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Requirements for managing deep-seas fisheries[391]

R. Shotton[392] and M. Haward[393]

We affirm that none can have property in the seas, whether taken in the whole, of in respect to its principal branches. The cause which obliged mankind to desist from the custom of using things in common has nothing to do with this affair; for the sea is of so vast an extent that it is sufficient for all the uses that nations can draw thence, either as to water, fishing, or navigation. Huig de Groot (1583-1645).

1. NATURE OF THE PROBLEM

1.1 The fisheries

Until most recently the incentives that existed to drive the development of deepwater fisheries were few. First, the abundance of shallow-water continental shelf fish resources satisfied market demand and provided for profitable activities by most fishing operators. Second, the great depths of many fish resources now routinely exploited made their capture difficult as this required larger and more powerful fishing vessels, development of appropriate fishing techniques and in particular, expensive and complex acoustic systems to locate fish aggregations and then enable them to be successfully targeted by the fishing gear. When deepwater fish were found in association with bottom features such as seamounts, acoustic systems were essential to enable the fish to be caught without loss of trawls through bottom hang-ups. Further, many of the fishes that were found were unknown to consumers, looked unmarketable, required specialized processing and, for certain species, had rather low flesh yields.

Few deepwater fisheries are of long standing and those that are - the Portuguese (Madeira) line fishery for black scabbard fish (Aphanopus carbo) and Pacific Island fisheries for snake mackerels (Gempylidae) and cutlass fish (Trichiuridae) were initially exploited by artisanal fisheries whose effects upon the resources were sustainable. This situation changed as a consequence of two developments, one driving the other. First, in the period leading up to the conclusion of the 1982 Law of the Sea Convention, more and more countries staked claims to national exclusive economic zones thereby displacing the operations of many distant water fishing countries from the near-shore fishing grounds they had traditionally fished. Many of these vessels were large and had the capacity to fish in deep waters. Second, the limit of 200 miles that was claimed, and secured as the offshore limit of control by the coastal states, in all but a few cases, exceeded the distance to the shelf break- if distant water fishing nations were to continue to operate, the slope and deeper waters became their only option as an area they could fish.

Deepwater fish species have been prosecuted in the North Atlantic, notably for red fish (Sebastes spp.) and to a lesser extent for cusk (Brosme brosme) and ling (Molva molva), prior to the adoption of 200 nautical mile Exclusive Economic Zones (EEZs). Following the expansion of distant water fishing, notably by the Soviet Union and Japan, in the years leading up to the adoption of 200 nautical mile EEZs, new resources were being discovered and exploited. Well known among these is the orange roughy (Hoplostethus atlanticus), a species that inhabits slope waters, those of seamounts and above the deep-sea floor, most notably around New Zealand and Southeast Australia where this commercial fishery initially began.[394] The fishery for orange roughy and associated species such as a suite of oreos later spread to the Walvis Ridge in the Southeast Atlantic, the Southwest Indian Ocean and a small fishery exists in the Bay of Biscay.

Fishes targeted by deepwater fisheries are often characterized as being particularly vulnerable to depletion because they are not only slow growing, indeed, their growth may be so slow that for a long time, the results of the first aging studies were received with incredulity. Further, certain deepwater species live to a great age; several of those harvested commercially have longevities of more than 100 years. Spawning may occur irregularly over periods of years and for some species, now fished for over a decade, no evidence of recruiting classes has been evident. Those species that aggregate in association with bottom features, e.g. for spawning, are particularly vulnerable to capture and as with pelagic schooling species, may retain a high level of vulnerability to capture independent of stock size, i.e. while stock sizes are declining, catch rates may remain relatively high.

As important as it is to note the sensitivity to overfishing of many deepwater species, at the same time, it should be recognized that other deeper water species have longevities not too dissimilar to that found in shelf species, e.g. the alfonsinos (Beryx spp.) and associated species such as boarfish (Pseudopentaceros spp.), cardinal fish (Epigonus spp.) and bluenose (Hyperoglyphe spp.).

1.2 Current basis for participation in deepwater fisheries

1.2.1 Operational requirements

Because of the extreme conditions, access to deepwater fishing is first restricted to those who can organize operations of vessels able to fish in deep waters. In the past this has meant that operators have tended to be well established companies with access to the appropriate vessels and sufficient operating capital to put large vessels to sea for extended periods, support their operations, sometimes on a near hemipshere scale, and operate when revenues are received often months after incurring the first campaign expenses. When new high-seas resources are first exploited, this may require access to good intelligence on the success, and thus whereabouts, of other operators, possession of the necessary operating expertise and associated processing and marketing ability. Thus, participants in these fisheries tend to come from a relative small pool of operators even when taken on a global scale. Despite this, sufficient companies exist that new fisheries can expand if not dramatically then unexpectedly when information on the availability of resources becomes common knowledge (see, e.g. Willing 2003).

1.2.2 Legal arrangements

The last decade has seen increasing attention to the problems caused by inadequate controls over high-seas or deepwater fishing, by definition outside direct national jurisdiction. While the problems caused by non-compliance with fisheries regulations are not new, the 1990s brought the problems in managing high-seas stocks, particularly those associated with straddling and highly migratory and stocks, into sharp relief. The entry into force of the United Nations Convention on the Law of the Sea (LOSC)[395] in 1994 provides the cornerstone of the high seas regime. In addition to this convention other ‘hard law’ instruments have been developed to fill lacunae identified in the provisions of LOSC. These instruments include the United Nations Fish Stocks Agreement (UNFSA)[396] and the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas (the FAO Compliance Agreement).[397] In parallel to, and nested within these instruments, are voluntary, hortatory, (also termed ‘soft law’) instruments such as the Code of Conduct for Responsible Fisheries.[398] The Code of Conduct provides opportunities for the development of subsidiary, specialist instruments - International Plans of Action - that are key elements of an emerging regime governing high seas fisheries. The development of the International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing (IPOA-IUU) builds upon, and reinforces, these other instruments creating a new framework or regime for high seas fisheries,[399] but its effectiveness is yet to be proved.

One indication of the scope and direction of these legal and policy developments can be seen in the focus given to fisheries at the World Summit on Sustainable Development (WSSD) held in Johannesburg in August-September 2002. WSSD outcomes include

There are significant challenges in the shift to ecosystems-based approaches as identified in the WSSD outcomes, particularly in relation to fisheries that have traditionally been seen as a core component of the concept of high-seas freedoms.

1.3 Origins of the concept of "Freedom to fish"

Fishing has long been accepted as a part of a high seas freedom. The freedom to fish is a concept that is first associated with the work of Grotius, although the origins of this principle in the freedom of the seas have been traced back to Roman law. The elaboration of the concept of a freedom to fish in the seventeenth century and its acceptance into customary practice in following centuries was incorporated into the codification of the law of the sea through the latter half of twentieth century. The codification of a freedom to fish on the high seas was incorporated into Part VII of LOSC, in particular Article 87. This article elaborates the ‘freedom of the high seas’ that includes ‘freedom of fishing, subject to the conditions laid down in section 2’. Article 87 (2) notes that ‘these freedoms shall be exercised by all states with due regard for the interests of other states in their exercise of the freedom of the high seas’.[400] This, in theory, reinforces the balancing of ‘rights’ and ‘obligations’ that permeates the LOSC. In practice, however, the freedom to fish has generally reflected all the problems of open access resources; few incentives for individuals to voluntarily constrain effort, problems in ensuring compliance with conservation measures when established through regional organizations and difficulties of enforcing such measures.

1.4 Open access and common property - Implications for management of deepwater resources

Arguably, the concept of Open Access in relation to exploitation of marine fisheries resources had its greatest applicability prior to the negotiation of the LOSC. Following this development, at least for those countries who accepted its provisions and had legal control of their vessels when they fished on the high seas, exploitation of high seas fisheries was subject to the requirements of a country to: (a) observe their treaty obligations (see Art. 116 (a)); (b) the duty to adopt measures... for the conservation of living resources (Art. 117); (c) co-operate with each other in the conservation and management of living resources in the areas of the high seas. (Art. 118) and (d); take measures... to maintain or restore populations of harvested species at levels which can produce the maximum sustainable yield (Art. 119 (a)).

However, even where high seas fishery management arrangements exist (and where some of the desiderata negotiated in the 1982 Law of the Sea Convention and related instruments have a chance of being implemented) problems of access to, and allocation of, stocks remain. When a new entrant accedes to a regional fisheries management or conservation commission (accepting the entrant’s interests in the fishery - see following) there is an expectation of them being able to participate in harvesting the allowable catch at a level that has been deemed to be appropriate by the other members of the relevant commission. Unavoidably, this reduces the potential harvest available to existing members of the commission. It is perhaps a moot point whether this situation should be described as open access or common property. If the management regime is open to whoever claims that they will abide by the conventions rules, then in operational terms there is no distinction between this and a truly open-access situation. Alternatively, those who already belong to a fishing convention might argue that the resource is managed under a common property arrangement, i.e. the resource is harvested in common among those who have accepted the rules of the commission or management arrangement.

