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PART II: DISCUSSION PAPERS


Discussion Paper 1:

FACTORS OF UNSUSTAINABILITY IN FISHERIES
by
Stephen Cunningham and Jean -Jacques Maguire

Discussion Paper 1:

REVIEW OF FACTORS OF UNSUSTAINABILITY IN FISHERIES: RELATIONSHIP TO INTERNATIONAL FISHERIES INSTRUMENTS
by
Michael Lodge

FACTORS OF UNSUSTAINABILITY IN FISHERIES by Stephen Cunningham and Jean -Jacques Maguire

1. Introduction

There is widespread concern about the precarious condition of world fisheries. Garcia and Staples (2000, p. 390) point out that “most fisheries are presently in a non-sustainable state as illustrated by the progressive decline of the state of world marine resources since the 1950s (Grainger and Garcia 1996). The number of declining fisheries has regularly increased since the 1950s, pointing to an inability of the fishery institution and management systems [...] to develop a resource and maintain it in an acceptable long-term (dynamic) equilibrium.” Ludwig et al. (1993) further observe that “there is remarkable consistency in the history of resource exploitation: resources are inevitably overexploited, often to the point of collapse or extinction. (p. 547)”. Considering the number of resources on which little or no information is available and the uncertainties affecting fisheries statistics, the situation may even be worst than it appears. The generalised overexploitation of world fish resources has widespread negative consequences, for instance on food security, on the socio-economic well-being of communities dependent on fishing and for the ecosystem.

This trend towards unsustainability has occurred despite the fact that “the concept of 'sustainability' of the natural resource base has been implicitly or explicitly present in the fundamentals of fisheries management at least since the 1950s [...]and is explicitly dealt with in seminal contributions of biologists (e.g. Hjort, Schaefer, Beverton, Holt, Gulland, Ricker and Cushing) and economists (Scott, Gordon)” (Garcia and Staples (2000) p. 390).

Faced with this situation, an FAO project has been established to explore the factors giving rise to unsustainability and develop appropriate remedies. The specific objectives set out in the project document are to establish:

1. What are the key factors contributing to fisheries overexploitation and unsustainability?

2. How do these factors interact?

3. Which are the priority issues in addressing fisheries overexploitation and unsustainability?

4. What are the best practical approaches to address long-concern (long-term concern?) of fisheries overexploitation and unsustainability?

This paper is principally concerned with the first question, and to a lesser extent the second one. We begin by discussing in section 2 the nature of unsustainability. In section 3, we point out that unsustainability may be a problem even in the absence of fishing. Two broad threats to the sustainability of unexploited fish resources may be identified: natural variability and external threats. We then consider what happens once exploitation begins, identifying factors that might lead to unsustainability under a number of stylised management systems. Section 4 presents the management scenarios and section 5 discusses the factors. In section 6 we discuss what appear to be the main threats to each management system. Section 7 concludes the document.

2. The nature of unsustainability

Before discussing unsustainability, it is useful to consider the concept of sustainability. FAO defines sustainable development as “The management and conservation of the natural resource base, and the orientation of technological and institutional change in such a manner as to ensure the attainment of continued satisfaction of human needs for present and future generations. Such sustainable development conserves (land,) water, plants and (animal) genetic resources, is environmentally non-degrading, technologically appropriate, economically viable and socially acceptable” (Garcia 2000).

Charles (2001, especially chapter 10) sees the perspective on sustainability as having changed from that of “sustainable yield” (where the focus was on physical output) to one of “sustainability” with “multiple objectives” (focussing on both the ecosystem and the human system, and a balance of resource conservation and human concerns). The FAO guidelines on sustainable indicators for fisheries (FAO, 1999) recognize fully the need to ensure both human and ecosystem well-being In a sustainable development context, Charles (op. cit.) stresses that “there is wide recognition of the need to view sustainability broadly, in an 'integrated' manner that includes ecological, economic, social and institutional aspects of the full system” (p. 186). His definitions of the four components of sustainability are given below:

He views ecological, socio-economic and community sustainability as the three points of a triangle, with institutional stability as the cement holding the other three together. He suggests (Charles 2001, p190, emphasis added) that “Sustainable development policy must serve to maintain reasonable levels of each (component)”. But who is to decide what is reasonable? The concept of sustainability does not offer simple policy prescriptions, but requires policy choices to be made, taking account of social preferences and societal values.

From a biological perspective, sustainability does not correspond to a unique yield or fishing effort value such as Maximum Sustainable Yield (MSY) and the corresponding effort. Biological sustainability can be achieved at any of the fishing effort values on the yield versus fishing effort curve except at the fishing effort corresponding to stock collapse. A similar curve can be constructed for the economic yield, but models do not exist to formally define the value of the other components of sustainability under various configurations of the fishery system. Nevertheless, it is reasonable to expect curves with similar shapes. From a fishery system perspective, it is not possible to define universally acceptable quantified definitions of the four components of sustainability. Our approach is to indicate in what direction a given factor may influence the different components of sustainability under different management regimes.

In addition to the four components of sustainability defined above, we use biological sustainability, when discussing single species resources.

3. Unsustainability without exploitation

Unsustainability is often associated with overexploitation. However, although exploitation is doubtless an important factor, the size of fish resources fluctuates from natural causes and may be threatened with biological unsustainability even if the resource is not exploited. In the absence of exploitation a fish resource faces two major threats to its sustainability:

3.1. Natural variations

Archaeological records (Baumgartner, Soutar and Ferreira-Bartrina 1992) show large fluctuations in the deposition of sardine and anchovy scales off the coast of California over a period of two millennia. The fluctuations prior to significant exploitation by human, which really began in the 20th century, are interpreted as indications of changes in abundance due to natural cycles possibly mediated through climatic changes. Kawasaki (1983) by suggesting that some species of small pelagic fishes in distant locales were fluctuating in synchrony is at the origin of a large number of studies between climate and fish stock fluctuations. In one of the most recent studies on this subject, Klyashtorin (2001), after identifying 50-60 years cycles in both fish abundance and a climate index, suggests that some species thrive during periods of increasing temperature while others do so during periods of decreases. He goes as far as developing a model using climate indices to predict commercial fish catches from 5 to 15 years in advance.

Given that the hydro-climatic conditions change over time, and that each species has specific requirements in terms of temperature, salinity, oxygen content etc., it is not surprising that the abundance, and even the presence of species varies over time for reasons other than fishing. The case of Atlantic cod in offshore Greenland waters is illustrative in this regard. Buch, Horsted and Hovgård (1994) describe how, in offshore Greenland waters, there were periods with cod and periods without cod, depending on water temperature. Baltic cod provides another example of environmental influence on the fate of a fish stock. Adult and juvenile cod are adapted to the low salinity of the Baltic sea, but reproductive success is linked, among other factors, to salinity and oxygen content with periods of good recruitment corresponding with the intrusion of saline and oxygenated North Sea waters (Aro 2000).

Whether or not time confirms the validity of the specific predictions made by Klyashtorin (2001), there is no doubt that climate does cause groundfish and pelagic fish stock abundance to vary. But is exploitation by human more important than natural changes? DeYoung et al. (1999) provide a sensible summary for Canadian groundfishes “... without the effect of fishing, some of the stocks may not have collapsed when they did or at all, and similarly, without unfavourable environmental conditions, other stocks may not have collapsed when they did or at all.”

The ecological component of the fishery system is therefore dynamic and ecological sustainability does not mean that resources will not fluctuate and that the species mix will not change over time as climate does.

3.2. External threats

These relate to the activities of humans which are not concerned with the direct exploitation of the fish resource itself. Two kinds of threat can be identified: deliberate and * accidental.

In the first case, a deliberate decision might be made that the unsustainability of the fish resource may be a price that has to be paid in order to achieve some other benefit. For instance, it may be recognized that certain fish resources depend on mangroves, but it may still be considered desirable to clear the mangroves. In this context, unsustainability is part of a trade-off and comes within the scope of social benefit-cost analysis, provided that all benefits and costs are properly identified. Such decisions may not be openly acknowledged, but they are nevertheless possible.

The second kind of situation is probably more frequent. No explicit consideration is given to the impact of other activities on the sustainability of the fish resource. Instead, the resource may simply bear some of the cost of the other activities. The fish resource may face a number of external threats, even if it is not exploited. Classic examples are coastal area development which may threaten important habitat, and land-based pollution which may originate far inland. Where the resource is not exploited, it will have no obvious value and policymakers in other sectors will probably pay little regard to it.

3.3. Scope for intervention

History tells us that decreased exploitation may lead to stock rebuilding as indicated by:

However, although substantial decreases in fishing mortality for groundfishes on Georges Bank off New England helped rebuild depleted haddock and yellowtail stocks, cod remains depressed in the same area. Decreased fishing mortality may therefore be a pre-condition for stock rebuilding, but it does not guarantee that stocks will rebuild. Several other cod stocks to the north in Canadian waters also remain below average even if fishing mortality has been drastically reduced.

4. The management scenarios

Although an unexploited fish resource may face some threats to its sustainability, the problem of unsustainability is likely to increase in importance once exploitation begins. Exploitation will reduce the size of the standing stock thereby tending to increase its vulnerability to natural variability. In general, exploitation of a fishery begins at a relatively low level but tends to increase over time. In many fisheries, exploitation has gradually become overexploitation, increasing the risk of unsustainability, even if the fishery may continue in a sustainable manner for a number of years with a low fish stock producing relatively low outputs. Hence although overexploitation and unsustainability are not synonymous, there is a strong relationship between them. An understanding of the factors that may lead to unsustainability requires consideration of the factors that lead to overexploitation.

In the following section we discuss the factors that might lead to unsustainability in the case of fisheries being exploited under a variety of management arrangements. We begin here by outlining a set of stylised management systems.

4.1. No management

In the absence of management, access to the fishery is free and open. This scenario is of interest for a number of reasons:

4.2. With management

We examine the following six sets of possible management arrangements that seem to describe reasonably well the current management situation in many world fisheries and the process through which “modern” fishery management passed in order to try to improve fishery management:

The first three scenarios are traditional management arrangements, in the order that they have been implemented in many jurisdictions. The last three are of a different nature and can be applied under a number of different arrangements.

4.2.1. Technical conservation measures

Fishery management regimes often focus on fish stock conservation as a key objective. When fisheries management begins, a typical first step is to implement some technical conservation measures, the general aim of which is to protect or rebuild the fish stock by reducing fishing mortality, either overall or on particular age groups, especially juveniles. Typical measures include mesh size restrictions in trawl fisheries, limits on engine power, fish size limits, closed seasons, closed areas and so on.

4.2.2. Input controls

As it has become clearer that a primary factor leading to non-sustainability is free and open access to the resource, an increasing number of Governments have sought to restrict entry into their fisheries. The most commonly-used mechanism to implement limited entry has been fishing vessel licences, although rights also exist based on gear usage, e.g. the number of pots in a lobster fishery. The input control scenario is therefore mostly a limited-entry one, although it would be possible to control other input factors such as technology, vessel sizes etc.

4.2.3. Overall output controls

The basic idea underlying overall output control is straightforward: the total catch that the fishery can sustain is calculated, the Total Allowable Catch (TAC) is set, and once it is caught, fishing is stopped for the remainder of that season. Under this scenario, there is no specification of what proportion of the allowable catch may be taken by each participant.

4.2.4. Use rights

Rights to fishing entitlements can be assigned in several different currencies. The most commonly proposed system is in terms of catch (Individual Quotas - IQs). IQs may be assigned to individual persons, vessels, communities, and son and may be transferable or not. However, it is also possible to assign use rights in terms of effort quotas (e.g. the fishery management system on the Faroe Islands), or in terms of area as has frequently been done in “traditional” management systems. It has even been suggested that rights could be assigned in terms of recruits (Gavaris 1996) in order to provide incentives to leave fish in the water until they have spawned at least once and reached a more profitable size. Licences are a kind of use right but they generally provide different economic incentives to rights such as IQs or area rights and are dealt with under input controls above.

4.2.5. Market - based measures

Rather than trying to control either inputs or outputs, management authorities could intervene in the market. The most-widely discussed approach is to introduce resource rentals requiring fishers to pay for the use of the resource. Such an approach is used in the management of other natural resources (for instance, oil) and with the development of “green” taxes it might become more common in fishing. So far, relatively little thought has been given to how resource rentals might be introduced into fishing. They may best be used in collaboration with other management measures (most probably IQs or licences). Thought should be given to how they might be introduced since there is no reason why they have to be in the traditional form and more novel approaches could prove more acceptable. One possibility might be to require use-rights holders to capitalise a local fund to support wider coastal community-based initiatives. Management on the market side might also be introduced in other ways. For instance, fish traders might be licensed. Alternatively, fish prices could be taxed (perhaps via a monopsony[4] -where the fishery is mainly for export, this might be a feasible alternative and it has been used by a few countries with some success). In both cases, it might be expected that reduced profits along the fish market chain will be pushed down towards the fishers, reducing economic incentives towards non-sustainability.

4.2.6. Co-management

Insufficient involvement of stakeholders in decisions concerning the management system has been linked to unsustainability. The term “co-management” is used to cover a wide range of possible institutional arrangements that might be used in fishery management. The key element is the sharing of management responsibilities between the State and communities or more conventional fisher organizations. It is often felt (Hollup 2000 pp. 407-409 for a recent brief review) that a primary advantage of co-management is that with increased user participation, the legitimacy of regulations will be increased and as a result so will be compliance. Implementation costs of management will therefore be reduced.

Co-management is not in itself a management system. Rather it establishes an institutional framework within which fishery management can occur. Choices will still have to be made concerning precise management arrangements, and the possibilities are likely to be similar to those discussed above in sections 4.2.1 to 4.2.5.

5. Factors of unsustainability

In addition to the threats to sustainability discussed in section 3 above which exist even in the absence of exploitation, an exploited fishery faces threats due to the nature of the exploitation itself. Three broad threats to the sustainability of an exploited fishery can therefore be identified:

Although the factors in the first and third group may be quite similar in the case of an unexploited and an exploited fishery, their impact may be different because where there is no exploitation the impact will be on the fish resource, whereas where there is exploitation the impact will be on the fishery (the resource being only a part of the fishery system albeit an important part).

Each of these broad threats may be sufficient to render a fishery unsustainable. Where they combine, the situation will be particularly serious. This seems to be the case in a number of developing country tropical fisheries where high natural variability combines with overexploitation and external threats associated with urban and industrial development.

There are a great many factors that may lead towards unsustainability under different management systems. As pointed out by reviewers of an early draft of this paper, it is difficult to be comprehensive in both breadth and depth without the discussion becoming unacceptably long. As a compromise, we propose to adopt a two-pronged approach, using a matrix format (Appendix 1) in an attempt to be comprehensive whilst discussing in more depth in this section what appear to be some of the key issues.

