Serge M. Garcia and Jean Boncœur 3
“Resources, their scarcity, their depletion, and their conservation are concepts of the social sciences, par excellence”… Property rights in resources are a primary economic institution of paramount importance in the economics of conservation.” (Ciriacy-Wantrup, 1968).
It is generally agreed that overcapacity, overfishing, habitat destruction and wastes relate closely to the “tragedy of the commons”, i.e. to the fact that access to the resources is relatively cheap (if not free) and easy (if not open). The implication is that the establishment of a system of clear use rights will eliminate the incentive to “race for fish” and increase the user's sense of responsibility, leading to conservation. This paradigm has significant conceptual and operational implications. The concepts of conservation and allocation are well defined, and the factors of success and failure are generally well known. The performance of allocation in terms of conservation depends on: the control variable (allocated factor); the rights attributes; the selection of private versus communal property; the initial allocation; the effectiveness of the rights'administration; the value of the fishing privilege and the destination of the rent.
The interplay between allocation and conservation is iconized in the “Tragedy of unmanaged commons”, and the solutions to the tragedy involve the use of either Pigovian taxes or Cosean use rights. The interplay has a number of institutional underpinnings related to the 1982 Convention of the Law of the Sea, the Convention on Biological Diversity, the UN Fish Stock Agreement, and the regional fishery bodies and arrangements. There is a close connection between the systems of rights and the social structures using them and the two have co-evolved in time. One of the main challenges faced by Governments today appears to be the choice between communal and private property.
The performance of fisheries in terms of conservation appears to be dependent on the solution of a number of allocation dilemmas between: (i) consumptive and non-consumptive use; (ii) fishers and other sectors including conservation; (iii) sub-sectors of fisheries; (iv) national and foreign fishers; and (v) present and future generations.
The issues become even more complicated in an ecosystem perspective with issues related to: (i) allocation between fishers (and human consumers) and other marine top predators; (ii) allocation in Marine Protected Areas; (iii) the interplay between conservation and social reproduction; (iv) contrastive evolution of the spatial units selected respectively for ecosystem management and fisheries resources allocation.
The interplay between allocation and conservation is probably as old as life on Earth. Its origin and implications have been brilliantly addressed by numerous eminent scholars and part of standard university text books. In the early 1980s, considering the issue, the Late John Gulland said that it was like “telling grand-mother how to suck an egg ”. However, looking at the appalling state of ocean resources more than 20 years after Gulland's remark, it would seem our “grandmothers” still need to be told again.
The interplay between allocation and conservation has probably affected the life of our ancestors for millennia, conditioning their survival. It has excited the intellect of scores of eminent philosophers, economists, sociologists and ecologists for centuries. It has been central to fisheries management for decades and is, today, as modern and relevant as ever as society moves towards an ecosystem approach to fisheries. The growing societal awareness of the fishery resources'distress and of the inexorable human population growth, the question of indigenous populations'rights (a sequel of colonisation); and the institutional quakes of the 1982 UN Convention on the Law of the Sea (hereafter, the 1982 Convention) and the 1992 Convention on Biological Diversity (CBD) have dramatically focused the international limelight on this old but most modern issue. The old debates among economists regarding the respective efficiency and roles of individual and communal rights, of the State and of the Market, are still a source of hot ideological debate, exacerbated by the ongoing process of globalisation. Indeed, the problem may not reside so much in the concepts as in their practical implementation and not so much in deciding about a theoretical long-term equilibrium “Graal” but in the process of transition and co-adaptation of ecosystems, human communities and the institutions connecting them.
Conscious to be treading on an old battered track, the paper aims at providing a background to the WFC4 session on allocation and conservation, with the aim of reminding this audience of some fundamentals and ongoing controversies. This review paper focuses on the interplay between allocation and conservation, rights and responsibilities, recognising that it depends significantly on many factors, internal or external to fisheries that may not all be covered here. In order to call back to mind what the issue has always been, how it was formulated, and what was proposed to resolve it, the first section of the paper recalls the concepts and definitions related to conservation and allocation (with the support of a glossary). The interplay between the two is addressed in the second part of the paper in which conceptual aspects are described together with a series of practical examples.
2. DEFINITIONS AND CONCEPTS
It may be useful, for the purpose of this review paper, to clarify a multidisciplinary terminology which remains sometimes confusing (Hardin, 1998). In this section, we will therefore recall the definitions and concepts of conservation seen as a central objective of management and of allocation seen as a means to achieve it. The following additional concepts and terms often used in the paper are defined in the Appendix: common pool; public resources; res communis; res nullius; discount rate; equity; efficiency; property rights; and sovereign rights.
Conservation has ecological, economic, social, ethical, metaphysical and emotional connotations. It tends to have two main meanings. Firstly, it is the preservation and protection of something from change, loss, or damage, including through the prevention of exploitation. It is the maintenance of the status quo. This seems to be the meaning most generally accepted by francophones for this word, taking conservation and preservation as synonyms. Secondly, it is the planned management and care of (used) natural and cultural resources to prevent their destruction or neglect. It reflects wise use or sustainable use (Ciriacy-Wantrup, 1968: p. 19). It is the long term maintenance of the flow of natural goods and services (Charles, 1992). In the 1980 World Conservation Strategy, it is “the management of human use of the biosphere so that it may yield the greatest sustainable benefit to present generations while maintaining its potential to meet the needs and aspirations of future generations. Conservation is positive, embracing preservation, maintenance, sustainable utilization, restoration and enhancement of the natural environment” (IUCN et al.,1980: Para. 4). This seems to be the meaning most generally accepted by the Anglophone and the economists in general. It corresponds to the concept of “strong sustainability” and is the only one making sense in this paper.
Conservation failure results in overfishing and depletion. Overfishing has been recognised and described centuries ago (Tiphaigne de la Roche, 1760; Pauly and Chua, 1988) and since Warming (1911), Graham, (1935), and the London Conference on Overfishing (1946), it has been clear that fishery resources could be depleted. During the last 50 years, conventional management strategies aimed formally at conservation through regulation of boats'and gears'characteristics (to limit fishing power and improve selectivity), operational constraints (e.g. closed areas and seasons, biological rest) and harvest limitations (e.g. total allowable catches, minimum landing size). The fishery management instruments, such as the 1982 Convention, have institutionalized the conservation objective, specifying that the stock size corresponding to the Maximum Sustainable Yield (MSY)4 is the limit below which, by convention, conservation has failed and biological overfishing occurs. This is confirmed, by necessity, in the 1995 UN Fish Stock Agreement (FSA) and the 1995 FAO Code of Conduct (the Code). More recently, the framework has been reinforced by the recent societal demand for more attention to associated and dependent species, critical habitats and, in general, the exploited ecosystem requirements (FAO, 2003; Garcia et al., 2003; WWF, 2003).
Constrained by the need to maintain social peace and not addressing the root causes of the phenomenon (see below), these measures attempted and failed, to mitigate the consequences of growing overcapacity. Economically inefficient, they were unable to resolve long-term use conflicts and to ensure conservation. The global consequences have been obvious for the last decades: overfishing, shortened fishing seasons, lower catch rates, decreasing harvest of lower quality, uncertain resource availability, excess harvesting and processing capacity, economic inefficiency and social stress. The resulting high long-term costs have often been shouldered by society through direct or indirect subsidies intended to mitigate the social costs of management, compounding the problem.
