DENOMINATING RIGHTS - Chairman: Matt Gleeson, Australian Forestry and Fisheries Administration

A Mechanism to Address Surplus Growth within Quasi-Property Right Systems - C. Annand and F.G. Peacock
The Missing T: Path-Dependency within an Individual Vessel Quota System - The Case of Norwegian Cod Fisheries - B. Hersoug, P. Holm and S.A. Rånes
The Scalefish Fisheries of Northern Western Australia - The Use of Transferable Effort Allocations in the Management of Multi-Species Scalefish Fisheries - L. Cooper and L. Joll

A Mechanism to Address Surplus Growth within Quasi-Property Right Systems - C. Annand and F.G. Peacock

C. Annand and F.G. Peacock
Department of Fisheries and Oceans, Scotia-Fundy Sector, Fisheries Management Halifax
PO Box 1035, Dartmouth, Nova Scotia, B2Y 4T3 Canada
<[email protected]> and <[email protected]>

1. INTRODUCTION

This paper provides a progress report on the introduction of thresholds in selected Canadian East Coast Fisheries and the degree to which the Department of Fisheries and Oceans (DFO) has been able to address multiple conflicting objectives of economic efficiency and socio-economic concerns. These objectives have been discussed in Angel et al. (1994 pp. 15-17). The economic performance objective has been to maintain an economically viable industry on an ongoing-basis where viability implies an ability to survive downturns with only a normal business failure rate and without government assistance. The employment objective has been to maximize employment subject to the constraint that those employed receive a reasonable income through earnings and fish-related transfer payments¹. In consort with these objectives is the rising social issue related to the well-being of coastal communities. In this paper these goals will be viewed in light of resource-booms linked with possible later downturns and the possibility of sharing excess profits to meet demands on the resource from other than the original quota holders.

¹ In Canada, funds are transferred from the wealthier provinces to those with lower average incomes; they are referred to as 'transfer payments'.

This paper describes the evolution of the threshold concept under a variety of different circumstances and provide a brief synopsis of the problems encountered. It examines the use of the Integrated Fisheries Management Plan (IFMP) process to provide a mechanism that is not only effective in reducing the political volatility associated with access and allocation issues within fisheries, but in doing so also garners support from industry as the decision-making process is devolved to them through these co-management approaches.

2. BACKGROUND

The use of quasi-property rights (QPR) in the form of individual quotas began in the Canadian East Coast fisheries in 1977 when Canada extended its Exclusive Economic Zone to 200 nm. The reduction of foreign fishing activity was heralded as going to provide a new frontier in prosperity for Canadian fish harvesting and processing. Even though several traditional stocks such as herring and groundfish were depressed due to high levels of exploitation, the "new era" anticipated growth in stocks of fish as well as all other venues of the fishing industry. Therefore at the announcement of the extended jurisdiction euphoria abounded in Canada as fishers, both traditional and new to the game, planned how to divide up the expected spoils of this good fortune.

The policy and decision-making processes of the day resulted in numerous and often conflicting principles of conservation, economic viability and more social objectives related to community support. By the late 1980s the real phenomenon of too many fishers and too few fish suggested that the vision of the government in its 1976 policy was wrong or that both industry and government were unable to make it work.

It was in this light, during the 1980s that government in concert with the industry began to seriously look at property right schemes as possible solutions for some of the problems. QPRs were seen as providing interesting solutions to some of the major problems in exploding fisheries in that they tend to make people accountable for their actions and can be successful, when used in a transferable format, at controlling capacity growth. In consort with stringent conservation controls for rebuilding resources QPRs can become formidable tools for adjustment in a way that industry supports.

Kirby (1982) recommended the allocation of non-transferable quotas to large fish companies which he termed Enterprise Allocations or EAs, as a means to encourage companies to live within their quotas. Since that time Individual Quota (IQs) and ITQs have been introduced for various fisheries from groundfish and herring to shrimp and crab, and within the Scotia Fundy region more than 50% of the landed value is now covered by these management approaches. In almost all cases those programmes introduced prior to 1996 have had as a major objective balancing capacity of the fleet with the resource, which coincidentally were in a state of decline at the point of introduction. Since their introduction, two salient points have become apparent among all QPRs, namely that fleet rationalization has occurred and stocks have stabilized or expanded after the time of introduction. The issue of rationalization is really a translation of economic self-sustainability or economic efficiency while conservation, leading to stock stabilization/growth, comes from the need by stakeholders to invest in the stocks for the future.

Despite the successes related to the introduction of limited access management, the question arises: does this type of management create any new problems? In the context of this discussion the real question might be the relationship of the technique to the socioeconomic concerns that confront managers on a day-to-day basis.

3. THE MOVE TO THRESHOLDS

Several factors can be identified as pertinent in developing a mechanism that could deal effectively with the boom and bust sequencies seen in the East Coast Fisheries. These included ecological changes as well as economic and social considerations. An obvious question that arose related to the impact of resource fluctuations on management thinking. Two decades ago, the 200-mile limit promised a new dawn of prosperity largely to be based on groundfish. But the 1990s brought a codfish collapse and one of the largest employment losses and aid programmes in Canadian history. While more recently, unprecedented growth in invertebrate resources has resulted in shellfish becoming the largest source of revenue in the fishery.

Currently there is no established policy framework or regulatory mechanism to determine when and how wealth created in a given fishery might become subject to redistribution. Without a framework every improvement is subject to political lobbying by various interest groups. When no clear policy exists, Integrated Fishery Management Plans (IFMPs) do provide a process that allows industry to decide these issues with a minimum of political interference.

Thresholds are seen as one way of triggering a wider distribution of the resource in a way that is not as subject to political interference in the methods of reallocation in satisfying the needs or demands of others. Several issues have contributed to development of the threshold mechanism in QPR fisheries:

i. Much of Canada's commercial fishery is based in areas where there are few non-fishery employment opportunities and the commercial fishery has to reconcile the realities of a modern fishing industry in a global market environment with other public concerns including the support of coastal communities.

ii. The fisheries have achieved a high degree of efficiency, which manifests itself in several forms namely, (a) excess profits per individual and/or company and (b) concentration of activities among a few vessels and/or companies thereby affecting the coastal community network.

iii. In light of the groundfish collapse rapidly-growing resources have demanded a rethinking of old solutions as disputes among existing users and those wishing to again access to these lucrative resources intensified and both government and industry looked for ways to avoid the mistakes of the past and come up with innovative solutions that satisfy all concerned.

Within the threshold concept, questions will naturally arise including:

i. What is an excessive share of wealth under a QPR privilege?

ii. Who should decide when there is a resource surplus?

iii. What criteria should be used to trigger the use of thresholds in a particular fishery?

iv. What would be the future status of participants entering the fishery?

v. If abundance is increasing should the licence pool be extended and if so should the number of participants bear any relation to the long-term stability of the resource?

vi. Does the Department of Fisheries have a mandate to meet social objectives or is this better left to industry or other government departments to address this issue?

Thresholds can best be described as mechanisms by which QPR participants can define when, for how long and what resources will need to be compromised within the QPR format, to ensure a devolution of activity to new participants. This approach has the advantage of defining the long-term objectives of management plans as well as allowing the permanent stakeholders the opportunity to define its parameters. For coastal communities and fishers it provides a counter to the fear of consolidation/concentration and allows for income opportunities to a wider number of people who often live close to the resource under consideration.

4. THE PROCESS

While enjoying the benefits of QPRs, the fisheries in Canada remains common-property resources with no allocations having absolute durability although some have more than others and the terms have been spelled out more explicitly in the development of IQs and EAs. In most cases the percentage shares of the rights holders have not greatly changed in many years.

Even so, fleets hotly dispute the various shares. The management plan for Atlantic groundfish (DFO 1999), for example, says that "Allocation of fishery resources will be on the basis of equity taking into account adjacency to the resource, the relative dependence of coastal communities and the various fleet sectors upon a given resource, and economic efficiency and fleet mobility". But the plan gives no priority listing or weights to these factors. Industry members can argue that any of the options should prevail. Rival interests often lobby heatedly for higher quotas, not only through the advisory committee system, but directly to official's and the Minister's office. This in turn creates suspicions of undue influence and politicization of the fishery's management.

Besides the rivalries between existing users, others often demand a place in the fishery, particularly for newly-developing or rapidly-growing fisheries. When stock-abundance seems surplus to the needs of the existing fleet, several contentions arise: (a) whether other core fishers outside that sector should get a share; (b) whether new entrants from outside the fishery should be allowed in, (c) should communities be allocated shares or (d) should we allow fleet-efficiency to continue to increase at the possible expense of coastal communities' welfare.

The co-management approaches currently being adopted in Canada provide a process with which to deal with the multiple and conflicting rules that continue to exist, including access rules that are fragile, given that the power of allocating the resource that continues to reside with the Minister. Integrated Fisheries Management Plans (IFMPs) have been adopted in recent years to give industry a greater voice in the decision-making process and through a cooperative process involving science, management and Industry set the basic rules for management and allocation, sometimes on a multi-year basis.

Integrated Fisheries Management Plans (IFMPs) and Joint Project Agreements (JPAs) have encouraged industry to reduce the political volatility by bringing the decision-making process closer to the local level. Rather than accepting an external process that is subject to rigid rules, or political pressures, as stocks increase or decline, industry has defined its own mechanisms to avoid this. Through this process some groups have designed management responsibilities for administering their share of the total allowable catch (TAC), including biomass thresholds for management action, as well as other aspects of the fishery. These co-management arrangements provide industry with better security of access, clearer roles for government and industry, and more opportunity for industry to put its expertise to use in managing the fishery. This process, in fact, allowed the next logical step to occur i.e. the introduction of thresholds.

5. THRESHOLD CASE-STUDIES

5.1 Introduction

What exactly is meant in this article by thresholds, how are they determined and when are they used? To explain the current thinking several case studies will be used as examples of the rationale for their use and their intended goals. While it is evident that this approach can take several forms, themes come to the fore which suggest objectives for this approach.

5.2 The Scotian Shelf Shrimp Fishery

5.2.1 The setting

The fishery, long a relatively dormant operation because of bycatch problems, was revived in 1993 through the use of the Nordmor grate. Since that time the harvest from this resource has grown from a TAC of under 2000t established in 1995 to over 5000t in 1999. Projections through the Regional Advisory Process (RAP) are for further increases. It is prosecuted largely by groundfish draggers under 19.8m although a small (500t) shrimp trap fishery also exists. Between 1994 and 1996 both the Scotia Fundy and Gulf components of the fleet moved to ITQs. These draggers come from many localities within the Maritime Provinces of Canada with all vessels fishing the 6-9 month fishery within one or two locations (Canso and Petit de Gras) in Nova Scotia. Local fishers and processors do not participate in the fishery and landings are trucked to New Brunswick, Newfoundland or the USA.

Local fishers are mostly groundfish operators who have been hard hit by the 1993 moratorium on cod. The main consultative body for this fishery is the Scotian Shelf Advisory Committee in conjunction with the Atlantic Canadian Mobile Shrimp Association, which represents all 29 licence holders.

