer the licence.

It may be that a fishing licence is better described as a right in the nature of a profit à prendre, the defence of which relies on principles of equity rather than property law.

Whatever the ultimate characterisation of the rights, it is submitted that the focus on them being some form of property right, is generated from the protection sought rather than the source of the right in Australia. As Justice Gummow said in Yanner:

"Although appropriate to describe it as having a proprietary character, that is not because property is the basis upon which protection is given; rather this is because of the effect of that protection".⁵⁰

⁵⁰ Supra n 37 at 36; albeit describing intellectual property rights.

While there is no doubt that the use of rights-based notions has assisted in developing effective fishery management regimes in Australia, continued secure access to the resource remains a critical concern. It is submitted that what is needed is a more clearly defined legal framework (both legislative and judicial) to support that development. It may be that the issue of native title and claims to the sea and its resources will provide the stimulus for the Courts to clarify and possibly redefine the legal nature of Australian Commercial fishing licence.

Rights Based Systems: Sovereignty and Property - C. Jensen

C. Jensen
167 East Park Avenue
Wasilla, Alaska 99654 USA
<cjensen@alaska.com>

1. INTRODUCTION

A successful rights-based system must draw a distinct line between sovereignty and property. The distinct goals of each principle must be defined and, because they compete with each other, these goals must be prioritized to avoid conflicts. Next, the system must develop management rules to achieve these goals: one set of rules for sovereignty, another for property and the third for interaction between the two. This structure stimulates a healthy tug-of-war between the competing principles. It produces a dynamic balance that makes the current management system reliable and, looking forward, reasonably predictable in the face of normal changes and therefore durable. If this lively interaction is lost, the game is over for the rights-holders.

2. CURRENT THEORY

2.1 Economic model

Figure 1 is a tool Dr. Scott has provided to help gauge the quality of property rights created through individual transferable quotas (ITQs) and other transferable licences in a rights-based system¹. We can also use this tool to compare the quality of rights created by different systems.

¹ More recently, Dr. Scott (1999) has added flexibility and divisibility to this model.

Figure 1: Economic model (Scott 1988) - Characteristics of property rights

An important finding, documented by using this model to study existing fisheries management programmes, is that systems that create the most property rights for their fishers have healthier fisheries and greater economic efficiency.

2.2 Working hypothesis

Many opinions have been offered to explain this finding. Most believe there is a relationship between private ownership, through rights-based allocations, and healthier fisheries. That view suggests fishers take better care of the resource, independently or through co-management with government, because they have an ownership stake in it.

In my view, better science and increasing environmental regulation are the more likely explanation for healthier fisheries. To some degree, limiting participation helps attain environmental goals. But, the common purpose of every rights-based system is economic: to limit access to increase the likelihood the remaining participants will make a living at the licensed activity. In turn, these licensees must comply with environmental regulations to maintain their licence rights. Compliance achieves sustainable stocks and other environmental goals.

As environmental goals increasingly encroach on economic rights, the licencees have a greater incentive to influence what goals are selected by government and the process by which these goals are to be achieved. To preserve the greatest economic rights, licensees develop an increasing capability to participate in the government management process. But, industry participation is the typical response to increasing government regulation of any activity. Thus, environmental stewardship and co-management are normal industry responses, whether or not the activity is controlled through rights-based allocations.

In this respect, the relationship between ownership and the environment seems tenuous. Increasing environmental regulation, as a cause, and a healthier resource, as an effect, seems a more likely explanation. Whether one participates as an owner or not is largely irrelevant. In any event, the ownership that a rights-based system provides to its licensees depends completely on the success of the system, as this paper demonstrates.

We can only progress if we examine rights-based systems in a valid framework. Today, the private sector has a huge investment that directly depends on the success of systems that use the rights-based model. Once the investment is made, the private sector has a limited ability to adapt to extreme changes in government management. For this reason, we have all our eggs in one basket.