It is now common knowledge that this poor sustainability is characterised by and results from the interaction of many interrelated factors, including: (i) the absence of guaranteed rights; (ii) the supremacy of short-term socio-economic considerations over long-term ones; (iii) a perverse incentive structure reinforcing (i) and allowing externalisation of private costs; (iv) rising demand from a growing human population and consequent rising prices; (iv) poverty and lack of alternatives in many areas; (v) ineffective governance and weak enforcement; (vi) disturbances such as pollution, climate oscillations, wars; (vii) scientific and administrative uncertainty and (viii) competition between users, within and between sectors.
It is usually agreed that, in line with the general theory of sustainable development, the corrective action required includes: (i) the granting of more effective rights of use; (ii) improved transparency; (iii) more participation in decision-making; (iv) better understanding of the resources and the communities depending on them; (v) a more precautionary approach to management; (vi) more active consideration of the ecosystem interrelationships; (vii) better monitoring and enforcement; (viii) more equitable distribution of benefits; (ix) integrated development and management policies; and (x) a stronger role of consumers.
The conservation issue has taken a new and stronger development with the adoption of the Convention on Biological Diversity, signalling a change in the foundation of the conservation concept, from ethics (the need to preserve species for future generations; to consider biodiversity as a patrimony; the respect for life forms) to sustainable use. One important consequence has been the general adoption of the Ecosystem Approach to Fisheries (FAO, 2003; Garcia et al.,2003), the significant consequences of which for the meaning and approach to conservation are still to be fully apprehended.
Allocation is both an object and an act. As an object, it is a share of something set aside for a specific purpose. Synonyms with this meaning include: portion, share, proportion, quota. As an act, it is the distribution of something among selected recipients such as splitting a total allowable catch among fishing nations or assigning coastal areas to different uses. Synonyms are: apportionment, allotment, appropriation, distribution, division, and repartition. The beneficiaries could be contemporary (intra-generational allocation) or belong to successive generations (inter-generational allocation). Both aspects are central to conservation.
Allocation involves the granting of rights (appropriation5). It may affect and be conditioned by pre-existing ones. Allocation implies also the assignment of the responsibility of controlling the way in which these rights are exerted (provision). The solution of one set of problems must be congruent with the solution of the second. The structure of the problems, and their solution, depends on the particular configuration of variables (resources, climate and habitat) the rules in use, and the attributes of the individual involved (Ostrom, 1990: 46–50).
THE OUTCOME OF AN ALLOCATION PROCESS, E.G. IN TERMS OF ECONOMIC EFFICIENCY, CONSERVATION AND EQUITY (SEE GLOSSARY, APPENDIX) DEPENDS ON A NUMBER OF ASPECTS BRIEFLY EXAMINED BELOW
2.2.1 The objective of the allocation
Granting access and allocating rights (and many of the characteristics of the allocation process) may be aimed at various interrelated objectives such as promoting development of an otherwise under-used resource or protecting an endangered one, reaching maximum economic efficiency, maintaining self-sufficient and healthy social groups in remote rural areas, reducing use conflicts and, obviously, improving conservation. While the objective of conservation (or ecosystem reproduction) is usually clearly stated, that of social reproduction is not yet as commonly referred to and taken into account as ecosystem reproduction is, particularly in the conservation arena. There seems to be little resistance to the concept of strong sustainability in relation to the environment (implied in the definition of “conservation”) but the intrinsic value of “social reproduction” may not be yet as fully understood as its environmental equivalent. It is sometimes by environmentalists, with the argument that human constructions are, by essence, evolving structures (an argument that applies indeed also to ecosystems), the possible disruptions introduced by a new system of rights on the social structure should not be a problem. The societal costs of a brutal degradation of social relationships produced by a radical shift in rights allocation (e.g. in terms of exclusion) may not yet be as well perceived as the societal costs of environmental collapse (e.g. following the cod collapse in Canada).
2.2.2 Allocated factor
The first level of allocation among potential users is achieved through granting of access, usually controlled through a more or less comprehensive system of permits, ranging from simple and quasi-free administrative registration to more elaborated licensing and limited entry systems. Limited entry has been used since the early 1960s, and its main problem seems to be the difficulty to reduce the initial over-capacity fast enough to mitigate the effect of technological progress despite difficult and costly buy-back schemes.
In most cases, because of their fugitivity, the resources themselves cannot be allocated between those having been granted access rights. As a consequence, the factor that is allocated (i.e. the control variable) is the best possible albeit necessarily imperfect proxy to the resources. This proxy could be:
Space, e.g. through territorial use rights, with potential problems with mobile resources;
Effort, e.g. through effort quotas, with potential problems with fishing capacity; time sharing, etc.
Catches, e.g. through catch quotas, individual or not, transferable or not, with problems of declarations, highgrading, discards, etc.
The attributes of a right determine its effectiveness in a particular situation. These attributes should relate to the characteristics of the resourceor resource system such as its location, geographical structure, distribution and mobility, variability, abundance, resilience and value. They should also relate to the characteristics of the fishers community, including its history and culture, and be compatible with fishing operations.
The main attributes include: exclusivity, duration, security, transferability. Other attributes such as flexibility and divisibility are also sometimes mentioned (Ciriacy-Wantrup, 1968; Scott, 2000; Stokes, 2000). Exclusivity gives protection from legal interference and provides the facility to exclude others. Duration encourages the sense of ownership of the user, provides conservation incentives and facilitates the use of the right as collateral. Security facilitates the defence of the right, increasing the assurance of the holder that it will keep it, contributing to conservation incentive. Transferability of allocations to buyers, renters or descendants is usually considered necessary to provide the flexibility needed for future evolution of the fishery and population of right holders, as well as to protect the family in case of death of the right holder. It provides a mechanism to deal with potential new entrants, increases economic efficiency but may lead to undesirable concentration if provisions are not made to avoid it. Mechanisms exist to permit State intervention on the market to re-establish equity as needed. However, full transferability is often opposed, e.g. to ensure that the original allocation (e.g. to nationals or disadvantaged groups) is not modified. In France, transferability is formally illegal (Boncœur and Troadec, 2004) but in practice fishing rights are transferred with the vessel, the price of which includes the implicit right to fish. Flexibility will allow the system to adapt to changing conditions of the resource or the sector. Transferability and divisibility add to flexibility. For highly variable resources, allocating proportions of the resource flow (e.g. % of the TAC) instead of fixed quantities will permit the adjustment of withdrawal to natural conditions. Divisibility allows a right to be split into components (species, seasons, sub-areas) that may be allocated to different right holders. The possibility to market some elements of the bundle of rights without affecting the property allows a significant reduction of transaction costs (Weber, 2002). Enforceability is self-explanatory and could be considered as part of security.