5.2.2 The problem

The fishery experienced its most profitable years in 1995 and 1996 due to high prices, increased stock abundance and gear selectivity in combination with the general downturn in the groundfish fishery and more recently a downturn in the inshore lobster fishery. With this situation demands for a "share of the resource" were made to the federal Minister by local and provincial politicians as well as fishers from the area, native groups and local merchants on the basis of adjacency to the resource and lack of other fishery related employment.

5.2.3 The solution

Faced with the prospect of arbitrated decisions by federal bureaucrats, the full-time licensed fishers set up a threshold scheme which would provide long term protection for vested licence holders and would provide for temporary sharing of stock growth on a predefined formula. One critical element was the determination of the average landed value and an open and reliable means of calculating it. Several objectives were put forward as part of the overall plan including: (a) protection and stability of the existing fleet; (b) incentives to the existing fleet to maintain stewardship of the resource; (c) and provision of economic relief in hard-pressed areas adjacent to the resource. The details of the programme are as follows:

i. Establish a quota minimum threshold equal to the 1997 quota base (3200t). As fishers think in terms of tonnes, a tonnage threshold was essential.

ii. Establish a minimum-revenue level which was equal to the 1997 tonnage and price, i.e. $Can5.29 million. Share revenue on amounts in excess to the 2 threshold levels. That is, if both thresholds are met, the sharing would be on the value on a predetermined basis. The value is established using a price per kilogram based on international accepted standards.

iii. Share the excess resource based on predetermined percentage levels of 50/50, 60/40 & 70/30 based on quota levels. New entrants, selected from applicants using a draw method would ultimately receive amounts equal to permanent licence holders over a 2-year period. Continued growth in value and tonnage could result in successive allocations to new groups of temporary licence holders over the duration of the 5-year plan.

5.3 The Eastern Nova Scotia Snow Crab Fishery

5.3.1 The setting

This fishery consists largely small vessels (under 19.8m length) based in four crab fishing areas in the eastern part of Nova Scotia. It operates from several local ports, which have a mix of fishers, with and without, crab licences. Through the 1970s the number of licence holders increased, with landings and licences keeping pace with one another. However, by 1982 quotas were not being reached and in 1984 quotas were removed as a management tool due to lack of scientific ability to predict stock biomass. Throughout the late 1980s increased biomass resulted in a resurgence of effort. Licences distributed remained stable until 1995 and biomass has continued to increase.

5.3.2 The problem

Perceived excess profits intra-port jealousies, the need for fishing alternatives given the groundfish downturn and the adjacency issue have all played a part in demands for more access, largely exerted through the political process. These factors were because of increased market prices due to the collapse in the Alaskan crab fishery and the growth in crab populations combined with the declines in both groundfish and lobster resource levels. The particular concerns in this fishery, apart from the knowledge of the status of the resource, are related to the efforts of many fishers to receive the benefits from ITQ fisheries where a level of great profitability is possible. Thus, there was a need to entrench a level of potential longer-term benefits while accepting the social need to have a process that delivers some benefits to local interests as surplus growth occurs. Research has indicated that with the stock increase certain areas within the crab zones were underfished by the traditional licence holders and it identified potential for new entrants.

5.3.3 The solution

Licence holders recognized that their fishery could tolerate additional effort on a temporary basis. Thresholds were then established in the inshore snow crab fishery in an attempt to protect a long-term viability position for existing IQ licence holders while at the same time allowing more fishermen to share resource surpluses. The long-term objectives for this fishery include (a) the continued biological and economic viability of these stocks and (b) the broader distribution of temporary access within the fishery to other core licence holders when both market and resource conditions are favourable, and in a manner that does not threaten the viability of the regular licence holders.

The threshold plan for each snow crab area is different but the principles are generally the same. These objectives are achieved through the following tactics:

i. Fulltime crab fishers identify location (traditional and non traditional areas) and threshold amounts (tonnage or tonnage and value).

ii. Licence holders identify a mechanism for sharing growth beyond a threshold. That is, sharing of access to temporary rights holders which may involve reciprocal zone-sharing, straight access-sharing or sharing of fishing zones.

iii. A complex tiered approach was developed, which if TACs continue to increase, will result in the temporary fleet receiving all the excess above the threshold and with equal access to the entire zone.

iv. Plans for crab are normally for a period of 5 years at which time issuance of thresholds based rights revert to a ground zero situation and negotiation recommence.

5.4.1 The setting

In established multispecies demersalfisheries the concept of thresholds manifests itself in a different manner. Licence holders are being encouraged to develop a threshold procedure that protects the interests of the initial licence holders but also allows access to other ITQ fishers in a reasonable manner. Because of the complex nature of these demersal fisheries (they are Atlantic-wide in Canada and consist of many fleet sectors both competitive fishing using quotas ITQ) and the fact that resources are generally not increasing (as is the case for shellfish) the issue of thresholds has not surfaced. However in one area, notably Georges Bank, the yellowtail flounder resource is experiencing a major resurgence of abundance that is expected to continue at least in the near-term future. This involves a fishery where ITQs have been proposed for fewer than the total number of licence holders currently exploiting the other groundfish resources in the area.

Prior to 1993 the resource was not fished by any fleet however with the initial recovery of the resource, the Mobile Gear ITQ fleet of vessels under 65ft in length began a directed fishery. At that time approximately 176 licence holders with initial cod and haddock quotas had access to the resource as a bycatch although in reality fewer than half of the fishermen prosecuted the resources available on Georges Bank. In the short-term it was recognized that the resource would not support a directed fishery for all possible participants. The industry decided to restrict entry based on their criteria, leaving open the question of long-term benefits. This implied that there may be stock growth and the need for restructuring as it was known that the precautionary TACs established would in the long-term be scientifically based.

5.4.2 The problem

The resource has continued to increase, currently to 2000t with 93% available to the ITQ fleet whose members have now requested that a formal ITQ system be established to guarantee this level of harvest. With this request other ITQ licence holders have questioned the fairness of restricting involvment to the initial participants and have asked the government to intervene. Fearful that a bureaucratic solution would be imposed, the fleet owners were prepared to put forward a threshold mechanism that may be acceptable to all. As in the invertebrate fisheries the primary objective will be to protect the interests of the initial participants while offering some level of reasonable access to other licence holders and perhaps fleets, while resource levels remain high.

5.4.3 The solution

The situation in this case is more complex than the scenarios put forward under the single species invertebrate approach with the issue further complicated by the necessity of establishing an ITQ allocation formula and dealing with thresholds within a multispecies fishery. To date, the fleet, while agreeing to the general principle, has not recommended a consensual approach. Currently, members are considering a three tiered-formula dealing with the initial licence holders, other active IQ participants and the inactive vessels. A second tiered approach using yellowtail catch-history and initial cod and haddock allocations to provide the appropriate access opportunities is also being examined. Sharing with other fleets, i.e. EA fleets, has not been broached other than to ensure adequate bycatch is available. Market value will likely not be a part of the sharing formula.

6. CONCLUSIONS

The objective of thresholds over time in a true stock-growth situation would be to normalize the activities of all participants within the fishery, which would in so doing guarantee the long-term viability of the permanent IQ fleet. In situations of no stock-growth, shrinkage of temporary participants would occur such that to the degree possible to guarantee the viability of the permanent fleet (if stocks go below threshold amounts or value it will not be possible). The degree to which success of this objective can be measured is limited. Currently we are only experiencing the ascending part of the boom-and-bust cycle. However general indications suggest that the increased participation in decision-making delivered through the IFMP process aids both temporary and permanent licence holders in understanding the shared responsibility they have undertaken. This should enable them to deal with the stock fluctuations that will test this concept more fully in the future.

It appears thresholds offer solutions to specific problem, but in the context of ITQs other questions should be asked:

i. Are thresholds simply a way of addressing a social/political agenda?
ii. Should they be viewed as a global solution?
iii. Do they degrade ITQs i.e. economic efficiency?
iv. Should they only be used in IQ rather than ITQ fisheries? and
v. What is their security of access?

In allowing fleets to choose their own path we could in effect create a tiered approach to QPRs. However, this whole topic will require further discussion before the threshold concept is adopted in any but special circumstances.

7. REFERENCES

Angel, J.R. 1994. Report of the workshop on Scotia Fundy Groundfish management from 1977 to 1993, Canadian Technical Report of Fisheries and Aquatic Sciences, 1979 1-175.

DFO 1999. Integrated Atlantic Groundfish Management Plan, Guidelines pp 64, Communications Directorate, Fisheries and Oceans Canada, DFO/5536.

Kirby, M.J. 1982. Chairman. Navigating troubled waters - A new policy for Atlantic fisheries, Report of the Task Force on Atlantic fisheries, Highlights and Recommendations, 1-151.

The Missing T: Path-Dependency within an Individual Vessel Quota System - The Case of Norwegian Cod Fisheries - B. Hersoug, P. Holm and S.A. Rånes

B. Hersoug, P. Holm and S.A. Rånes
The Norwegian College of Fishery Science, University of Tromsø
NFH, University of Tromsø, 9036 Tromsø, Norway
< [email protected]>, <[email protected]> and <[email protected]>

"Given the availability of such a marvellous system as the ITQs, why have not all fishing nations implemented it?" (Hannesson 1992:93).

1. INTRODUCTION

Individual Transferable Quotas (ITQs) or more generally individual (private) property rights, are now being introduced in fisheries management world-wide, not only as a solution but as the solution to the familiar management problems we find all-over: over-capacity, dramatically reduced stocks, declining profitability, rising management costs, unworkable MCS systems, lack of management legitimacy, etc. With a crude simplification we can group the solutions to the present problems in three camps, with economists generally arguing in favour of (a) individual property rights while social scientists, and in particular social anthropologists, are pointing to (b) co-management, community management or more generally to (c) user-group participation (Christy 1996, Neher et al. 1989, Hannesson 1998, Jentoft et al. 1998, Pinkerton 1989). In between we find the still reigning biologists, either defending the old models with more sophistication, or pointing to multi-species modelling, or to the even more complicated concept of "ecosystem management" (Degnbol 1998).

Even if rights-based fishing can be associated with all three views, the concept of ITQs is clearly connected to fisheries economists and to the market as the central agent in fisheries management. The basic idea is expressed by Hannesson (1992: 92): "The advantages of ITQs are obvious....Dividing the TAC among all vessels participating in a fishery prevents a self-defeating race for the largest possible share of the total catch. And making the vessel quotas transferable makes it possible to minimise the cost of taking a given catch. In the short term, transferability ensures that the least efficient fishing vessels will not be used, as their quotas will be bought by the owners of the more efficient vessels at a price that benefits both buyer and seller. In the long run transferability means that the owners of fishing vessels can adjust their fishing capacity to the amount they may expect to be able to take, or vice versa."