We need to identify flaws in the management structure and fix them before they become serious problems and the solution is taken out of our hands. At the end of the day, without the licence, or the rights we thought we had bought, there is no business, only a pile of sticks and bricks, vessels and gear and miscellaneous equipment that has no equally productive use.

2.3 Question: how many property rights are enough?

Our task is to chart the future for rights-based systems. A loud cry for more (or, its synonym, better) private rights has resounded throughout this conference. It is based on an assumption: if some private rights rebuild resources and promote economic efficiency, more property rights will provide an even better result. To test this assumption, we must ask how many property rights does a system need to function optimally? Once we find the answer, we will have a viable rights-based model.

2.4 Perfect property eliminated

An important point can be quickly made using an extreme example. Here, we will use the concept of perfect property. Figure 2 below shows us what perfect property looks like in the economic model.²

² Scott (1999) did not design the model for this purpose.

Figure 2: Perfect property

Participants from Namibia, Zimbabwe, South Africa, Estonia, plus the Aborigines immediately recognized the meaning of the big black rectangle. Perfect property gives absolute control to the owners. It enables these owners to manage the activity to achieve their goals. Everyone else is excluded.

Absolute control is not a characteristic of property in the real world. Rights at the extreme ends of the model are not property rights. Thus, the optimal property rights will fall short of this extreme in the economic model.

2.5 Framework: the relationship between sovereignty and property

There has been a great deal of analysis on the subject of property in rights-based systems. There has been less analysis on how property works outside a rights-based management system. Perhaps that inquiry can point us in a fruitful direction.

If your government fell today, what would your property be worth? The answer is nothing. A government creates property and, as it goes, so goes your property. Hence, owners have a vested interest in the stability of the government that creates their property.

If your government allocates economic rights to only a few, what will happen? It will fail. Why? The huge group of excluded have no reason to support the government. So, a government must manage for the good of its community, not just its property owners. Sometimes, there are conflicts between the sovereign community and the property owners. Then, the government must make choices between the two. A government will thrive if it creates enough rights and, when deciding conflicts, its choices preserve a balance between the community and the property owners.

These examples illustrate the dynamic relationship between sovereignty and property. The same rules apply to a rights-based system, which functions according to the same principles. It might help to think of a rights-based system as a mini-sovereign system.

A successful system must incorporate the sovereignty-property dynamic if it is to endure. We will consider that general relationship here. But, this analysis does not evaluate particular systems, engage in comparisons of different systems, or recommend any specific course of action. Instead, it leaves that difficult task to those with a direct stake in the outcome, an approach which, in my experience, consistently yields the best result.

3. PROPERTY

3.1 Properties of property

Many speakers have examined property rights in specific systems. We have also heard about the historical development of property, including the rights-based fisheries model. This section takes the generic approach. It implies that property is the same in every nation of the world. The distinctions are simply a matter of degree. As such, property is a concept that is easily understood by everyone.

3.2 What is property?

Property is a man-made concept. Its purpose is to organize private relationships. Sovereigns create property. In the broad sense, a sovereign is a community that bands together for the common good of its members. In a technical sense, a sovereign exercises dominion over a specific group. This word is typically associated with government and I use this term here in that context.

A government usually creates property by making laws that create property rights. Standing alone, a property right is insignificant unless the owner has a way to enforce it. For this reason, the government must also make laws that give individuals a way to protect their property rights.

3.3 Property is a right, not a thing

Property is the legal right, not the thing to which the right refers. Specifically, property is a relation between an owner and others in reference to a thing (Cohen 1927). An example helps us understand the difference:

i. My neighbour. When I am leaning over my fence, talking with my neighbour, I point to the house behind me and ask, "How do you like my house?" In my relationship with my neighbour, I have all the rights to the house; to use, possess, encumber and convey it. That is why I refer to it as "my house" when I talk to him.

ii. My spouse. When I sit down with my spouse, we talk about "our house" because, in this relationship, my spouse and I share the legal rights to it.

iii. My banker. Later, I drop off my mortgage payment to my banker. In this relationship, my banker has property rights in the house. I gave him those rights when I signed my loan contract. My banker can enforce his property rights if I do not pay my debt. However, I keep my property rights to the house as long as I make my payments on time. So, my banker and I each have property rights to the house that are enforceable, by one or the other of us, but only if certain events occur.