2.2.4 The right holder: Private versus communal property
The right holder could be a country (as per the 1982 Convention), a community, a fishing company, a vessel or an individual. Selecting individual rights (private property6) or communal rights (common property) is probably the hottest policy issue of the allocation process and the relative advantages or drawbacks of the two options in terms of efficiency, equity and sustainability have been debated for centuries (Ostrom, 2000). While some scholars consider contemporary examples of common property as remnants of an irrelevant past bound to disappear, recent research challenges that presumption, and there is a substantial evidence that, in the past, in resilient rural communities, communal property has been able to solve a wide diversity of problems at low interaction costs (Ostrom, 2000: 333). Under the modern conditions of market globalisation, however, it is not obvious that the conditions for this performance still exist or can be re-established.7
The choice is rich in long-term consequences, politically delicate and conditioned by the objectives. The neo-classical economists advocating private property (e.g. individual transferable quotas) tend to stress maximum long-term economic efficiency and benefits (including conservation), with a risk on equity. The socio-economists stress that communal property rights may be more indicated when controls are difficult, and one of the aims is to maintain human settlements in remote rural areas where livelihood alternatives are scarce. In this case the exclusion often implied in individual rights may be unacceptable (Ostrom, 1990: 22), even though this solution may not be economically optimal. The proponents of communal rights argue for other sets of values including equity,ethics8 and social reproduction.9
The proponents of private forms of property argue also that: (i) by setting everyone's share they eliminate the “race for fish” and reduce the incentive for “stuffing in” technology, reducing costs and overcapacity; (ii) they allow each individual to fix the timing of his harvest, choosing times where the weather is better (reducing life risk), the species is of higher quality, the by-catch or concentration of juveniles is lower, etc.; (iii) they turn the right to fish into a transferable asset of fairly well established value; and (iv) to the extent that they allow stock rebuilding, they reduce the uncertainty of the fisher as to what fish he will find where and facilitate contractual arrangements with buyers.
For their detractors, these forms of property presents drawbacks such as: (i) unintended social effects such as non-fishermen owners and concentration of ownership, a phenomenon largely observed and apparently accepted, however, in all other industries;10 (ii) difficulty to accurately adjust the quotas to inter-annual changes in reproductive success, abundance or availability because of uncertainty, reducing therefore the accuracy of the management response (even when quotas are defined as percentages of a variable allowable annual catch);11 (iii) political risk for elected officers in lowering the total allowable catch, reducing management response effectiveness;12 (iv) increased incentives for under-reporting and black market of unreported catches; (v) increased incentive to discard (highgrading; discards of species when its quota has already been reached); (vi) difficulty to reduce capacity fast enough in highly overcapitalised fisheries; and (vii) inadequacy for an ecosystem approach to fisheries.
The two sets of proponents differ also in the way they treat exclusion. On the one hand, limiting access to establishing individual rights is likely to result in the exclusion of the least efficient actors (perhaps the poorer), either initially or during the process of economic “optimization”. The market is the mechanism used for exclusion and compensation. Equity is generally not considered explicitly. On the other hand, granting exclusive access to a whole “community” reduces the initial exclusion problem and allows explicit consideration of equity. However, exclusion of non-community members, often violently, is also a characteristic of kinship-based traditional fishery management systems. Whether market-based exclusion is less ethical than exclusion based on racial or ethnic criteria is debatable.
While ITQs are systematically used in countries like Australia, New Zealand, Canada, Iceland and Netherlands, they seem to be considered as unacceptable in principle by a large part of the EU fishers in Italy, Spain, and Greece. In France, a recent law provides that fishing authorizations cannot be transferred, and fisheries are considered as a “common heritage” (patrimoine collectif)13. This last terminology may relate to the “Common Heritage of Mankind”14, an asset defined in the UN in the 1960s and which, by definition, goes beyond a res communis (see glossary) and cannot be appropriated. In Iceland, however, where a similar terminology was used in the law, the Supreme Court decided that it should not impede the free allocation of ITQs based on fishing history. In countries were ITQs have been adopted some time ago, the debate is still raging (Collet, 2002).
The common property challenge needs to be faced by governments if small-scale fisheries are to survive globalisation. The conditions for successful common property include (Ostrom, 1990: 90): (i) clearly defined right holders (and hence exclusions) and resource boundaries; congruence between allocation/conservation rules15 and local conditions; (ii) collective choice arrangements in participative framework, allowing fine tuning of the institutions to local conditions and improved enforcement; (iii) reliable monitoring, in which those in charge of monitoring are accountable to the right holders; (iv) graduated sanctions, possibly inflicted by the right holders themselves or their institutions, and social recognition of good behaviour; (v) effective (rapid-access, low-cost, equitable) conflict-resolution mechanisms; (vi) recognition by higher authorities of the right to organise, implying an effective transfer of the management right; and (vii) institution nesting to effectively address cross-jurisdictional problems or problems at different scales.
Conversely, factors influencing success or failure in developing appropriate institutions include: (i) the number of decision-makers (the less the better): (ii) the number of participants (a minimum is needed to achieve collective benefits but large numbers may be a problem); (iii) the diversity of participants (similar profiles, perceptions, interests and discount rates help achieving the necessary consensus); (iv) presence of local leadership. Communal right holders in common pool resources systems have shown capacity to develop sustainable institutions and achieve conservation but they have not always done so. A number of inexplicable failures or successes indicate that the present understanding is not sufficient to elaborate unambiguous policy advice. It is advisable therefore to proceed with incremental action, starting at small-scale, building on existing institutions and their self-transforming nature (Ostrom, 1990:188–191).
2.2.5 The initial allocation
The initial allocation requires identifying the future right-holders. A lottery would randomise the selection and reduce corruption without ensuring equity. A sale (e.g. an auction) would probably be economically efficient, but equity would also not be addressed, as wealthier elements of the community or rich foreigners would be favoured16. Alternatively, a regulatory or political process could be used with criteria related to historical antecedents, existence of alternative livelihoods, vulnerability, maintenance of rural communities, ethnic origin, etc.
Pre-existing allocation patterns must be actively looked for as the new allocation of rights is likely to interfere with existing ones, potentially leading to accidental exclusion, social unrest, etc. The process should be fast enough to avoid massive entry before the law is operational. The so-called Coase Theorem (Coase, 1995) holds that, if transaction costs are negligible, the economic outcome will be optimal, regardless of the initial allocation. It also stresses, however, that the outcome might not ensure equity. By symmetry, if there are significant transaction costs, the efficiency of the outcome should depend on the initial arrangement and the solution is to minimise transaction costs (Edmundson, 1995). In other words, according to Coase, it is the law that should define property in such a way as to minimise the costs of interaction between incompatible uses.
The initial allocation to new entrants is a general and recurrent problem in international and many domestic fisheries. Open-ended rights, which for existing right holders is a sword of Damocles, seriously reduce the security (and value) of the right and the incentive to conserve. The “real interest” of the fishing State applying for entry into an existing international sharing arrangement needs to be assessed but the basis for such an assessment is uncertain (Munro, 2003).
The physical size of the share allocated to each right holder, if not left to the market through which each holder acquires what can be afforded, can also be negotiated using arguments such as historical antecedents (e.g. catch records), local knowledge, the position of spawning, nursery and feeding areas, concentrations of juvenile, biomass distribution and migration (defining the zonal attachment 17 in the case of straddling stocks). The agreement, e.g. on shared stocks, may include compensations and side payments as negotiation facilitators. Highly participative systems seem to be preferable and most likely to reach acceptable agreements (Munro, 2003).