In this world institutions, rights and efficiency are simple and well defined concepts, given for everybody who are not blinded by "ideological or political reasons" (Hannesson 1992:93). Considering the theme of the conference: "Use of property rights in fisheries management", we feel as social scientists more like the devil's advocates; trying to show that there is more to institutional change than getting the incentives right, that property rights are constituted through complicated processes and that efficiency is highly dependent on the political setting. As a demonstrative case we shall use the (attempted) introduction of ITQs in the Norwegian fisheries in general and the introduction of individual vessel quotas (IVQs) in the cod fisheries in particular.

The interesting aspect of the Norwegian case is that the deliberate effort of introducing ITQs was flatly rejected, even though all actors acknowledged the need for a more flexible system. In the meantime, the introduction of a "temporary" IVQ-system, meant to be a crisis measure, in practice, has turned out to be something close to a permanent ITQ-system, where only the official recognition of the transferability is missing. Having introduced the "I" and the "Q" it will be argued that some form of "T" will follow, as a path-dependent process. This paradoxical situation, where planned intervention failed while the efforts of "muddling through" produced the unintended results, reminds us of the importance of politics and power, labelling and timing. By unfolding the story, we hope to shed some light on the construction, "selling", implementation and gradual acceptance of a quasi-ITQ system.

This paper will therefore concentrate on answering four basic questions:

i. Why was the deliberate attempt of introducing a Norwegian variant of the ITQ-system totally rejected, not only in the Norwegian Parliament but generally in the fishing industry?

ii. Why has the implicit attempt of introducing a temporary IVQ-system ended up as a "quasi ITQ-system"?

iii. What are the prospects of the existing system in terms of gaining transferability of the fishing rights (the path-dependency)?

iv. What are the lessons of this paradoxical case for institutional theory and, in more practical terms, for the introduction of new management systems?

2. INSTITUTIONAL CHANGE AS A POLITICAL PROCESS

In social science approaches to fisheries management it has become commonplace to state that management takes place through institutions, and even more important, that changes in management regimes (like introducing ITQs or rights-based fisheries more generally) happen through the establishment of new institutions or modification of old ones. Recognising that there are many competing forms of institutionalism, what are the minimum defining criteria - what are we talking about? According to Peters (1999:18) there are at least four defining characteristics of an institution:

i. It must be in some way a structural feature of society, formal or informal

ii. It must have some existence over time

iii. It must affect individual behaviour

iv. There should be some sense of shared values and meaning among its members.

In our case we are most concerned with institutional change and with the establishment of new institutions. For the sake of simplicity we shall concentrate on two different institutional perspectives, one instrumental, which is quite common among fisheries economists, and a more sociological perception of institutions as embedded in a larger social structure.

Starting with the instrumental perspective, there are differences in approach, e.g. between economists and political scientists. Both will, however, be concerned with the manipulation of existing institutions and the design of new ones, like setting up ITQ regimes. Most often they will rely on some form of rational choice theory. Underlying this instrumental approach to institutional design and implementation is according to Peters (1998: 44): "that utility maximization can and will remain the primary motivation of individuals, but those individuals may realize that their goals can be achieved most effectively through institutional action, and find that their behaviour is shaped by the institutions. Thus, in this view, individuals rationally choose to be to some extent constrained by their membership in institutions, whether that membership is voluntary or not".

Institutions are consequently seen as sets of positive (inducements) and negative (rules) motivations for individuals, where the individual's utility maximisation is acting as the dynamic element in the institutional set-up. Although differing in detail, the different strains of rational-choice models are characterised by a common set of assumptions regarding the rational individual behaviour, and a common set of problems, relating to the classic challenge of how to make decisions relating to social welfare without having that decision imposed by a (central) authority. Most important, however, is the common assumption that institutions are formed from a "tabula rasa". Past history is of little concern and new sets of incentives can produce the desired behaviour immediately, provided the right mix of inducements and constraints. The immediate focus will nevertheless vary.

A political scientist like Ostrom (1990) has been most concerned with extracting the necessary minimal requirements relating to the successful management of common property resources (CPRs). She is concerned with institutions as means of "prescribing, proscribing and permitting a certain type of behaviour". Economic historians, like North (1990) and economists, like Eggertsson (1990), have been more concerned with the particular institution of the market, and the rules prescribing property-rights regimes. All approaches within the rational choice paradigm have problems of explaining how the ultimate preference of maximising individual gain is made. While institutions can form most other preferences, the most important driving preference is somehow externally driven and (evidently) constant over time.

Against this instrumental perception of institutions we supply a more sociological concept, where management institutions are viewed as being embedded in a larger social structure. The key concept, "embedded" originated from Polanyi's (1944) famous study where he accounted for the social and cultural constraints on economic action in premarket societies. Thirty years later Granovetter (1985) resurrected the term in order to explain how rules, procedures and normative standards of conduct in various institutional realms, such as economic, cultural and social life, influence and shape each other (Apostle et al. 1998:236). While Polanyi was concerned with the disembedding features of modern market economies, Granovetter's intention was to show that these economies are indeed influenced by personal relations transmitted through networks. But as pointed out by Barber (1995), who traces the story of the embedded concept, Granovetter does not deal with the larger social systems in which all economies are located. This deficiency is the explicit starting point of Hollingsworth and Boyer (1997:3), who try to develop the argument that markets and other co-ordinating mechanisms are shaped by, and are shapers of, social systems of production. There is, in other words, an interconnectedness between social and economic institutions, working both ways. Dominant social values, rules and procedures may limit, or obstruct, what is planned in the economic sector, and vice versa, economic processes may, over time, influence social and economic beliefs. The important point is that institutional change is partly outside the realm of direct human intervention. Therefore, institutional reforms may give some quite unexpected results, or even no results in the short run, if they are totally out of context with what is considered socially and culturally acceptable. Whatever the case, institutional reform will most often require considerable time to show results, due to the inherent sluggishness in the system. (The more detailed logic, based on a nested systems perspective is spelt out in Holm, Rånes and Hersoug 1997).

Within the sociological perspective the use of symbols may play an important part in shaping a particular institution and not least in regulating the behaviour of the participants. In our case we should also include the symbolic use of institutions in politics, that is, the use of certain institutions as signal markers, in order to increase legitimacy, or more plainly, to increase support for a party or a position (Edelman 1985). Adherence e.g. to the Raw Fish Act is largely considered to be such a symbolic gesture, necessary for everyone seeking political support in the north. The symbolic use of institutions also allows for double book keeping, such as when fishermen flag one popular institutional solution with the public while participating in the development of another, contradicting institution in the more closed and concealed arenas of corporate management.

Having already indicated that there are a number of different types of institutionalisms we run the risk of distorting a complex issue by presenting two ideal types. Nevertheless, Table 1 points at some of the main differences between the two perspectives that we have briefly sketched.

Table 1
Properties of different institutional perspectives

Properties	Instrumental perspective	Embedded perspective
Definition	Rules/incentives	Cognitive, regulative and normative structures
Incentives	Rational self interest	Socially defined goals
Preferences	Exogenous	Endogenous
Actors	Organisational entrepreneurs	Social forces, mediated through institutional participants (with important time lags!)
Genesis	Deliberate construction	Normally a gradual social process through various stages
Change	Often, dramatic, based on bad performance	Gradual, incremental, conforming to social pressures

According to the embedded perspective, the introduction of a new management regime, like introducing ITQs, is more than designing the system, getting the incentives right and persuading the decision-makers. If institutions matter, politics matters even more! And politics is not an exogenous variable in fisheries management which can easily be eliminated. Politics is, whether we like it or not, the very essence of resource management, that is, allocating scarce resources (Easton 1953).

3. THE NORWEGIAN FISHING INDUSTRY

Norway is one of the larger fishing nations in the world, with catch volumes ranging from 2.5 to 3.5 million tonnes per year; this ranks Norway as number ten in the world according to FAO statistics. Norway's position arises from its areas along the coast belonging to a up-welling system (the Gulf Stream) and that these areas have been exclusively reserved for Norwegian fishermen. Most of the fish are caught within the Norwegian Exclusive Economic Zone (EEZ), an area encompassing more than 1.2 million square kilometres. In addition Norway is responsible for two fishing zones of approximately 1 million square kilometres around the islands of Spitzbergen and Jan Mayen. Nevertheless, 80% of the total catches are based on shared stocks, with management responsibility shared with Russia, the European Union (EU), Iceland, the Faroe Islands and Greenland.

The fishing industry plays a relatively limited role in the overall Norwegian economy, being responsible for approximately 1.5% of GNP and near 2% of total employment. However, as an export industry fish and fish products are the second most important sector after oil (and before gas), being responsible for 9% of Norwegian exports. In 1998 the total export value was close to NOK 28 billion (@3.5 billion US$). This figure includes the sales of aquaculture salmon (@ NOK 10 billion), which has turned out to be an extremely important part of the Norwegian fishing industry, both in terms of production, employment and export. The exvessel value of the Norwegian catch is NOK 10 billion, distributed among 22 916 fishermen, of whom 6 257 are part-time and 16 659 have fishing as their main or sole occupation (Director of Fisheries 1998). The fishing industry plays a much more significant role, on the West Coast and in Northern Norway, where entire municipalities are based on fishing, processing, aquaculture and related activities.

The Norwegian fishing fleet comprises about 6658 active vessels of which about 90% are coastal vessels below 30 metres in length (Director of Fisheries 1998). While coastal vessels vary in size from 3m skiffs to 30m shelter-deck ships, the vessels in the 8 - 24.9m range account for 80% of the fleet's total landings. Seasonality is a characteristic feature of the coastal fishery since it exploits the different fish stocks as feeding and spawning migrations bring them close to shore.

As the mainstay of the traditional coastal economy, the fish resources have been regarded as the common property of the coastal people. In practical terms, this meant open access to the fisheries, but not for anyone. When capital intensive technologies - seine and trawl - were introduced in the groundfish fisheries towards the end of the last and the beginning of this century, the fishers resisted fiercely. They saw this as an attempt by merchants and industrial capitalists to take control of the fisheries. The fishers regarded them as outsiders with no legitimate right to harvest the resource. The Norwegian authorities have reluctantly accepted this viewpoint. Hence, seines were banned from groundfish fisheries with the adoption of the 1897 Lofoten Act (Jentoft and Kristiansen 1989), while trawlers were banned with the adoption of the 1936 Trawler Act, except for the few already established (Johansen 1972). Free access to the fishery only applied to people adhering to traditional fishing practices. This restriction was reconfirmed by the 1947 Ownership Act, which reserved the right of owning fishing vessels to active fishermen (Mikalsen 1977).

During the post-war period the restrictions against capital intensive technologies, and hence against "outsiders", have gradually been weakened. As part of the attempt to rationalize the fisheries, both the Trawler and the Ownership Acts were made less restrictive (Sagdahl 1973; Mikalsen 1977). This meant the addition of an offshore trawler fleet in Norwegian fisheries, partly controlled by the processing industry. Instead of ending the traditional fishery, as the fishers had feared, the result has been a dual fleet-structure where the coastal and offshore sectors exist side by side. In addition to the differences in technology, operational patterns and ownership structure, the two fleet segments were subject to different regulatory regimes. While the coastal fishery remained under an open access fishery, the trawler fleet - as a direct consequence of its introduction in the face of massive resistance from established fishers - was subject to strict access controls right from the start. Not before the cod crisis of 1989/90 would the coastal fisheries be effectively closed, even if the principle was introduced by the mid 1980s.