In the matrix, we identify as many factors as possible that impinge upon sustainability and consider how different kinds of management affect the situation. What emerges is that fishery management is not a simple process of identifying and correcting a set of problems. Instead, as management progresses some problems (factors of unsustainability) are resolved but others arise; and the nature of the factors may change in the sense that what leads to unsustainability under one set of management arrangements may not do so under another. Moreover, as one dimension of unsustainability becomes less of a concern, other dimensions come to the fore.

In the following sections, we discuss some of the most important factors of unsustainability and their effect under the various management arrangements (no management, technical conservation measures, input controls, overall output controls, use rights and market measures). Co-management is discussed as a separate category since it is qualitatively different to the other systems. In fact, each system may be developed on a co-management basis.

5.1. Profitability

Profitability is a key issue in non-sustainability. The fishery must be (or must be expected to be) sufficiently profitable (at least over some time period) to encourage the investment leading to high (excessive) fishing effort. Exploitation will not develop in fisheries that are not profitable (although it may continue for reasons discussed below in exploited fisheries that become unprofitable) and hence (natural variation apart) such fish resources should not be unsustainable from a biological perspective, except perhaps for very low productivity species that might become depleted even as a by-catch. Individual fishers decide when, where and how much to fish on the basis of the expected profitability of fishing compared with other economic activities that they might undertake. Other things being equal, increased profitability in fishing will lead to an increased demand to participate in the fishery, both by those within the fishery and those currently outside.

Under the no-management scenario, increased profitability will attract new entrants to the fishery and may also lead existing participants to intensify their activities. The result will be overcapacity (i.e. a step on the road towards socio-economic unsustainability) and, if profitability is sufficiently great, overfishing (i.e. a movement towards ecological unsustainability). Under this scenario, if profitability is maintained it is easy to imagine ecological, socio-economic and community unsustainability all occurring in due time, as happened for instance in the case of whaling. Institutional unsustainability is not relevant under this scenario.

Technical conservation measures do not control new entrants or limit investments by existing participants. Therefore, this arrangement will lead to the same unsustainability problems with respect to profitability as the no management scenario, with the possible addition of institutional unsustainability when the other three components have become unsustainable.

Input controls (limited-entry) could solve the problem of new entrants being attracted by the profitability of the fishery if it were implemented early enough in the development of the fishery, but that has rarely been the case. Instead, limited-entry has generally been implemented only once excess fishing capacity has built up. Limited-entry, by itself and in its simplest implementation, does not solve the problem of increased investment by existing participants. Although it may take longer than under the previous scenarios, increased profitability under a limited entry system is also likely to push the fishery towards unsustainability in the four components.

In theory, output control could resolve the problem of ecological unsustainability, but it does nothing to prevent socio-economic unsustainability. Once socio-economic unsustainability is reached, it is unlikely to be possible to avoid community unsustainability. Output control systems are also prone to institutional unsustainability, mostly because of uncertainties discussed below under that heading (section 5.3).

Under a rights-based management system, the effects of profitability become ambiguous. Rights assigned in terms of catch may give rise to “high-grading” where only the most valuable specimens of the allocated species are kept while the others are discarded, usually dead. But assigning rights may also increase the incentive to protect the source of income. The effects on socio-economic and community sustainability are equally ambiguous, depending on the specific parameters of individual systems.

Increased profitability comes from one of two sources: either because revenue has increased relative to costs, or because costs have declined relative to revenues, or some combination of the two. Factors that increase revenue and/or decrease cost are thus also linked to unsustainability and some are discussed below as sub-factors of profitability.

5.1.1. Increased demand for fish

Revenue depends on the quantity landed and the price achieved. Quantity and price are related to one another through the demand curve. Over time, the demand curve for many fish species is tending to shift upwards for a variety of reasons: rising real incomes, rising populations, increased awareness of the health benefits of fish and so on. As a result, a given quantity of fish can be sold at increasing prices and hence real revenues increase (ceteris paribus) and so do profits in the short-term.

5.1.2. International trade aspects

Trading opportunities may also be an important factor in increasing revenues. The traditional gains that are expected from trade need to be carefully considered in the fisheries context because of the rather unusual sectoral management arrangements that may exist. Although trade has increased, tariff and especially non-tariff barriers to trade still exist. Reducing barriers, or otherwise increasing trade opportunities, can be expected to increase profits for producers in exporting States leading to increased exploitation rates. If the fishery is thereby pushed towards non-sustainability, fish supply may be decreased in the longer term. The local population is likely to suffer doubly: first, because of the decreased general availability of fish, and secondly because an increasing proportion of what is available is likely to be exported. Ironically, the interests of the local population (in terms of food security and sustainability) may be best served where trade barriers have been erected by trading partners.

Since an important proportion of world trade involves exports from poor developing countries (which generally have no or limited fisheries management) to rich developed countries, its impact has almost certainly been towards non-sustainability. It must be emphasized that it is the lack of effective fishery management which is the main problem, but in a second best situation trade policy may also be called into question. Moreover, since the general trend has been for the exchange rates of the rich developed countries to appreciate relative to those of the developing countries, fishers in developing countries are faced with an increasing incentive to export their fish products. In itself, this is an opportunity for the developing countries but in order to realise it they have to start with a rational fishery management system. If they are unable or unwilling to put such a system in place, the opportunity becomes a threat to sustainability.

5.1.3. Changes in fish landings

Changes in fish landings also affect revenues. In many fisheries, prices are set on the global market so that fishers are forced to take the prices on offer. In this case, revenue varies in the same direction as landings: an increase in quantity (because of increases in recruitment or as a result of good management) will increase revenue and vice-versa.

However, if fish prices depend on the quantity landed, then decreased landings could increase revenues, provided that price increases sufficiently to compensate for the decreased quantity. As a result, decreasing supply could lead to increased profitability. Such a fishery would face serious threats to sustainability, at least over a certain range of outputs. At low outputs, price effects may no longer suffice to maintain profitability; the situation would depend on the species and the nature of markets. Nonetheless, Clark (1973) showed that extinction might be the profit-maximising policy under some circumstances. This condition is generally a very severe test, although it may be more easily met in mixed fisheries where effectively the costs of extinguishing one species are subsidised by profits from exploiting another: the classic example being the way that exploitation in the Antarctic of the larger whales (blue and humpback) continued almost to extinction because whalers were able to target smaller sei and minke whales.

5.1.4. Decreased input costs

If real fishing costs decline then profitability will increase leading again to higher exploitation. One factor may be variations in input prices, especially fuel prices, but also improved technology would be expected to decrease the cost of fishing. However, improved technology does not only play a role in terms of profitability. Therefore, it is discussed as a stand-alone factor, not as a sub-factor of profitability.

5.1.5. Resource rent

The issue of resource rent in current fishery management processes is closely linked to that of profitability. If profitability as perceived by fishers increases, so will their demand to participate in the fishery. The fish stock is, however, a naturally-limited resource[5]. In a fisheries context, increased demands to participate make the fish stock more valuable. If the stock belonged to an owner who charged rents to users then the rents would rise. But in the absence of management there is no one charging a rent for the use of the resource, and as a result this rent is perceived simply as part of profit by the users of the resource. As a result, they keep on entering the fishery until the resource rent has been driven down to zero.

The inability or unwillingness to collect resource rents (or establish institutional arrangements where they are capitalized) means that the fishery is driven to an exploitation rate that is much higher than is optimal from a purely economic point of view. Of course, higher exploitation rates may offer advantages that interest both users and policymakers, but they also push the fishery closer to the region of non-sustainability.

5.2. Access conditions

Access conditions are another crucial factor in non-sustainability. Profitability determines the desire to exploit the resource, the institutional arrangements determining access conditions establish the terms under which exploitation may occur. Under no management and technical conservation measures, conditions of free and open access to fish resources exist. If the profitability conditions are met, such access arrangements allow overcapacity and overfishing to emerge.

Input controls deal with only one dimension of capacity: new entry. But, as discussed above, it leaves open the possibility for those who are already in the fishery to increase their effort within the capacity constraint imposed by the licence. The extent to which they can do this depends on the input substitution possibilities within the production function. In addition, if it is not made clear that the number of licences is fixed in relation to resource availability, the Government is likely to come under intense political pressure to allocate too many licences to begin with and to continue allocating licences over time. This is especially the case in the most common situation where licences are given away free on a discretionary basis. A different problem may arise in cases where licences have taken on a substantial value, because a Government may find it tempting to sell more licences at the going rate as a way of raising revenue. Clearly if the Government finds it difficult to control the number of licences, for whatever reason, the fishery will be pushed closer to non-sustainability.

TAC-based management is that it does nothing to resolve the access problem. For this reason, this kind of management system has been baptised “regulated open access”. Since neither new entry nor the capacity of existing participants is controlled, there will be nothing to stop the attraction of profits being turned into increased capacity. Assuming that the catch is under control (a big assumption), the stock dimension of sustainability should be achieved - but only at the cost of the other dimensions, particularly the economic one. In a situation where the TAC is more or less fixed each year and fish prices are increasing and/or fishing costs are decreasing, increasing amounts of labour and capital resources will be used to produce the same amount of output. The system will thus generate increasing inefficiency. Only if the break-even point of the fishery is close to the target TAC will it be possible for the management authorities to hold the fishery at the TAC for an extended period of time. Even here it would be important for the fishery to be fairly stable. Otherwise high profits in the good years will tend to attract capacity which may not leave again in the bad years. Regulated open access significantly worsens the problem of the race for fish. Fishers know that there is only a given amount of fish to be taken before the fishery is closed. A premium is placed therefore on the ability to fish quickly. The system therefore leads to too much investment and to the wrong kind of investment.

A well-documented case of this kind of management (both technical conservation measures and output controls but without limited entry) is the Pacific halibut fishery in North America. Until the 1990s, the fishery was managed using measures (seasons mostly) aimed at not exceeding a given catch (TACs). The management system avoided ecological unsustainability. However, the inherently high profitability of the fishery meant that the fishery continued to attract increased capacity and effort with the result that the available catch was taken more and more quickly. The fishing season declined from something in excess of 300 days per annum to only a few days. Eventually it became apparent that the management system itself was not sustainable because of the extreme effect that it was having on capacity. In recent years, first Canada and then the USA have moved to individual quotas. Therefore, output controls may avoid ecological unsustainability, but they appear susceptible to all other kinds of unsustainability.

Under a properly enforced rights-based management system, access conditions should no longer be an element leading towards non-sustainability.

A market-based approach solves the free and open access problem by removing the free part rather than the open part. The industry remains open to entry to those prepared to fish given the economic circumstances that prevail following the introduction of resource rentals. Although in principle this also should resolve the access problem; the adjustment mechanism is likely to be more rigid than under rights-based systems; and the fishery remains open to the risk posed by asymmetric entry and exit conditions.

Under co-management, access remains a key issue. A co-management system without genuine exclusive access will be vulnerable to increased exploitation by uncontrolled elements that are outside of the system.

5.2.1. Asymmetric entry/exit

One particular aspect of access conditions that may lead towards unsustainability is the frequently observed situation that fishers find it much easier to enter a fishery during good times than to leave it during bad. A commonly-proposed explanation is that fishing capital is both highly specific in its usage and very long lived. It may be very difficult therefore to correct investment mistakes, which may emerge only over a period of time. This problem is referred to as capital non-malleability. The acuteness of the problem will vary under the different management scenarios. For example, a market-based approach where the price to get in the fishery may be relatively high may provide an incentive to stay in the fishery to recover the cost. Of course, asymmetric entry-exit is also linked with profitability, subsidies and a number of other factors.

Ikiara and Odink (2000) analyse the exit decision of Kenyan fishers on Lake Victoria. The main problem in these fisheries is not lack of capital malleability but lack of alternative economic activities leading to fishing being used as an occupation of last resort. In this situation, ease of entry coupled with lack of exit spells gradual decline of the fishery, a situation which has been observed in this fishery since the 1960s. Interestingly Ikiara and Odink find that even in overexploited fisheries, fishers welcome more fishers because, although they add to the negative stock externality, they create positive externalities in terms of expanding the beach area, increasing activity in the area and hence improving price, and also create the demand for commercial and service activities. In such fisheries, the need for management to ensure the sustainability of fishing is overwhelming.

5.3. Uncertainty

If we had perfect knowledge of the marine ecosystems and of the fishery systems exploiting them, the scientific analyses would indicate what management measures were necessary and when, and with perfect institutions, the correct fishery management decisions would be made and perfectly implemented. Therefore, unsustainability is closely linked to uncertainty.

We consider four main sources of uncertainty:

Estimation uncertainty is a secondary source arising from some or all three of the first sources and it will only be discussed when relevant. Similarly, institutional uncertainty arises from the interactions of the various groups involved in fishery management processes. In this section we will evaluate their effects on sustainability under the scenarios of no management, technical conservation measures, input controls, output controls, rights-based, and market based management.

The no management scenario implies that there are no management measures and no fishery management decision to make. It therefore assumes that there is no data collection either for monitoring the fishery or for monitoring the stocks. Consequently, there is also no scientific advice nor any of the other activities associated with modern fishery management. Although there may be uncertainty in the outcome of fishing, uncertainty as described above does not have an explicit influence in the no management scenario.

Technical conservation measures suppose a conceptual model linking the adoption of a specific management measure to some desired outcome: if we increase mesh size to let small fish escape it is because we have a conceptual or a quantitative model that these fish will survive, that they will grow and that they will be available to be caught at a later time when they are bigger and more valuable. Model uncertainty is important both in theory and in practice in a management approach using technical conservation measures. In the increased mesh size example, if the injuries suffered by the fish going through the meshes cause it to die, obviously the expected benefits will not materialise, and in fact the measure could inadvertently harm the resource. Similarly, if fish do not grow as expected, possibly because of cold water (process uncertainty) or if they migrate outside of the area fished by those who adopted the increased mesh size, then the measure will not result in the expected increased yield. Model uncertainty is also important for other technical conservation management measures. Permanent seasonal or year-long closures to protect juveniles assume that a large proportion of the juveniles are and will permanently be found in the area closed, and they have similar survival, growth and availability assumption as the regulation on mesh size. Implementation uncertainty is large with technical conservation measures, particularly with respect to gear configuration and there are many ways by which the intent of a regulation can be circumvented (e.g. using larger twine in a larger mesh implies that the selectivity will remain the same or even decrease). Properly chosen time and area closures can generally be implemented with minimum monitoring, control and surveillance without suffering major implementation uncertainty.