2.2.6 Administration of the rights
Rights need to be protected in order to maintain their conservation and socio-economic efficiency through time, ensuring the existence and enforcement of rules, defining who has the right to do what and how the returns of that activity should be allocated (Ostrom, 2000: 334). This requires the establishment of institutions, e.g. for monitoring the evolution of the fishery and the resource, verify conservation and economic performance as well as equity, forecast natural oscillations, ensure compliance, etc. The less effective the enforcement is, the higher the uncertainty about the future returns from the right and the lower the incentive to conserve for the future. An important element of any allocation system is the availability of dispute resolution mechanisms. With quasi property rights, ordinary tribunals may be able to resolve any dispute. In the case of international fisheries (global commons) the International Tribunal for the Law of the Sea (ITLOS) is competent and it has recently intervened in the dispute related to the management of the Pacific Southern bluefin tuna. Local institutional capacity-building is essential for a decentralised administration.
2.2.7 Value of the privilege
Obtaining an exclusive share of a resource belonging to the Nation as a whole is obviously a privilege. This privilege has a value and indeed often leads to a request for explicit or implicit “compensation” when the privilege is lost. If those fishers who may have to be excluded from the allocation need to be compensated for a loss, those obtaining the privilege might obviously be requested to pay for it. This is of course a hot issue, as fishers usually ask for compensation if forced to leave a fishery but are reluctant to pay for the privilege to continue fishing, particularly when the stocks are low and profitability is marginal. This question, too complex to be treated here, relates to the difficult one of the allocation of the rent(see below).
2.2.8 Destination of the rent
The destination of the rent is a hot issue. If well managed, renewable natural resources generate a rent as a super-profit above the normal return on labour and capital. In overfished fisheries, the rent is dissipated through over-use of capital and labour. Through resource rebuilding, the rent can be re-established progressively as profitability goes up with stock size. It could be recuperated by the State through some form of taxing or fishing-right fee under the user pays principle and used for the benefit of society. If the rent is left to the right holder, it is capitalised at the first sale of the right by its first holder (as a windfall gain) and is passed to the next right holder as an additional investment cost, possibly replacing overcapacity with over-investment.
3. ALLOCATION AND CONSERVATION INTERPLAY
Allocation and conservation are functionally inter-dependent. While conservation (or sustainable use) is the fundamental objective, allocation is one of the means to achieve it. If conservation fails, and resources are depleted, there will be no stable flow of resource units to allocate. Conversely, without adequate allocation of rights and responsibilities, there is no incentive for conservation and resources are depleted.
In fishery management literature, conservation is usually not a conspicuous part of the argument that tends to focus essentially on economic efficiency and marginally on equity. One of the reasons may be that rent maximisation, the objective of reference of most economic studies, is supposed to maximise the long-term flow of wealth to society (Hannesson, 1993; Boncœur and Troadec, 2004), an outcome that cannot be obtained −under strong sustainability constraints − without conservation of the resource flows. However, the transitional costs related to marginalisation and exclusion, in certain forms of allocation may result in social stress, civil unrest, non-compliance (piracy, illegal fishing), destructive practices (dynamite, poison), etc., that may not be properly accounted for in performance assessments and may seriously compromise the conservation outcome of the allocation process.
The evolution of the environmental capital (towards conservation or depletion and failure of ecosystem reproduction) is convoluted with that of the socio-cultural capital (towards development or poverty and failure of social reproduction) and both can be at the same time cause and consequence of the other. Despite the recognition of this strong functional link, most international agreements appear reluctant to link explicitly allocation and conservation. For instance, allocation is mentioned only once in the Code (Art. 10.2.2) and once in FSA. By comparison, access to resources is mentioned six times in the Code and eight times in the UN Agreement. The term is also used in the CBD. Rights are mentioned ten times in the Code, referring to Sovereign rights of States (eight times) or people (twice) and five times in the FSA (in reference to Sovereign rights of States' rights). By contrast, conservation is mentioned 61 times in the Code and 26 times in FSA and is a keyword throughout the CBD. In conclusion, while States refer easily to conservation as an agreed universal objective or type of use, they seem to be more reluctant to explicitly relate it to allocation or rights. A similar remark can be made regarding poverty eradication (easily agreed as a universal objective) and equity (a much more sensitive concept to agree with).
Allocation institutions have a consequence on social structures and vice-versa (Collet, 2002).This points to the need to study existing social structures and rights before introducing modifications (Ostrom, 2000) . We have stressed above that existing traditional rights had often been suppressed in the early 20th century in developed countries and their colonies. During the colonial era, many developing countries' borders were arbitrarily established and these were maintained at independence. The establishment of nationhood has often been obtained at the expense of traditional (tribal) rights, replacing or super-imposing traditional rights with the new State ones, weakening traditional institutions to strengthen modern ones. In some of these countries, the concept of re-allocation of property and use rights to indigenous or traditional communities raises for policy-makers the spectra of renewed ethnic conflicts, and solutions will be needed to achieve the benefits of re-allocation without endangering the nations'unity. The issue is not theoretical, as demonstrated by the relation between the outbursts of civil (ethnic) wars and the discovery of rich resources (oil, diamonds). This may not always be a violent evolution, however, as shown in New Zealand, where the modern recognition of Maori rights (contained in the 1840 Treaty of Waitangi) is said to have led to the development of “tribal capitalism” institutionalizing ethnic differences in that country (Rata, 2003).
Allocation and conservation are connected with equity and poverty. The growing identification of conservation with sustainable use or sustainable development connects allocation and conservation directly to poverty and equity (Weber, 2002). Lack of equity may lead disadvantaged actors (excluded from allocation) to poverty, high discount rates, non-compliance and predatory behaviour. As a consequence, achieving conservation requires reduction or eradication of poverty and extreme forms of inequity (WCED, 1987). This, in turn, requires allocations of rights. “The way out of poverty starts from the formal recognition of secured rights of access to land, resources and public goods ” (Barbault et al., 2002). The progressive destruction of agricultural soils and forests, despite apparently complete forms of property, may indicate that property is a necessary but not sufficient condition for sustainable use. The outcome of an allocation scheme will depend both on the quality of the right and the social and institutional conditions within which it is exerted, particularly the mechanisms of redistribution of the benefits.
3.1 The tragedy of unmanaged commons18
The failure of many international instruments to explicitly connect the desired conservation and the necessary allocation may be consequential. The 1946 London Conference on Overfishing failed to lay the basis of the sustainable development of fisheries in the Northern hemisphere because States could not agree on effort/capacity allocation. The present poor state of fisheries in that region can be directly connected to that failure. It would be candid, however, to assume that this happened out of ignorance.
According to the literature, the fact that local natural renewable resources could be depleted through wasteful competition because of lack of ownership has been known for centuries, since Aristotle, the Greek philosopher, and Justinian, the Roman emperor. This understanding has been recurrently rediscovered, reformulated, completed, e.g. by Lloyd (1833); Warming (1911); Graham (1935); Whitehead (1948), Gordon (1954)and Hardin (1968). By the end of the 1960s, the “tragedy of the commons”, an expression attributed by Hardin to Whitehead, was already common knowledge (Ciriacy-Wantrup, 1968:142–145). This signalled that, contrary to what was conveniently assumed, the freedom of the sea was a source of problems19 and the ocean resources were exhaustible20.