4. THE INTRODUCTION OF AN ITQ-SYSTEM

In 1988/89 it was evident that a new cod crisis was looming. Following record catches in 1986-87 the researchers at the Institute of Marine Research openly admitted that the TACs had been fixed too high and that the stocks were rapidly declining. Consequently, the issue of over-capacity was put on the agenda.

The issue of ITQs (as distinct from non-transferable quotas) was introduced through the report of a working group on the structure of the harvesting sector. The group comprised representatives from the Ministry of Fisheries, the Directorate of Fisheries and the Norwegian Fishermen's Association (NFA). The original idea was to introduce enterprise allocations (rederikvoter) in the offshore fleet thereby making it possible for companies with two or more vessels to rationalise harvesting and by next the round, make it possible for two or more companies to co-operate in reducing fishing. This was considered by most fishermen and politicians alike to be more or less similar to ITQs. Although the NFA originally had endorsed the proposal, it was soon in a heated debate, with almost unified opposition from the coastal fishermen. On the outset everybody agreed that over-capacity was the main problem. According to the committee the costs of restructuring had to be borne by the fishermen themselves, as state subsidies had been dramatically reduced. This did not go well with the perception of fisheries policy as a regional development policy contributing to the coastal settlement pattern. Politically the new high flyer was shot down even before take-off.

Faced with overwhelming opposition the Minister backtracked and decided to initiate a white paper to Parliament, but dealing with a much larger range of management issues. Four officials from the Ministry of Fisheries were assigned to draft the first discussion paper, which (for the first time) was discussed not only with biologists from the Institute of Marine Research (the official adviser to the government) but with economists and social scientists from the Norwegian universities as well. Drawing heavily on the existing ITQ-schemes in Australia, New Zealand, Iceland and Canada the group presented an overview of different forms of ITQs, ending up by recommending an ITQ-system with strong geographical limitations on transferability (Ministry of Fisheries 1991). The report discussed various forms of "transferability", including:

i. the traditional trading of quotas
ii. transfer of vessels with quotas
iii. enterprise allocations to be "traded" within the company
iv. the renting of quotas on an annual basis and
v. co-fishing where several owners may decide to use one boat to catch several quotas.

By taking the demand for more flexibility and the need for regional stability into consideration, the Ministry thought the proposal would be accepted, both among fishermen and local and regional politicians; the opposite happened. "The overwhelming majority of those consulted were strongly against ITQs, even in the modified version suggested in the draft" (Apostle et al. 1998: 198). Looming large in the background was the fear that Norwegian harvesting rights would be bought up by European companies (Government of Norway 1991:126-7). Not only was the ITQ question connected to the coming debate of Norwegian accession to the EU, it was also immediately made an issue in local elections of 1991 where, especially, representatives of the north opposed "any privatisation of the commons". The issue threatened the political harmony of the Labour Party (now in government) and a task force within the party found that the question of ITQs was not on the political agenda, a position reinforced by the Prime Minister, evidently for expedient political reasons (Moldenæs 1993).

When the revised political version of the white paper appeared in Parliament, the question of transferability was considerably watered down. In the report from the Standing Committee on Fisheries the majority rejected outright an ITQ option while a minority would continue the work to introduce a programme for ITQs, a situation that was later reflected in the general debate in Parliament.

ITQs were, according to the winning coalition "a dead horse", thereby signifying a remarkable defeat for the former Minister, the top bureaucrats in the Ministry and the generally powerful employers organisation of Norway (NHO).The Ministry had evidently miscalculated not only the general political attitude, but misread the fishermen as well. Apostle et al. (1998) discuss the possible explanations, pointing to the short duration of the crisis (on recovery in 1992/93 overcapacity was no longer the pressing issue), the extraordinary process (where the industry organisations were not represented in the committee drafting the paper) and the lack of power on behalf of the government to make tough decisions in times of crisis. None of these explanations seen in isolation are satisfactory. Suffice to say that the horse was definitely not dead - it just took another route!

5. THE END OF OPEN ACCESS: THE IVQ SYSTEM

5.1 Beginning of the process

The open-access regime in the Norwegian coastal cod fishery came to the end with the collapse of the Northeast Arctic cod stock towards the end of the 1980s. Due to a sudden and unexpected decline in the size of the cod stock, the overall TAC was set to 340 000t in 1989, down from 630 000t the previous year. The coastal fleet's quota was reduced from 200 000t in 1988 to 116 000t in 1989. As it turned out, the combination of a small total quota and a competitive fishery produced unhappy results in the 1989 fishery. In contrast to most years during the latter half of the 1980s, the cod in that year proved easy to catch. This meant that the total quota for the whole year was finished and all fishing stopped as early as April 18, half-way through the traditional Lofoten fishery. This had severe distributional effects, with those who started early having good results, while the latecomers, often operating the smallest vessels, got little or nothing. Out of this emerged a strong resolve to avoid repetition of the 1989 situation: "Never again April 18!" On the basis of this experience, an individual vessel quota (IVQ) system was devised during the fall of 1989 and implemented during the 1990 season.

The political process by which the IVQ system was put together has been detailed by Holm and Raanes (1996). User groups, and particularly the fishers through the Norwegian Fishermen's Association, had a relatively strong position in this process and the key policy arena in the case of the negotiation of the IVQ regime was the Regulatory Council, established in 1983 as the meeting place between industry representatives and the fisheries authorities in resource management issues (Hoel, Jentoft and Mikalsen 1996). The Fishermen's Association formed the largest single group within the Council and appointed five of the nine industry representatives. While the Council formally only had an advisory role vis-à-vis the Fisheries Minister, the Council's decisions were usuallyvery influential particularly if they were unanimous. In this case a government decision was made during the fall of 1989, based on the recommendation of the Regulatory Council.

The IVQ system was two-tiered: the most active vessels, as measured by the quantity of cod landed in the 1987-89 period were put under a vessel quota regime. These quotas were exclusive, so that the vessel owner (skipper) had full discretion to decide when and where to take it. The less active vessels were allowed to fish competitively under a group quota. There were no restrictions as to participation in this fishery; any registered fisher could join. However, the allocation to this group only amounted to about 20% of the total quota in the coastal cod fishery, and each vessel was subject to a small maximum quota (originally 2.5-3.5t, later to be increased).

In the 1990 season, the Individual Quota group (Group I - full rights) had 3534 vessels, while the Maximum Quota group (Group II - restricted rights) had 4172 vessels. Since then, the number of vessels in both groups have declined considerably, to 2766 and 3536 in 1999 for groups I and II respectively. Underneath this relative stability, substantial interchanges between the two groups have occurred. While transfers of vessel quotas by themselves are not allowed, such transfers happens when vessels change hands. A fisher can hence join Group I by buying a vessel with a right to fish in Group I. In addition, a certain movement in and out of this group is controlled by the fisheries authorities under the label of "recruitment". From 1994, continued participation in Group I was made subject to an activity requirement: To keep its quota, a vessel had to have fished at least 40% of its allocation the previous year, later to be adjusted to 10%. The vessel quotas that became available in this way, were set aside for the recruitment system within Group I.

Whether a particular vessel in 1990 qualified for Group I and got an individual quota, dependent on how much it had landed during the 1987-89 period. The principle of historical rights was also applied to decide the size of the vessel quota, although not in the same straightforward manner. First, it was not the catch record of each vessel that decided its quota, but the average catch records within the size group to which it belonged. Hence, every vessel within one size group (defined by length) would get the same quota, regardless of how much that particular vessel had caught. Second, the quota of each size group was not calculated, as one might have expected, as some constant share of historical records across size groups. Instead, the quotas were calculated on the basis of a scale decreased with increasing vessel size, so that the smallest vessels (under 8m) received 100% of their historical catches, while the largest (over 27.5m) only received 50%.

Two important points should be noted before we go to the question of how this system became permanent. First, the IVQ regime represented a departure from the traditional open-access regime in the coastal cod fishery. This observation is not only warranted by the fact that about 80% of the quota was allocated to Group I, the membership of which was strictly controlled. In addition, while Group II was open to almost anyone, the vessels within this group were severely restricted by the total group quota and the individual maximum quotas.

Second, the distributional consequences of the transition from an open-access to a rights-based regime were the key concern during the policy process. As is often the case, a principle of "historical rights" formed the basis of the quota-distribution mechanism. Such a principle is particularly suited to secure acceptance from the established parties in 'co-management' sectors, that is, sectors in which economic and political rights are linked. On top of this "grandfather clause", however, the smaller vessels were given preferential treatment, which is more unexpected. The main reason was that the smaller vessels were widely expected to be the main losers in a transition to a rights-based regime. Within this segment of the coastal fleet one would find a large concentration of vessels that only operated part of the year and fishers who would combine fishing with other occupations. The majority of those who would not qualify to Group I and therefore in practice would be barred from making a living in the fishery, were hence found here.

5.2 A temporary regime

An important reason why the IVQ regime could be adopted was that it was a temporary response to the resource crisis, and would be abandoned once the situation returned to normal. This was not explicitly stated neither in the regulations themselves nor in the Regulatory Council's recommendations to the Minister though all the major parties involved clearly expressed this view. The National Council of the Fishermen's Association in November 1989 reluctantly accepted the vessel-quota system, on condition that the excluded vessels be allowed to re-enter the cod fishery when the resource situation improved (NFA 1989b:7). One year later, the National Council still insisted that vessel-quota regime was temporary (NFA 1990a:21).

As the officially recognised representative of Norwegian fishers, such viewpoints from the Fishermen's Association would have carried weight even if the authorities had held a different opinion. In this case, however, they shared the NFA's standpoint at the outset. The Director of Fisheries, who was heavily involved in the design of the IVQ system as the chairman of the Regulatory Council, presented the IVQ system as a direct response to an exceptional situation in the coastal fishery (Director of Fisheries 1989a: II,18). Also the Ministry of Fisheries regarded the vessel-quota system as transitional.

While the fisheries authorities as well as the Fishermen's Association hence regarded the IVQ system as transitional, they were not in complete agreement as to which part of the system would have to change. The Fishermen's Association wanted to abandon access restrictions as well as individual quota rights and return to an open-access regime of the pre-1990 type (NFA 1989:7). The fisheries authorities, in contrast, wanted to get rid of the individual quota rights, but keep the strict entry controls (Director of Fisheries 1993a:II,8; Ministry of Fisheries 1992:136). In the debate over the quota system, this difference of opinions was not brought into the open, giving an appearance of complete agreement that the IVQ system was a temporary crisis measure.