The conceptual model underpinning input controls is subject to considerable process uncertainty. “The first limitation of this model is that it considers only one species at a time [...] but no species exists in isolation. Some species are predators, others prey, many are both, and there may be complex food web effects of fishing. Yet this model assumes that changes in population size are due to fishing alone” (Roberts 2000, p. 178). In addition, climatic conditions affect the carrying capacity of the environment and the ability of the resources to respond to exploitation. This means that MSY is not a fixed value and that it can vary as environmental conditions change. Input controls are also directly susceptible to observation uncertainty: in order to estimate the reference points needed to implement input control (MSY and the fishing effort needed to generate it), it is necessary to collect data on catches and fishing effort. In theory, it should be possible to estimate catches reasonably accurately, but often there are reasons not to report all the catches made. Nominal fishing effort is relatively easy to measure (either in number of vessels, number of trips, number of nets set and their length, number of days fished, number of hours fished etc.) but increases in fishing efficiency over time means that the currency of effort in fact changes and one day (or any other unit) fishing in year 1 of the fishery can be expected to exert considerably less fishing mortality than one day fishing in year 10 of the fishery. Similarly, input controls also suffer from model uncertainty. The surplus production curve is often perceived as being symmetrical, but that is not necessarily the case and the shape of the curve describing catches versus fishing effort can take many different asymmetrical shapes. Estimation uncertainty is also important in a management system using input controls because the data are rarely sufficient to unambiguously indicating what model structure is appropriate. Implementation uncertainty can be small or large depending on the currency used to measure effort. Effort measured in number of vessels involved in the fishery is easy to implement, but it is considerably more difficult to control the number of hours fished or the number of hooks set. Input controls also suffer from another form of implementation uncertainty: in order to estimate MSY, it is generally necessary to fish more heavily than the effort that is necessary to generate MSY in order to verify that catches are indeed decreasing and that the effort corresponding to MSY is indeed smaller than the current fishing effort. Ludwig et al. (1993) claim that it can be demonstrated from statistical arguments that is impossible to estimate MSY without having to reduce fishing effort. They suggest that “that sustainable exploitation cannot be achieved without first overexploiting the resource” (p 548). The economic nature of input controls (licensing) makes it essential for the management authorities to understand the economic basis of fisher behaviour in order to predict their likely response to management. The dearth of work in this area is more of a problem for management measures such as licensing since quite simplistic views have tended to be taken in their implementation. As a result, such schemes have often failed to live up to expectations.

Output controls are normally introduced under various forms of catch quotas. All sources of uncertainty play a role in impeding sustainability under output controls. Process uncertainty makes it very difficult to accurately forecast what catches should be in the future in order to achieve the desired fishing mortality. When general production models, are used to predict catches in the coming years, they are subject to process uncertainty related to recruitment variability and availability of fishes to the fisheries. When age-structured models are used to estimate what catches will generate what fishing mortality, process uncertainty affects a number of the parameters used in the calculation: future recruitment is rarely known with precision and an average value is often used. Similarly, the weights at age of the fish to be caught in the coming year are not known and can rarely be predicted with any precision. If the recruitment or the weights at age used in the calculations are higher than turns out to be the case in reality, it means that it will be necessary to catch a larger number of fish to reach the quota that was set, and therefore that the fishing mortality will be higher than intended. Observation uncertainty is also considerable under an output control management system because these systems are based on considerably more data than the previous approaches. Detailed information on the age and size composition of the catches are often used and these are subject to considerably variability. As for the previous two sources of uncertainty, model and estimation uncertainty is also considerable under output controls because more complex models are often used as a basis for management decisions in these management approaches. Age-structured assessment models require estimates, or more often assumptions about natural mortality. More often than not, natural mortality is assumed to be constant over time, an assumption that is unlikely to be true when climate and preys as well as predators of the species under investigation both vary. Implementation uncertainties are also significant in output controls system. It is in this system that the incentives to under-report and mis-report catches are highest. Depending on the actual implementation, there may also be incentives to discard and high-grade.

Rights-based management would suffer from the same uncertainties as those affecting the chosen mechanism to assign rights.

The economic nature of resource rentals makes it essential for the management authorities to understand the economic basis of fisher behaviour in order to predict their likely response to different rental rates. Fishers behavioural responses could be completely different depending on the business objectives that they are trying to achieve. In order to devise an optimal resource rental system, a large amount of economic data is required which is generally not available. In practice it will have to be accepted that resource rentals are unlikely ever to be optimal and seek, instead, to gradually improve the system over time. What might be termed a “satisficing” approach could be adopted, under which the State defines satisfactory returns on its fisheries. As different rates are achieved, the definition of satisfactory can be revised upwards on a trial-and-error basis so that the satisfactory return gradually approaches the optimum. An approach such as this is used by many large-scale business enterprises to maximise their profitability and a similar approach might, perhaps, be made to work in the case of fishing.

The discussion above has dealt mostly with ecological uncertainty, but there are also considerable uncertainties in the other dimensions of the fishery system. The importance of variability/uncertainty in key economic variables will depend on the precise nature of the system.

A key feature of attempts to correct overexploitation is to be able to predict how fishers will respond to various management measures. Fisheries policy is conspicuous by its failure in this area. Until recently, very little work had been undertaken and it remains the case that managers are likely to know more about the dynamics of the fish stock than of the exploiter of the stock. As a result, management measures have often made the overexploitation problem worse, and significantly so in some dimensions of the problem, especially overcapacity.

5.4. Improved technology

A major source of cost reductions in fishing has been improved technology. Many innovations have occurred outside of fishing and have been adapted for and adopted by the fishing industry. Other innovations have been specifically developed in the fishing context.

Under free and open access arrangements where ownership of the resource is conferred only by capture, there will be a tendency for the industry to over-innovate. This is because competition between fishers takes place not merely in the market place but also at sea in the form of an attempt to maximise, or at least maintain, their share of the catch available from the (naturally-limited) fish stock. Fishers may find themselves on a technological treadmill where they are forced to copy successful innovations adopted by other fishers (or see their share of the catch decline). Technological advance will be a double-edged sword for fishers - on the one hand, they must innovate to remain competitive (and because their profits will increase) but on the other hand, as everyone innovates individual innovations will tend to be neutralised in the aggregate and the main overall effect will be increased exploitation rather than increased profit.

In the case of management based on technical conservation measures, improved technology will have a tendency to increase effective fishing effort and therefore exploitation rate. It will therefore push the system at least in the direction of ecological unsustainability.

Because effort has many dimensions whereas licences are necessarily specified in terms of only a few (hopefully key) dimensions, fishery management based on input controls using a licensing system creates an incentive for fishers to attempt to get around the licensing constraint by substituting uncontrolled inputs for controlled ones. The extent to which they are ABLE to substitute inputs is a technical question related to the way in which inputs can be combined to produce effort; the extent to which it is WORTH substituting inputs is an economic question related to the cost of different inputs and the expected pay-off from making changes. But even if it is impossible to substitute inputs in the short term at a reasonable cost, an incentive will be created to innovate so as to avoid the restriction. Due to input substitution problems, fishers already face a strong incentive to innovate under licensing schemes. A policy of improving fishing technology is likely simply to worsen the situation. Managers will then be faced with the problem of either placing additional restrictions on the licences or reducing the number of licences. In practice it is not uncommon to find both things being done. Hence through input substitution a licensing system is likely to be faced with distorted technical choices and an excessive amount of innovation. This activity is likely to dissipate a substantial portion of the resource rent over time, although licences make take on a significant value for a while at least. Under licensing, the race for fish is likely to continue to be a factor leading to unsustainability. The main reason is that the licence does not specify how much can be caught. As a result, each fisher has an incentive to try to catch as much as possible. The problem may not be too severe if the number of licences is appropriate to the state of the resource. But the practical experience is that over time fishing power increases within the licensing constraint and the system has therefore to be supplemented with restrictions on fishing time. The alternative is an on-going process of licence reduction but most States do not have the financial resources necessary to do this. Also the concept of aligning capacity with the state of the resource is seductive in theory but very difficult to achieve in practice - there may be many reasons why fishers choose to have higher capacity than might appear warranted at first sight (e.g. safety at sea, ability to take advantage of variations in fish stock size etc).

Under an output control system using a global TAC, improvements in fishing technology run the risk of encouraging waste and pushing the system towards unsustainability. Individual fishers become more productive, but in the aggregate their investments have no impact on output since they are faced with a fixed output constraint (the TAC). The fact that fishers find themselves on the “technological treadmill” arises from a combination of access conditions and policy. With TAC-based management, fishers are unable to invest in fish in the sea and there is therefore intense competition to extract fish before someone else does.

Under a market-based management system, if rentals are specified in terms of fish prices, then there should be no distorting effect in the choice of fishing technology. If however they are imposed via taxes on inputs then fishers can be expected to reduce use of the taxed input to the extent that input substitution is possible. Although this could introduce some elements of non-sustainability, it could also be used to achieve subsidiary objectives - for instance, a fuel tax would reduce fuel consumption and save on the nation's fuel bill.

Fishing technology policy has often been an important element along the road to unsustainability. Many countries have followed a policy of encouraging improved fishing technology in situations where management systems are unable to control effort. In addition to affecting the amount of technology, policy measures have distorted the choice of technology. The most obvious example is where subsidies have favoured capital over labour. Ironically this has often occurred in situations where governments are also trying to achieve employment objectives. In many countries, there has been a policy of trying to identify the “ideal” fishing technology. This policy seems misplaced. It has committed governments to certain kinds of technology, giving them a kind of moral responsibility to support the technology (subsidies) when times are hard. It seems more appropriate that the choice of production technology should be the fishers. This also provides an example (amongst many) of conflicting policy objectives. On the one hand, the management authorities try to control mortality basically by requiring the fishing industry to use less-than-efficient technology whilst on the other attempts are made to encourage individual fishers to become more productive.

5.5. Lack of economic alternatives

For small-scale fisheries in particular and where there are no or few alternative economic activities, fishing may become an unemployment sink. The condition emerges (as aptly summarised by MacKenzie 1979) that “fishermen are not poor because they are fishermen, they are fishermen because they are poor”. If there are few opportunities for alternative employment (i.e. low opportunity cost of labour), particularly as local populations increase in size, then under conditions of free and open access overcapacity and overfishing are often inevitable. A very similar situation arises, where there is a substantial body of labour not suitably skilled for alternative employment. A kind of equilibrium is likely to emerge only when returns have been severely depressed by a reduction in catch rates due to a decrease in stock size.

Technical conservation measures have the same effect as with the no-management situation described above because they do not address this issue.

Input controls through licensing offers some potential for improvement because it offers the potential for resource rents to be extracted or capitalised (partly at least) into the licence price. Such rents could be used to invest in the local economy so as to create economic alternatives. Many things could be done. Among the most obvious are training and re-training for fishers in order to give them alternatives and infrastructure development to increase the attractiveness of the region to other investors. Whether such investments are forthcoming depends to some extent on who decides what to do with the rent. One argument in favour of extraction by the Government is that there is more certainty that the rent will be used in a local context. If the rent is left with the private sector, there is no guarantee where the investments may be made.

On the other hand, if the money is left with the Government there is perhaps less guarantee that the rent will be used productively (rent-seeking behaviour may be a serious problem) whereas the private sector is more likely to be guided by the returns available.

The relationship between the lack of economic alternatives and output control management is complicated, but, with perfect implementation, output controls should mean that the lack of alternatives will not impact the exploitation rate of the fishery, but the links with improved technology may. In addition, the lack of alternatives may encourage non-compliance and the government may be unwilling or unable to do anything about this in situations where it has nothing else to offer. Finally, where there is a lack of alternatives, an economically-efficient management system may generate strong feelings that it is inequitable, thereby increasing the social dimension of non-sustainability.

This may be particularly the case when output controls are combined with rights-based management. Rights-based management could result in improving ecological and resource sustainability. Economic theory tends to assume that displaced capital and labour can do something else but in practice policy-makers may be faced with trade-offs between social, economic and resource sustainability. Even if it is recognised that the true problem is to develop alternatives, politically there may be no choice in the short-run but to make such a trade-off. An output-based rights system offers the potential to generate sustainable rents which could be used to fund investments in the local economy so as to create economic alternatives. However, they also offer the potential to capitalise and remove the main livelihood source in a region. Careful management of them is therefore required.

The problem of the lack of economic alternatives will complicate market-based management. First, the management authorities may be unwilling to introduce rental-based systems at all in this situation, and even if they do introduce them, they may be reluctant to push the system very far. As a result, the system may fail in practice to remove much of the pressure on fish stocks. In principle, resource rentals collected offer the potential to invest in fishers in order to increase their economic alternatives. However, such an approach requires that management authorities invest first and collect the rents later. This order of events is not usually attractive to the authorities.

5.6. User participation and compliance

When there is little consultation with resource users concerning the management instruments and regulations that must be put into place, users are seen as exploiters of the resource whose activities must be regulated if the resource is not to be endangered. As a result, the regulations may have little legitimacy from the users' point of view, leading to poor compliance and expensive enforcement. Fishery regulation may turn into a game wherein users feel it acceptable to cheat the system.

Non-compliance with fisheries regulations is a major factor in unsustainability. A key issue therefore is what explains compliance and what must be done about it. It seems obvious that the solution is not simply to be found in ever stricter enforcement. The issue is to investigate how the system might be designed in a way which gives fishers incentives to comply and then to look at the enforcement required.

Under input controls through licensing, licences are a use right, and user participation can be expected to commence under such a system. However, it may not go very far. There may still be little consultation with resource users concerning the management instruments and regulations that must be put into place. Users may well continue to be seen simply as exploiters of the resource whose activities must be regulated if the resource is not to be endangered. Licences also may suffer therefore from a lack of legitimacy, leading to poor compliance and expensive enforcement. Many licence programmes suffer from both non-compliance with regulations and exploitation of loopholes in definitions. Simply increasing enforcement may not be a realistic alternative.

Under a TAC-based management system, there is a tendency to see resource users as an important part of the problem for which regulations are required. Even where there is consultation, it may be difficult therefore to generate a sense of legitimacy for the regulation among the fishermen. They may feel that TAC controls (especially reductions) place them in a position where they have no choice but not to comply if they are to survive. This will lead to expensive compliance problems and will tend to undermine the system. There will tend to be an antagonistic relationship between managers and fishers, resulting in a lack of co-operation, because they have conflicting goals and interests. Managers seek to conserve the stock whereas the management system gives fishers the perverse incentive to catch what they can in the time available (before the TAC is exhausted or the season closed). There will be no natural tendency to comply with the system. Only if enforcement is adequate will the system work.

Because output-based rights are likely to deliver good results in terms of economic efficiency, the incentives to under-report and mis-report catches will be great. Both of these factors may lead to non-sustainability in that they may cause overfishing and errors in stock assessment. On the other hand, if rights are transferable fishers should have an incentive to comply because the price of rights will be influenced by expected future profitability of the fishery. But there will always be a need for enforcement effort coupled with dissuasive penalties. Perhaps the most pernicious threat facing output-based rights systems is the problem of targeting behaviour by the fishers. Under most such systems, although the aim is to restrict fishers' catch to a certain amount, in practice the requirement is that fishers do not land more than a certain quantity. As a result, fishers may be faced with an incentive to ensure that what they do land is of the highest value possible. This problem of so-called “high-grading” may lead to substantial discarding, leading to underestimates of true fishing mortality and hence overestimates of the TAC.