The emerging axiom, central to sustainable development, could be expressed in many popular ways: no stewardship without ownership; no responsibilities without rights; no environment well-being without human well-being; no conservation without allocation. In more technical terms, the economic theory indicates that, as the fisheries resources most often have the characteristics of a common good, undivided and subject to subtractive use, their fishing generates a set of criss-crossed negative externalities between fishermen. In a competitive context with no or weak regulations, this leads to divergence between individual and collective rationality, the individually optimal effort level being systematically higher than the collectively optimal one. The divergence grows with increasing pressure on stocks, leading to a “race for fish”, chronic overcapacity, overfishing and social conflicts.
As Ostrom (1990)strongly argued, the Tragedy of the Unmanaged Commons (Hardin, 1998) does not imply that all resources owned in common are bound to be wasted. In small rivers, lakes, estuaries, very coastal waters, and around small islands, the evidence of resources exhaustibility, the effects of the resulting scarcity and an easier defence than in the open sea, may explain the early adoption of forms of common property regimes (res communis) by traditional communities. Often area-based, combined with technical regulations and taboos aiming at conservation, some of these systems persisted for centuries but many disappeared in the processes of modernisation, colonisation, independence21, construction of the Nation State, and globalisation of the market economy (Christy, 1982; Johannes, 1981; Ostrom, 2000; Feeny et al., 1990; Berkes, 1985; Collet, 2002; Kurien, 2000; Mathew, 2003; Weber, 2002).
3.2 The Tragedy's solution: Pigou's taxes or Coase's property rights
The conventional economic treatment of externalities originates in the theory of social costs of Arthur Cecil Pigou in his “Wealth and welfare” in 1912 and “The economics of welfare” in 1920 which brought social welfare into the scope of economicanalysis. According to his analysis, an individual using a (scarce) common-pool resource creates negative externalities for other users, i.e. additional costs that are not borne by himself, but by society. This, in turn, generates a societal inefficiency in that the responsible activity will be developed beyond what would be optimal. In a Pigovian perspective, externalities are seen as a market failure in that competition fails to lead to efficiency. The public administration needs to correct the failure, forcing the producer to ”internalise” the societal cost of its activity, taking it into account together with his more private costs of production. The Pigovian instrument of choice is a tax equal to the cost of the externality to society (or a subsidy in the case of a positive externality).
In environment management, the polluter-pays principle is a direct application of the theory. In fisheries, the theory would lead to taxing effort or catches, increasing the real cost of fishing (of already economically weak industries) to bring it back the level of withdrawal compatible with the socially optimal resource level, modulating the tax on the various fisheries to redirect efforts to less pressurized resources. Once instated, a tax would need to be increased as the resource improves to maintain its efficiency. However, taxes are not often used to regulate access to fisheries resources, and present practices to use subsidies reflect instead an opposite principle of negative taxation.
In stark contrast with Pigou's theory, Coase (1960)considers that externalities do not reflect market failures but result from an incomplete definition of rights without which a market cannot effectively operate, generating high interaction costs. According to him, the solution is not in State interference with the market through taxes but in freeing the market forces through definition of rights and establishment of institutions and mechanisms to exchange the rights (market) and reduce interaction costs (e.g. regulations and tribunals). For Coase, numerous externality issues could be solved through decentralised negotiation between actors. In environmental management, this is reflected by the establishment of transferable “pollution rights”. In fisheries, it may lead to individual transferable quotas (ITQs) or other kinds of transferable individual fishing rights. According to the so-called “Coase theorem”, the initial allocation of rights has no bearing on the final economic efficiency, since in any case the most efficient economic agents will appropriate the rights through the market. Of course, this has nothing to do with equity, which means that the process does not guarantee a societally acceptable (ethical or equitable) outcome. Moreover, as it was long ago demonstrated by Coase, property rights may be an inefficient framework of organisation of production when transaction costs are high (Coase, 1937).
3.3 Allocation dilemmas
The explicit allocation of resources among individuals or groups of the present generation is one of the most complex and delicate of the tasks faced by a government because of the high potential financial and political costs incurred. Not surprisingly, these decisions are among those that governments often do not like to take or publicize.
Consumptive and non-consumptive uses compete for resources. As the impact of unsustainable forms of use becomes more conspicuous, a movement in favour of non-consumptive uses develops. This materialises through requests for allocation of resources to forms of eco-tourism (e.g. on coral reefs), whale watching, etc., at the expense of fisheries and other forms of exploitation, even though some forms of eco-tourism are sometimes criticized by environmentalists for their impact on the environment. Such allocation may take place in the framework of Integrated Coastal Areas Management (ICAM) or Marine Protected Areas. When the objective is to exclude fisheries (e.g. in no-take zones), opposition and non-compliance is to be expected, unless decided within a participatory approach in which transitional difficulties are taken into account and mitigated. This issue is getting more emphasis in the context of the Ecosystem Approach to Fisheries.
A second level of allocation is among consumptive uses, i.e.: (1) between the fishery and other sectors in a coastal zone or ecosystem; (2) within the fishery sector itself, between concurrent sub-sectors or fisheries segments.
Allocation between fishery and other sectors needs to take place within a spatially integrated management framework such as the coastal zone in which economic activities compete for scarce space and resources within the EEZ, and this highly competitive behaviour leads to resources degradation, particularly in the coastal area. Management integration requires a framework within which choices are made and policies are implemented. The main issues relate to: (i) the selection of compatible activities and exclusion of others; (ii) the allocation of space to activities or groups of compatible activities within a comprehensive coastal space-use planning; (iii) the allocation of resources other than space among competing activities. The FAO Code of Conduct contains specific guidance for the integration of fisheries into coastal area management (Fallon Scura, 1994; Chua and Fallon Scura, 1992; FAO, 1995). The allocation to conservation may be best decided in that framework. It might take the form of an allocation of quotas of preys to predators and the establishment of sanctuaries or marine protected areas. It may often involve a re-allocation of resources. With some exceptions, the Integrated coastal area management frameworks have not been very successful yet, perhaps because they represent one of the most complex area of application of the Coase theorem in which: (i) resources are numerous and of different types, often mobile and impossible to delimit precisely; (ii) users are numerous and with different objectives competing for space and resources; (iii) severe externalities are imposed by land-based activities and (iv) uncertainty and interactions costs are very high and cannot easily be reduced. Applying the Coase theorem a contrario would imply that: (i) property rights may not be a workable solution unless transaction costs are reduced (e.g. through zoning); and (ii) the initial allocation (and some agreement about it) is fundamental to the outcome.