5.3 The IVQ system becomes permanent

In spite of this agreement, the IVQ system became permanent: when the crisis passed, the established regime remained. We summarize this development in Table 2 which gives data on the coastal cod fishery for the 1990-1999 period. During the 1980s, the annual landings from the coastal fleet averaged 180 000t. Assuming this represented a "normal" situation in the fishery, then the crisis was over by 1993, which also was the perception within the industry. Despite this, the Ministry of Fisheries did not want to abandon the vessel quota system. With reference to over-capacity in the coastal fleet, it was argued that the quota was still insufficient to allow all vessels a normal level of operation (Ministry of Fisheries 1992). In spite of its earlier position, the Fishermen's Association supported this view (NFA 1992b), and the vessel quota system remained in place. The IVQ system remained also for 1994 which saw an innovation, however, in that 33% of the quota within Group I (full rights) was allocated on a competitive basis. Thus, the vessels got a maximum vessel quota of which only two thirds were guaranteed. For 1995, and the consecutive years, this arrangement was extended and the whole quota was allocated on a competitive basis.

The introduction of more competition within Group I did not mean a return to open access. The vessels that had been excluded from this group in 1990 were not allowed to re-enter as the Fishermen's Association originally had wanted. Two features of this system lead us to the conclusion that it should be interpreted as an adjustment of the IVQ regime rather than its abolition. First, although applied to allocate maximum rather than exclusive quotas, the arrangement for distributing quota allocations to individual vessels was not changed. Second, the shift from exclusive to maximum individual quotas was not permanent, but directly linked to the availability of cod on traditional fishing grounds. As operated at present, the system will produce exclusive vessel quotas when the availability is good, and maximum vessel quotas when it is not. Instead of a systemic change, the mechanism of "over-allocation" has injected a healthy dose of flexibility into the IVQ regime.

Table 2
Number of vessels and total quota for vessel quota group, maximum quota group and coastal fleet within the cod fishery 1990-1999 (Director of Fisheries 1990-1999d)

			1990	1991	1992	1993	1994	1995	1996	1997	1998	1999
Vessel
	quota	No vessel	3 534	2 367	3 640	3 618	3 446	3 363	3 388	3 255	3 034	2 766
	group	Tot. quota (t)	61 750	70 375	101 800a	133 420	184 425	195 460	192 780	237 330	196 025	143 490
Maximum
	quota	No vessel	4 172	5 401	4 697	4 463	4 140	3 874	3 494	3 036	3 205	3 536
	group	Tot. quota (t)	12 000	17 000	11 000	17 000	21 000	21 000	21 000	25 000	20 000	15 500
Total
	coastal	No vessel	7 706	7 768	8 103	8 081	7 606	7 237	6 882	6 291	6 239	6 302
	fleet	Tot. quotab (t)	84 750	96 375	112 800	176 820	217 425	226 460	223 780	262 330	216 025	158 990

^a After new advice from ICES Norway and Russia agreed the 17th July to increase the Norwegian TAC with 24 500t from 165 000t to 190 500t. Subsequently the total quota for the vessel quota group was increased to 118.800t.

^b Total coastal fleet quota includes the bycatch quota and is hence larger than the sum of the total quotas for vessel quota and maximum quota groups.

A main reason why the IVQ regime remained in place when the stock crisis passed away was a change in the position of the Norwegian Fishermen's Association. While the Association in 1989 saw the IVQ regime as a temporary derogation from open access, it actively supported the IVQ regime from 1994 onwards. How can the shift in the Norwegian Fishermen's Association's position towards the IVQ regime be explained? We argue that the answer lies in the power of vested interests. Once individual quota rights were established, the rights holders set out to protect their new-gained interest. To substantiate this interpretation, we must show that the vessel quotas and the fishing rights, represented important assets for the holders, and, second, that the interest in maintaining them became dominant in the Association's policy-making arenas.

Even if the majority of the participants in the cod fishery never have fished up to their technical ability, the exclusion of some 4000 vessels from full quota rights implied a dramatic improvement for the remaining 3500 rights holders in Group I. The price of their guaranteed quota (later fishing right) can be calculated by comparing similar vessels from Group I and Group II. Although officially there is no legal market for fishing rights, the fishing press has from the beginning shown advertisements for buying and selling vessels with and without fishing rights. As could be expected, the opening of a new, although "grey", market, initiated a dynamic process. During the 1990-1996 period, about 33% of Group I vessels changed hands (Director of Fisheries 1996). Today the figure has probably passed 50%. Having bought their rights, these fishermen are naturally unwilling to give them up, at least not without compensation. And the first generation of owners have long ago realised they stand to receive a windfall profit when selling, thus making this group less inclined to reverse the process and reverse to open access.

This attitude is also reflected in the question of rights transfers where we should have expected a restrictive stand on behalf of the NFA. However, when in 1991 a moratorium on sales outside the owner's home municipality was introduced (Director of Fisheries 1990c; 1991c), this led to massive protests from fishers who feared that the value of their vessels would fall. Within two weeks, the regional constraints were changed, to allow free transfers within counties. Still, the Norwegian Fishermen's Association was not satisfied and has ever since argued that a national market for vessels with quota rights is the only fair option (NFA 1992b).

This incident suggests that the interests created by the IVQ system had an immediate impact on policy-making within the Fishermen's Association. One factor that may explain this is the strong representational bias within the Association. While the proportion of rights holders relative to all fishermen is approximately 30%, the ratio of rights holders in the organisation's elite is 90% (Holm, Rånes and Hersoug 1996).

6. FROM IVQS TO ITQS?

In the opening paragraphs we claimed that the established IVQ system is gradually developing towards "something close to a permanent ITQ system". This statement requires qualification. The IVQ system is a property right system constituted by two types of rights. First, the IVQ system implies an access right to the coastal cod fishery. The legal authority for this right is given in accordance with the Participation Act of 1972 (Deltakerloven). Second, the IVQ-system defines a fishing-right in the coastal cod fishery. This right is given in conformity with the Marine Fisheries Act (Saltvannsfiskeloven). Thus, legally the two types of rights within the IVQ regime are independent of each other. In practice, however, they are strongly linked, since a fisherman, or more precisely a vessel owner, holding an access-right generally qualifies for a fishing-right. The distinction is important because the two types of rights are different; the access-rights are more "complete" property rights than the fishing rights. Access-rights are relatively exclusive, freely transferable within each county (fylke), and seem to be rather secure. Even though they are only granted on an annual basis, they are now in the process of being renewed for the tenth consecutive year. The fishing-rights, on the other hand, are not exclusive. This is because the individual quotas within the IVQ system at present are distributed as competition quotas, and not as guaranteed quotas. Further, the fishing-rights are not divisible and consequently, not fully transferable. While it is possible to buy an access-right, and thus get a fishing right, it is not possible to buy or sell fractions of fishing rights or quotas. In addition, the security of the fishing-right is less than that of the access-right, since it has been subject to several modifications in the political process during the 1990s, and it is likely to be modified this year (Ministry of Fisheries 1998).

This brief outline of the characteristics of the IVQ-regime indicates that the present regime is not an ITQ-system in the Icelandic or New Zealand version of the system. Instead, it may be labelled as a system of individual transferable access-rights. While these access-rights give the owners fishing-rights (or quotas), it is not the fishing-rights or the quotas per se that are transferable. Thus, the regulation and allocation of individual fishing-rights, or quotas, is still within the political sphere, while access to the IVQ fishery is more or less managed through the marketplace, with important geographical limitations on transferability.

Many vessel owners, opposed to an ITQ-system like in Iceland or New Zealand, privately admit that the present system is too rigid and cumbersome. To fish more efficiently they must either circumvent (or bend) the regulations or engage in the time-consuming process of buying and selling vessels with rights. There are, however, indications of easier transfers in the future.

First, the road back to open access for the coastal fleet seems to be effectively closed. There will still be options but the choice of overshooting the recommended TACs as in the 1980s, will be more and more difficult as harvesting becomes constrained by a number of international treaties. An increasing awareness on behalf of the consumers regarding sustainable management, and numerous watchdogs on the national scene, will effectively block any irresponsible behaviour. Hence, the quota is fixed! Second, the "trawl ladder" (the allocation key for cod) and other allocation keys are up for revision in 2001. Although the ladder and the keys have been hotly debated in the previous years, they will, by 2001, have been in operation for twelve years and few believe there will be large changes in the system, although categories and percentages may change. Investments have been made over the last decade in the firm belief that the distribution is more or less fixed. Consequently, expansion through administrative reallocation will be difficult. Third, a system of licences and "unit quotas" (enhetskvoter) is under consideration for the larger coastal fleet. As soon as it is implemented it will be possible to merge existing rights. The same system has been proposed to be extended to all coastal vessels larger than 21m. And, there are alarming signs of dramatically reduced cod quotas for the next years. This means that a simpler system of merging existing rights has to be found.

One of the most serious challenges to the status quo will probably come from a new political alliance within the coastal cod fishery. This political alliance is constituted around the concept of the "robust coastal vessels". These are large (15-34m), new and modern coastal vessels, which have emerged within the coastal fisheries during the last years. The main reason for this particular development is a strong political support, symbolically as well as financially, for the realisation of such vessels into the coastal fisheries. The principal argument in favour of this policy has been that such vessels provide a steady supply of fish, thus contributing to permanent employment in the processing industry. In addition, such vessels will, according to their proponents, contribute to improved quality, better security and working environment and consequently, improved recruitment to the coastal fisheries (Ministry of Fisheries 1998).

The political basis for the robust coastal vessel has gained broad political support from the major parties within the Norwegian fisheries since the idea was launched in 1996. In spite of the favourable political support for such vessels, they are still few in number; only about 20 vessels have been built so far, while another 10 are under construction. The reason for this modest renewal is that the investments costs are formidable, each requires NOK million 25 to 45 per vessel, or ten times the costs of a traditional coastal vessel. These vessels will have problems of operating profitably in years with extremely generous quotas. Thus, it goes without saying that they will face considerable problems in future meagre years. There are two alternatives: either a political/administrative favouring of a particular group of vessels (which will be difficult under a system characterised by formal equal treatment), or a system which makes it possible for the new owners to buy or lease quotas in order to use their vessels' greater technical capacity, i.e. a system with greater transferability. Scrapping the whole political project of "robust coastal vessels" is highly unlikely, as it is widely endorsed, politically, administratively, and not least, among the processors, who stand to control this fleet in the future. Consequently, greater transferability seems to be inevitable.

7. LESSONS

Here the challenge is to understand why the deliberate effort of introducing an ITQ-system in Norway failed, while the temporary crisis measure of an IVQ-system survived and gradually developed towards an individual rights-based system.

Within the instrumental institutionalist perspective a standard explanation for the failure of introducing an ITQ-system would be that the incentives were not right. In addition there are, according to Hannesson (1992) two main reasons why "such a marvellous system as the ITQs" has not been implemented; either because anticipated side effects (such as regional inbalance and unemployment) have discouraged people from implementing the ITQ-system, or because "ideological and political reasons stand in the way". The first two explanations have considerable merit. Generally, the fishermen did not have much confidence in the incentives that were offered originally, but for different reasons. While the offshore fishermen felt that a 13-year advantage (before the quotas reverted back to the state) was not enough, the coastal fishermen did not believe in the strict separation of the different markets (created in order to keep some regional stability). Fear of regional inbalance and elimination of the small-scale fleet were also concerns of great importance in the political assault on the proposed ITQ-system.