Under a market-based system, as with all costs, there will be an incentive for enterprises to reduce their resource rental burden so far as possible. An appropriate institutional structure will have to be established to ensure compliance at reasonable cost. One of the key issues regarding the use of such a system is whether it can be made to work without all, or most, of the benefits of reduced exploitation being used up as extra costs required to enforcing the system.

Large resource rents are likely to be available to a rental-based system. Depending on the precise way in which the system is implemented, it is to be expected that rent-seeking behaviour will emerge. The cost of administering the system could become excessive. On the catching side, illegal landing will become very profitable as will mis-reporting if rental rates vary substantially by species. Enforcement will be essential.

5.7. Desire for stable fishing opportunities

Both policy-makers and the fishing industry like to have predictability and stability, preferably in the form of fixed annual catch plans. TACs set under a conservation-based management system may give the impression of such stability. But attempting to maintain stability in the face of ecological risks (or uncertainty) is a dangerous strategy. There is likely to be strong political pressure for stability (e.g. EU plans for multi-annual TACs). But the greater is the ecological uncertainty, the greater the need for flexibility.

Under licensing the desire of policy-makers and the fishing industry for predictability and stability is likely to lead to a greater threat to sustainability than under conservation-based management. The problem is that stability will not be in the form of catch but in terms of numbers of licences and of their operation. In the face of ecological uncertainty, it would be essential to be flexible to respond to ecological changes, but it may prove difficult to be so under a licensing system.

A threat may be posed to community sustainability in certain areas if rights are transferred away from those areas. The problem arises because many people associated with, or even dependent on, the fishing industry may not qualify for an allocation of rights. Even though therefore those who have been allocated rights may gain in transferring them elsewhere, the transfer process may create losers in the system. A simple fix is to restrict transferability but this also restricts the potential benefits from the system.

5.8. Subsidies

Subsidies are a common feature of fisheries policy that may impact sustainability. As a general rule, subsidies reduce fishing costs as well as related infrastructure and service costs. They thereby increase profitability and hence the demand to participate in the fishery. The way in which this increased demand materialises itself will depend on the management system. Under management systems that do not control access (no management, technical conservation, overall output controls), subsidies are likely to push the fishery towards non-sustainability.

Under licensing the initial effect will probably be the price of licences. But it will also strengthen the incentive to substitute inputs (leading to a net investment in unrestricted inputs) and hence the threat to push the fishery closer to a non-sustainable position. Under a rights-based system, subsidies should not affect exploitation levels since their effect will be upon the price of rights (assuming transferability). With a system based on resource rentals, the issue will presumably not arise since it does not seem to make sense to charge rentals whilst giving subsidies (except perhaps on a targeted basis to achieve specific goals).

Providing subsidies also has the general drawback that it creates expectations that the industry will be rescued from financial crises. As a result, investments may be forthcoming that would not otherwise appear, i.e. fishers will undertake riskier investments than otherwise.

It may be possible to design some subsidy programmes that impact capacity in a way that enhances sustainability (e.g. buybacks) but the evidence suggests that this is very difficult to achieve (Holland et al., 1999).

5.9. External factors

An exploited fishery may face a broader set of external factors than an unexploited fish resource. To begin with the exploited fishery will be faced with the same indirect effects - i.e. a deliberate decision might be made that the unsustainability of the fishery is a price that has to be paid in order to achieve some other benefit, or the fishery might simply bear some of the cost of other activities that impinge upon it.

In an exploited fishery, it might be expected that more consideration will be given to external impacts, than in the unexploited case, because of the economic implications. But there is no guarantee that this will be the case. The generally poor economic state of unmanaged fisheries may make it difficult to convince policy-makers in other sectors to take the needs of the fishery sector seriously. In this case, the lack of management itself might be considered a factor of unsustainability. It will tend to result in a situation where:

Issues such as habitat degradation and pollution may be more serious if considered from a fishery perspective, rather than from fish resource one. Even if such problems do not imperil the survival of the fish resource, they may threaten the fishing activity based upon it. And the industry may also be vulnerable to competition for space in the coastal area where rising property prices associated with increasing coastal population may make it impossible for fishers to maintain their activity in an area. They may find both housing and dock space too expensive in traditional areas.

External threats are likely to remain a significant threat to non-sustainability under an output-based rights system. Although fishers can be expected to defend their valuable rights combating external threats, and although those posing the external threats may be forced to take into consideration the impact that they may have on the fishery, the practical situation may not be simple. First, identifying sources of pollution may be difficult and taking appropriate legal action expensive and uncertain. Second, rights may not necessarily infer any right to the protection of critical habitat for the fish population.

5.10. Policy objectives

The fishing industry does not exist in a vacuum. Even an unmanaged fishery will be affected by broad policy decisions. In many cases, the industry is a small, but possibly locally important, part of the macro-economy. The industry may be affected by Central Government's macroeconomic policy, particular in its regional and trade aspects. Depending on circumstances, Governments may be prepared to sacrifice sustainability goals in order to meet pressing macroeconomic requirements. The obvious example is widespread unemployment in coastal areas which may be a prime motivator for increased fishing activity. Likewise in isolated areas, Governments may be prepared to tolerate non-sustainability in some dimensions in order to limit de-population problems.

The overcapacity generated by a TAC-based management system may be viewed positively in such circumstances. Take a hypothetical example of a fishery producing 100 tonnes of fish per annum. At the beginning of the system, the fishery employed 500 people, but over time capacity has increased and 1 000 are now employed taking the same output. Those who take an efficiency perspective will emphasize that twice as many resources are now used as are necessary. But it is possible to take a different perspective and argue that where previously the fishery could only support 500 people, it is now capable of supporting 1 000. Moreover, since the stock is held at its highest long-run productivity, the system produces the maximum number of jobs in processing, although with the disadvantage that all landings may occur within a very short period of time.

The fishing industry will be subject to the same general economic rules as the rest of the economy. Sometimes these rules may encourage a build-up of capacity. For instance in the case of capital depreciation allowances, cases have been documented where fishers were given a clear incentive to over-invest by the general tax rules concerning depreciation.

5.11. Equity issues

Equity is not an issue under the no-management nor, generally speaking, under technical conservation measures. Licensing, if fisheries become very profitable, is the first fishery management stage where equity may become an issue. Economically efficient management methods such as output-based rights will result in large resource rents being generated in the fishery. If such rents are not extracted by the management authorities (for instance in the form of resource rentals), they will be capitalised into the price of rights. Since rights have typically been allocated for free where they have been introduced, a significant amount of wealth has effectively been transferred from the community at large to rights holders. The scale of this transfer usually becomes apparent only once trading of rights begins, by which time it is may be difficult to do much about it. If this process is considered inequitable, then whole system may come under challenge.

There is also a risk that rights may become monopolised, which may represent a threat to community sustainability. If monopolisation is felt to be inequitable, it may also pose a threat to the sustainability of the management system itself since it can be expected that those outside the system will attempt to undermine it.

Rentals also are likely to face equity issues. It may be felt that it is unfair that fishers should be asked to pay for the use of a natural resource to which they have traditionally had access for nothing. Moreover, if managers wait for the fishery to be in a poor condition before introducing management, then again it is likely to be considered unfair because instituting rentals will effectively drive some fishers out of business. In order for sustainable arrangements to emerge, it will be necessary to give serious thought to the way in which rentals are introduced.

5.12. Factors of particular relevance for co-management

5.12.1. Group objectives

It is expected that under co-management the user group will focus on sustainability but this is a testable hypothesis. It will be important to investigate whether the group is not pursuing objectives (e.g. employment, social equity) that may prevent effective effort control and the avoidance of excess capacity. Otherwise, the group could find itself over time drifting towards unsustainability.

5.12.2. Incentives of group members

The incentives of individuals within the group may not be all that different to those existing under State management systems. As is the case with the State, the results of management will depend on the management methods used by the group. Often such systems seem to rely on effort control of one kind or another. In such cases, the group may find that input substitution becomes a problem.

5.12.3. Need for overall view of resource

In general the scale of operation of user groups is likely to be less than the scale of the resource. It will be essential therefore for the management authorities (State) to take an overall view of the resource. Otherwise, a number of threats to sustainability exist. Perhaps the most probable is that efforts made by the user group to manage their share of the resource simply benefit those outside (depending of course on the precise nature of the resource being managed). Members of the user group are unlikely to be committed to it on a sustainable basis in the face of such dissipation of the benefits that they expect to receive from their efforts.

An alternative possible scenario is that the user group could overexploit one important aspect of the fishery. Where user groups represent small-scale fishers, their activities are often close inshore where they may be exploiting juveniles or brood stock. If their exploitation is high on these elements of the stock, they could put pressure on the fishery taken as a whole. It is conceivable that this could pose a threat to the sustainability of the resource base, although more likely the threat will come to the sustainability of the management arrangements and the users who depend on them.

5.12.4. Weak groups

User groups may be unable to play the role assigned to them. The co-operation within the group may be inadequate. Such co-operation will be required on a permanent basis. The State will have to monitor different groups to ensure that they do not break down over time, particularly because this has tended to be the fate of many traditional management systems.

5.12.5. State role

Under co-management, user groups tend to be considered the primary element for resource management. But the State clearly continues to have a critical role in view of the limitations of local collective action.

By far the most important role of Government is to ensure that appropriate local systems of resource management operate in a legal framework which provides legally enforceable recognition of their identity and rights. The State must also provide the framework within which these rights can be enforced. The systems face three broad threats against which they must be able to protect themselves: from within, from encroachment by neighbouring groups or external intruders, and from other economic sectors (e.g. pollution, tourism).

At the same time the State will have to protect individual members of the system, providing a conflict-resolution mechanism whenever conflicts cannot be settled within the community. It may also have to intervene in conflicts between groups.

In addition, as mentioned above, the State will be responsible for overall fishery policy and will have to monitor overall resource usage within which the local system operates.

If the State is unable or unwilling to play these roles, then a co-management system is likely to be unsustainable.

5.12.6. Need for an adjustment mechanism

Where there are overlapping groups and/or stocks, a key issue will be how to change the allocation of rights over time as relative efficiencies change. Also, consideration might have to be given to the issue of what to do if the group no longer represents the best management alternative. How are rights to be transferred away from the group? Sustainability depends on having an adjustment mechanism but often the expectation seems to be that the management problem has been solved once user groups have been established. This is an unrealistic view, especially taking a long-run perspective. Systems that do not have an adjustment mechanism will be inherently unsustainable.

6. Discussion by management scenario

In section 5, we discussed some of the main factors that might lead to unsustainability under different management arrangements. The matrix presented in Appendix 1 presents a fuller set of such factors. It is clear that the relative importance of factors changes from management system to management system. In this section, we briefly discuss the main factors of unsustainability that seem likely to affect each system. The discussion is limited to the cases where exploitation is taking place, the no-exploitation scenario having been covered in section 3.

6.1. No management

A situation of “no management” defines a particular set of institutional arrangements - basically free and open access. Under such arrangements, we argue that there are many economic and social factors that will tend to push the fishery towards increasing exploitation over time, eventually reaching overexploitation and unsustainability in at least one of its components. It must be stressed that there is no single factor that leads to unsustainability. It is combinations of factors, which are important. The principal ones under no management appear to be: the conditions of free and open access, sufficient profitability, resource variability and various ratchet effects (due to asymmetric entry/exit conditions and lack of economic alternatives).

The key factor is the free and open access to the resource associated with no management. However, in itself free and open access does not necessarily lead to overexploitation (and hence to non-sustainability). A second necessary condition is that the fishery should be (or should be expected to be) sufficiently profitable for exploitation to be high enough.

Profitability may increase over time for a number of reasons. Some of these are associated with the fishery itself: increased demand due to rising population, decreased costs due to technical progress. Others are related to the general economic environment. Increasing profitability under free and open access will lead to increased exploitation.

The situation may be worsened by various factors. Due to their naturally regional or local scope, many fisheries exist in areas where alternative economic activities are few and far between. As a result, fishers may be prepared to continue fishing even though the returns that they receive become very low. This problem of low opportunity costs is often accompanied with asymmetric entry into and exit from the fishery. Good times attract yet more effort (labour and capital) into the fishery but bad times do not necessarily result in it leaving again. The result is that exploitation in the many (but not all) unmanaged fisheries tends to ratchet up over time, gradually approaching unsustainability. As exploitation increases, the fishery becomes increasingly vulnerable to shocks.

Unmanaged fisheries will also be vulnerable to the natural variability of fish resources and external threats from other activities. Experience strongly suggests that the basic dynamics of unmanaged fisheries push them towards unsustainability, which is of course a primary reason many fisheries are now managed.

6.2. With management

The fishery management processes in place today have rarely emerged as a result of a grand design. Instead, they have often evolved over time in an attempt to resolve problems as they have arisen. The result is often a patchwork of more or less complementary measures. Moreover a belt and braces approach tends to be taken with administrations reluctant to remove one set of regulations as others are introduced. Consequently, the management systems tend not to be as watertight as may be suggested by the discussion below but often exist in parallel.

Nonetheless the development of fishery management over the past 50 years or so has broadly been to move from one system to the next. Not all countries, and certainly not all fisheries, have followed the same path, but there does seem to be a fair degree of consistency in the process. Broadly speaking, the fishery management process has evolved from little state intervention; to the implementation of technical conservation measures followed either by input and/or output controls. In recent years, great emphasis has been laid on the need to ensure that fishers face appropriate incentives so that they perceive it to be in their own interest not to over-exploit fish resources. In this context, one trend is towards more economically-oriented management systems, based either on use rights or on resource rentals (or, still quite rarely, a combination of the two). Another trend is towards the implication of stakeholders in the management process, especially with the development of co-management.

6.2.1. Technical conservation measures

The principal feature of technical conservation measures is that they focus on one dimension of sustainability: the fish stock. Other dimensions are ignored. There is some evidence that technical conservation measures may be effective at controlling fishing mortality, even if this is not the objective. On Georges Bank, the closure of large areas where catch per unit of effort was high is believed to have contributed significantly to the substantial decrease in fishing mortality estimated to have occurred in the second half of the 1990s.

Under technical conservation measures, the key factor is free and open access, but the nature of the adjustment mechanism is different. Assuming that the conservation measures are complied with, it may be possible to avoid ecological unsustainability. As a result equilibrium will be restored not by falling stock size but by increased entry depressing individual catch rates. If profitability is sufficiently high, this process may be taken to extremes. With technical conservation measures, unsustainability may also be reached because of natural variability, and overexploitation. Such measures generally fail if used alone because they do not control access to the resource.

As the limitations of technical conservation measures become apparent, the fishery management authorities typically react in one of two ways: either they try to restrict the number of participants in the fishery (licensing) or they try to restrict the catch that is taken (TAC).