Competition within the fishery sector is one of the most serious issues for the future of fisheries. Conflicts exist between fisheries of similar scale, for space (e.g. gear competition), resources (biological interactions, by-catch) or both (e.g. between aquaculture and capture fisheries). Space can be allocated through zoning to reduce interactions. Resources can be allocated within multispecies fisheries management, taking into account gear and species interactions, but success in that direction has been very limited. Major conflicts exist between: (i) small-and large-scale fisheries; (ii) subsistence and export fisheries; (iii) recreational and professional fisheries; and (iv) capture fisheries and aquaculture (e.g. extensive aquaculture; ranching). In countries where aquaculture is rapidly developing, that industry is looking for more and more complete and secure rights (Harte and Bess, 2000). As these rights crystallise and harden, flexibility and reversibility are reduced, and the potential for conflicts increases as conditions change.
In countries with important and dominant non-indigenous population (UNITED STATES, Canada, Australia, New Zealand), the issue of allocation between sub-sectors is compounded by ethnic considerations. In this highly sensitive context, the question of traditional rights and respect of colonial treaties plays a key role.
The EU “common pond” offers a particularly interesting case. The European Commission struggles with the issue of widespread overfishing and rampant overcapacity. The management process is in two stages: (i) a conservation-based scientific analysis and negotiation leading to advice on TACs (including precautionary TACs when appropriate) at ICES level, followed by (ii) a strictly political negotiation in which the maintenance of the socio-economic status quo (e.g. preservation of traditional fishing), social peace and the equilibrium allocation between countries (under the “Principle of relative stability”) overrides the question of conservation (Boncœur and Mesnil, 1999; Lequesne, 2003). It is an example in which allocation of access and outputs does not lead to conservation despite a complex system of allocation and sub-allocation, officially within States and unofficially through quota hopping. It is interesting in that respect to see the development of a debate on “nationalization” of resources opposed by those with more mobile fleets (in Spain, France and Netherlands) and favoured by those where local fleets dominate (in Portugal, Ireland, Scotland).
Allocation between nationals and foreigners is another thorny issue, particularly in developing and developed coastal countries, endowed with more resources they could harvest themselves. Applying the concept of “surplus”, these countries gave access and quantitative harvest rights22 to fleets belonging to Distant Water Fishing Nations (DWFNs). Following the extension of their jurisdiction, these coastal countries have rapidly developed their own harvesting and processing capacity, often without cutting down on the previous agreements, precious sources of foreign exchange. The consequence has been a huge duplication of highly subsidised investments and development of a large overcapacity that the world fishery sector is still in the process of “digesting”. In the process, conservation “took a plunge” while the majority of the world stocks were intensively exploited or overfished.
Allocation of shared resources (resources totally or partially outside EEZs) remains a serious issue and stumbling stone. The spectacular damage of the resources of the Loophole, Donut hole, Peanut hole, Nose and Tail of the Grand Banks, etc., and more recently of sea-mounts, illustrate the problem. The use and management of transboundary stocks must be negotiated with neighbouring EEZ owners. While scientific collaboration usually exists, often under the aegis of FAO, the main difficulty remains the negotiation for the allocation of shares to the various countries concerned. The straddling, highly-migratory and purely high-sea resources remain global commons with decreasing preferential rights allocated to the coastal State. They need to be exploited and managed in collaboration through regional fishery management bodies and arrangements and management measures inside the EEZ and outside it shall be compatible (Article 7.2).
Inter-generational allocation is a key to conservation. Sustainable development and responsible fisheries management require maintenance of the resources and the ecosystem productive capacity for future generations. This is a case of inter-temporal allocation of resources. While it has been proposed in the past by economists that some resources might be foregone in exchange for man-made capital offering equivalent or higher opportunities to future generations (soft sustainability), the present international consensus as illustrated by the 1982 Convention and its aliases (including the FAO Code of Conduct) is that resources should be passed unchanged to future generations (strong sustainability). Impact on these resources by present generations should be reversible within an acceptable timeframe. Considering the general disapproval of overfishing, the implication is that present generations are allowed to use the productivity of the stocks (the “interest”) while the natural capital should be preserved for future generations. From a stock perspective, this has been attempted for the last 50 years at least, albeit with generally poor results. From a general ecosystem perspective, habitat destruction, persistent pollution, deforestation and global warming do not indicate a better performance.
3.4 Allocation and conservation in ecosystems
The allocation and conservation question becomes a lot more complex in the context of ecosystems, and a number of new issues are emerging. Ill defined and poorly understood, ecosystems represent a complex, variable and changing pool of interrelated resources. Critical elements of the ecosystem (e.g. critical habitats) may be “fully” allocated to conservation. Animals attached to the bottom (e.g. oysters, clams, coral reefs) may be firmly allocated on a territorial basis together with a thin layer of water above it. The problem increases with the fluidity of the resources and the number of interacting sectors. The fact that ecosystem management objectives, parameters, indicators and reference values are not yet clear is reflected in the fuzziness of the allocation issue in ecosystem-based management. The "reflex" of environmentalists may be to ask for exclusion of any (consumptive) use, e.g. establishing a network of reserves as a precautionary device. This can, however, be a solution only in a small part of the biosphere such as no-take zones in the middle of managed MPAs. Obviously, more work is urgently needed in ecology and social sciences to resolve the issue. In an ecosystem perspective, allocating a resource leads to allocating a productivity chain, with its preys and predators. A network of causal links appears between rights holders fishing in the same area at different trophic levels or in different areas. The ecosystem approach to rights-based fisheries requires therefore an allocation matrix including shares for fishermen, predators, conservation and insurance purposes, as well as for other uses. The difficulty of managing shared ecosystems is one order of magnitude more complex and was already raised by Gulland (1984)20 years ago, when he wrote that “there are no international arrangements to facilitate the necessary trade offs …to manage …according to an ecosystem approach ”.
Allocation between fisheries and other predators is progressively gaining importance as resource-rebuilding strategies are being studied to comply with the requirements of the World Summit on Sustainable Development (WSSD). Fishermen are human predators operating on behalf of fish consumers. As such, they compete with other natural predators for space and resources. In Australia, of about 1 000 000 tonnes of fishery resources being extracted from the sea 20 percent are taken by fishermen, 78 percent are taken by marine mammals and birds, the rest being taken (allocated) to other uses, including conservation (Kearney, 2003). The implication is that other predators consume more fish than humans, a fact that society might not have “registered” and formally analysed yet. The argument has been used to suggest that reducing the abundance of predators would free resources for humans (Tamura, 2003), a proposal raising serious concern and opposition in various parts of society. At the same time, the present depletion of natural predators has affected the quality and level of fisheries harvest (Garcia and Newton, 1997),as well as the ecosystem structure and functioning, with important consequences for fishers themselves (Pauly et al., 1998; Jackson, et al., 2001).
Competition between fishers and fish also occurs for instance when nets set for other purposes interfere with the passage of large cetaceans, entangling them. This interaction leads to damage to the fishing gear and can be fatal to the animals. The response sought by conservation has been the establishment of sanctuaries as well as the banning of drift nets. In both case, the economic activity is simply obliterated. Competition for food resources occurs when the fishermen and an animal predator look for the same prey. The competing predator may be targeted by fisheries (e.g. cetaceans, tunas, sharks and groupers) or not (e.g. seabirds). In both cases, an allocation of preys to some predators to ensure their conservation has been proposed and implemented, e.g. in the North Atlantic.