The last factor, referring to ideological and political reasons, is definitely the weakest point, as it goes a long way in explaining away what is most important. Introducing an ITQ-system is a political and ideological act, whereby some actors obtain certain privileges while others lose them. Despite the possibility of compensating through side payments, the political reality is that a closing of a commons is not only an economic transaction, it is even more a transfer of political power. This is clearly demonstrated by the "unintentional" introduction of the IVQ system. According to the instrumentalist perspective this scheme was badly designed and even more haphazardly implemented. Nevertheless, this system stands a good chance of ending up as a transferable rights system. And again the explanation is found by applying the nested systems perspective, whereby the dynamics in the economic system gradually "force" a political (legal) solution.

In 1990 the adherents of ITQs in the catching sector were few and far between. Although they had support from parts of the processing industry and leading bureaucrats of the Ministry, the politicians balked out as soon as they understood the sentiment at the grassroot level. Privatisation of the marine commons was not on the agenda, at least not during an election campaign. In 1999 the situation has changed. Through the gradual development of an IVQ system in the coastal fleet, developed over a period of ten years, there has emerged a group of privileged rights holders. This group, which controls the most important positions not only in the Norwegian Fishermen's Association but also in the corporate co-management structure, has realised that they are best served with a continuation of a rights-based system. Consequently, most other fishing resources have also been allocated, according to size of vessel and their post-catch record participation. (The allocation keys may now be changed, as a result of political initiatives, but the principle of restricted access is not up for discussion).

On the other side, the adherents of free access, or more precisely of the coastal fishery as a commons-organised fishery, have gradually been marginalised. They have few commanding posts in the NFA and even fewer in the corporate structures. A limited number have organised in a splinter organisation (the Norwegian Association of Coastal Fishermen), but so far they have not succeeded in getting much official recognition. The majority of part-time fishermen remain unorganised. The last stronghold of opposition are the regional and local politicians who are strongly committed atthe symbolic level against any "privatisation of the commons". So far they have been less interested in the technical details pertaining to the de facto selling of rights and accompanying quotas. And regarding the "new coastal fleet" local politicians have been just as uncritical as most of the fisheries establishment. They support local initiatives, even if these initiatives over time will contribute to the eradication of the small-scale fleet.

In the long run the present rights holders, and especially the group that are heavily represented in the NFA, will probably find that they stand to gain from easier transfers of rights and accompanying quotas. Then we will probably see a gradual transformation of the legal instruments regulating the economic activities. It is important to stress that Norway still does not have an ITQ-system of the Icelandic or New Zealand type. At most we have a transferable access-rights system. The present challenge is whether the accompanying quotas will be administratively allocated or distributed by the market. We have noted that the direction seems clear, bearing in mind the substantial political costs involved in removing allocated rights from a large number of small-scale fishermen and transfering them administratively to larger operators. It is then easier to let the larger buy out the smaller, but again, this depends on the degree to which the allocation system in the fisheries is considered consistent with society values. There is no doubt that fishing over the last ten years has moved closer to a position of being an ordinary industry, quite opposite to the former perception of being a way of life (Holm 1996). Nevertheless, fishing as a way of life, contributes to the maintenance of the settlement pattern and to the coastal culture, and is still of significant value in the political system. For this reason the NFA has to manoeuvre cautiously, balancing claims to be an industry (for example when fighting off the part-timers) and claims to represent "a way of life" (e.g. when NFA battles for the exclusive ownership of fishing vessels by active fishermen). According to the Danish author Storm P. "you need a strong morale to sell rubber bands by the yard!" That is probably what will be required by the Norwegian fishermen in the years to come.

In Norway the question of ITQs is either heaven or hell, the solution to most problems or the cause of even more problems to come. These positions have, to a large degree, hampered the understanding of what is going on through the silent process of creating a group of privileged rights holders. The paradox is evident; in 1990 the proponents of ITQs lost because they did not understand the political context. In 1999 the "hellfighters", primarily connected to the small-scale fleet and local/regional politics, stand to lose, due to lack of understanding of the underlying processes of the IVQ-system - a fact which underlines the usefulness of analysing the political process behind the new management schemes.

8. LITERATURE CITED

Apostle, R., G. Barret, P. Holm, S.Jentoft, L. Mazany, B. McCay, and K. Mikalsen 1998. Community, State, and Market on the North Atlantic Rim. Toronto, University of Toronto Press.

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The Scalefish Fisheries of Northern Western Australia - The Use of Transferable Effort Allocations in the Management of Multi-Species Scalefish Fisheries - L. Cooper and L. Joll

L. Cooper* and L. Joll**
Fisheries Management Services Division
Fisheries Western Australian
*Northern Regional Office, P.O. Box 3064, Broome, Western Australia 6725
<[email protected]>
**Locked Bag 39, Cloisters Sq P.O., Western Australia 6854
<[email protected]>

1. INTRODUCTION

The demersal scalefish (Osteichthyes) stocks of the tropical waters of Northern Western Australia consist of a diverse range of species. The stocks are fished by a number of different managed fisheries - the Northern Demersal Scalefish Interim Managed Fishery (NDSF) in the waters around the Kimberley region (far north Western Australia), the Pilbara Fish Trawl Interim Managed Fishery (PFTF) and the Pilbara Trap Managed Fishery (PTF) in the Pilbara region (North West coast) (Figure 1). In addition, an open access line fishery also operates in the Pilbara.

Figure 1: Western Australia

The NDSF and PFTF are relatively new fisheries and the access and management arrangements provided in their developmental phases were inadequate for the level of management necessary for long term sustainability as they developed into fully developed fisheries. In seeking to develop new management and access arrangements both input and output options were considered. However, because of the issues associated with catch quotas in multi-species fisheries, such as dumping of catch of species of low value with overall quotas, over-quota dumping with species quotas and the remoteness of some of the localities in which vessels operate and land their product, an output quota was not considered an appropriate management mechanism.

This paper describes the development of time-based input management arrangements for the NDSF and PFTF and the shift to new management arrangements for the PTF. Reference is made to how these arrangements have moved these fisheries from a relatively unmanaged status to one which more directly manages to ensure the sustainability of these fisheries. In the process, the form of the rights issued to licensees in these fisheries has created a more flexible access right and has developed a common interest in the long-term sustainability of the resource.

2. HISTORICAL BACKGROUND

2.1 Northern demersal scalefish interim managed fishery

The major fishes exploited in the NDSF include the snappers or sea perch (Lutjanidae), the emperors or nor-west snapper (Lethrinidae) and the cods or groupers (Serranidae). Presently the snappers or sea perch which includes red emperor (Lutjanus sebae) and jobfish (Pristipomoides species) dominate commercial catches by the trap and line fishermen in the NDSF (Fisheries Department of Western Australia, 1995).

Prior to 1987, the take of demersal scalefish by any means in Western Australian waters was restricted to people who held a Western Australian Fishing Boat Licence (WAFBL). A 'freeze' on the grant of this type of licence was implemented by the then Minister for Fisheries in 1983, prior to which a WAFBL was granted upon application. Today, in 1999 there are in excess of 1500 WAFBLs.

In June 1987 the first Constitutional Settlement Arrangements between the Commonwealth and Western Australia came into effect. In regard to trap and lining for demersal scalefish in the Kimberley region, this meant that management of trapping for all species (with the exception of rock lobster) within the waters extending to the 200 metre isobath came under State management. It also meant that line fishing in the waters from the baseline out to 12 nautical miles also came under State management, while line fishing outside of 12 nautical miles fell under Commonwealth management jurisdiction. Line fishing encompassed the take of all scalefish (with the exception of tuna) by means of hand lines, trolling and droplines. Previously, the state only had management jurisdiction over coastal waters i.e. from the baseline to 3 nautical miles. Consequently, there was overlapping management jurisdiction between the State and Commonwealth in the Kimberley region which resulted in different management arrangements regulating the exploitation of the same resources. In addition, within the State itself there were two commercial fisheries exploiting the same resource under different management regimes.

In 1988 in accordance with the provision of the Fisheries Act 1905 a notice prohibiting the use of traps unless authorised to do so was implemented. Authorisation was granted in the form of a 'condition' on a WAFBL and was generally granted upon application. As a result approximately 20 holders of a WAFBL were authorised to take scalefish by means of trap. Lining for demersal scalefish in both Commonwealth and State waters at the same time was relatively unrestrictived in comparison. Any person who held a fishing boat licence to fish in Commonwealth or State waters had a perceived right to take demersal scalefish by means of line. In the Western Australian fishing fleet alone, this meant in excess of 1500 fishermen had the ability to take demersal scalefish by line in the Kimberley region from the baseline out to 12 nautical miles.

In 1992, as a result of advice that the demersal scalefish resource in the Kimberley region could not sustain the fishing effort which might be exerted, both Commonwealth and State fisheries management authorities reviewed the management arrangements for the resource. In terms of the trap fishery, this meant the implementation of a catch history criteria that had to be satisfied prior to an authorisation being granted to continue fishing by trap. This resulted in the number of trap fishermen being restricted to nine. Further effort restrictions were placed on the number of traps which could be used by an authorised fishermen (20 traps/boat) as well as an area closure around the town site of Broome (Cape Bossut to Point Coulomb).

Also in 1992, the new Commonwealth Fisheries Management Act 1991 came into effect. In accordance with that Act, an application for an authorisation to fish in relatively under-developed fisheries was generally approved providing that the applicant had the means to access the stocks. In respect to the Commonwealth line fishery outside of 12 nautical miles, which was considered at the time to be under-developed, authorisation to fish for demersal scalefish by means of line was granted to:

i. holders of Commonwealth Fishing Permits that authorised fishing in the Northern Shark Fishery or

ii. those who had an appropriate endorsement on their permit that authorised the use of dropline, handline or troll off the Kimberley coast east of 120^oE.

Further Offshore Constitutional Settlement Arrangements between the Commonwealth and Western Australia in February 1995 saw the State obtain management authority over all waters off the Kimberley coast and extending to the Australian Fishing Zone for a number of species and methods of fishing, including the take of demersal scalefish by hook and line. Relinquishing of management jurisdiction to the State was prompted by the same demersal scalefish resource being targeted by two separate (and potentially 3) fisheries which it was considered could be better managed as one multi-species, multi-geared fishery.

In March 1995 the State Minister for Fisheries closed all fishing for demersal scalefish by means of line-fishing outside of 12 nautical miles. This was to enable the development of the Kimberley Demersal Line Interim Managed Fishery Management Plan 1995 which was implemented in December 1995. This plan identified catch-history criteria which had to be satisfied prior to an authorisation to fish in the fishery being granted, as well as specifying the management arrangements for the fishery. These included restrictions on the type and amount of gear that could be used, restrictions on the use of automated hauling gear unless authorised and non-transferability of authorisation to fish in the fishery.