6.2.2. Input controls

Limiting entry, usually by licensing, is a step in the right direction compared to technical conservation measures. Where the system works, it may allow exploitation rates to be controlled over some period of time, thereby reducing vulnerability to natural variation. External factors may continue to be a significant threat to non-sustainability. However, if licenses are transferable, they will take on some value and this may help to protect the fishery against external threats. The main reason to expect some improvement is that licensing introduces the notion that the fishing sector has some rights. The fact that such rights take on a significant monetary value may encourage fishers to defend them by combating external threats, and it may also force those posing the external threats to take into consideration the impact that they may have on the fishery, particularly once the legal position of licence holders has been tested through the judicial system.

However, input-based rights tend to be vulnerable to a number of problems that may increase risks of unsustainability. These problems are discussed in this section.

A major problem is that licensing controls only one dimension of capacity: new entry. It leaves open the possibility for those who are already in the fishery to increase their effort within the capacity constraint imposed by the licence. The extent to which they can do this depends on the input substitution possibilities within the production function. One situation where this might be avoided is if the number of licence holders is small so that co-operative behaviour can emerge.

A significant practical difficulty in many cases is that licensing is not introduced until significant overcapacity has built up in the fishery. As a result it is not uncommon to find that the number of licences issued is far greater than warranted by the available catch. Licences are usually issued free on the basis of participation in the fishery over some reference period. As a result, some fishers who are no longer involved in the fishery qualify for a licence. Since licences are free they understandably take up the licence in the hope that it will take on some value in the future. Where such licence overhang is significant, management may be extremely difficult because attempts to reduce capacity will activate some inactive licences, leading to maintained, or even increased, exploitation levels.

Because the licence does not specify how much can be caught, the race for fish is likely to continue to be a factor leading to unsustainability. This problem is likely to worsen over time as input substitution proceeds. The standard way to address this and the previous issue is through a licence reduction programme but most States do not have the financial resources necessary to do this. In fact, many Governments come under pressure to increase, rather than decrease, the number of licences, especially if these are available free, as is often the case.

6.2.3. Output controls

Output controls through overall TACs do not resolve the key problem associated with free and open access. If the TAC is respected, it may be possible to maintain the stock (or avoid biological unsustainability). But economic pressures will remain and equilibrium will be restored not by falling stock size but by increased effort (new and existing fishers) depressing individual catch rates. If profitability is sufficiently high, this process may be taken to extremes. The fishery system may also be threatened because it is likely to become vulnerable to shocks. Given the very high effort and capacity that can emerge, it may become difficult to predict the impact of effort.

In most practical implementations, it has been found that output controls, by themselves, or in combination with technical conservation measures and input controls, have not been sufficient to protect the resources and ensure sustainability.

6.2.4. Rights-based

Rights-based fishery management is expected to improve the situation with respect to many factors of unsustainability, but several problems remain.

Under ITQs and exclusive zones, the free and open access problem is largely resolved. Threats to sustainability come from a variety of factors. A prime difficulty for ITQs is the difficulty of calculating accurate TACs, especially if fishers are highgrading or are mis-reporting catch. External threats in terms of habitat loss and pollution will remain important.

Nonetheless, ITQs with adequate monitoring, control and surveillance, offer the possibility of improvement in terms of resource sustainability. As a result other dimensions of sustainability come more to the fore under such systems, in particular the problem of community sustainability and perhaps the sustainability of the management system itself. A difficulty facing ITQs or other rights-based systems is to ensure that there is an appropriate definition of management units. In particular, such units have to be sufficiently encompassing. Some elements of fishing may prove difficult to bring within the management system. If for political or other reasons it is not possible to prevent their increase, then over time they may undermine the system. Obvious examples are recreational fishing in the case of developed country fisheries and small-scale fishers in developing countries.

Until recently, there had been little progress in defining appropriate use rights. As a result fishers have had little incentive to conserve their own resource base; and they have been exposed to threats from outside the fishery sector (especially in the coastal area). In other words, the institutional arrangements create economic conditions which leave fishers with no interest in sustainability.

Output-based rights systems are likely to have an important economic impact. It is important to realise, however, that much of the impact will be in terms of wealth, rather than income, generation. In practice, there often seems to be an expectation that such rights-based systems will help achieve the frequently-cited policy objective of increasing incomes. If such schemes are to contribute to such a goal, then very careful consideration must be given to the design of the system, paying especial attention to the distinction between income and wealth effects. Not doing so may lead to the creation of systems that are considered inequitable and hence are unlikely to be sustainable (Whitmarsh 1998, Cunningham 1994).

6.2.5. Market-based

Under a market-based fishery management system, the access is no longer free and fishers are forced to take into account the inherently valuable nature of the resource that they are using. Various factors may threaten sustainability under a rental-based system. As with ITQs, rentals are likely to represent a great improvement in terms of resource sustainability, and other dimensions of sustainability are likely to be more important. However, fishers may have less of a direct stake in the fishery than under say an ITQ system. As a result, it will be essential for the management authorities to deal with external threats.

Given the value of fisheries resources, a resource rental system can be expected to generate significant amounts of revenue. Depending on the precise institutional arrangements that are established, such revenue might encourage rent-seeking behaviour of various kinds, going from simple bribery and corruption to unnecessary expenditure on the trappings of office for the institutions charged with running the system. An appropriate system of checks and balances will be required to ensure that rent-seeking behaviour does not use up a substantial portion of the benefits of the system.

Resource rentals may lead to an increase of the price of fish for poor consumers and this may impact upon food security. However the issue is complicated. If the fishery is overexploited, then resource rentals may lead to falling supply and higher prices in the short term, but to increased supply and lower prices in the longer term. The issue becomes then one of a trade-off between short and long term priorities.

6.2.6. Co-management

Co-management is somewhat different to the other management systems considered, in that it provides an institutional framework within which such systems (or the instruments that constitute them) might operate. Many of the threats to sustainability identified in the previous sections are likely to be relevant also to co-management, depending on the precise management choices made. Co-management is likely for instance to be vulnerable to external threats (e.g. habitat loss) and to internal threats (e.g. input substitution).

In addition, co-management faces some threats related to the sustainability of the system itself. Somewhat ironically, perhaps the most important element is that the State should identify and play its role properly in terms of defining legally-enforceable use rights, and in taking an overall view of resource exploitation. The most difficult long-term issue facing co-management systems appears to be to devise effective adjustment mechanisms that will allow smooth transitions as economic and other circumstances change.

7. Conclusions

It is easy to conclude that without some form of explicit institutional arrangement, either through local or national institutions, fisheries will progressively become unsustainable, at least under one component. In general, they will become economically unsustainable before ecological unsustainability becomes a possibility, but there are cases of low productivity species (deep water slow growing species) where exploitation rates may increase sufficiently rapidly for the fisheries to remain economically sustainable while being biologically unsustainable. Also, low productivity species may become threatened even as by-catch species.

The almost exclusive focus on ecological sustainability (biological) in the past is probably one of the contributing factors to the currently perceived limited success of fishery management. Implied in that focus, was the understanding that fishery management would succeed in rebuilding all stocks of predators and preys at their optimal sizes and maintain them there. This was overly ambitious (hubristic) because climatic variability (whether natural or induced by human activities) may have a more important effect. It might therefore be preferable to act on those components of sustainability where fishery management is likely to have a more direct effect, i.e. the socio-economic, community and institutional components.

The institutional arrangements with the highest probability of avoiding the three components of unsustainability are those involving meaningfully interested parties in the decision-making process but also in the implementation, and to develop an appropriate incentives structure. Command and control approaches have therefore limited potential outside of very specific situations. Therefore co-management appears a promising approach, whatever method of management (technical conservation measures, input controls, overall output controls, use rights, market measures) is chosen.

Modern fishery management, particularly in the context of the implementation of the precautionary approach, has become closely associated with harvest management strategy and control rules evolved from control theory. Saila (1997) notes that although “conventional control theory has been a tremendous success where the system is very well defined, such as in missile and space station guidance” the theory is perhaps not appropriate to control complex systems such as commercial fisheries. Amongst the reasons, he mentions that the precise structure of the system is virtually unknown and that there are no reliable models of the process to be controlled. He suggests that success in fishery management requires a system that can handle qualitative information and uncertainty, in a straightforward, transparent and not computationally intensive manner. This is not the direction in which most fishery management processes are heading.

In addition to seeing sustainability in terms of components, it is also possible, indeed important, to consider it in terms of scale. There is a need to decide at what scale sustainability is to apply. The traditional scale is the exploited fish stock and the fishery that depends upon it, but there are many alternatives (e.g. the exploited ecosystem, the overall fishery sector, or the national economy in general). This question can only be decided by considering the appropriate macroeconomic role of the fishery sector (and the fisheries that comprise it). A similar question exists in terms of time scales: over what period is sustainability to apply? Is it acceptable to operate the system unsustainably in some element over a particular period, provided that an irreversible situation is not created?

No fishery management system aims at unsustainability. Yet, it is rarely possible to avoid all of its components: when ecological unsustainability is avoided, it is often at the expense of the other components, and vice-versa. Does this mean that all fisheries are going to eventually become unsustainable under some or all of the components of sustainability? Or is unsustainability a normal statistical expectation of the fishery management system failing some of the time? Is a given percentage of unsustainable fisheries a normal feature of a given fishery management system due to the slowness of the control and feedback mechanisms?

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REVIEW OF FACTORS OF UNSUSTAINABILITY IN FISHERIES: RELATIONSHIP TO INTERNATIONAL FISHERIES INSTRUMENTS by Michael W. Lodge

INTRODUCTION

The purpose of this document is to attempt to identify whether the main factors contributing to unsustainability and overexploitation in fisheries are addressed in international fisheries instruments and, in so far as they are addressed, to analyze how and in what way they are addressed. The present document is complementary to an analysis of the key factors contributing to unsustainability and overexploitation prepared for FAO as a basis for discussion by Stephen Cunningham and Jean-Jacques Maguire.

In recent years the international legal and policy framework for fisheries management has been substantially improved as a result of action taken both within FAO and within the broader United Nations system, as well as at the regional level. These actions have resulted in a complex web of both “hard” and “soft” law provisions giving rise to a variety of rights, duties and obligations. While considerable progress has been made by States and within regional fishery bodies in the implementation of international fisheries instruments, there is a need for continuous review and assessment of the progress that has been made with a view to a more efficient application of the provisions of those instruments.

The present document aims therefore to provide a general review of international fisheries instruments and their relationship to the major factors identified in the FAO study which might be used as a basis for a more detailed assessment of the opportunities, constraints and priorities for implementation of existing instruments as well as the identification of possible gaps.

INTERNATIONAL FISHERIES INSTRUMENTS

International efforts to regulate ocean fisheries have a long history. Indeed, disputes over access to fisheries resources lay behind some of the first attempts to regulate the use of the oceans. Before the modern era, the greatest issue was allocation of rights to fish in particularly crowded fishing grounds. Since the twentieth century, however, the emphasis has been on the regulation of overfishing and overinvestment.

Prior to the widespread adoption by coastal States of the 200 nautical mile exclusive economic zone (EEZ) in 1976-77, ocean fisheries were an open-access common property resource, open to all. While governments could regulate their own fishers, no single government had the right to regulate all fishing and consequently regulation of all fishers depended upon cooperation between governments. As problems of overfishing became more apparent, governments responded by establishing international bodies charged with making joint decisions about managing common property resources, one example of such a body being the North Pacific Fur Seal Commission, established in 1911.

It was not until the 1950s, and the First and Second United Nations Conferences on the Law of the Sea that efforts were made to codify the international law of the sea and create a uniform system of ocean governance. While the First Conference failed to agree on the limits of the territorial sea, it nevertheless made some progress in relation to the issue of fisheries conservation and management by adopting in 1958 the Geneva Convention on Fishing and the Conservation of the Living Resources of the High Seas. The 1958 Convention contained implicit recognition of the fact that the fish resources of the oceans were not in inexhaustible supply and that some measures had to be taken for their conservation and management. However, although there was a general exhortation for cooperation among all those who fish on the high seas, it was largely left to flag States to determine and enforce any measures for conservation and management of the stocks.

The establishment of 200 nautical mile exclusive economic zones in the mid 1970s as a result of the Third United Nations Conference on the Law of the Sea led to a fundamental shift in the normative framework within which international fishery bodies operated. Most ocean fisheries were no longer open-access. Instead, property rights were attributed to coastal States, with varying consequences for conservation and management of fish stocks. Indeed, while enclosure of the oceans was thought to be a necessary and inevitable step towards more efficient management of fisheries resources, it in many cases resulted in more rapid depletion of stocks as coastal States, some of which lacked the experience and capacity to manage their fisheries resources, sought to maximize the economic benefits from exploitation of the EEZ.

The basis for the modern legal framework for ocean governance is the 1982 United Nations Convention on the Law of the Sea. In respect of fisheries, the most significant new contribution of the Convention was the establishment of a legal regime for the exclusive economic zone. This is contained in Part V of the Convention (articles 55 - 75). Within the EEZ, the coastal State has sovereign rights for the purpose of exploring and exploiting, conserving and managing natural resources, whether living or non-living. At the same time, however, the coastal State is obliged under article 61 to determine the allowable catch of living resources in its EEZ and to ensure, through proper conservation and management measures that the maintenance of such resources is not endangered through overexploitation. Measures adopted by the coastal State shall also be designed to maintain or restore populations of harvested species at levels which can produce the maximum sustainable yield, as qualified by relevant environmental and economic factors.

Article 62 of the Convention formulates the duty of the coastal State to promote the objective of optimum utilization of the living resources of the EEZ and elaborates upon the powers of the coastal State to regulate access to its EEZ. Articles 63 and 64 deal with the special situation of shared stocks, straddling fish stocks and highly migratory fish stocks.

The other important contribution of the Convention was to preserve the freedom of high seas fishing while at the same time making the right to fish on the high seas subject to the provisions of articles 116 to 119, which impose a duty on all States to conserve the living resources of the high seas and to cooperate with one another in the conservation and management of the living resources of the high seas.

By the early 1990s it was recognized that the Convention regime was inadequate to prevent depletion of the world’s fish stocks. In particular, it became apparent that the ambiguity in the provisions in the Convention relating to the conservation and management of straddling and highly migratory fish stocks and high seas fishing needed to be addressed if overexploitation was to be avoided. At the United Nations Conference on Environment and Development in 1992, the problems affecting fisheries were identified succinctly in Chapter 17 of Agenda 21 as “unregulated fishing, overcapitalization, excessive fleet size, vessels reflagging to escape controls, insufficiently selective gear, unreliable databases and lack of sufficient cooperation between States.”