In any event, if the objectives of management were to obtain the most economic welfare possible from a fishery resource, the operational effect is the same - if membership of a fisheries arrangement is open to new entrants who qualify equally with existing members for access to harvest the resource, the commercial conditions will exist that result in dissipation of economic rent as are described, essentially without exception, in all contemporary bio-economic reviews of fisheries management starting with the seminal work first of Graham (1943), then more formally by Scott Gordon in 1954. Still it is relevant to review what the consequences of open access and common property, as access arrangements, may be in commercial fisheries.[401]

Where there is no arrangement or management regime to determine and control the amount of harvest that is to be taken from a fisheries resource, fishing operators will enter the fishery as long as financial returns from their operations are profitable and exceed those that can be obtained elsewhere. Thus, what determines the level of fishing effort exerted in the fishery, at least in the shorter term while resources are available, will be the ability to cover costs and opportunity costs of capital. As the resource is fished down, catch per unit effort (or its economic equivalent) will decline until, on aggregate, costs equal revenues and a bio-economic equilibrium is achieved. However, should subsidies be provided, then fishing may remain profitable at even lower levels of resource biomass and rates of harvest.

Companies based in different countries will operate under different cost structures. Further, when they prosecute high-seas fisheries, to avoid domestic rules on conditions of employment that impose otherwise higher costs of operations, it is not unusual that their operations are structured in the least costly way. Vessel may be re-flagged in another country and crews employed from locations that offer lower costs while still providing essential levels of skills. Complex arrangements may be entered into to mask the ‘beneficial owners’ of such vessels, further limiting the reach of flag-state control and the costs associated with such controls.

Where surplus fleet capacity exists and vessels are laid up, many fixed costs (especially for depreciation) may be deemed sunk and in this case the costs determining whether a vessel can operate profitably will be even less, resulting in the bio-economic equilibrium being even lower - at lower levels of resource biomass that offer lower rates of catch per unit effort. This has been the situation with many of the large ex-Soviet vessels that no longer have access to past fishing grounds. This situation can also arise where fleet renewal programmes (whether subsidized by other sectors of a country’s economy, or by regional economic agreements) result in vessels being displaced from controlled entry fisheries or by fleet buyback programmes that remove vessels from a particular fishery, but not from fishing in general, so exporting the problem of excess capacity to some other unfortunate area of the world.

Do these phenomena operate in deepwater high-seas fisheries? That is, are deep-sea fisheries resources being depleted, or at least reduced, to levels at which sustainable benefits are significantly less than they may otherwise be? At least some examples indicate that the answer is unequivocally yes but closer examination of specific high-seas demersal fisheries shows that the situation is not simply one of the lowest-cost operators (using older low-cost vessels and crews recruited from offshore and paid low salaries) displacing those who retain operations based in higher cost countries and using newer, and often purpose-designed, vessels. However, operating pressures do seem to continue to drive high-seas deepwater fisheries to the point where they operate at the bio-economic equilibrium.

Deep-sea demersal fisheries require a suite of particular skills. First, aimed trawling on deepwater fish aggregations that are often associated with seamounts or similar seafloor features requires particular skills if the gear is not to be lost. In at least one type of wide-spread deepwater fisheries, it is not unusual to find that the skippers and officers come from the few countries where such fishing techniques have been pioneered. Second, deepwater species require particular processing skills. The price that may be received for a particular deepwater species may be acutely dependent on the ability of the operator first to ensure that once caught, its quality is maintained,[402] and second, to process it in a manner that achieves highest prices on international markets.[403] Thus low-cost low-revenue operators may operate beside those who have higher costs but also achieve higher revenues. Third, deep-sea resources are marked by their relative scarcity - total catches tend to be small when compared with landings from traditional shelf-based demersal fisheries.[404] The companies that are most successful in their sales operations carefully regulate supply to avoid price reductions through demand-supply market imbalances. Low cost operators, who, because they are often more highly financially geared, may be price-takers and must accept low prices that are further depressed by their inability to add value through vertically-integrated onshore processing plants or by their need to sell their stocks whatever the current supply and demand situation.

These problems are accentuated by difficulties in management driven by the traditional characterisation of such fisheries as open-access, common-property resources. Despite increasing constraints on the traditional unfettered ‘freedom’ to fish on the high seas emerging in both hard and soft law instruments negotiated in the 1990s - discussed following - fundamental problems remain in terms of the open-access nature of deep-sea fisheries resources (Stokes 2000, UN 1992). The LOSC gives ‘all states’ the right to fish on the high seas,[405] effectively constraining the effectiveness of other provisions within the LOSC that emphasise a duty on states to cooperate on the management of such stocks.

1.5 Resource management requirements

Effective administration of deep-sea fisheries resources, no less than those found within national EEZs, has various administrative requirements if they are to provide sustainable harvests. These may be summarized as follows

Providing advice on desirable levels of fishing effort, or total allowable catches (TACs), requires that fishery-related information is available that permits the status of stocks to be assessed against agreed reference points. At a minimum this requires that fishing operators provide accurate data on the operations, i.e. where catches were taken, how much were caught and of what species. Information on the size composition of the catch and, or, body parts that would permit ageing the fish for use in production models must be collected and analysed if yield-effort analyses are to be undertaken - an activity that characteristically underlies the management of fish resources.

However, experience from actual fishery situations supports the common sense view that commercial operators are reluctant, if not loath, to provide information, either voluntarily or under duress, that they believe may threaten their commercial competitiveness. This understandable attitude creates particular problems for management of many high-seas fisheries. For some species, harvesting locations that provide commercially viable catch rates depend on where the target species aggregate, e.g. for spawning. Exclusive knowledge of this information is of self evident commercial advantage, especially when initial high catch rates may decline rapidly as a consequence of harvesting. Thus, local populations or sub-stocks may be depleted before a managing authority, if one were to exist, becomes aware of the existence of the fishery. This problem is compounded by other difficult-to-resolve practices. High-seas deepwater resources may exist as local, relatively small, populations that are targeted by a relatively small number of vessels (e.g. <10 and sometimes only a couple of vessels). In these cases it may be that only one or two vessels from a particular country or company are involved in the fishery. Assuming that flag-state regulations exist that require the fishing companies to report their operating data to the national authority, national legislation governing confidentiality of data (whether it be fish catch or tax returns) provided to the government may prevent national authorities from making data available for analysis. The lack of availability of ‘commercial - in confidence’ data, no matter the accepted good intentions of those needing the data, or the need for such data to provide appropriate resource management, provide serious constraints on the ability to provide management advice.

Management of fisheries at the national level commonly undertakes other basic administrative research and support activities that, as yet, are not done for high-seas fish stocks. These can be summarized as follows

National governments also commonly develop oceans policies[406] that articulate in detail their scientific, commercial and social objectives for oceans management and their legal or treaty obligations. Social and commercial considerations, e.g. maintaining communities, supporting regional development and equality of opportunities may form politically important aspects of such policy statements. Moving from a sectoral-based arrangement (fisheries management) to commitments to integrated management that underpin contemporary initiatives in oceans policy is difficult (see Foster and Haward 2003). Achieving agreement on what fishing entitlements will be usually proves to be the most difficult issue on which to reach agreement, not least because it often results in win-loose situations among competing stakeholders, e.g. splitting a TAC between two different gear sectors or regions, or differential access to fishing grounds with the introduction of marine protected areas.

Conservation and environmental issues affecting the high seas have been addressed (though not satisfactorily resolved), as noted earlier, in the United Nations Law of the Sea Convention. A consistent approach to the management of deep-sea high-seas fishing entitlements remains unresolved, reliant on a variety of approaches established under different arrangements.

1.6 Governance issues to be resolved

1.6.1 Who are the stakeholders?

It is our view that successful governance[407] of high-seas deep-sea fisheries requires the creation of the same incentive structures that enable effective management within national jurisdictions. At the core of this requirement is the need to align the interests of all stakeholders so that they share common objectives (see, e.g. Metzner (2002) for further discussion on this point). To do this requires identifying who stakeholders are within the context of high-seas deep-sea fisheries and what are their interests.

There are three primary stakeholders in the case of deepwater highs seas fisheries:

i. the "community of nations" who have the capacity (right?) to negotiate and agree on a convention for management of deepwater fisheries resources and conservation of deepwater fisheries habitat

ii. commercial fishing companies that have the capacity to exploit high-seas deepwater fisheries resources and

iii. coastal states that have fish stocks that straddle the boundary of their EEZs and the high-seas.