In mid-1995 the Minister for Fisheries appointed the Northern Demersal Scalefish Working Group (the 'working group') to review the management arrangements for the Kimberley Trap Fishery and the Kimberley Demersal Line Interim Managed Fishery, and to provide advice in respect to how these two fisheries could be managed under one management regime toprovide for long term sustainability of the resource. The working group consisted of an independent chairman, members from the trap and line fisheries, the recreational fishing sector, the indigenous community and Fisheries Western Australia (FWA).

The working group submitted their report to the Minister in late 1996. However, following consideration of the working group's report and as a result of a number of allegations that the working group process was inequitable to industry, the Minister sought further advice from FWA, the Kimberley trap fishermen and the Kimberley demersal line fishermen. In May 1997, the Minister finally approved the elements to form the basis of the Northern Demersal Scalefish Interim Managed Fishery Management Plan 1997 which was subsequently drafted and implemented on 1 January 1998. The management arrangements with specific reference to the use of individually transferable effort unit allocations are discussed later in this document.

2.2 Pilbara fish trawl fishery interim managed fishery

The Pilbara Fish Trawl Interim Managed Fishery (PFTF) developed primarily out of the Nickol Bay Prawn Fishery (NBPF), when a number of licensees with surplus fishing capacity began to investigate the potential for demersal trawling for scalefish. Initial results were promising and, given the high variability in catches in the NBPF because of its variable recruitment of banana prawns (Penaeus merguiensis), a number of other operators were attracted to demersal fish trawling. Because the fish trawling activity was primarily developmental and an adjunct to another fishery, access was granted in a way that provided for a substantial level of effort to enter the fishery. A total of 84 months of access was granted, based on three pioneer boats having 12 months access and 8 later entrants having 6 months access. The thinking appeared to be that it was unlikely that fish trawling would prove to be economically viable in the long-term and that no harm would be done by providing the opportunity to examine the potential of fish trawling.

However, the fish trawling was indeed economically viable, and the catches in the fishery improved as prawn skippers became skilled at fish trawling (Figure 2). The relatively generous allocation of access into the fishery began to look as it might lead to recruitment overfishing of some of the longer-lived, late-maturing, low-fecundity species such as red emperor (L. sebae) and rankin cod (Epinephelus multinotatus). There were indications that some of the fast-growing species were still under-exploited. Scientific studies, which commenced in 1994, found this so (Stephenson and Dunk 1996) and consequently fishing effort on the key indicator species of red emperor and rankin cod was reduced to a sustainable level.

The reduction of fishing effort to sustainable levels required that a management plan be developed. Fishery access to that point had, with one exception, been derived from the vessel's access in the NBPF, but was attached to a WAFBL rather than the Managed Fishery Licence (MFL) for the prawn fishery. To develop an appropriate management regime it was necessary to define the form of access and to determine an appropriate set of management arrangements. Because the future of the fishery was still being explored, it was also decided to move through an interim managed fishery arrangement. This did not commit the access and management arrangements to the comparatively more permanent status of a managed fishery.

Discussions on new management arrangements commenced in 1996. However, because of a need for a substantial effort reduction to deal with the over-exploitation of red emperor and rankin cod, industry were initially loath to enter an arrangement. Discussions took place through 1996 and 1997, as the need for the reductions was examined and the proposed management regime developed. One of the issues in the development of the new arrangements was the relative inflexibility of the monthly unit of access. Boats with six monthly access units had to nominate which calender months they intended to operate in the fishery, but once a nomination had been made, the time was deducted from the vessel's access, whether it was fished or not. Time lost from bad weather or breakdown was simply forgone.

Figure 2: Annual landings in the pilbara fish trawl fishery 1989-1999 (1999 landings estimated)

Industry's desire for a more flexible unit of access (such as weeks, days or hours) gave rise to consideration of the use of a vessel monitoring system (VMS), to monitor the use of vessels' time in the fishery. This desire for a VMS-management regime coincided with FWA's desire to sub-divide the fishery so that the spatial distribution of effort could be better controlled. The ability to control the spatial distribution of effort allowed implementation of a closed area to reduce effort in area which had been heavily exploited, focus of effort in an area of high abundance of fast-growing species and distribution some of the effort to more remote and under-fished areas of the fishery.

In addition to the development of a more flexible unit-of-time access, improved arrangements for transferring time-access between licences were developed. Transferability of access to a fishery is generally a normal component of management arrangements of most managed fisheries in Western Australia and the development of both permanent and temporary transfer arrangements provided the basis for a fairly simple mechanism for participants to adjust their holdings in the fishery in response to the proposed effort cuts. Smaller operators whose reduced access made the option of continuing to stay in the fishery unattractive were able to sell their access to larger operators seeking to regain access in order to maintain the profitability of their operation. Alternatively, the smaller operators were able to purchase access from other smaller operators to regain a more substantial level of access. Operators who wished to explore these avenues would be able to use the processes of temporary transfers to examine how their business ran at different levels of fishing activity, while permanent transfers could be used when operators finalized their decision to withdraw or to make a commitment to the fishery.

3. CURRENT MANAGEMENT REGIMES

3.1 The northern demersal scalefish interim managed fishery

The NDSF consists of an inshore and an offshore zone (Figure 3) which are managed by different management regimes. The inshore zone is regulated primarily by a limit on the number of permits authorising fishing in the zone (a total of 4) as well as a limitation on the type and quantity of handlines that may be used. Inshore permit holders may use up to five handlines with no more than six hooks per line. They cannot use automated hauling gear.

The offshore zone of the fishery is restricted to demersal trapping and lining and is regulated by means of individually transferable effort unit allocations as well as a number of other input controls. In respect to the individually transferable effort allocations, the capacity of the fishery in terms of the maximum number of trap fishing days and line fishing days is determined annually by the Executive Director of FWA. This is done after receiving advice from the Director of the Fisheries Research Division, the NDSF Management Advisory Committee (MAC) and the NDSF permit holders.

The capacity of the fishery is calculated in accordance with the following equation:

The estimated Total Allowable Catch (TAC) is a function of the estimated Total Sustainable Catch (TSC) for the offshore zone of the fishery, which is estimated from available stock assessment data on the fishery. The catch rate of trap and line vessels (kg/boat/day) is determined by FWA's Research Division annually from the catch and effort statistics that the permit holders are required by statute to submit on a monthly basis. This is further refined using the catch rate for a trap or a line. Effectively, the capacity of the fishery varies annually according to the quantity of effort exerted by the offshore zone fishermen during previous years. The TAC may also vary on an annual basis.

Figure 3: The northern demersal scalefish interim managed fishery

Upon implementation of the Northern Demersal Scalefish Interim Managed Fishery Management Plan 1997, the successful applicants were granted a permit which conferred either trap-units or line-units, depending on their historical method of operation. The unit allocation was determined in accordance with equation (2) and is referred to here as the permanent unit holding.

The holder of a permit is currently authorised to use either a trap or line depending on the type of units conferred by a permit (i.e. trap- or line-units). Notwithstanding, the ability to transfer trap-units onto a permit which confers line units or vice versa is provided for within the current management arrangements. This provides flexibility in using traps and lines, although not simultaneously, according to prevailing weather conditions and behavioural aspects of the key target species.

A permit holder may temporarily or permanently transfer units from, or to, a permit. This enables permit holders to adjust their unit holding on a temporary or permanent basis according to the extent of their fishing operation hence increasing economic efficiency in the fishery without affecting the sustainability of the resource. The management system further provides a mechanism for the internal restructuring of the fishery by allowing less viable operators to sell their interests in the fishery and they maximise the economic viability of the fishery. This results in fewer permit-holders with larger unit holdings, which it is anticipated will result in remaining permit-holders having stronger commitment to the long term sustainability of the fishery.

The extent to which a permit-holder may fish the permanent unit holding is determined by the value of a trap-unit or a line-unit which is calculated on an annual basis using equation (3). Upon the commencement of the plan, 1 trap-unit was specified to have the value of 1 trap-day for the first licensing period. Similarly, 1 line-unit had a specified value of 1 line-day upon the commencement of the plan for the first licensing period.

Therefore the extent to which a permit holder may fish in any one year can be determined with the following equation:

Extent to which can fish (trap-days or line-days) = permanent unit holding × Annual unit value ... (4)

Any change in the catch rate in the fishery automatically effects the unit value and therefore the extent to which the permanent unit holding can be fished in the following year. In 1999, each offshore zone permit holder could fish to the equivalent of 156 fishing days during the licensing period, assuming that 20 traps or 5 lines are used per day. This was an increase from 132 allowable fishing days (assuming 20 traps or 5 lines used per day) per permit-holder allocated in 1998.

The NDSF is monitored via a Vessel Monitoring System. That is, all vessels operating in the offshore zone of the fishery are statutorily required to have installed an approved Automatic Location Communicator (ALC). The ALC consists of two components (a) a transceiver that relays to the base monitoring system, the location, the speed and bearing of the vessel at any given point in time, and (b) a computer which enables Fisheries Western Australia (FWA) to communicate with the vessel and vice-versa. Prior to leaving port the master of the boat must inform FWA via the ALC of date of departure, the date fishing will commence and the number of traps or lines which will be used for that trip. In addition, the master of the boat is required to submit to FWA, via the ALC, a declaration that fishing has ceased and the estimated time of arrival in port. All details provided in the nominations and declarations are verified via the ALC or Fisheries Officers. As the management mechanism is self correcting a lack of integrity on the master's behalf will adversely affect the extent to which entitlement can be fished in future years.

The unit consumption is calculated on a trip by trip basis according to equation (5) and is directly correlated to the length of a fishing trip and the traps or lines used for each day of that trip:

Unit consumption number = length of trip (days) × amount of gear used/day ... (5)

Although the individually transferable effort-unit allocation management regime offers a number of benefits there are a number of additional factors that need to be addressed. These include:

i. the complexity of the legislative framework which gives affect to the system

ii. the cost of providing management, compliance and research services to ensure the success of the system and

iii. that sufficient bycatch provisions for the key target species have not been introduced or are not enforced in other fisheries which incidentally take those species.

Other management arrangements regulating the offshore zone of the fishery include an area closure around the town site of Broome, restrictions on the maximum number of hooks per handline and droplines, restriction on the maximum internal volume of a trap and restriction on the size of mesh used in the trap. Provision has also been made in the management plan for the Executive Director of FWA to close the fishery if the TAC is exceeded.

3.2 Pilbara fish trawl interim managed fishery

The present fishery management regime is an Interim Managed Fishery Management Plan, and has been operating since 1 January 1998. The regime is effectively a time-quota, with spatial controls on the use of that time. The fishery is broken up into six areas, with fishing effectively limited to four of the areas (Areas 1,2, 4 and 5) (Figure 4). Area 3 is currently closed to allow the stocks to rebuild and is expected to remain closed for the foreseeable future. Area 6 is closed to commercial fishing activity but is available for research fishing designed to provide data on the deeper water (100 - 200m) fish-stocks. The gear controls in the fishery remain the same as those established in the initial allocation of access (the primary controls are maximum headrope length and sweep lengths, mesh size and boat size and engine power).