As a result, the international community has made strenuous efforts since 1990 to address the problems of fisheries management through a range of “hard” and “soft” law instruments. These take the form of, on the one hand, legally-binding treaties of a global nature, the most notable of which is the United Nations Agreement for the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks (UNFSA), and, on the other hand, non-binding declarations and resolutions issued by a range of fora, including the UN General Assembly and the FAO Conference. The most comprehensive non-binding instrument that has been adopted during this period is the FAO Code of Conduct for Responsible Fisheries (CCRF), which is itself made up of a number of separate, but linked, documents, and which is continuing to evolve through the formulation of international plans of action on issues of immediate concern.

The growing use of soft law instruments to address issues of immediate concern has been one of the most interesting developments in international fisheries law in the past decade. These instruments, while clearly not intended to give rise to binding legal obligations, are often drafted in a quasi-legal style and reflect many of the principles found in binding legal instruments such as the 1982 Convention and the UNFSA. Some instruments, such as the UN General Assembly resolutions on large-scale pelagic driftnets, have had a greater impact on the conduct of States than their actual legal status would suggest. Others, such as the CCRF, having been adopted by a formal decision of the FAO Conference, may well be reflective of international “best practice” and relevant as an aid to the interpretation of legal obligations specified elsewhere. Indeed, in the case of the CCRF, the Preamble to the UNFSA itself gives recognition to the importance of “responsible fishing”.

Conversely, while one of the fundamental tenets of treaty law is that only the parties to a treaty can be bound by the legal obligations contained in that treaty, one of the consequences of the close linkages between the various international instruments is that there is much repetition of key concepts and provisions and States may well give implicit consent, on a voluntary basis, to certain “obligations” which they would not otherwise commit themselves to in the context of a binding treaty. For example, article 7 of the CCRF substantially reproduces, in non-binding form, many of the provisions found in Part III of UNFSA relating to the structure and functions of regional fisheries management organizations. Thus it might well be argued that even those member States of FAO that have not become party to UNFSA have agreed at the international level to apply the same principles and standards on a voluntary basis through the CCRF.

For the purposes of the present paper, a selection has been made of those international fisheries instruments which have most relevance to the subject-matter of the workshop. The current status of the instruments selected is shown in Annex 1. A brief description of each of the instruments will be given, followed by an analysis of whether the key factors contributing to unsustainability are, in fact, addressed by those instruments. In addition, given the importance attached to institutional factors, consideration is given to the need to reinforce existing regional fishery management bodies.

The relationships between the international fisheries instruments considered in this paper are shown in figure 1 below.

Figure 1: Schematic representation of relationships between international fisheries instruments

A. United Nations Agreement for the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks

The UNFSA was adopted in 1995 following three years of negotiations. It entered into force on 11 December 2001 and there are, to date, 30 States Parties. As the title of the Agreement implies, it is intended to implement the provisions of the 1982 Convention relating to straddling fish stocks and highly migratory fish stocks. The broad objective of the Agreement is “to ensure the long-term conservation and sustainable use of straddling fish stocks and highly migratory fish stocks”. While the provisions of the Agreement apply primarily to straddling fish stocks and highly migratory fish stocks in areas beyond national jurisdiction, article 5 of the Agreement also establishes new principles for management which are of general application both within and beyond areas under national jurisdiction. These principles include provisions on minimizing pollution, protection of biodiversity in the marine environment, the development of appropriate technologies in support of fishery conservation and management and taking measures to prevent or eliminate overfishing and excess fishing capacity. In addition, article 6 (which sets out the precautionary approach) and article 7 (which emphasizes the need to ensure compatibility between conservation measures established for the high seas and those adopted in areas under national jurisdiction) are expressly made applicable in areas under national jurisdiction.

In addition to establishing new rules and principles for management of straddling fish stocks and highly migratory fish stocks which serve as a blueprint for fisheries conservation and management in general, the UNFSA also makes two other significant contributions to the development of international law. The first of these concerns the role of regional fishery bodies in the conservation and management of straddling fish stocks and highly migratory fish stocks. The Agreement recognizes that, in the final analysis, neither coastal States nor distant water fishing States can manage the stocks in isolation. There must be a framework through which coastal States and fishing States can cooperate to establish management regimes and agree on problems of allocation and effort limitation. In this regard the provisions of the 1982 Convention have been elaborated upon. The roles and responsibilities of regional fisheries management organizations have been clarified and made more meaningful as a forum for management of shared resources. Where a competent regional fisheries management organization exists, States should either become members of the organization or they should agree to apply the conservation and management measures established by the organization. The second major area of development relates to the increased emphasis on the responsibilities of flag States for their fishing vessels. Not only have the requirements for flag State responsibility been further developed and enumerated, but also they have been supplemented by the measures that can be taken by members of regional organizations in cases where the flag State is unable or unwilling to take effective action itself. Thus, through a combination of the mechanisms provided in the Agreement and the measures to be adopted through regional organizations, an important gap in the effective application of conservation and management measures has been filled. This is an important innovation and a major development in international law.

B. FAO Code of Conduct for Responsible Fisheries

The CCRF was adopted by the FAO Conference in October 1995 after three years of elaboration through working groups and technical consultations. It should be noted that much of the work on the CCRF was carried out in parallel with negotiations in the United Nations on the UNFSA. There is, therefore, considerable overlap and consistency between the two instruments. The need for a code of practice or guidelines on responsible fishing practices had been recognized by FAO’s Committee on Fisheries in 1991 during the lead-up to the UNCED and it was considered that the CCRF would be an important contribution to achieving sustainable fisheries development.

The CCRF covers all aspects of fisheries, including capture, processing and trade in fish and fishery products, fishing operations, aquaculture, fisheries research and the integration of fisheries into coastal area management. Its broad objectives, which are set out in full in its article 2, are to:

The overall purpose of the CCRF is to facilitate structural change within the fisheries sector so that stocks are exploited in a long-term, rational and sustainable manner. Although aimed particularly at governments and their national fisheries administrations, it is also recognized that regional fishery bodies have a special role to play in implementing the CCRF where fish stocks are shared.

At the core of the CCRF are the nineteen general principles set out in article 5. These provide, amongst other things, that management measures should be aimed at ensuring the level of fishing effort is commensurate with the productive capacity of fisheries resources and emphasize the importance of a precautionary approach to conservation, management and exploitation of living aquatic resources.

The CCRF is voluntary in nature, although articles 1 and 3 make it clear that certain parts of it are based on relevant rules of international law, including those reflected in the Convention. It is to be interpreted and applied in conformity with the Convention and consistent with the relevant provisions of the UNFSA.

The CCRF is not a static instrument and has been supplemented by a number of other instruments elaborated by FAO. These are shown schematically in figure 2. These instruments include the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas (the “FAO Compliance Agreement”), which is a legally-binding agreement that was in fact adopted in 1993 before the CCRF had been completed, but nevertheless forms an integral part of the CCRF and a series of non-binding technical guidelines and international plans of action. Since its adoption, the provisions of the CCRF have been supplemented by more detailed technical guidelines issued by FAO in consultation with experts from around the world. To date, guidelines on fisheries management, fishing operations, the application of the precautionary approach, aquaculture development and inland fisheries have been issued. The guidelines have no legally-binding effect and are intended to serve as technical guides to the interpretation and application of the various provisions of the Code. In addition, FAO has elaborated, “within the framework” of the CCRF international plans of action on the management of fishing capacity, for the conservation and management of sharks, for reducing incidental catch of seabirds in long line fisheries and, most recently, to prevent, deter and eliminate illegal, unreported and unregulated (IUU) fishing.

Figure 2: Elements of the Code of Conduct

The various subsidiary elements of the CCRF will be considered briefly below.

FAO Compliance Agreement

The FAO Compliance Agreement was developed by FAO as an urgent response to the Declaration of Cancún (1992), which called upon States to “take effective action consistent with international law, to deter reflagging of fishing vessels as a means of avoiding compliance with applicable conservation and management rules for fishing activities on the high seas”. This call for action was subsequently reiterated in Agenda 21.

Following a rapid negotiation process, the FAO Compliance Agreement was approved by the FAO Conference on 24 November 1993 as “an integral part” of the CCRF. The Agreement will enter into force on the deposit with the Director-General of FAO of the twenty-fifth instrument of acceptance.

The Agreement aims to elaborate upon the provisions of article 94 of the 1982 Convention by making them specifically applicable to fishing vessels on the high seas. The most important element in the agreement is the emphasis given to the concept of flag State responsibility. There is a general obligation on the flag State to take such measures as may be necessary to ensure that vessels flying its flag do not engage in any activity which undermines the effectiveness of international conservation and management measures. The flag State must not allow any of its vessels to be used for fishing on the high seas unless they have been authorized by the relevant national authorities to be so used. Authorized fishing vessels must fish in accordance with the conditions of the authorization.

All Parties to the agreement undertake not to grant authorizations to any fishing vessel which has, within the previous three years, had its authorization to fish on the high seas suspended or withdrawn by its former flag State. This provision is designed to prevent the practice of re-flagging fishing vessels to escape controls. There are some exceptions and limitations to this obligation, particularly where it can be shown that there has been a bona fide change in the ownership of the vessel, or where the new flag State, taking into account, inter alia, the circumstances in which the authorization was withdrawn, makes a determination that to grant the authorization would not undermine the object and purposes of the agreement.

Parties are required to take enforcement measures against their flag vessels which act in contravention of the agreement and sanctions must be of sufficient gravity to be effective in securing compliance and to deprive offenders of the benefits accruing from their illegal activities. For serious offences, such sanction should include refusal, suspension or withdrawal of the authorization to fish on the high seas.

IPOA-Fishing Capacity

The IPOA-Fishing Capacity is a voluntary instrument which elaborates upon the CCRF by setting out urgent actions and mechanisms to promote its implementation. Such actions include assessment and monitoring of fishing capacity and the preparation of, and implementation of, national strategies as well as the exchange of information on issues related to the management of fishing capacity. The immediate objective of the IPOA-Capacity is to achieve world-wide an efficient, equitable and transparent management of fishing capacity.

IPOA-IUU Fishing

The objective of the IPOA-IUU Fishing is to prevent, deter and eliminate IUU fishing by providing all States and regional organizations with “comprehensive, effective and transparent measures by which to act”. The IPOA lists a series of measures under the headings of State responsibilities, flag State responsibilities, coastal State measures, port State measures, internationally-agreed market-related measures, research and regional fisheries management organizations. Like the other IPOAs, the IPOA-IUU Fishing reiterates and elaborates upon the provisions of the CCRF and other instruments, including the UNFSA.

C. Other non-binding measures

A number of other “soft” law instruments of a non-binding nature may be considered. These include the various UN General Assembly resolutions on large-scale pelagic driftnets, as well the Kyoto Declaration and the Ministerial Declarations adopted by FAO.

Although recommendatory in nature, UN General Assembly resolution 44/225, on the problem of large-scale pelagic driftnets, had a significant impact on international fisheries, not least as a forerunner of the application of a precautionary approach to fisheries. The resolution called for a moratorium on large-scale pelagic driftnet fishing in the absence of sound scientific evidence showing that the practice had no unacceptable adverse impact on the sustainable management of marine living resources. Since the adoption of resolution 44/225, the UN General Assembly has considered an annual report on the status of implementation of the resolution and has also extended its interest to other key problems of global fisheries management, including fisheries by-catch and discards and unauthorized fishing in zones of national jurisdiction. A list of the relevant UNGA resolutions appears in Annex 1.

Of perhaps less global significance than the UN General Assembly resolutions, are the Kyoto Declaration and the Ministerial Declarations adopted by FAO. The Kyoto Declaration was one of the outcomes of the International Conference on the Sustainable Contribution of Fisheries to Food Security, held in 1995. While the Declaration has clear links to all the other international instruments under consideration, its focus is primarily on the problem of a growing world (human) population and the need to secure food for present and future generations.

The Rome Consensus on World Fisheries, adopted in 1995, and the Rome Declaration on the Implementation of the Code of Conduct for Responsible Fisheries, adopted in 1999, are hortatory declarations of a political nature and have no precise legal status. They are not decisions of the FAO Council of Conference and, while they draw attention to a number of issues of global concern, it would appear that the primary objective of these instruments was to endorse the implementation of strategies at the highest level.

FACTORS CONTRIBUTING TO UNSUSTAINABILITY

The FAO study identifies the various factors of unsustainability in fisheries and considers their relative impact under each of six different management scenarios. For various reasons it is exceptionally difficult to make any precise correlation between the factors identified in the FAO study and the provisions of international fisheries instruments. One clear reason for this is that many of the factors identified are of an economic nature, often driven by external factors which are not necessarily reflected in international fisheries instruments. Furthermore, as should be obvious from the scope of the study and the narrative above, no attempt has yet been made to address systematically the factors of sustainability within the context of an international fisheries instrument. Such instruments far more often develop as a response to political issues than a scientific attempt to address specific economic, social or biological problems. In many cases, therefore, the best that can be done is to use international fishery instruments to create or facilitate the right environment to make the best-informed choices in fishery management decision-making. In particular, international fishery instruments are a critical tool for the establishment of appropriate institutional arrangements, which in turn have a direct effect on sustainability.

The following brief analysis, presented in tabular format, is useful as an indicator of the extent to which the factors identified in the FAO study are dealt with in the context of international fishery instruments.

Factor of unsustainability

Extent to which addressed in international fisheries instruments

Citations

Profitability

Not addressed explicitly. However, the study points to the need for an appropriate institutional/management framework to prevent increased profitability from leading to overfishing and/or overcapacity. These institutional factors are addressed by UNSFA, CCRF and IPOA-Capacity.

Trade aspects

While CCRF addresses the issue of responsible international trade in fish and fish products and the IPOA-IUU Fishing contains a section on internationally-agreed market-related measures designed to promote international trade in fish and fish products harvested in a sustainable manner and to deter or eliminate trade in products derived from IUU fishing, no instruments deal with the macroeconomic environment (currency exchange rates, general economic policy) dealt with in the FAO study.

Access conditions

Access conditions for most commercial fisheries have been substantially changed, in particular high seas fisheries and fisheries for straddling and highly migratory stocks. Freedom of fishing has been drastically curtailed. Where a competent regional fisheries management organization exists, States should either become members of the organization or they should agree to apply the conservation and management measures established by the organization (UNFSA, article 8).

UNFSA, article 8.

New general principles for management under UNFSA are also applicable in the EEZ and include the precautionary approach, which is elaborated in detail (article 6 and Annex II). UNFSA also introduces target reference points and limit reference points in place of MSY.

UNFSA article 5, (general principles), article 6 (precautionary approach), article 5

CCRF recognizes long-term sustainable use is the overriding objective of conservation and management.

One major problem that remains under any management scenario is new entrants/non-parties.

Asymmetric entry/exit problem not addressed

CCRF, article 7.2 (management objectives) and 7.6 (management measures)

Sources of uncertainty

(a) Inadequate data

Both UNFSA and CCRF emphasize the critical importance of collecting, compiling and disseminating timely, complete and accurate catch and effort data, promoting scientific research in support of fishery conservation and management and taking into account the best scientific evidence available when making management decisions.