Marine Protected Areas (MPAs) may be seen as a test bed of the ecosystem approach to fisheries and of the interplay between the CBD and the 1982 Convention. They imply in most cases a non-explicit total or partial re-allocation of existing of fishing communities, often without compensation. While their impact on local biodiversity is evident, their systemic impact on the resource systems and on fisheries and communities is improving but remains poorly documented. There is still some way to go before full consensus is developed between fishery scientists and ecologists (Hilborn et al., 2004)and a fortiori between fishers and conservationists, and more testing is needed. As MPAs grow in size and include more uses, their use becomes as problematic as in Coastal Area Management, requiring, for instance the development of alternative source of livelihood for displacement of existing activities to other areas.
Spatial boundaries are central to both allocation and conservation. Garcia and Hayashi (2000)have stressed that, during the last 50 years, the allocation of world resources has progressed through progressive splitting of the resource pool into successively smaller bundles23, from global commons to ITQs. During the same period, however, the requirements of conservation, particularly the Ecosystem Approach to Fisheries, demand integrated management by larger and larger areas and a change of the management scale from single species to multispecies stocks, from assemblages to whole ecosystems, from MPAs to coastal areas and Large Marine Ecosystems.
The contrast between the two evolutions is striking. The first leads to more and more specific and complete rights at the smaller possible scale (individual or communal). The second, on the contrary, leads to the definition of objects the growing complexity and uncertainty of which do not easily lead to manageable rights, except through total exclusion. The first is required for decision-making to establish security and liability and generate responsibility. The second is required for scientific understanding and awareness-raising. If the two processes of allocation and conservation are to be integrated towards sustainable development governance, it will be necessary to develop institutional bridges between the two processes at the appropriate scale.
3.5 Institutional underpinnings
The interplay between allocation and conservation in fisheries is governed by international instruments, regional mechanisms, and national legislation. Some of the related issues are briefly addressed below.
The UN Convention on the Law of the Sea is the legal foundation of sustainable development in the ocean. In 1945, the unilateral extension of UNITED STATES's jurisdiction to its entire shelf (Truman Proclamation), followed in 1952 by Chile, Peru and Ecuador claiming over a 200-miles jurisdiction, allegedly to protect their coastal resources from depletion by DWFNs, ignited a progressive but revolutionary process of re-allocation of ocean resources between Nations. The process took about half a century, culminating with the adoption, in 1982, of a legally binding Convention which entered into force in 1994. The convention is the legal foundation of sustainable ocean development and it provides that: “In the exclusive economic zone, the coastal State has… sovereign rights 24 for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil…( Article 56.1)”. Sovereign rights include the rights to legislate, manage, exploit, control access and to determine property regimes applicable to the resources. The right of alienation (or right to sell, grant, lease), which together with the others constitutes complete property, is granted in Article 72 while Article 62.4.1 stipulates that the State can fix quotas.
The Convention establishes therefore the conditions for States to re-allocate these resources within their jurisdiction and negotiate allocations for shared resources (whether highly migratory, transboundary or straddling). It does not provide any explicit guidance about allocation except in relation to the surplus.25 In addition, the coastal State has an obligation of conservation, a duty of stewardship, under a concept of strong sustainability.26
The rights resulting from the harshly negotiated convention are complex and reflect a gradient in property depending on the resources types. They appear to be exclusive and close to full ownership when the resource is either fixed to the shelf or entirely circumscribed in the exclusive economic zone (EEZ). If eggs and larvae are dispersed beyond the EEZ, the ownership cannot be complete as the coastal State loses control of one or more life stages of its resource. Ownership of the coastal State is also ensured for anadromous resources that originate in the coastal State's inland waters such as salmon and sturgeon.
The Convention explicitly provides for joint ownership when the resources form a common pool extending through two or more EEZs (transboundary stocks) extend into the adjacent high seas (straddling stocks) or migrate on large distances (highly migratory species). As the high seas portion of the stock is accessible to all, the Convention established in fact a regime of more or less regulated global common. For these shared resources, the Convention requires instead that divergences be solved through international cooperation. The respective shares must be negotiated and the resources should be managed in a bilateral agreement or a regional fishery body or arrangement. Ideally, they should be managed as a common resource to ensure conservation and equity. Disagreements should be resolved through statutory dispute resolution mechanisms, or through the Tribunal on the Law of the Sea (ITLOS). The purely high seas resources (e.g. on sea mounts) are not explicitly addressed, leaving them in a basic regime of free and open access. Despite this, thousands of transboundary stocks are still not jointly managed.
During the 1990s, a number of international agreements and arrangements 27 have progressively specified and strengthened this regime, increasing the coastal states prerogative for high-sea resources adjacent to EEZs or strongly connected to it (i.e. the FSA) or entirely circumscribed between EEZs (e.g. in the Barentz Sea Loophole, Bering Sea Donut hole and Okhotsk Sea Peanut hole). The process may not be stabilised yet and some countries contemplate a substantial extension of their jurisdiction beyond 200 miles such as in the Chilean concept of Presential Sea.28.
The Convention on Biological Diversity, adopted ten years later (in 1992) does not seem to modify the institutional context of the allocation/conservation interplay in any way. Focusing on intellectual property rights and patents of genetically modified organisms, it does not really deal with the natural resources, leaving them under the sovereign rights of the countries, the implications of which have already been discussed above. Considering, however, that it is extremely difficult to detect, control or impede bioprospecting, the implication is that in the CBD framework natural resources are de facto under open access, unless already appropriated by the country to specific holders (Weber, 2002).
Regional fishery bodiesand arrangements (RFBAs) are the institution of choice for the management of shared resources (both straddling and transboundary) but, with few exceptions, their performance in relation to conservation has been poor. These institutions have generally been established to foster international collaboration as a means to achieve conservation and it must be concluded that collaboration is necessary but cannot replace allocation29. Many of them do not have any mechanism of allocation of resources among their members. The most developed do and use TACs, often subdivided into national quotas, leaving the responsibility of the sub-division of national quotas (if any) to their members. They nonetheless fail to achieve their conservation objective because of: (1) lack of power to adjust fishing capacity and effort to quotas; (2) persisting “race to fish” between and within national fleets when the TACs or national quotas are not sub-allocated; (3) inaccurate statistics; (4) lack of enforcement capacity leading to low level of compliance (under-reporting, illegal, unreported and unregulated (IUU) fishing by non-parties; (5) difficulty to allocate quotas to new entrants, potentially leading to IUU.
In the context of an ecosystem approach to fisheries, regional institutions meet with additional (perhaps not exclusive) difficulties. For example, they may not have a comprehensive enough mandate. This is the case of the International Whaling Commission, the mandate of which does not include small cetaceans. It is also the case of the Indian Ocean Tuna Commission, the mandate of which does not cover by-catch species.