Only the first two of these stakeholders are considered here though management issues of straddling stocks must also be considered in terms of managing high-seas stocks. In principle, an acceptable basis, through the UN Fish Stocks Agreement[408] exists to resolve them. Two other groups of stakeholders may deserve particular attention:

i. countries whose vessels participate in these fisheries, either under their own flag, or through some form of re-flagging, or joint-venture agreement and

ii. countries that claim special interests in the deepwater fisheries.

One basis for claiming special interest may be geographical proximity, e.g. Mauritius may consider its interests in southwest Indian Ocean fisheries deserve greater recognition than say those of Moldavia or Malta. Another basis for asserting favoured treatment or rights might be historical participation, pioneering involvement in the development of a particular fishery and, or, past investment in research and management activities related to the fishery. Such possible claims are alluded to in the LOSC Article 119 (a), which refers to the qualification of management "measures... taking into account fishing patterns". Within this context, the Convention also refers to "the special requirements of developing States" but without further elaboration.

1.6.2 Governance objectives

In our view, the objective of fisheries governance of high-seas deepwater fish resources should be to derive maximum economic welfare benefits. This should include considerations of appropriate pricing of externalities such as conservation of biodiversity, protecting fisheries habitat and use of an agreed discount rate in valuing future benefits. In practice, the wide diversity in preferences regarding rates of discounting future benefits and societies’, or at least decision makers’, attitudes to risk mean that except in some particular circumstances, "maintaining or restoring populations of harvested species as levels "which can produce the maximum sustainable yield"[409], [410] is likely to remain at the core of management objectives.

2. HIGH-SEAS FISHERIES

2.1 Issues of governance

Critical provisions in relation to the governance of high-seas fisheries are found in Parts V and VII of the LOSC. Articles 63 and 64 indicate that coastal states[411] and other states shall cooperate over the utilisation of straddling and highly migratory stocks. The limitations are clearly apparent in these articles, particularly with the emphasis on cooperation between coastal and distant-water fishing states. A number of commentators have examined the development of regimes governing the oceans,[412] noting that the ‘bulk of this ocean law has been created during the last three decades (Joyner 2000: 200). The 1990s saw increased focus and concerted action to address problems emerging in the ‘management’ of high-seas fishing.[413]

Effective governance of high-seas fisheries will build on what has been termed ‘operational interplay’ between instruments.[414] As Stokke (2000) notes, where "activities impinge on similar or connected activities, operational interplay can be a way to avoid normative conflicts or wasteful duplication of problem-solving activities".[415] One key element of such operational interplay is the application of relevant conservation and management measures whether a state is a member of an regional fisheries management organization (RFMO) or not. The Compliance Agreement, and more importantly the LOSC, support relevant provisions of the UNFSA.[416] Despite the broadening of the high-seas regime through the development and entry into force of hard law instruments and soft law agreements, the effectiveness of these remain unclear while major distant-water fishing states reject critical provisions of the UNFSA. The high-seas regime’s effectiveness is further weakened by a lack of agreement over the reach of provisions that extend compliance and enforcement regimes away from the traditional ‘flag state’ regime embedded in the LOSC.

2.2 The concept of common heritage

The mid-to-late 1960s saw increasing concerns over the inadequacy of the outcomes of the 1958 Geneva conventions. These concerns were given significant impetus by the advocacy of Arvid Pardo, Ambassador of Malta to the United Nations who argued that the world’s oceans should be the ‘common heritage of mankind’. Pardo’s speech was a reaction against the ‘creeping jurisdiction’ of coastal states asserting rights over the seabed and water column from the late 1940s onwards (Pardo 1967). The Maltese initiative to address this problem was to lead to a United Nations General Assembly resolution establishing a conference to address the development of a comprehensive approach to the law of the sea. The concept of the common heritage of mankind was to be at the core of the discussions at UNCLOS III and embedded directly into the LOSC.

2.3 Codification of the ‘Law of the sea’

The development of ‘customary’ law of the sea was based on the acceptance of a number of key principles that had evolved from the debates in the seventeenth century and the work of Grotius and his critics. Attempts to codify the law of the sea in the twentieth century met first with failure with the collapse of the Hague Conference in the late 1930s. Following the action of the United States in proclaiming sovereignty over their adjacent continental shelf in 1947, a number of states took similar action. These actions led to the first United Nations Conference on the Law of the Sea (UNCLOS I) being held in Geneva in 1958. UNCLOS I resulted in, inter alia, the drafting of Convention on Fishing and the Conservation of the Living Resources of High Seas.[417] This convention entered into force in March 1966 and was "not a success" attracting support of only 37 states although "its provisions in relation to fisheries management are illuminating" (Kaye 2001). The 1940s and 1950s saw a number of fisheries conventions that applied to the high seas and instruments concluded such as the International Convention on the Regulation of Whaling of 1946.

2.4 The Third United Nations Conference on the Law of the Sea (UNCLOS III)

The Third United Nations Conference on the Law of the Sea (UNCLOS III) was the most complex multilateral treaty negotiation undertaken under the auspices of the United Nations. UNCLOS III, held between 1974 and 1982, involved 15 sessions of negotiations totalling 585 days. These negotiations concluded with agreement over the Law the Sea Convention 1982 comprising 320 articles and 9 annexes. This convention is at the centre of regimes governing high-seas fisheries and provides the basis for a comprehensive ‘constitution for the oceans’.[418] The LOSC is built upon a key principle - elaboration of rights of states brings related obligations and responsibilities. LOSC is a classic hard law instrument that includes mandatory provisions - language that includes the words ‘states shall ...’ Despite these provisions the LOSC is centred on traditional concepts such as flag state responsibility and has a weaker focus on fisheries outside the exclusive economic zone, merely exhorting states to seek cooperative arrangements to manage these fisheries

2.5 Post UNCLOS III

2.5.1 The United Nations Fish Stocks Agreement.

The United Nations Fish Stocks Agreement (UNFSA) was developed to fill lacunae identified in the provisions of the LOSC, most notably in relation to straddling stocks, but also those affecting management of highly migratory stocks. The United Nations sponsored conference that gave rise to the UNFSA was mandated by the United Nations Conference on Environment and Development (UNCED), held in Rio de Janerio in June 1992. The UNFSA, negotiated between 1993 and 1995, entered into force in December 2001. The UNFSA is linked directly to the LOSC, and thus reinforces ‘traditional’ flag states responsibility for high-seas fisheries.

The UNFSA does, however include significant non-flag state enforcement powers. State parties who are members of regional or sub-regional fisheries management organizations may detain vessels that have engaged in activities that undermine the effectiveness of the organization’s conservation and management measures on the high seas until such time as appropriate action is taken by the flag state.[419] A port state has the right and duty to take certain measures such as inspect documents, fishing gear and catch on board vessels when such vessels are voluntarily in its ports (Art. 23 (2)). Port states may adopt regulations prohibiting landings and trans-shipments where it has been established that the catch has been taken in a manner which undermines the effectiveness of subregional, regional or global conservation and management measures on the high seas (Art. 23 (3)).

The UNFSA provides that where a competent RFMO exists, states should either become members of that body, or they should agree to apply the conservation and management measures established by such organizations. Only states that are members of RFMOs, or which agree to apply the relevant RFMO conservation and management measures, shall have access to the fishery resources to which these measures apply. Membership of relevant RFMOs is open to states having a ‘real interest’ in the fisheries concerned. While not defined this is a test to be determined by the existing membership of the RFMO.[420] The potential of these bodies is illustrated by measures such as limiting or refusing port access and, or, introducing trade-related controls to deter catches from non-party vessels that have been initiated in several RFMOs.[421]

2.5.2 The FAO Compliance Agreement

The FAO Compliance Agreement seeks to ensure that there is effective flag state control over fishing vessels operating on the high seas.[422] It was created to deter the practice of re-flagging of vessels to avoid compliance with conservation and management rules for fishing activities on the high seas. The Compliance Agreement is an integral part of the Code of Conduct (see following)[423] and is a legally binding instrument. It is designed to apply to all fishing vessels that are used, or intended, for fishing on the high seas (Art. II (1)), although parties may exempt vessels of less than 24 metres in length (Art. II (2)). The exemption of vessels under 24 metres in length has been seen as a major weakness, but this provision must be read in conjunction with Art. III (b) of the Compliance Agreement. If a party exempts vessels less than 24 metres in length parties ‘shall ... take effective measures in respect of any fishing vessels that undermines the effectiveness of international conservation and management measures’ (Art. III (1) b).