UNFSA, article 5 and Annex 1;

CCRF, article 7.4.

UNFSA contains detailed standard requirements for collection and exchange of data (Annex I).

UNFSA, article 5 and Annex I.

CCRF also recognizes that responsible fisheries requires the availability of a sound scientific basis to assist fisheries managers and other interested parties in making decisions (article 12)

CCRF, article 12.

(b) Limits to fish stock size

Not addressed.

(c) Variability of fish stocks

Not addressed, except in the sense that the precautionary approach is incorporated as a central feature of both the UNFSA and CCRF.

UNFSA, article 6; CCRF, article 6.5, 7.5.

(d) Limitations to biological modeling

The key problems identified in the study (i.e. failure to look at spatial stock structures, narrow approach, inappropriate models) are specifically addressed in UNFSA and CCRF, which both contain multi-species (ecosystem) approach to fisheries management.

Thus UNFSA contains specific requirements (as part of application of precautionary approach) to take into account uncertainties in size and productivity of the stock, impacts of fishing activities on non-target and associated or dependent species (article 6), as well as emphasizing the need to apply compatible measures throughout the range of the stocks (article 7).

UNFSA, article 6.

CCRF also contains detailed provisions on data gathering and management advice (article 7.4), the precautionary approach (article 7.5) and fisheries research (article 12), as well as emphasizing the need for effective fisheries management to be concerned with the whole stock unit over its entire area of distribution (article 7.3).

CCRF, article 6.4, article 7, article 12.

(e) Inadequate understanding of fisher behaviour

CCRF requires interests of fishers to be taken into account (article 7.2.2.) and requires sufficient knowledge of social, economic and institutional factors to be developed through data gathering, analysis and research (article 7.4.5.).

CCRF, article 7.2, 7.4.

(f) Insecure use rights

Addressed indirectly through changes in access conditions to EEZ and high seas resources (see Access Conditions).

(g) Complexity

Both UNFSA and CCRF recognize complexity of fisheries activity and need for integrated approaches.

CCRF, article 2, article 6.

Improved fishing technology

All aspects of fishing technology use addressed extensively in CCRF (article 8) and should act as a constraint upon management choices (see also Inappropriate gears and Habitat destruction above)

CCRF, article 8

Inappropriate gears

Strong emphasis placed on the need to develop and use selective fishing gear, methods and practices so as to minimize waste, discards, catch of non-target species and impacts on associated or dependent species. CCRF provides that selective and environmentally safe fishing gear and practices should be further developed and applied, to the extent practicable, in order to maintain biodiversity and to conserve the population structure and aquatic ecosystems and protect fish quality (article 6.6).

UNFSA, article 5; CCRF, article 6.6, 7.2, 8.5

Lack of economic alternatives

Not addressed.

Compliance factors

Substantial progress made in addressing the problems of IUU fishing. UNFSA and FAO Compliance Agreement elaborate upon the responsibilities of flag States; UNFSA provides mechanism for regional and subregional cooperation in enforcement, including boarding and inspection regimes and jurisdiction of port States; CCRF elaborates upon duties of flag States and port States; IPOA-IUU Fishing sets out principles and measures to prevent, deter and eliminate IUU fishing.

UNFSA, Parts V and VI; FAO Compliance Agreement; CCRF, article 8.2, 8.3, IPOA-IUU Fishing.

External factors

Habitat destruction

CCRF (article 6.8) recognizes the need to protect and rehabilitate all critical fisheries habitats in marine and freshwater ecosystems, such as wetlands, mangroves, reefs, lagoons, nursery and spawning areas. Fisheries interests are to be taken into account in the multiple uses of the coastal zone and integrated into coastal area management, planning and development (article 10).

CCRF, article 6.8, 6.9, 8.7, 8.8, 10

Degradation of the environment

CCRF refers to the need to protect the marine environment and atmosphere.

CCRF, article 6.8, 6.9, 8.7, 8.8.

Refer also to the 1982 Convention, Part XII, on protection and preservation of the marine environment.

1982 Convention, Part XII.

Subsidies

Not adequately addressed, despite being identified in Agenda 21 as a major cause of unsustainability. Covered in part in CCRF, article 7.1.8; 7.6.3 and UNFSA Preamble.

UNFSA, Preamble; CCRF, article 7.1.8; 7.6.3

Policy objectives

All international fishery instruments under survey have as their sole or primary objective sustainable use of fish resources. However, there is no agreed definition of “sustainability”.

The objective of UNFSA is “to ensure the long-term conservation and sustainable use of straddling fish stocks and highly migratory fish stocks” (article 2).

The objectives of the CCRF, inter alia, are to “establish principles and criteria for the elaboration and implementation of national policies for responsible conservation of fisheries resources and fisheries management and development” (article 2)

UNFSA, article 2; CCRF, article 2, article 6.

(a) Inadequate management units

By their nature, international fisheries instruments have tended to focus on the relationship between States, e.g. UNFSA. However, the CCRF gives more explicit recognition to the economic and management role of small-scale fisheries, particularly artisanal and subsistence fisheries (article 6.18) and the need to develop institutional and legal frameworks taking into account coastal communities and customary fishing practices (article 10).

CCRF, article 6.18, article 10.

(b) Conflicting objectives between managers and fishers

Not addressed.

(c) Preference for coastal State fishers

Addressed in part by UNFSA which seeks to restore a balance between the sovereign rights of coastal States in the EEZ, freedom to fish on the high seas and the broader community interest in conservation and management throughout the range of stocks.

UNFSA, article 3, 4, 5 and 6.

(d) Correct identification of policy issues

Expressed in the context of integrated coastal area management: CCRF (article 6.8 and article 10) set out policy and institutional framework to ensure sustainable and integrated use of resources.

CCRF article 6.8, article 10

Institutional factors

(a) Weakness of regional fishery bodies

Major achievement of UNFSA is to substantially reinforce the role of regional fishery bodies as the appropriate framework through which coastal States and fishing States can cooperate to establish management regimes and agree on problems of allocation and effort limitation.

UNFSA, article 10.

(b) Poor choice of management instruments

Existing instruments give adequate management choices, problem lies in implementation. UNFSA provides guidance for mandates of regional fishery bodies (article 10), particular problem is ineffective decision-making. IPOA-Capacity provides guidance on appropriate mechanisms for controlling input/output.

UNFSA, article 10; IPOA-Capacity

Some useful, albeit extremely preliminary, conclusions may be drawn from the above brief analysis.

It is important to stress that the problem with ocean governance generally today is not that there is no legal framework but rather how States should act in the discharge of their responsibilities under the Convention and related instruments and in the exercise of the rights and duties ascribed to them. The major problem today is not so much with respect to the legal framework at the international level but effective discharge of duties or responsibilities for ocean governance in areas under national jurisdiction for which international law has provided States with extensive competence. Unfortunately, a review of the activities of States will reveal that a majority of them have assumed jurisdiction of maritime zones but have not developed national policies to administer these zones in a manner consistent with the sustainable use of the oceans and their resources as envisaged by the Convention. As is confirmed by the FAO study, marine resources development cannot be viewed independently of the overall socio-economic development. The dimension added by the marine sector must therefore be viewed in the overall context of national development priorities. Governments need to better integrate their policies on marine development in their overall development strategies so as to ensure an appropriate allocation of resources between the marine and other sectors. It is important, therefore, that any administrative structure or mechanism for ocean management should ensure adequate coordination at the national level. Such a structure should allow for the initiation and implementation of national ocean development objectives while at the same time facilitating the discharge of obligations relating to regional and global ocean management, especially those reflected in the Convention. Such coordination at the national level will also ensure more effective collaboration bilaterally and multilaterally with the various international and regional organizations and agencies that have been given a role to play in the system of global ocean governance.

D. Regional fishery bodies

One of the most significant and important trends in recent years has been the emphasis on the role of regional fishery bodies in promoting sustainable management of fisheries, especially shared fish stocks and straddling and highly migratory fish stocks. Indeed, in the case of the latter categories, the UNFSA, supported by the provisions of the CCRF establishes the regional fishery body as the paradigm for conservation and management of fisheries resources. Thus, the regional fishery body is established as the primary mechanism through which States should fulfil their obligation to cooperate under the 1982 Convention. Articles 9 and 10 of the UNFSA (which are echoed in the CCRF) set out the functions of regional fishery bodies. Article 10 provides that:

“[I]n fulfilling their obligation to cooperate through subregional or regional fisheries management organizations or arrangements, States shall:

(a) agree on and comply with conservation and management measures to ensure the long-term sustainability of straddling fish stocks and highly migratory fish stocks;

(b) agree, as appropriate, on participatory rights such as allocations of allowable catch or levels of fishing effort;

(c) adopt and apply any generally recommended international minimum standards for the responsible conduct of fishing operations;

(d) obtain and evaluate scientific advice, review the status of the stocks and assess the impact of fishing on non-target and associated or dependent species;

(e) agree on standards for collection, reporting, verification and exchange of data on fisheries for the stocks;

(f) compile and disseminate accurate and complete statistical data, as described in Annex I, to ensure that the best scientific evidence is available, while maintaining confidentiality where appropriate;

(g) promote and conduct scientific assessments of the stocks and relevant research and disseminate the results thereof;

(h) establish appropriate cooperative mechanisms for effective monitoring, control, surveillance and enforcement;

(i) agree on means by which the fishing interests of new members of the organization or new participants in the arrangement will be accommodated;

(j) agree on decision-making procedures which facilitate the adoption of conservation and management measures in a timely and effective manner;

(k) promote the peaceful settlement of disputes in accordance with Part VIII;

(l) ensure the full cooperation of their relevant national agencies and industries in implementing the recommendations and decisions of the organization or arrangement; and

(m) give due publicity to the conservation and management measures established by the organization or arrangement.

It is noteworthy that the list in article 10 touches upon and correctly identifies several of the factors identified in the FAO study, such as biological and ecological factors (article 10 (d), (e), (f) and (g), as well as economic and social factors (article 10 (a), (b) and (i)).

The mandates of most of the regional fishery bodies in existence today were established before the international fishery instruments referred to in this paper. Unfortunately, it is also apparent that many of these regional fishery bodies have failed to achieve real progress in addressing issues of sustainability. In particular, the functions of many of them do not adequately reflect the requirements of article 10 of UNFSA. One of the most important of these is article 10 (j), which requires regional fishery bodies to agree on decision-making procedures which facilitate the adoption of conservation and management measures in a timely and effective manner. One of the key factors which has paralyzed decision-making in most regional fishery bodies to date is insistence on decision-making mechanisms which either require full consensus of the parties or allow some kind of opting-out mechanism or objection procedure. If conservation and management measures are not to be undermined, it is important that effective decision-making procedures are adopted.

Annex 2 to the present report examines a selection of regional fishery bodies and attempts to classify them according to a range of management functions and capabilities, which correspond very broadly to the range of management scenarios identified in the FAO study (i.e. no management to market-based management). Although a precise correlation is impossible, and unnecessary for the scope of the present document, an attempt has been made to classify regional fishery bodies according to whether they carry out the following broad functions:

(a) carry out, or promote, scientific research and exchange data between participants;

(b) harmonize national policies relating to fisheries;

(c) establish a TAC for a stock or portion of a stock and allocate quotas between participants;

(d) recommend technical conservation and management measures (of a non-binding nature) for stocks under the purview of the regional fishery body;

(e) adopt binding conservation and management measures which the regional fishery body (through its members) has the power to enforce.

It is apparent from even a very cursory analysis that while most regional fishery bodies carry out functions (a), (b) and (c), which may be described as limited management functions, very few of the bodies in existence today have the mandate or capacity to carry out function (d) and (e).

Work within FAO on review of regional fishery bodies is ongoing. However, the outcome of even this preliminary review suggests strongly that more work should be done to examine whether each of the regional fisheries bodies in existence today has as its primary objective sustainable fisheries, as determined through an analysis of its characteristics, and whether its mandate and functions are such as to promote sustainability.

CONCLUSIONS

International fishery instruments developed since the early 1990s address directly or indirectly many of the factors contributing to unsustainability in fisheries today. Indeed the instruments considered in this paper reveal a high level of consensus at the international level on the factors to be addressed. It is suggested that the key international fishery instruments would benefit from a more detailed examination and assessment against a more precisely-defined and internationally agreed list of factors contributing to unsustainability. In the meantime, however, it is suggested that the main problem is not a lack of internationally-agreed measures to address problems of unsustainability, but a problem of failure to implement existing instruments.

Some factors cannot be addressed by international instruments, which generally require States to take action, but instead require coordinated action to be taken at national or regional level. The focus of many of the international fishery instruments is on action at the regional level, primarily through regional fishery bodies. At the same time, however, cursory analysis reveals that many of the existing regional fishery bodies are ineffective and have not successfully addressed key factors affecting sustainability including those relating to compliance, illegal, unregulated and unreported fishing, as well as effective decision-making. Further work needs to be done (which may be done effectively through FAO) to strengthen regional fishery bodies to ensure that these bodies (a) meet the standards established by the relevant international fishery instruments, and (b) possess the necessary mandates to enable them to address the factors affecting sustainability.

In summary, the recommendations for further action proposed in this paper are as follows:

(a) a detailed analysis and assessment should be made of key international fishery instruments against a more precisely-defined and internationally agreed list of factors contributing to unsustainability (e.g. based on the outcomes of this workshop);

(b) in the light of such an analysis, a further study should be carried out and recommendations made to strengthen existing regional fishery bodies to ensure that such bodies:

(i) meet the standards established for them by relevant international fishery instruments, and

(ii) possess the necessary mandates to enable them to address the factors affecting sustainability.

Annex 1: Status of international fisheries instruments

Status

A. Treaties

United Nations Convention on the Law of the Sea

Entry into force 16 November 1994. 137 States Parties as at 30 August 2001.

United Nations Agreement for the implementation of the provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks

Entry into force 11 December 2001. 30 States Parties as at 30 January 2002: Australia, Bahamas, Barbados, Brazil, Canada, Cook Islands, Costa Rica, Fiji, Iceland, Iran, Maldives, Malta, Mauritius, Micronesia, Monaco, Namibia, Nauru, New Zealand, Norway, Papua New Guinea, Russian Federation, Saint Lucia, Samoa, Senegal, Seychelles, Solomon Islands, Sri Lanka, Tonga, United States of America, Uruguay.

Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas

Adopted November 1993 by the FAO Conference (resolution 15/93) and forms an integral part of the Code of Conduct. Not yet in force. Signatories as at 30 August 2001: [22] Argentina, Barbados, Benin, Canada, Cyprus, Egypt, European Community, Georgia, Japan, Madagascar, Mexico, Morocco, Myanmar, Namibia, Norway, Peru, St. Kitts & Nevis, Seychelles, Sweden, Tanzania, United States of America, Uruguay. [Will enter into force on date of receipt of twenty-fifth instrument of acceptance].