A property right gives the holder the power to exclude others. If I have the legal right to possess a thing, I have the power to exclude others from possessing it. The same is true with the right to use, convey and encumber. This power is the way private relationships are organized. But, this power is never absolute. It competes with other property rights and, as we will see later, this private power is subordinate to public law.

3.4 Fisheries management systems

3.4.1 Property rights are created by licensing rules

New property rights are created by the licensing rules. All fisheries management systems create new property rights, not just systems that use transferable licences or allocations. A few examples demonstrate this point:

i. Today many systems manage fisheries through transferable licences, such as ITQs. If a licence rule says an ITQ is transferable, that rule creates certain property rights. For example, the rule creates the private right to receive payment when the ITQ is transferred.

ii. Although less obvious, a licence rule can create a property right even though a licence is not transferable. For example, there is a licence buy-back programme established under United States' fisheries law. Under it, the buy-back fund will pay money to retire access rights. So, this licence rule creates a property right to receive payment, even though the licence, itself, is not transferable.

iii. When a new rights-based system is designed, licence rules set out the requirements a fisher must meet to qualify for an access permit. Typically, one requirement is catch history. This licence rule creates a property right if it allows catch history to be transferred. Specifically, that rule authorizes a fisher to sell his catch history to another person before any licences are issued. Later, the buyer can apply for a licence in his own name.

3.4.2 Rights-based systems do not recognize property rights or provide rules to enforce those rights

Today, no rights-based system expressly states that licence rules create property rights. Instead:

i. Most systems define their licences as privileges, even though all recognize they are bought and sold in the marketplace everyday. And, a few of these systems record liens for the private sector on their licences. A lien cannot attach to a privilege.

ii. The regulations in a few systems assert that their licences are property, which is wrong. As between the sovereign and the licensee, the licence is always a privilege. The reason is explained in the following section on sovereignty. Even in a private relationship, the licence is only the thing that refers to the property rights, not the property.

These two deficiencies threaten both the management system and private investments made in reliance on those systems for obvious reasons. They leave key parameters to be decided outside the licensing system; namely, by the courts or in the political arena. These deficiencies can be corrected without disrupting the management system or the property rights it creates.

A successful system must expressly state that property rights are created by its licence rules. It must, also, provide that property law controls the enforcement of those rights with two exceptions:

i. Only the manager has the authority to transfer a licence. Private voluntary or involuntary transfers are prohibited. This rule makes sure the manager can control participation in the way that is required by the management-system rules. It also solves serious property problems that otherwise arise, including when a private transfer is made to an ineligible person. And, it prevents a secondary market solely for passive investment, speculation and manipulation.

ii. The manager will transfer a licence if the licence is eligible for transfer and the licencee is eligible to hold the licence under the management-system rules. This rule tells the private sector that the manager will not impermissibly intrude into private relationships or impose burdens that unnecessarily restrict property. It will work only if the system designers can accurately identify a limitation on property rights that is required to manage the fishery compared with a limitation that is not required to manage the fishery.

4. SOVEREIGNTY

4.1 The purpose of sovereignty

Sovereignty is the same in all nations. The distinctions are simply a matter of degree. As such, sovereignty is a concept that should be easily understood by all. The purpose of sovereignty is to impose limitations on individuals for the common good. These limitations create an orderly society. They are made through public law.

Public law is unlike property law, which orders private relationships. For example, a private law may allow you to buy a car, but public law can prevent you from driving it without a driver's licence. Or, private law may allow you to buy a factory, but public law can prevent you from operating the factory if it pollutes the air. In our context, private law may allow you to buy a vessel, but public law prevents you from going fishing unless you first get a government licence. So, the distinction between public and private law generally depends on the object to be achieved. Is the law trying to protect the community or to protect a particular individual?