The Compliance Agreement also allows a port state "to promptly notify the flag state" if it "has reasonable grounds for believing that a fishing vessel has been used for an activity that undermines the effectiveness of international conservation and management measures."(Art. V (2)). This provision also states ‘that parties may make arrangements’ to enable the port state ‘to undertake such investigatory measures as may be considered necessary.’ (Art. V (2)). FAO is also requesting, on an ad hoc basis, that countries that have not accepted the Compliance Agreement make information available for the organization concerning their vessels authorized to fish on the high seas. A database to support the implementation of the agreement has already been established (Art. VI.).

2.5.3 Other approaches

As indicated above, the 1990s were noteworthy for the development of new ‘hard law’ instruments (containing some innovative provisions) addressing high-seas fishing. These instruments provide important bases for future regimes and governance. At the same time the last decade has also seen considerable efforts to develop non-binding, ‘soft law’ agreements addressing fisheries issues. These approaches are important and may be significant influences in improving governance by establishing norms and values that over time may gain widespread acceptance and use. The Code of Conduct for Responsible Fisheries (FAO 1995) and the development of subsidiary, specialist, instruments - International Plans of Action - are examples of such alternative approaches.

The Code of Conduct’s general principles note that states and users should use selective and environmentally safe fishing gear and practices. It is a voluntary instrument (Art. 1) that is directly linked to ‘relevant rules of international law’, including the LOSC.[424] The code contains six thematic areas or chapters for which guidelines should be developed: (a) fishery management practices; (b) fishing operations; (c) aquaculture development; (d) integrating of fisheries into coastal area management; (e) post harvest practices and trade and (f), fishery research. The Compliance Agreement is an integral part of the code. States should ensure compliance with, and enforcement of, conservation and management measures. States authorising fishing and fishing-support vessels flying their flag should exercise effective control over those vessels.[425] The code ‘provides guidance that may be used where appropriate in the formulation and implementation of international agreements and other legal instruments, both binding and voluntary’ (Art. 2 (d).). It is this provision that has been used to support the development of a series of International Plans of Action (IPOAs). The initial IPOAs addressed reducing fishing capacity, conservation of sharks, and protection of seabirds.

The International Plan of Action to Prevent, Deter and Eliminate IUU Fishing (IPOA-IUU) reinforces the provisions of the LOSC, the UNFSA and the Compliance Agreement and has direct relevance to issues of governance of high-seas fishing. Australia raised the problem of IUU fishing at the United Nations Food and Agriculture Organization’s Committee on Fisheries (COFI) meeting in February 1999. At the FAO Ministerial Conference in Rome following COFI, FAO declared that it would develop a global plan of action to deal effectively with all forms of IUU fishing[426] to be tabled at the next COFI meeting in February 2001. This decision was supported by a number of member states, and entities including Australia, Canada and the European Community. As with other IPOAs, the IPOA-IUU is voluntary, and ‘elaborated within the framework of the Code of Conduct’.[427] The Code of Conduct provides the basis for ‘the interpretation and application of the IPOA and its relationship with other international instruments’[428] including vessel flying ‘flag of convenience’, through coordinated efforts by states, RFMOs and other relevant agencies including the FAO. The IPOA was adopted by ‘more than 110 countries’ and was seen as providing ‘the international community [with] a powerful tool’[429] to fight IUU fishing. The IPOA-IUU, linking traditional flag-state responsibilities with port state and market or trade-related measures, reflects significant development in the development of the governance of high-seas fisheries.

3. OPTIONS FOR GOVERNANCE

3.1 Current approaches

The accepted model for management of high-seas fisheries has been the creation of regional fisheries bodies. Where these arrangements exist, prosecution of deep-sea fisheries may be subject to such legal arrangements, when and where those doing the fishing choose to comply with them. In the case of deep-sea fisheries that are wholly within national EEZs, then their exploitation is subject to the relevant provisions of the Law of the Sea that deal with coastal state rights and responsibilities over the EEZs[430]. This Article effectively confers sovereign rights over how these resources are managed by the coastal state. Where the deepwater resources straddle the offshore limit of a state’s EEZ, then their management, in terms of the Law of the Sea is subject to Article 63 (2)[431] and requires states to seek to agree on measures needed for resource conservation.

Where multilateral agreements exist to regulate and manage deep-sea resources on the high seas, then these arrangements affect the operations of the vessels under the control of the states that have acceded to the fisheries agreement. There are presently about thirty active regional fishery bodies, nine of which have been established under the FAO Constitution. They vary considerably in size from bilateral agreements such as the International Pacific Halibut Commission, to those such as Convention on the Conservation of Antarctic Marine Living Resources CCAMLR (24 members) and the North Atlantic Fisheries Organization (17 members) and in the nature of their objectives and manner of operation (FAO 2003).

How fishery entitlements are managed depends on the particular fisheries arrangement. In the case of NAFO, proposals for the allocation of catches take into account the interests of Commission members whose vessels have traditionally fished within that area. In the allocation of catches from the Grand Bank and Flemish Cap, Commission members give special consideration to Canada because its coastal communities are primarily dependent on fishing for stocks related to these fishing banks and it has undertaken extensive efforts to ensure the conservation of such stocks. However, in the past, members could opt to dissent to quotas that had been recommended by the Commission. Meltzer (1994) reports that from 1986 until the early 1990s, the EEC for its fleets had been setting unilateral quotas that were many times higher than those set for the EEC by the NAFO. Meltzer reports that the NAFO Convention objection procedure allows member countries to dissent to quotas set by the organization and there is no compulsory dispute settling procedure. However, it should be noted that over the last decade, considerable progress has been achieved in reaching consensual agreement of what national shares of TACs should be for specific stocks and the need for formal votes on shares has been avoided by direct negotiations between delegations.

In the case of CCAMLR, based on the advice of its Scientific Committee, and with due regard to a precautionary approach, total allowable catches (TACs) are set for various exploited fish stocks. Quotas are not assigned to particular members, instead, the commission monitors total catches and when the TAC has been reached the fishery is closed. In this regard the fishery may be considered the common property of the member countries to the extent that they can persuade other stakeholders, e.g. port states, importing and re-exporting countries to abide by, and support, the regulations the Commission has adopted to ensure that participants follow its conservation guidelines.

Not all high-seas deep-sea areas are covered by fishing agreements. In the case of the southern Indian Ocean, when the Indian Ocean Fisheries Commission was disbanded by the Food and Agriculture Organization in 1999 to enable the formation of the Indian Ocean Tuna Commission, there had been no successful preparations for a replacement organization and subsequent fishing for deep-sea demersal resources has continued outside of an agreement of any kind.[432]

The decision making process established under such agreements establishing regional organizations is also an important factor. Organizations that operate on a consensual approach to decision making (e.g. CCAMLR) may only progress at a rate that satisfies all parties. Such decision-making has been criticised as leading to lowest common denominator or ‘minimal tolerable consensus’ approaches. The requirement for consensus creates opportunities for veto positions enabling states to block measures. It should be recognised that other voting systems can also create opportunities for reserving positions and that once consensus is gained a measure is clearly supported by all members. This support may not of course translate into action, particularly where vessels operate outside flag state control. This also leads to the problem of ‘free riders’; those who gain the benefits of collective actions without sharing the costs of such actions. The free-rider problem is at the core of IUU fishing. Addressing the free-rider problem is clearly an important issue for governance of high-seas fisheries, with action centering on improved compliance with management measures, improving enforcement and encouraging non-parties to join appropriate organizations and commit to cooperative action to manage stocks.

Under the UNFSA, a key function of RFMOs is the development of ‘participatory rights’ that include ‘allocation of allowable catches or levels of fishing effort’. This is a difficult and contentious issue with RFMOs varying considerably in their methods of allocation. These vary from national allocations (e,g. CCSBT), through broad-based TACs (e.g. CCAMLR) to no allocation method (e.g. IOTC). Allocation methods may include a range of tools including closures as soon as a TAC is reached - what has been termed an ‘olympic-style’ fishery, as used, for example, by CCAMLR. Effort limitations can be used, e.g. limiting number of vessels or gear, and these can be set in conjunction with other measures. ICCAT, for example, has developed complex criteria for allocations, yet arguably the more complex the criteria the less effective it will be. Catch history is the traditional basis for arguing for allocation. This can sometimes be seen to reward unsustainable practices. One possible development would be a stronger international commitment opposing claims of past ‘unregulated’ catch as the basis for allocations under RFMOs.

The UNFSA provides that where a competent RFMO exists, states should either become members, or they should agree to apply the conservation and management measures established by such organizations. Only states which are members of RFMOs, or which agree to apply the relevant RFMO conservation and management measures, shall have access to the fishery resources to which these measures apply. Membership of relevant RFMOs is open to states having a ‘real interest’ in the fisheries concerned. While not defined, this is a test to be determined by the existing membership of the RFMO. Certain criteria for determining ‘real interest’ by RFMOs are found within UNFSA. These include fishing patterns and practices, contributions to conservation and management of stocks, collection and provision of data, and the conduct of scientific research on the stocks. These criteria are supplemented by consideration of the needs of coastal communities; coastal states that are ‘overwhelmingly dependent’ on exploitation of living marine resources and the interests of developing states. Catch history is not the only criteria in determining ‘participatory rights’ in RFMOs. The importance of other criteria was identified in the early years of CCAMLR - ‘no [provision of] data, no fish’ - became shorthand for determining interests and allocation.