The time allowed in the various areas open to commercial fishing has varied over the lifetime of the plan. These variations have been in response to the need to reduce fishing effort in Area 1 to reduce mortality levels of the indicator species, as well as to reflect more correctly the conversion of the time-access in Areas 4 and 5 from the previous monthly-access management system. The total levels of access into the fishery in 1998 and 1999 are shown in Table 1.

Table 1
Total hours of access the various areas of the pilbara fish trawl fishery in 1998 and 1999

Area	1	2	3*	4	5	6*
1998	17 135	3360	0	3360	5712	0
1999	11 481	3360	0	3058	5198	0

* Area 3 closed to trawling
** Area 6 only open to research trawling under an agreed plan

i. a reduction in the fishing mortality of the indicator species (red emperor) from unsustainable levels of F = 0.26 in 1996 to the agreed limit level of F = 0.1 by 1999

ii. a marked reduction in the number of active participants in the fishery as the larger operators have made arrangements to buy the time allocations of the smaller operators and

iii. strong interest in the long-term viability of the fishery.

Section 136 of the Fish Resources Management Act 1994 (FMRA) clearly specifies that "a person is not entitled to the grant of an authorization as of right". But, it is often perceived by the Western Australian fishing fleet, including the NDSF and PFTF, that previous fishing history in a particular fishery incurs some right to continue fishing in that fishery. Further, Section 71 of the FRMA states that prior fishing, or the use of a boat for fishing, in the fishery does not confer any right to the grant of an authorisation if a management plan is subsequently determined for the fishery. That is, Section 71 provides that no substantive rights are created. However, Section 71 also specifies that the Executive Director of FWA must take into account "the fact that a person held an authorisation when determining whether or not to grant the person another authorisation".

In accordance with Section 73 of the FRMA, to fish in a managed fishery or an interim managed fishery the appropriate authorisation must be held, i.e. an interim managed fishery permit (IMFP) or MFL. That is holding a WAFBL, a Commercial Fishing Licence which allows an individual to engage in fishing activities, or any other licence (other than the appropriate IMFP or MFL) granted subject to the FRMA or the Fish Resource Management Regulations 1995 does not authorise the use of a boat for fishing or engage in a fishing activity in a managed fishery or an interim managed fishery.

It is also perceived that the grant of an IMFP "strengthens" the 'right' to fish more than an endorsement ('condition') on a WAFBL. Similarly, it is perceived that the grant of a MFL further strengthens the right to fish in the fishery. These perceptions often dictate the 'value' an individual places on the long term interest that they have in the fishery and its sustainability and therefore its profitability.

If a management plan for a managed fishery or an interim managed fishery is revoked or expires, "any authorisation in force in respect of the fishery ceases to have effect" (Section 70, FRMA). Further, subject to Section 55 of the FRMA, any instrument which revokes (i.e. the determining of a management plan for a fishery) a previous instrument of management for the fishery is subject to tabling and potential rejection by Parliament. In terms of the NDSF and the PFTF, the holder of an authorisation has the right in any one licensing period (12 months) to fish to the extent of the entitlement conferred by that permit for that 12 month period. There is no provision for carrying-over unused entitlement from one licensing period to the next. However, provision is made in the management plans for both the fisheries, for the Executive Director FWA following consultation with the permit-holders and the relevant Management Advisory Committee, to close either fishery or any part of either of those fisheries if the Executive Director considers that it is in the better interest of either fishery to do so.

The holder of a NDSF or PFTF authorisation has the right to apply to the Executive Director FWA for the renewal of that authorisation. The Executive Director may refuse to renew that authorisation on grounds that the applicant has been convicted of a fisheries offence under the FRMA or the relevant Commonwealth fisheries act. The Executive Director may also refuse to renew the authorisation if the applicant has contravened a 'condition' of a authorisation or the relevant management plan. Further, the renewal of the authorisation may also be refused on the basis that the holder has not used the authorisation in the previous 2 years or that the holder has failed to keep any record, or submit any return that is required to be kept or submitted under the FRMA. Failure to pay the relevant fees, charges or levies payable in respect of renewal or any other grounds that may be specified in the management plan for the fishery may also result in a similar refusal.

In addition, the holder of an NDSF or PFTF authorisation also has the right to apply to transfer the authorisation to another person or part of an entitlement under the authorisation to another authorisation. The Executive Director FWA may refuse to grant the application to transfer the authorisation or part of the entitlement if the grounds for transferability specified in the FRMA or in a management plan for the fishery have not been satisfied. The holder of an NDSF or PFTF authorisation has the right to apply to the Executive Director to transfer part of an entitlement under the authorisation for a limited period providing the management plan for that particular fishery authorises such a transfer.

5. FURTHER DEVELOPMENTS

5.1 Northern demersal scalefish interim managed fishery

The Northern Demersal Scalefish Interim Managed Fishery Management Plan 1997 will expire on 31 December 1999. FWA has sought Ministerial approval to extend the management plan for a further 12 months to enable finalisation of the draft Northern Demersal Scalefish Managed Fishery Management Plan. This plan will then be forwarded to the Minister for his consideration and approval and is scheduled for implementation before the the end of 2000.

The draft Northern Demersal Scalefish Managed Fishery Management Plan 1999 attempts to move away from the complexity of the previous Northern Demersal Scalefish Interim Managed Fishery Management Plan 1997. By doing this only one type of unit will exist under the plan - a fishing-day unit. This will remove the requirement to individually calculate the total trap fishing-days, line fishing-days, the value of a trap-unit and the value of a line-unit on annual basis. An average catch rate for the fishery (trap and line boats) will be calculated annually and used in determining the capacity, in terms of the total number of fishing days, for the offshore zone.

Moving to a singular unit-type fishery will enable all offshore zone permit holders to use traps or lines, although only one method of fishing is permitted to be undertaken for the duration of a single trip. FWA must be notified of the type of fishing to be undertaken on a particular fishing trip via the ALC prior to leaving port. The other nomination requirements specified in the Northern Demersal Scalefish Interim Managed Fishery Management Plan 1997 have been maintained in the draft Northern Demersal Scalefish Managed Fishery Management Plan 1999.

Figure 4: Management areas of the pilbara fish trawl fishery

This further-developed individually transferable effort-allocation management system will be less complex and therefore cheaper to administer. The movement to fully-managed fishery status will also strengthen the permit-holders' perceived access rights and therefore their long-term commitment to the fishery and hence the sustainability of the fishery. The improved management system will provide the permit-holders with additional flexibility which should improve the economic viability of the fishery.

5.2 Pilbara fish trawl interim managed fishery

The present Interim Managed Fishery Management Plan runs until 31 December 2000, when it is expected that the fishery will move to a fully-managed fishery status. Future management developments are likely to include the development of more selective fishing gear to enhance the catch of the under-exploited species while holding the catch of the more vulnerable species at agreed mortality levels. Possible changes in the management controls on boat size and power will facilitate a move to different gear types, including the possible unitisation of gear to allow for different gear allocations and the development of mid-water trawling gear, which is likely to be more selective for the under-exploited species.

5.3 Pilbara trap managed fishery

The Pilbara Managed Trap Fishery (PTF) is a small fishery of six licensees which may operate in the same general area as the PFTF and take many of the same species. However, the effort of the PTF is directed more at red emperor and rankin cod, the same large long-lived species which are used as key indicator species in the PFTF. The PTF has been barely profitable for many years, but in recent years a number of dedicated and skilled operators have begun to make the fishery viable. This has resulted in a number of previously under-utilised access entitlements becoming more fully used and has raised the likelihood of the fishery over-exploiting red emperor and rankin cod stocks. Given the large cutbacks in the PFTF to lower fishing mortality to sustainable levels, a sudden increase in fishing mortality on these species from the trap fishery is not desired.

Although the PTF is a fully managed fishery, the mechanics of its management plan were unwieldy in their ability to respond to the issue of the mobilisation of latent effort. The only tool available in the management plan was a reduction in the number of traps. This would immediately make a number of operators unprofitable and even make the economics of the more efficient operators fairly marginal. While this situation could have been resolved by transfering traps from departing operators to the remaining efficient operators, it was considered a rather heavy-handed response. Discussions with the licensees in the fishery were undertaken to explore other options to a direct cut in trap allocations which would allow them to continue to operate, albeit at a reduced total level of access, and to allow the adjustment of access to occur over a longer period.

After these discussions it was agreed to change the basis of access to the fishery from one based solely on traps to one based on a unit of time-gear access, using VMS to monitor access use. The use of such a system allows operators more flexibility in their response to the changes in access and provides for temporary and permanent transfers of units of time-access. In many ways the proposed changes to the Management Plan mirror the management arrangements for the NDSF and provide a common thread to the arrangements for both of these northern scalefish trap fisheries. The proposed changes are due to come into place on 1 January 2000.

5.4 Pilbara line fishery

The line fishery for demersal scalefish in the Pilbara currently remains largely unregulated, with approximately 1500 WAFBLs potentially able to operate in the fishery. In practice around 40 vessels have operated in the fishery over the last few years, some being active every year, while others move in and out of the fishery.

Within the context of the demersal scalefish resource and the high level of regulation of the activities of the PFTF and PTF, it is clearly undesirable to have a virtually unregulated sector. Proposals to limit access to the capture of scalefish by line have been publicised and benchmark dates have been published beyond which any history of line fishing will not be considered. The further work required to move the line fishing sector to a more managed state have not yet been finalised because of the urgent need to deal with the PFTF and the PTF, but it is expected that now the new management arrangements in the trap fishery have been determined, attention will be focussed on the line sector.

6. CONCLUSION

The development of transferable effort allocations in the multi-species scalefish fisheries of Northern Western Australia has resulted in management arrangements that manage for sustainability, but do not have some of the drawbacks of output controls such as catch-grading and dumping. However, the use of a notional global TAC (in reality a total expected catch) in the NDSF and PFTF as the means of determining the annual allocation of access has some deficiencies, as it is possible to over-exploit vulnerable species in the species mix while under-exploiting others. Consideration may need to be given in the future to mechanisms which more explicitly control the catch of the more vulnerable species. The use of fishing mortality reference points in the PFTF for particular indicator species (red emperor and rankin cod) does manage for the sustainability of these vulnerable species, but results in the more productive species being under-exploited. The use of VMS creates opportunities to control the spatial distribution of effort, which can allow the total effort levels to be targeted according to the distribution of species and so produce the optimum catch composition within the other constraints.

Given the nature of the localities where these fisheries operate, and the resources available to carry out compliance checks, the use of a VMS-monitored effort-based management system provides a practical sustainable management solution for these fisheries. In addition, the transferability of the access entitlements has created a market for the trading of access entitlements, which has allowed operators to efficiently adjust their levels of access according to their circumstances. Through the provision of this tradeable entitlement licensees develop a direct interest in the long-term sustainability of the fishery.

7. LITERATURE CITED

Fisheries Department of Western Australia 1995. Kimberley demersal line interim managed fishery, Fisheries Management Plan, 1 i-vi.

Stephenson, P.C. and I. Dunk 1996. Relating fishing mortality to fish trawl effort on the north west slope of Western Australia, FRDC Final Report 93/25.