4.2 The real reason licences are not property

In the big picture, the purpose of a sovereign is simply to govern. It has no other central purpose, such as to own property or be profitable. The power to govern is inherent and, as logic confirms, a sovereign cannot give that authority away. For example, a government can make a contract with a company to provide police services. But, a government cannot contract with a company to make the public safety laws. This basic principle of sovereignty is an absolute barrier to full privatization of commercial fisheries. Industry should recognize this barrier and adjust investment accordingly.

4.3 I paid for it, it's mine

A law is unenforceable if it gives away the government's power to rule. For example, a government can choose, but not be required, to pay fishers when the government decides to limit or end access-rights. Recently, the government of New Zealand went into the market place and bought back its licences to satisfy a court order related to Maori rights. Luckily, a good price was obtained. I will use this event to consider the big picture.

Certainly, a government can choose to buy-back its own licences. The economics of that decision are not entirely clear since, in most nations, the government initially issued transferable licences to fishers for free or a nominal charge. And, there seems to be no benefit to, later, buy those licences back at the taxpayers' expense. We can also see why a government might buy-back resources in a different situation. If a government owned natural resources in its jurisdiction and sold them, it might pay the new owner to buy the resources back at a later time. In this kind of transaction, the government is acting in a private capacity and the normal property rules apply.

However, no one owns the free-swimming fish. The futility of trying to exert ownership over something that swims away clearly makes this point. Instead, a government's authority over its fisheries is based on its power to manage affairs within its jurisdiction. A government is acting solely in its sovereign capacity in this arena. So, the important question is whether a government can be forced to pay licensees before it can manage its fisheries in a different way.

A fishing licence or an ITQ, is simply a tool to manage fisheries in the changing national interest. These licences regulate private participation to achieve national goals, such as sustained yield, economic efficiency and social benefits. The process of governing is dynamic. National goals change over time and, as they change, the sovereign adjusts its rules accordingly. For this reason, the sovereign retains the sole power to create, expand, limit or end private licence rights and does not have to pay the owner if their rights are diminished or terminated as a result.

What does this mean for rights holders? It means their property rights are only as good as the current licensing rules. It also means that fishing licences, or their allocation, is a privilege given by their government; a sovereign permission to engage in conduct that otherwise would be illegal. In a contest with the government, property law does not apply. Instead, one's remedies are limited to those expressly provided in the fisheries management system and, then, only if they do not require the government to buy back its right to govern.

4.4 The benefits of sovereign limitation on property rights

4.4.1 Sovereign community

To round out the picture, we must recognize the benefits we obtain from the sovereign principle of limitation. The ability of a government to change the way a country is run from time to time allows progress. It acts as a pressure valve when public needs shift. We know that governments that lack effective pressure valves fail.

More to the point, public rules create social order. Social order creates property value. Therefore, property rights are only as reliable and durable as the government system on which those private rights depend. So, what we lose in certainty on the private rights side, we gain through stability on the public side. These simple principles illustrate the mutually dependent relationship between sovereignty and property.

The sovereign community consists of those on whom a government depends for support. In our case, it includes commercial fishers, for-hire sport fishing businesses, recreational fishers, subsistence fishers, other marine users, environmental advocates, consumers, the public, other nations and so forth.

Each sector of the community has needs. Particular needs change over time. So, the government must remain able to adjust its management methods to respond to changing needs in its community. A rights-based system must have effective mechanisms to allow dynamic sovereignty to work with the least disruption to established property rights.

Rights holders should assist government in designing these mechanisms and work to put them in place before problems polarize the sovereign community. An essential requirement may be a strong connection to the local communities in which specific fisheries are conducted. And, licencees should recognize that changes implemented to achieve new sovereign goals may affect the licence conditions under which they can conduct their business operations.

4.4.2 Overcapitalization and aggregation of rights

"Overcapitalization" is the popular word for too much effort, measured by units of gear or in some other way. It was one scourge that limited access programmes and, later, rights-based systems were designed to remedy. Did they achieve this goal? The number of participants clearly diminished. So, the goal was achieved in that respect. But, limitation on the number of participants created something new. The value of a fishing operation shifted from the vessel to the newly created licence and, as rights aggregate into relatively fewer hands, the licence value increases proportionately. Was one form of overcapitalization traded for another?