3.2 Developing countries

Reference to the special needs of developing countries[433] are common in international protocols and declarations though it is rare that a useable definition is given of what a "developing country" is or what their needs are. As noted earlier, the LOSC (Art. 119(a)) in relation to conservation of the living resources of the high seas refers to "the special requirements of developing States." A recent (October 2002) motion of the UN General Assembly, relating to sustainable fisheries, notes as follows:

The report of the WSSD[434] notes that to achieve sustainable fisheries the following actions are required

"(e)Encourage relevant regional fisheries management organizations and arrangements to give due consideration to the rights, duties and interests of coastal States and the special requirements of developing States when addressing the issue of the allocation of share of fishery resources for straddling stocks and highly migratory fish stocks, mindful of.... etc.... on the high seas...".

It would seem reasonable that the intentions of such references to developing countries in the texts of international treaties and conference outcomes reflects international concerns about the inequity of the distribution of benefits to be derived from high-seas fisheries as a "developed" or "developing" country. However, other members can challenge the decision of a member to make use of provisions available to developing countries. For the Development Assistance Committee of the OECD, "developing country" means a country on Part I of their list of aid recipients. Other organisations have their own definitions. The World Bank uses the term to refer to low and middle-income countries assessed by reference to per capita GNP. The United Nations Conference on Trade and Development has different income thresholds from the World Bank and other organisations often have a "developing country" category of membership. resources. However, the assumption that the appropriate response to this situation is "to assist developing States, in particular the least developed among them to enable them to develop their national capacity to exploit fishery resources" maybe dangerously naïve in the case of deep-sea fish resources and deserves careful consideration. As noted earlier, successful participation in deep-sea fisheries involves capital-intense marine operations complemented by well-developed processing and marketing expertise if operations are to have any chance of success. If not, attempts at assistance often result in the dissipation of the investments through ill-conceived and environmentally unfriendly "aid". Even given these skills, many otherwise well-managed fishing companies lose money in deepwater fishing and soon stop operations after limited trial fishing.

Experience in deepwater fishing activities suggests that assisting developing countries to enter deepwater fishing, if they do not already have the expertise that is required, is likely to encumber their Treasuries with debt, misplace scarce human resources and divert efforts from areas where wealth-creating activities are likely to be successful. This is not to say that such countries should have no call on a share of the benefits that can be derived from highs-seas fisheries, rather some other basis must be found whereby this can be done. Assisting new entrants, from developing states or otherwise, into fisheries that, with few exceptions, will further endanger already fully exploited stocks and, at a minimum, certainly reduce net benefits as catch rates fall as might total catches. Avoiding a reduction in potential benefits from existing fisheries caused by the entry of new participants may only be avoided it existing operators agree to forgo some part of their share in existing harvests and, or, reduce the level of their fishing operations. But, as yet, negotiations of international fisheries organizations action show that hopes for voluntary reductions in fishing activities are unlikely to be fulfilled.

3.3 Lessons available - the International Seabed Authority

There are an ever increasing number of organizations and instruments that have some interest in, or effect on, the management of marine resources beyond national jurisdiction, that is outside the coastal states Exclusive Economic Zone. The International Seabed Authority (ISA), established through the LOSC, is the only institution that has an exclusive focus on areas beyond national jurisdiction.[435] The ISA is responsible for the management of the international seabed ‘area’ defined as being the common heritage of mankind ‘in such a manner to give effect to the principles contained within Part XI of the LOSC.’[436] These principles include equitable treatment of all states and the ‘equitable sharing of financial and other economic benefits derived from activities in the Area.’[437] The ISA is guided by detailed provisions within the LOSC and while it is focused on seabed minerals its governance structure and the principles underpinning this structure may have broader application and provide lessons for the governance of high-seas deepwater fisheries.

3.4 Institutional requirements for effective governance

Governance of high-seas deepwater fisheries requires effective management institutions and activities no less than those found and needed within national jurisdictions. These mechanisms and actions consist first of undertaking the scientific and technical activities needed to determine appropriate levels of harvest and how such harvesting should be done in relation to, e.g. constraints to protect bottom fauna or predator species competing for the same target resource. Once agreement is reached on the appropriate TAC, it is essential that participants do not have the option of "dissenting" or registering an "objection" so that they can continue to fish and so contribute to over-fishing. This is most likely to happen when a member’s time preference, or discount rate, is high and they are prepared to forgo greater long-term benefits for those that are more immediate. This may happen when a fleet is near the end of its operational life and the owners do not intend to replace them. In this case, they will have little incentives to promote the long-term interests of the fishery, but wish, rather, to gain the maximum benefit from their assets before they are scrapped.

Second, mechanisms must exist to enforce rules and regulations or otherwise ensure compliance with requirements for conservation. These days this may mean compulsory participation in high-seas vessel monitoring systems (VMSs), provision of tow-by-tow data on catch and fishing locations in an accurate and timely manner to the management authority, willingness to accept (and pay for) fisheries observers on, if need be, a full time basis and agreement to permit inspectors to board and examine the catch, log books and fish processing records when required.

Third, a system must exist that is responsible for administering the management and, subject to agreement, determine the level of levies needed to pay for management costs (Schrank, Arnason and Hannesson 2003). Procedures must be in place to receive members’ funds and deal with the situations where participants (be they countries or companies) do not pay their assessments.

4. ISSUES OF ORGANIZATION GOVERNANCE - OWNERSHIP AND ENTITLEMENTS

A fundamental difference between governance of fisheries resources on the high seas and those within a state’s EEZ, and thus subject to the provisions of the Law of the Sea, and those resources that are absolutely within territorial waters, is that management of the fishery resources in these latter waters is under the aegis of the state. As such the state has sovereign[438] control and can decide if it wishes to allocate catch entitlements to individuals or ‘legal entities’ and if so, how such entitlements may be exercised. In an operational, if not legal, sense the state may be deemed to ‘own’ the resource in that it has the power to determine how it is exploited. Indeed, it is not uncommon for national legislation to refer to marine fisheries resources as a patrimony and in some countries, divestiture of ownership by the state is impossible under their national constitution. But, note here, it is the functional aspects of the nature of control over ‘ownership’ of the entitlement that is most important, and not the legal basis defining the characteristics of the entitlement or property right.

A state’s powers that derive from sovereign control of its fisheries resources manifest in two critical ways that provide it with the potential to derive maximum economic benefits from its marine resources. Through the power to control access to the resource or, equivalently, being able to determine the conditions of access or harvesting entitlements, the state can impose a management structure that avoids many of those characteristics that lead to over-fishing and dissipation of rent. These primarily arise from competitive fishing to maximize an company’s shares of the quota, e.g. often set as a TAC. But, with the evolution of rights-based fisheries management, the potential benefits from sovereign control go far beyond this. The state has the power to implement policies that create incentives for the industry themselves to promote good management and in this way, the industry’s incentives coincide with those required to maximize the economic rent that can be derived from the fishery. That is, adopting policies so that those who harvest the resource share in any future increase in catches arising from investments they themselves make in conservation of the resource, whether from funding scientific research, enforcement of regulations, or jointly deferring short-term benefits be voluntarily reducing catches to avoid growth and recruitment over-fishing, or even short-term price reductions from supply-demand imbalances in fish markets.

A central feature of sovereign control is that participants in a fishery can be assigned a catch entitlement, usually referred to as an Individual Quota. This benefits the recipient in numerous ways that have been extensively documented.[439] First, when operators know in advance what their annual catch quota is they can plan their capital investments (i.e. the number and type of fishing vessels required to harvest their quota.) and operations with much greater certainty and least cost. Second, they can match their harvesting to peak market demand and thus maximize the revenues that can be obtained for their limited quota. This may also have safety implications as operators, when they have assured catch quotas (often referred to as security of entitlement), can avoid competitive fishing in inclement weather.