B. Non-binding instruments

UN General Assembly resolutions

A/RES/44/225 (large-scale pelagic drift-net fishing), A/RES/49/118 (fisheries by-catch and discards and their impact on the sustainable use of the world's living marine resources), A/RES/49/116 (unauthorized fishing in zones of national jurisdiction and its impact on the living marine resources of the world's oceans and seas) [and subsequently see A/RES/50/25, A/RES/51/36, A/RES/52/29, A/RES/53/33 and A/RES/55/8].

Code of Conduct for Responsible Fisheries

Adopted 31 October 1995 by the FAO Conference.

IPOA-Fishing Capacity

Adopted February 1999 by the 23rd Session of the Committee on Fisheries and endorsed June 1999 by FAO Council.

IPOA-IUU Fishing

Adopted 2 March 2001 by the 24th Session of the Committee on Fisheries and endorsed 23 June 2001 by the FAO Council.

Rome Consensus on World Fisheries

Adopted 15 March 1995 by the FAO Ministerial Conference on Fisheries

Rome Declaration on the Implementation of the Code of Conduct for Responsible Fisheries

Adopted 11 March 1999 by the FAO Ministerial Meeting on Fisheries

Kyoto Declaration and Plan of Action on the Sustainable Contribution of Fisheries to Food Security

Adopted 9 December 1995 by the International Conference on the Sustainable Contribution of Fisheries to Food Security, Kyoto, Japan.

Annex 2: Characteristics of selected regional bodies

Appendix 1: Factors of unsustainability

Factor

Sub-factor or comment

Exploitation, but no management

Technical conservation measures

Input controls

Output controls

Use rights

Market measures

Profitability

Increased profitability leads to increased desired exploitation rates

Exploitation rates simply increase leading to overcapacity and to eventually overfishing

Technical conservation measures have no effect on desire to increase exploitation rates in profitable fisheries. May improve exploitation pattern and help ecological sustainability.

Increased demand for rights pushing up their price rather than the exploitation rate. May be attempt to increase exploitation within the constraint of the number of licenses.

Competitive TACs lead to a race for the fish. Exploitation rates increase up to TAC. If TAC binding, unnecessary investment in capital then follows, with the possibility of the TAC being caught in extremely short periods of time.

Increased demand for rights pushes up their price rather than the exploitation rate. May be attempt to increase exploitation within the constraint.

Increased profitability offers opportunity to increase tax revenues rather than the exploitation rate.

Profitability can increase for a number of reasons. Amongst the main ones are increased demand, linked among other things to international trade, variation in landings and decreased input costs. Input costs may decrease for a number of reasons, such as decreased fuel costs, but increases in efficiency are particularly important. They are covered separately under improved technology.

Resource rent

Neither extracted nor capitalised, so perceived by fishers as profits, driving the fishery to higher exploitation rates

Measures may create rents in short run, but this will encourage increased effort (new entry or existing participants). Resource rents dissipated

Resource rents become capitalised into price of licenses. Provides opportunity to extract rents if desired. If not may give rise to equity issues. Possible rent-seeking behaviour (input substitution)

Similar to technical conservation measures. TACs may create rents in short run, but this will encourage increased effort (new entry or existing participants). Resource rents dissipated

Resource rents are capitalised in the price of rights. Provides opportunity to extract rents if desired. If not may give rise to equity issues. Possible rent-seeking behaviour (high-grading)

Tax systems offer possibility to extract rents and to reduce exploitation rates.

Access conditions

Under no management, access is free and open leading to overexploitation. Often observed that it is easier to enter fishing than to leave (applies both to capital and labour) which results in a ratchet effect progressively increasing exploitation rates.

Similar effect as no management.

Input controls by licensing has generally been introduced once exploitation rates are too high, or it has become uneconomic to fish.

Overall TAC controls, without input controls, will lead to new entrants. In combination with input controls, it may lead to increased fishing efficiency because of the race for fish.

Similar to above on resource rent.

Uncertainty






 

The nature of uncertainty, its effects, and whom it affects varies according to the management scenario. Under no management, natural variability in stock sizes and markets are the main sources of uncertainty. As management progresses, more sources of uncertainty are introduced. Uncertainty is an important factor leading to unsustainability. If the fishery management agency had perfect knowledge, it would make the correct decisions all the time and would also implement them perfectly.

Species resilience

Species have different resilience to exploitation, and within species, different populations will also have different resilience. The resilience of individual species is not known, and it is likely to vary over time with climatic changes. Some species with low reproduction rates, such as shark and rays, are generally expected to be less resilient than more prolific species such as cod and herring. No management implies that all species will eventually become overexploited and perhaps depleted. Once management starts, it generally aims at avoiding depletion of a target species. In multispecies fisheries, low productivity by-catch species could become depleted even in the absence of a directed fishery.

Scientific assessment

Uncertainty in the scientific assessments have no effect under no management. Assessments may even not exist.

Under technical conservation measures, the expected effects of the measures adopted may not materialise because of assessment uncertainties.

There are considerable uncertainties about the fishing effort necessary to generate the Maximum Sustainable Yield or a fraction of it. These play a direct role towards unsustainability under input controls.

Catch based output controls are subject to considerable assessment uncertainties, not only with respect to current population parameters and status, but even more so with respect to future ones.

Depends on the nature of the rights.

Depends on the nature of the market shares.

In output control fishery management systems, TACs are often adjusted yearly in order to keep fishing mortality below an accepted threshold or to aim at a target. In order to do so, practice is often to assess current stock status and project future trajectories. This requires information on future recruitment, future weights at age, future exploitation rates, future natural mortality etc..

Ecosystem functioning

Sustainable development, in particular the principle of intergenerational equity, calls for letting future generations having similar options to those we presently have. This requires that the functioning of ecosystems, if not all their constituents be protected. There is limited understanding of how this can be achieved, and what exactly needs to be protected. Failure to protect ecosystem functioning leads first to ecological unsustainability, but eventually, under all components.

Management units

This is particularly relevant for ecological unsustainability. The aim is to manage fisheries on the basis of meaningful biological units that should respond similarly to management measures. Too large a management unit, comprising several distinct biological units, may run the risk of depleting some of the more easily accessible ones. Too small a management unit could lead to confusion about the developments of the unit. Small and large in the sentences above are relative to the real nature of the biological unit. Problems can be expected when a management boundary is not adequate for all dimensions (ecological, socioeconomic, community and institutional).

Data requirements

By definition, no data are needed in support of management.

Relatively limited data are needed in either time or space once the potential effect of a management measure have been validated.

Long time series of data are needed to evaluate MSY and the effort corresponding to MSY. Continued monitoring is needed to assess changes in efficiency.

Large quantities of detailed data are required on a continued basis.

Depends on the nature of the rights.

Depends on the nature of the market shares.

Targeting behaviour

Targeting may lead to discarding of non-target low value species.

Mostly similar effect as no management or made worse by some measures (e.g. fish size limits).

Discarding of low-value non-target species.

If TAC binding, may lead to discards of both target and by-catch species.

High-grading of catch likely in order to maximise value of landed catch.

Discarding of low-value non-target species.

Input substitution

No incentive to use other than economically optimal input combination

Control of one or more inputs will encourage substitution

Input-based rights likely to encourage expansion of uncontrolled inputs

If TAC binding, race for fish worsens encouraging investment in speed

Output-based control should mean choice of optimal input set

Depends on how tax applied in detail. Attempts to tax effort may have similar effects to input-based rights

Asymmetric entry/exit (Lack of alternatives)

Capital non-malleability and/or low opportunity cost of labour (due to lack of economic alternatives) may lead to ratchet effect. Entry attracted in good years but does not exit in poor years.

Since access not controlled, short term improvements will attract new entry leading to longer run problems (depending on exploitation levels)

May make it difficult and/or expensive to achieve licence reductions if licensing introduced once capacity built up

Since access not controlled, short term improvements will attract new entry leading to longer run problems (depending on exploitation levels)

May lead to conflict unless equity issues carefully considered

May mean that very high rentals would be required to reduce effort levels

International trade opportunities

Will work through profitability, hence impact similar

Improved trade opportunities may be a threat to sustainability because of impact on short-term profits

Threat

Opportunity but potential longer term threat through input substitution

Threat

Opportunity

Opportunity for management authorities but potential threat if rentals not adjusted

Rent-seeking behaviour

N/A

N/A

Likely to be encouraged, mainly via input substitution

N/A

Likely to be encouraged mainly via highgrading

Depends on institutional arrangements. Can be expected to be a problem

User participation and compliance

N/A

Situation varies according to management systems. Frequently antagonistic relationship between managers and fishers. Compliance poor and enforcement expensive

Give fishers a stake in the fishery. Compliance likely to be good.

Because output controls often lead to overcapacity, compliance often poor, especially when output reductions required because fishers cannot survive economically on reduced catches.

Give fishers a stake in the future of the fishery. Expectation that compliance and peer-based enforcement will improve, but highgrading appears a problem.

Depends on institutional arrangements. A significant proportion of benefits may disappear in compliance and enforcement costs.

Choice of unsustainability

Whatever the management system, policymakers may choose to trade-off sustainability in one area in return for benefits in another

Fishing technology policy

States have often sponsored technological improvements

N/A

Technical advance tends to undermine management system

Policy of improving technology likely to push the fishery towards less sustainable situation, unless accompanied by mechanisms to reduce number of licences

Technical advance tends to undermine management system leading to increased catch up to TAC and increased capacity once constraint binds

Investment only if costs reduced or revenue increased. Policy can be better targeted once rights exist

May be a problem if rentals difficult to adjust

Subsidies

Often an important element of technology policy but may be used more generally. Main effect to reduce fishing costs

N/A

By lowering costs, subsidies will tend to increase exploitation levels.

Subsidies reduce costs and hence profits. This will push up licence prices, encouraging input substitution.

Example of buybacks as subsidy - difficult to design so as to be effective

By lowering costs, subsidies will tend to increase exploitation levels up to TAC constraint. Once constraint binds, encourage investment in redundant capacity

Subsidies will affect the price of rights rather than exploitation levels. Possibility to use selective subsidies (eg environmentally friendly gear)

If fishery being managed by taxation, it would not make sense to have a policy of general subsidies, although targeted subsidies still possible

Lack of understanding of fisher behaviour

N/A

Fishers have generally changed their behaviour in order to minimise the impact of management measures.

Failure to understand fisher behaviour has often led to simplistic views of possible results of licence programmes.

In the absence of sufficient enforcement (the rule rather than the exception), output controls have led to misreporting, dumping, discarding and high-grading in order to maintain income despite the restrictions.

Need to understand economic basis of behaviour, especially if rights to be used to achieve goals other than economic efficiency. Need to avoid unintended consequences.

Use of taxes should provide correct incentives for fishers, but still need to understand behaviour to be able to predict response.

Desire for stable fishing opportunities

N/A

N/A

If stability is interpreted in terms of number of licences, may be too much capacity locked into the fishery

May lead to attempt to maintain TACs in face of ecological (and other) variability and uncertainty

Unwarranted attempts to maintain TACs may be resisted by fishers concerned about the value of their rights

Once fishing effort brought into line with available opportunities, some possibility to stabilise by varying taxes to compensate for other changes

Failure to distinguish between income and wealth

N/A

N/A

Depending on the precise nature of the licensing scheme, licences may take on a substantial value. The main effect will be on wealth, not on income. Confusion of these effects may lead to inequitable outcomes and unsustainable management systems

N/A

Effect similar to input controls but economically efficient systems (such as individual catch rights or spatial monopolies) are likely to have an even greater wealth effect, on a sustainable basis. Need for clarity on resource ownership, use rights, equity and sustainability of management system.

Royalties also will influence wealth and income. Need to clarify resource ownership issue, and who is to benefit from the resource and in what way.

General economic policy

Fishery responds to general economic incentives - e.g. taxation rules may allow depreciation of capital assets at rates providing incentive to over-invest

Fishery responds to general economic incentives - e.g. taxation rules may allow depreciation of capital assets at rates providing incentive to over-invest

Although fishery will still respond to general economic incentives, existence of rights should remove incentive to over-invest. Depending on precise nature of rules, could still be some distortion

Fishery responds to general economic incentives - e.g. taxation rules may allow depreciation of capital assets at rates providing incentive to over-invest

Although fishery will still respond to general economic incentives, existence of rights should remove incentive to over-invest. Depending on precise nature of rules, could still be some distortion

In setting tax levels in fishery, need to take overall fiscal situation into account. Could still be some distortion

Equity issues

Regional shifts

N/A

N/A

If licences are transferable, they may not continue to be held in the same regions as before, leading to threats to community sustainability in some areas.

N/A

Similar problem to input controls but may be more severe in case of transferable catch rights because relatively easy to transfer these to existing vessels in other areas.

N/A

Monopolisation of rights

N/A

N/A

A system of transferable licences will open the possibility for some monopolisation. This could threaten community sustainability and the management system itself if it is felt to be inequitable

N/A

Similar problem to input controls but perhaps more severe because may be easier to monopolise catch rights.

N/A

Political acceptability

N/A

General acceptability to use such measures

Political will to introduce licences but often too late. Less will to reduce number of licences in line with resource availability

Output controls often accompanied by unwillingness to reduce TACs in line with scientific advice

Much resistance to introduction of use rights

Generally unacceptable (except for foreign fishers). Problem that rentals may have to be increased when fishery already stressed.

Beggar-my-neighbour policies

In the case of capacity reduction

N/A

N/A

Impact of capacity reduction programmes by foreign States depends on how licences allocated. If new licences easily available at low cost, availability of cheap capacity may lead to increased exploitation

Capacity reduction programmes may lead to excess capacity being exported

Fishers will invest in cheap capacity only if costs lower. But some potential conflict because only some sectors likely to have access to cheap capacity (e.g. industrial versus small-scale fishers)

Fishers likely to be interested in cheap capacity

Habitat degradation

Activities of other sectors (or sometimes the fishery sector itself) may destroy key habitat

Under these arrangements, both habitat degradation and pollution are likely to be serious sources of non-sustainability for the fishery sector. The value of the fish resource is likely to insufficiently identifiable.

If licences are transferable and take on some value, fishers are seem likely to have a more clearly identified self interest in protecting the resource and their activity.

Issue likely to be similar to first case. Fishery management agency must take the lead in defending the sector.

Similar to input controls. Valuable use rights should provide an incentive (and the legal basis) for the sector to seek to protect itself.

Economic benefits of resource exploitation will go to the State (as custodian) in the form of royalties. Up to the State to ensure that such royalties are not undermined.

Pollution

Activities of other sectors (or sometimes the fishery sector itself) may lead to pollution



[4] A monopsony occurs when there is a single buyer and several suppliers (sellers).
[5] In a surplus production context, increased exploitation results in increased production until maximum sustainable yield is reached. Further increases in exploitation results in decreased productivity.

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