Now, we will add another dimension. In open-access, assume one begins with a fishery that is not sustainable and suffers various problems, which is not always the case. With limited-access, the fishery begins to rebuild. With exclusive transferable allocations through the rights-based model, the fishery reaches sustainability. As the allocations continue to aggregate, the fishery may even become bountiful. At this point, there may be only a few fishers that control a vibrantly productive fishery; perhaps, one of the most productive fisheries in the world for the particular species. We have some fisheries today that fit these specifications.

One can all see how the picture has changed from open-access to aggregation of rights. The end result could easily be perceived as a government-created and controlled monopoly for a favored few. Of course, the fishers devoted their lives to building the fishery and their livelihoods depend on the level of allocations they acquired. But, the excluded think they should share or, at least, start paying rent. There are producers in South Africa today who have gone through this process and lost property rights. Until the entire sovereign community is included, the system is not complete. Whatever the reason, and in every case, the government gets to make the call.

5. SUMMARY

Today, there are six billion people on Earth. Twelve years ago there were one billion less. The United Nations projects that twelve years from now there will be one billion more. By any measure the world is experiencing staggering growth and the political response of nations, on a local and a global scale, may range from ominous to fruitful. Either way, it is going to be expensive.

Ways must be found to accommodate the population increases starting with the basic necessities of food, housing, health-care and energy. Today, many nations with the greatest projected growth have trouble feeding their current population. The role other nations play is important. And, issues of genetically modified foods, sustainable agriculture, forests and fisheries, clean air, water, land and energy, including non-fossil or more efficient fuels, biodiversity, global warming and the like, are real problems of today and not intellectual exercises.

On a more practical note, we must recognize that, with population growth, competition for everything (not just profit-making activities) increases and, in response, governments will be required to allocate increasingly scarce opportunities to a relative few. To this requirement, we must factor in the tendency for businesses to grow, which is a particular concern in many nations. The result, as we can already been seen, is that competition becomes increasingly ferocious among sectors.

The necessary policies will be set by governments and the solutions will be developed by the private sector or free market. In my view, our burgeoning population and growing businesses are the catalysts to develop new management techniques simply because what we use today will not work tomorrow.

At this juncture, rights-based systems offer the management tool of choice. Today, many nations control a large number of activities using the rights-based model. Nuclear power plants, hydro-projects, telecom-munications, broadcasting, air carriers and trucking, to name a few. Use of this model is a global trend that is strong and expanding with no end in sight. As opportunities diminish, there will be a premium for systems that divide opportunities and allow reallocations in a fair way. Of all the systems I have studied, I believe fisheries systems are the most likely to develop a rights-based model that will best meet the challenges of this millennium, along with producing a bountiful harvest for all to share.

6. LITERATURE CITED

Cohen, M. 1927. Property and Sovereignty, 13 Cornel L.Q. 8.

Scott, A.D. 1988. Conceptual Origins of Rights Based Fishing. In Neher et al.(eds.) Rights Based Fishing. Kluwer Academic Publishers, Dordrecht.

Scott, A.D. 2001. Introducing Property in Fisheries Management. In Use of Property Rights in Fisheries Management. Proceedings of the FishRights99 Conference. Freemantle, Western Australia, 11-19 November 1999. FAO Fisheries Technical Paper No. 404/1, FAO, Rome.

Property Rights in Relation to Fishing Licences in Australia from a Legal Perspective - D. Fitzpatrick

D. Fitzpatrick
Fitzpatrick Teale, 380 Bourke Street, Melbourne
Victoria, Australia 3000
<higteale@ozemail.com.au>

1. INTRODUCTION

From a legal perspective there are many forms of property. Property¹ may be real² or personal, tangible or intangible, legal³ or equitable⁴. Examples of pr