The third major advantage of exerting sovereign control over fisheries resources is that those in whom control is vested can insist that the operators who are granted entitlements, i.e. some form of property right to their catch entitlement, pay for the benefits they receive. Such payments usually take one, or both, of two forms. When there are formal rights associated with a catch quota, many sovereign management regimes implement a practice of recovering the management costs from the participants. This has a number of advantages. The first is that of equity - those directly benefiting from a privileged access to the resource rightly pay for the management costs that they create. This is often an easy policy battle to win for when fishing rights are secure and have a reasonable degree of exclusivity intelligent operators accept that investing in management will provide them further benefits through sustained or expanded individual quotas. The second benefit is that when management funding depends on national treasuries to provide an adequate budget, such disbursements are usually subject to competition for funds from other sources, perhaps entirely unrelated to fisheries, or similar sectors of the economy. Governments inevitably have recurrent financial shortages (if not crises) and when they occur, funding against all budgetary lines is likely to be reduced. Policies that create close links between those paying and those receiving the benefits are also more likely to achieve an appropriate balance between the marginal expenditures on management and the marginal benefits that are produced.

The second attraction of providing fishing entitlements that endow the holder with valuable rights is that such policies provide the basis to demand payment of rent for exploiting the resource, over and above payments made to cover the management costs. Clearly, the better the nature of the rights that are associated with the entitlement, the more valuable they will be, and thus, the more rent that may reasonably be asked and received. The policies of national management regimes vary in regard to the collection of resource rents from those who possess catch quotas. One view at the national level is that resource rents are collected through the normal taxing of company profits. In some jurisdictions, resource rents have been recovered by an annual tax of a certain percentage of the quota that is held and which is then auctioned, with the quota-holder who is taxed having the first preference to re-purchase their taxed levy.

In the context of deep-sea fisheries on the highs seas, an important issue is whether policies and management practices of national jurisdictions that have been successful in ensuring the sustainability of fisheries within EEZs can be used on the high seas given that there is no corresponding sovereign body. Consideration of these issues, both in general and in particular are not without precedent. As noted, in 1971 Malta proposed the adoption of the common heritage concept at the United Nations General Assembly not only with regard to the seabed beyond national jurisdiction but also to the ocean space as a whole beyond national jurisdiction. As Carroz (1984) noted, this proposal was revised in 1973 and conceived the creation of new international institutions with fairly wide powers over the entire ocean space and its resources. However the proposal failed to receive much support, and neither did the less ambitious proposals subsequently submitted by Lebanon, Kuwait and Singapore, which envisaged the establishment of a new organization to regulate the exploitation of all living resources outside the territorial sea or which assigned this task to the prospective International Seabed Authority. However, when agreed upon, UNCLOS III gave little consideration to suggestions concerning international regulation of fisheries beyond EEZs or the outer limit of the continental shelf. China suggested the creation of an international organization to regulate fisheries in areas beyond national jurisdiction. Pakistan and Guyana suggested that the entire space beyond national limits be treated as a single entity with no distinction between living and non-living purposes. These countries proposed that the international Seabed Authority be vested with comprehensive powers covering all resources."

More recent and more concrete proposals have addressed the potential for more effective management regimes on the high seas. Stone (1993), in a paper that focuses on the need for environmental protection of global commons, proposed the creation of a Global Commons Trust Fund that would have responsibility for a range of issues that went beyond those simply of fisheries. This fund, he proposed would underwrite the policing of fisheries agreements, noting that at present (that was 1993) this relied too heavily on the fishing fleets’ self-monitoring. He believed that a number of sources could be tapped for revenues, including, e.g. a 0.5 percent tax on fish landings, including those from EEZs and expressed the view that it was indefensible that coastal states should snatch all of the wealth with no accounting just because they happened to be closer to the resource.

France and Exel (2000) provide a particularly dismaying description of the consequences of the open access regime provided for by UNCLOS III and the inevitability of resource depletion once the existence of high-seas resources becomes common knowledge. They provide examples in recent years where this has occurred within a few years of stocks being discovered. While they note that there is no single cause for the problems of high-seas management, they conclude that lack of effective access-rights is certainly one of the biggest. In giving credit to the progress achieved with UNCLOS III, they believe that the challenge of dealing with international rights was too great at the time this agreement was negotiated. Despite these constraints, the fishing company which employed these authors worked with their (Australian) national government, which in turn attempted to collaborate in developing management mechanisms with the governments of other flag states involved in high-seas fisheries their company were prosecuting. However, France and Exel report, these efforts foundered because of the lack of definition of high-seas rights, other than those of open access.

5. A GLOBAL FISHERIES TRUST

5.1 Initial steps

There exist more than 30 regional fisheries bodies (FAO 2003) comprising a wide range of activities, target species that ought to be managed, geographical areas, institutional competencies and histories. Many can rightly be described as famous and accord great respect, while others are barely known even in their region of competency and show limited functionality. Thus, in proposing the creation of a new global fisheries body, indeed one that to be effective would require the types of powers traditionally found only within national jurisdictions, the inevitable challenge to contend with, whether true or not, will be that a new body will create more bureaucracy and burden those who at the present time must do this job within the context of existing institutional arrangements. Added to such challenges must be the realization that in even the most optimistic scenario, it would be no less that five years before such an arrangement could be functional and, based on the time required for other arrangements to come into force, i.e. from when there was agreement to when sufficient states had ratified the agreement, a period of twenty years for agreement might not be unrealistic. If this were to be the case, then sufficient experience now exists to indicate that most, if not all, the resources that such an arrangement would be designed to safeguard will be gone. Indeed, given that newly discovered deepwater resources may be depleted over periods of a few months to two-to-three years, one might be excused for forgoing the attempt to address the problem.

However, such defeatism may not be entirely justified. Not all deep-sea resources offer little hope of sustainable exploitation and even for those fisheries that target fish of enormous longevity, low biological productivity and unknown recruitment relationships, evidence exists that several offer hope of sustainable exploitation. Further, issues of fish habitat protection and ecosystem considerations require that at least some degree of coordinated monitoring and analysis of the deep-sea’s fish resources be maintained if the little data that does exist on fishing operations is not to be lost and the invaluable information it represents along with it.

5.2 Institutional requirements

Creating a global fisheries trust faces two primary challenges. First, assuming that its creation would require support and agreement from a wide range (majority) of states, many of whom may have no involvement in high-seas deepwater fisheries, incentives would be needed to gain their support for such an initiative. Further, even if many of the states have no present, or future likely, involvement in high-seas deepwater fisheries, they may (reasonably?) assert that as part of the international community, they have standing in determining how net benefits from high-seas fisheries that arise from effective management of such resources are to be distributed. This challenge may be termed the Rent Distribution Issue - the concept that a global fisheries trust would have some form of tenure of the fisheries resources in question. That is, such a trust would hold in escrow for the world, rights to extract resource rents, or royalties through management of high-seas deepwater fishery resources.

The second challenge would be to convince fishing operators, both of distant-water fishing nations and of coastal states with straddling stocks, whether they fish on the high seas or not, that an effective and encompassing arrangement will better protect their interests than do current management arrangements. As France and Excel’s views (2000) show, at least some companies recognize that such an arrangement will be in their interests. Probably the major concern of existing high-seas fisheries operators will be that any new highs seas fishing arrangement is not, whether by stealth or otherwise, an extension of sovereignty by coastal states over adjacent marine areas or the high-seas part of the range of straddling stocks. They will wish to ensure that any past, or present, fishing activities on their part are able to continue in the future. Indeed, some countries may insist that at least the opportunity exists for them to expand their high-seas fishing activities or develop new ones. This challenge may be termed the Catch Entitlement Issue - that is, that any new high-seas fisheries arrangement can provide secure catch entitlements to existing fishing operators with negotiated conditions of exclusivity and other rights-related conditions.

These two issues that will dominate any discussions relating to the creation of a global high-seas deepwater fisheries trust - that of payment of management costs, and rent or royalties for harvesting high-seas resources in exchange for agreed conditions for providing catch entitlements - are complementary negotiating issues and can be separated and dealt with independently. Indeed, this may be the only way of proceeding with such a proposal.

5.3 Institutional options

Current experience indicates that no existing regional fishery body has all of the powers they desire and need to ensure that the fisheries they administer can be managed to provide high levels of sustainable benefits. It may be possible that these deficiencies could be addressed by re-opening the conventions that determined their arrangements so as to address whatever particular deficiencies exist, but if circumstances have changed considerably since the respective fisheries arrangement were first negotiated, this may result in an unavoidable renegotiation of many other unrelated articles of their conventions. Such a process may take as long to negotiate as a new, and more preferable, option. For many fisheries arrangements there may be a fair, if not high, degree of satisfaction in how the arrangement is fulfilling its mandate and the members of such arrangements may feel strongly that there is little or no need to consider a new and untested management approach. In such cases the challenge would be to complement existing competencies through an additional global arrangement and at the same time avoid duplicating institutional mandates that are already well satisfied.

If it is true that the challenge of achieving effective high-seas deepwater fisheries management is global in extent and can only be addressed on this basis, then the need will be to implement arrangements first for high-seas areas where there are no agreements, e.g. the southern Indian Ocean, and then, perhaps, to accommodate existing conventions by complementing their activities with those that are global in nature and for which regional arrangements are inadequate. In this regard, it would be unwise to underestimate the, perhaps understandable, antipathy to the creation of new global organizations. But on the other hand it would be counter productive to fail to recognize the benefits from such an approach or its essential need. By skilful negotiations assisted by appropriate incentives it should be possible to create a global body that in the first place complements existing regional arrangements, by undertaking those management responsibilities where there are no existing regulatory mechanisms.

Where there is a need for activities on a global basis that are already undertaken, or attempted, regionally, a global fisheries trust could supplement existing regional arrangements. Examples of such activities would include global high-seas VMSs and global implementation and management of catch documentation systems as it may be assumed that the need for such reporting systems will expand as progressively more stocks become heavily exploited, if not depleted, as they attract the attention of those who choose to operate outside the arrangements of existing conventions. Balancing the need for well integrated global management functions is the recognition that many of the operational requirements of a global organization will be best served through a regional structure with appropriate responsibilities undertaken on a devolved basis.

While the majority of existing RFMOs exist outside of the United Nations system, it is difficult to conceive that this would also be the case should a global fisheries trust be established. Whether it would be more appropriate to create a new organization, or add such a proposed mandate to an existing one, is at this conceptual point a matter for future evaluation.

5.4 Fishing access and catch entitlements

Experience at the national level shows that the conferring of catch allocations to fishery participants is the most contentious and difficult step when a rights-based approach to management is adopted. However, sufficient experience now exists to show that despite this, the problem can be resolved. There appear to be two options that reflect the importance that may be given to differing considerations when providing for catch allocations or entitlements. For one, a system of preferences that favours certain countries (e.g. coastal states or developing countries) may be implemented and what ever quota remains is then available for ‘non-preferred’ states. There are various reasons why this would be a deficient policy. To start, it would be difficult, if not impossible to assess the relative merits of claims to preference and then, were they to be granted, it would be at the cost of maximizing the benefits to be gained from the resource. A preferable way of recognizing the claims of states to be favoured, should this be an accepted policy objective, would be through preferential shares of resource rents that were to be collected from those prosecuting the fisheries.

As an alternative to a system of allocations by evaluation of social merit, many national practices offer examples that have elements of potential applicability. Most commonly, national regimes when granting catch entitlements have based the initial quota allocations to an operator based upon their past catches using a variety of formulas that differ mainly in the period used in setting the share rather than the underlying principle. Where there is no basis for determining a historical right, the allocation may be sold by auction or tender. There are reasons why auctions should be used only after careful evaluation, but in theory there are a number of reasons why such an approach would find much support. First, an auction would result in the trust receiving the maximum value for the catch entitlements it holds in escrow. This would in turn maximize royalty payments to the beneficiaries no matter what allocation formula for the catch was decided upon. Second, it would have the advantage of being transparent and, if "rule by the market place" was acceptable, fair. No restrictions should be placed on who could bid for quota.[440] In national contexts, there are often fears that auctions favour those with a competitive advantage in accessing capital and these entities may not be those who are capable of creating the most benefits from a fishery. Whether this would be a consideration in a global context requires further elaboration.

As in other avenues of commerce, the revenues that are received from the sale or lease of catch entitlements will depend on what is being sold. It is a well established experience that fishing entitlements that have the characteristics of strong property rights[441] are the most valued. Entitlements that are secure (i.e. not liable to arbitrary or unwarranted forfeiture), have reasonable duration (note that operators developing new fisheries will require multi-annual entitlements), are exclusive (when operators, through their own investments increase the productivity of the resource, they should not have to unfairly share the returns of those investments with new entrants) and are transferable, will achieve the highest bid in any auction or tender system.

Rarely are all these attributes to be found absolutely in national fishery quota systems, and what ever suite of characteristics is decided upon should depend on the characteristics of the particular fishery to which they apply. In any event, however it is considered to be appropriate, a global fisheries trust may decide to stint the characteristics of the catch entitlements, e.g. limit the relative share that may be held by any one operator (or country?), or the length of time that an entitlement is valid. While negotiating these issues is usually difficult, there is ample experience at the national level to show that when the incentives to succeed exist, a resolution will be possible.

Should a trust be able to grant catch entitlements to fishing operators, it is likely that concerns about market concentration will arise. Most high-seas deepwater resources are relatively small (see Footnote 5). Many stocks may be specific to a single local seamount complex and support no more than one, or a few, vessels even when fished on a seasonal basis. In these situations, there may be major advantages in providing a single operator with exclusive rights to an area, analogous to a territorial user right (TURF).[442] In any event, it is unlikely that there need be fear of market concentration because of exclusivity over access to a particular stock.

6. NON-CONSUMPTIVE CONSIDERATIONS

The perception of high-seas deepwater fisheries as yet another environmental tragedy in the making has spawned a plethora of political campaigns, international conferences, initiatives and agreements, described above. Put together, these actions and initiatives signify a growing political commitment to sustainable fishing. The last two decades has seen increasing focus on the importance of what has been termed ecosystem-based management, first pioneered in the 1982 Convention on the Conservation of Antarctic Marine Living Resources and gaining greater salience with the discussions at, and outcomes from, UNCED in 1992, reinforced by pronouncements of the WSSD in 2002.

As a result there is an increasing tendency to frame fisheries issues in terms of concepts such as ‘integrated management’, ‘the precautionary approach’, ‘inter-generational equity’, ‘stewardship’ and the ‘maintenance of biodiversity’. These concepts address a broader concern than simply the sustainability of the stock. Institutional arrangements providing governance of high-seas deepwater fisheries will need to address these issues.

Ensuring the maintenance of high-seas stocks and protecting the biodiversity of deepwater fisheries leads back to broader concerns expressed four decades ago over the resources of the oceans as the common heritage of mankind. The problem of these resources as public goods under open-access regimes reinforces the difficulties in governance addressed above. Despite increasing attention to the need for ecosystem-based management to be applied to the word’s fisheries, with WSSD setting a target date of 2010 for the application of such approaches, limited attention has been placed on the mechanism to fund the introduction of such management approaches. The creation of a global fishery trust could resolve this deficiency.

7. MOVING AHEAD

Developing a global governance arrangement for high-seas deepwater fisheries will be challenging. Progress in implementation of instruments, even when there is widespread acceptance of the need for action may be slow. Where such instruments contain provisions - either rights or obligations - that are seen by some states as contentious, the process of agreement and ratification can be difficult. Objections have been raised where initiatives have been proposed that extend or develop the provisions contained within the LOSC that, in the words of Johnston and VanderZwaag (2000), has assumed the status of ‘sacred text’. Alternative approaches that focus on the opportunities to build acceptance of measures through ‘soft law’ processes provide mechanisms to advance issues and perhaps see the emergence of customary law as these measures gain broader agreement and support over time. Observations over the negotiation of the IPOA-IUU indicate that states are, however, adopting formal treaty-making tools and procedures (e.g. reservations and declarations) in these non-binding, hortatory instruments. Formal, Track I approaches are necessary to gain acceptance of institutional forms that ‘bind’ parties to obligations contained in an instrument.

Alternative approaches may, however, have utility in advancing discussion of appropriate institutional forms and governance arrangements affecting high-seas deepwater fisheries. Track II approaches that facilitate discussion outside formal state-to-state diplomacy can help advance issues and overcome constraints posed within the formal Track I arenas. Track II approaches can build on civil society’s concerns over the state of the world’s fisheries and oceans and the agenda set at WSSD to examine options for governance arrangements for high-seas fisheries. As Track II initiatives gain strength the ideas and outcomes can feed into formal intergovernmental processes. Such ‘bottom-up’ processes may help sustain important political constituencies during what inevitably will be difficult formal negotiations.

Opportunities to consider such governance arrangements may arise through the agenda of the United Nations Informal Consultative Process on the Law of the Sea (UNICPOLOS) that has already addressed issues such as high-seas marine protected areas on its agenda. UNICPOLOS provides one forum that encompasses the benefits of Track II approaches within a more formal framework. Other avenues are also available. The FAO’s biannual meeting of the Committee on Fisheries (COFI) provides opportunities for a UN Specialist Agency to discuss the governance of deep-sea fisheries. Discussion of such issues during the annual debate at the UN General Assembly on the UN Secretary-General’s Report on the Law of the Sea may provide further opportunities.

8. CONCLUSION

The governance of deepwater, high-seas fisheries raises many issues. This paper has noted that, notwithstanding the significant developments in the law of the sea regime over the past three decades, there are limitations in the current legal framework and management arrangements affecting deep-sea fisheries is areas outside national jurisdiction. Given the increasing constraints on fleets operating in areas within national jurisdictions, high-seas areas deepwater resources are likely to be increasingly targeted in coming years. This development may well parallel the concern over management of straddling and highly migratory stocks that emerged in the 1990s, which gave rise to an innovative management instrument by focusing on extending tools and approaches embedded in the 1982 Law of the Sea Convention.

This paper has provided a necessarily brief survey of issues that are central to considerations of governance and management of deepwater, high-seas fisheries. Governance focuses on institutions and processes providing both frameworks and context for decision-making. Deepwater fisheries in areas beyond national jurisdiction clearly lack a sufficient governance framework, being the residual from the coastal states and distant water states’ ‘rights’ found within the Law of the Sea Convention.

One way forward will be to look back, back to the innovative proposals from Malta (and other states) in early, preliminary discussions prior to the opening of the Third United Nations Conference on the Law of the Sea. This initiative proposed establishing an institution responsible for fisheries beyond national jurisdiction, based on the concept of such fisheries as the ‘common heritage of mankind’. This would have paralleled the approach adopted for deep-seabed minerals with the International Seabed Authority. While the Maltese proposal did not gain currency in the early 1970s we argue that such an approach, based on the experience gained by institutions such as the International Seabed Authority, could provide the basis for managing deepwater high-seas fisheries. This paper proposes a deep-seas ‘trust’ as a mechanism to address current lacunae in the law of the sea regime with respect to deepwater fisheries outside of national jurisdictions.

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[391] The views expressed in this paper are those of the authors expressed in an individual capacity. They are not necessarily those of the Food and Agriculture Organization.
[392] Fisheries Department, Food and Agriculture Organization,
Via delle Terme di Caracalla, 00153 Rome, Italy
<[email protected]>
[393] School of Government/Institute of Antarctic and Southern Ocean Studies and
Antarctic Climate and Ecosystems CRC, University of Tasmania
Private Bag 22 Hobart, Tasmania, Australia 7001
<[email protected]>
[394] Interestingly, orange roughy was first described from the Azores in the mid-Atlantic, hence its scientific trivial name, ‘atlanticus’.
[395] 1833 UNTS 396.
[396] 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, also known as the United Nations Fish Stocks Agreement (UNFSA). The United Nations Fish Stocks Agreement entered force on 11 December 2001. For a review of this agreement see Hayashi (1999) and Doulman (1995).
[397] Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas, FAO. Rome, 1995. See also (1994) 33 ILM 968.
[398] Code of Conduct for Responsible Fisheries, FAO. Rome, 1995.
[399] For an assessment of this ‘international ocean regime’ see Joyner, (2000).
[400] LOSC Art. 87 (2).
[401] Many authors have noted that common-property fishery regimes, especially subsistence, or traditional-practice fisheries, may function within effective customary management arrangements.
[402] Vessel operators may handle some species by hand and install expensive sprinkler systems to rapidly chill freshly caught fish prior to processing.
[403] Soviet vessels operating the southern Indian Ocean, though aware of the existence of orange roughy resources, avoided catching them as their sale in the Soviet Union had been prohibited because of the purgative effects when roughy fillets are eaten that not had the sub-surface oils removed during processing by deep skinning.
[404] Global orange roughy and oreo fishes comprised only 0.38% of general demersal fish landings in 2001; toothfish - only 0.28%.
[405] LOSC Article 116.
[406] See, e.g. <http://www.cos-soc.gc.ca/engage/toce.asp> for Canada’s Oceans Strategy; <http://www.oceans.gov.au/theoceanspolicyoverview.jsp> for information on Australia’s ocean policy; <http://www.oceans.govt.nz/> for New Zealand’s Oceans Policy.
[407] Taken here as the manner in which something is governed or regulated - the methods of management and systems of regulations.
[408] See, for example the United Nations Convention on the Law of the Sea; the Agreement relating to the implementation of Part XI of the Convention, and the Agreement for the Implementation of the Provisions of the Convention relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks.
[409] LOSC Art. 119 (a).
[410] Noting the variety of ways that maximum sustainable yield may be defined.
[411] LOSC, Article 61 notes that ‘the coastal state shall determine the allowable catch of the living resources of its exclusive economic zone’ but also introduces the need to ‘take into consideration the effects on species associated or dependent upon harvested species with a view to maintaining or restoring populations of such associated and dependent species’.
[412] See, for example, the collection of papers in Ocean and Coastal Management, 43 (2000), particularly the paper by Douglas M. Johnston and David L. VanderZwaag (2000).
[413] Ibid. See also Johnston and VanderZwaag (2000).
[414] Stokke, (2000).
[415] Ibid.
[416] Identified as having status as a ‘sacred text’ by Johnston and VanderZwaag, (2000:143).
[417] In addition to the Convention on Fishing and the Conservation of the Living Resources of High Seas, the 1958 UNCLOS I conference negotiated the Convention on the Territorial Sea and Contiguous Zone; the Convention on the High Seas; and the Convention on the Continental Shelf (UN 1958).
[418] T. B. Koh, (1983).
[419] Art. 21 (8), also Art. 23 (1). See Stokke (2000) who describes the provisions of port state controls as ‘a more controversial element of compliance regimes’, p. 220.
[420] The definition of ‘real interest’ is still contested.
[421] The problem has been traditionally addressed by RFMOs through resolutions and diplomatic demarches aimed at persuading particular non-party states to withdraw an authorisation of vessels or to comply with relevant fisheries management regulations through effort limitation and national regulation. It should be noted that in the UNFSA non-members or non-participants are not discharged from their obligations to cooperate, such as not issuing licenses for straddling or highly migratory fish stock subject to conservation and management measures by regional organisations. There is also a duty on members of RFMOs to exchange information on non-member fishing operations. Parties are also obligated to encourage non-parties to become parties and adopt appropriate laws.
[422] See Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas Art. III.
[423] Compliance Agreement Preamble.
[424] Ibid.
[425] See; generally Art. 8.2 ‘Flag State Duties’.
[426] FAO The Rome Declaration on the Implementation of the Code of Conduct for Responsible Fisheries, adopted by the FAO Ministerial Meeting on Fisheries, Rome 10-11 March 1999. Par 12 (j).
[427] Report of the Expert Consultation, Document AUS:IUU/2000/3. Expert Consultation on Illegal, Unreported and Unregulated Fishing Organized by the Government of Australia in Cooperation with FAO, Sydney, Australia 15-19 May 2000. Appendix D par 4.
[428] Ibid. par 5.
[429] FAO Press Release 01/11 ‘New International Plan of Action Targets Illegal, Unregulated and Unreported Fishing’
[430] Article 61, Conservation of the living resources.
[431] Article 63. Stocks occurring within the exclusive economic zones of two or more coastal States or both within the exclusive economic zone and in an area beyond and adjacent to it. 2. Where the same stock or stocks of associated species occur both within the exclusive economic zone and in an area beyond and adjacent to the zone, the coastal State and the States fishing for such stocks in the adjacent area shall seek, either directly or through appropriate sub-regional or regional organizations, to agree upon the measures necessary for the conservation of these stocks in the adjacent area.
[432] Unfortunately, the dissolution of the Indian Ocean Fisheries Commission followed by only a few months the discovery, or at least, significant expansion of commercial exploitation of deepwater demersal species in the southern Indian Ocean. The subsequent significant reduction in fish resources biomass occurred in the absence of any potential regulatory authority.
[433] The World Trade Organization has no definition of “developing” country–members may declare themselves as a “developed” or “developing” country. However, other members can challenge the decision of a member to make use of provisions available to developing countries. For the Development Assistance Committee of the OECD, “developing country” means a country on Part I of their list of aid recipients. Other organisations have their own definitions. The World Bank uses the term to refer to low and middle-income countries assessed by reference to per capita GNP. The United Nations Conference on Trade and Development has different income thresholds from the World Bank and other organisations often have a “developing country” category of membership.
[434] Plan of Implementation, Section IV - Protecting and managing the natural resource base of economic and social development, Paragraph 30 (e).
[435] M. Bliss presentation on ‘Institutional Gaps’ at Workshop on the Governance of High Seas Biodiversity Conservation, 16-20 June 2003, Radisson Plaza Hotel, Cairns, Australia.
[436] S. Nandan ‘Current and Foreseen Activities of the International Seabed Authority in Relation to the Resources and Environment of the Deep-seabed’ presentation at Workshop on the Governance of High Seas Biodiversity Conservation, 16-20 June 2003, Radisson Plaza Hotel, Cairns, Australia.
[437] LOSC, Article 140 (2).
[438] Jensen (2000) provides further insights on this topic in this context.
[439] See for example FAO (2000).
[440] Though it may be desirable to ban from bidding operators who contravened fishery regulations.
[441] See Scott (2000) for an elaboration of these concepts.
[442] See Christy (1982) for an exposition on Territorial Users Rights (TURFs).

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