The UN Fish Stocks Agreement (FSA) is the institution of reference to manage shared resources in the high seas and it intends to strengthen the arm of the coastal state and regional fishery management bodies and arrangements. It deals with the strategic confrontation between coastal states and distant-water fishing nations (DWFNs), both roles being often played by the same nation. Effective regional cooperative management is complex due to the potential number of participants and the differences in: (i) legal status (States, geographical entities, private firms); (ii) socio-economic status (developed and developing nations); (iii) objectives and histories. Potential new entrants (and fishing non-parties) represent potentially numerous free riders and a source of IUU fishing weakening management schemes. The FSA intends to overcome the difficulty by allocating, de facto, special use rights to members of the RFBAs, requesting non-members to join such institutions and in any case to apply the measures adopted by it. If such measures include quotas, the absence of an allocation to non-members or new entrants, including through the market, is a major impediment. To counter free-riding and abuse, the thorny question of the real interest of the potential new entrants is being examined. The implementation of the FAO International Plan of Action on Illegal, Unreported and Unregulated Fishing (IPOA-IUU) is fundamental for the performance of RFBAs.
4. DISCUSSION AND CONCLUSIONS
Conservation and allocation are the two main functions of fisheries management. The interplay between allocation and conservation has been known for centuries. Scientists have described the problem and advised the governments recurrently for the last 50 years. Beyond a few miles from shore, however, resources remained practically unallocated and accessible to all until the mid-seventies, when EEZs began to be unilaterally expanded30. During that period, governments have experimented technical regulatory measures aiming at conservation, through the regulation of gears, vessels, and operations and constraints on effort, including through limited entry and constraints on removals quantity and quality. In the process they learned, the hard way, that the approach did not really perform as hoped.
It is now quasi-generally agreed (at least by scholars) that forms of high-quality individual or communal rights, as appropriate, are needed, together with adequate institutions for their administration. The movement has tended to connect the allocation (devolution) of rights to that of responsibilities under a principle of subsidiarity31. The growingly accepted paradigm is that there will be no stewardship without ownership; no responsibilities without rights; no environment well-being without human well-being and no conservation without allocation. Following the general trend towards rights-based fisheries, a wide movement has started in favour of various forms of partnership management, including co-management, even though the capacity of fishers' communities to effectively undertake the tasks concerned is limited32.
While the lessons of the last 2–3 decades are only becoming familiar to fishery managers, the need to add ecosystem considerations seriously complicates the adjustment task. While the sector is still struggling with the implementation of the 1982 Convention, a number of new international instruments and initiatives33 have precipitated the shift to an ecosystem approach to fisheries adding many dimensions to the allocation and conservation problem.
Various degrees of conservation are possible, depending on the balance of objectives between social and ecosystem reproduction, with significantly different cost implications for rights holders and society. Various forms of allocation are also possible, the outcome of which, in conservation terms, depends to a large extent on the nature of the rights granted (e.g. their security and transferability); the asset allocated (e.g. time, space, catch, effort, etc.) and the method used to regulate the access (e.g. through regulatory, command-and-control, measures or through economic incentives such as taxes or rights.
Experience has shown that taxes are not favoured in fisheries, and negative taxes (i.e. subsidies) are generally considered as having substantially contributed to overcapacity, overfishing and failure of conservation in general.
The rights-based fisheries concept is getting growing attention in fisheries. It is much less developed in relation to ecosystem management but the ecosystem approach to fisheries may accelerate its general application in the present context of globalization. One of the main challenges is in choosing between individual and communal rights and in finding the right balance between conservation, economic efficiency and equity. Globally, the process will need to pay attention to two global objectives: food security and poverty alleviation.
The interplay between allocation and conservation is very relevant for the interplay between ecosystem management and fisheries management. As the two types of management aim at sustainable use, there is a significant potential for synergy and the Code of Conduct articulates indeed both types of requirements. However, each type of management is underpinned by different instruments, implemented by different national, regional or global institutions with partially overlapping objectives and constituencies. The reality is that the apparent agreement on the concept of sustainable use hides significant differences in the understanding of the concept, the means to achieve its ends and above all, perhaps, in the resources allocation it implies. This situation sets the scene for misunderstanding, wasteful competition for power and significant interaction costs.
The adoption of systems of rights is not, in itself, a sufficient guarantee of long-term rent maximisation, social welfare and conservation (Boncœur, 2003). The interplay between allocation and conservation, affected by climatic vagaries, is also influenced by the time horizon of the actors and their vision of the future. Their weighing of short-term versus long-term benefits is conditioned by their personal discount rate, depending, inter alia, on the economic and financial context in which they operate. A discount rate higher than the intrinsic growth rate of the resource will normally induce non-sustainable extraction rates.
A practical conclusion might be that that if society attaches an existence value or an option value to resource conservation per se, it may be necessary to impose to right holders and to enforce a specific constraint of sustainability. This constraint is enshrined in the sovereign rights provided by the 1982 Convention and must be passed on during the successive process of sub-allocation and enforced by the coastal State under its original obligation.
In terms of policy changes, most governments face two main options: (i) to maintain social structure as a priority, through the historical fishery model, assuming that this model is still functional, at the expense of economic efficiency, injecting public resources through rehabilitation and re-distributive programmes; or (ii) support the outright liberalisation, concentration and competition for the sake of economic efficiency, injecting public resources to finance the social costs of transition, including that of exclusion. These two options might not be mutually exclusive in a transition period (Ostrom, 2000) and might be used simultaneously either in a layered system of coastal and offshore rights as in Japan (Asada and Hirasawa, 1983), radically transferring to coastal communities complete property rights together in a concerted effort to develop their capacity to effectively use and defend them34. Political shifts towards large-scale attribution or simply recognition of “hard” property rights to coastal communities might have very significant consequences for the sector, particularly in highly populated countries. There are, however, very few analyses of that option yet and the ongoing globalisation will not facilitate that outcome.
Common pool resources
Ostrom (1990)defines common pool resources “as natural or man-made resources systems which are sufficiently large to make it costly − but not impossible-to exclude potential beneficiaries from obtaining benefits from its use. Berkes et al. (1989)give a perhaps clearer definition of “a class of resources for which exclusion is difficult and joint use involves substractability ”.In Ostrom terminology, fishing grounds or stocks may be common pool resource systems while catches taken from them are resource units. Withdrawal of resource units from a resource system is act of appropriation and who does it is an appropriator. While a common pool resource system (a fishing ground) can be jointly appropriated, the resource units withdrawn from it (e.g. the catch) are private. It may be costly to exclude any appropriator from benefits deriving from improvements of a common pool resources system, even if he does not contribute to its management (free rider) and undermines the capacity for others to do so (subtractive or competitive use).
Ostrom (1990)stresses the need to avoid confusing the characteristics of a resource (as discussed above) with that of the system of use. A common property (or common) is a system of joint use underpinned by jointly agreed rules, including access rules, and regulations.
When they invest or act, individuals usually attribute less value to future benefits than to present ones, and the farther away the future benefits are, the lower its present value. They tend to “discount” the future. The discount rate depends inter alia on the information available, the perceived probability to reap future benefits and on present alternatives for investment or action. Because vulnerable and insecure people usually have particularly high discount rates, poverty leads to the degradation of the only resources they have access to. Uncertainty about rights may also lead, for the same reason, to degradation of private resources. Property rights, as well as social norms of behaviour (religion, ethics), may help reducing uncertainty about the future and related discount rates (Ostrom, 1990: 35).
Economists view equity as part of the equity-efficiency axis along which the performance of policies is assessed. From that angle, one needs to distinguish: (i) Private from collective efficiency: accounting for the externalities of the first; and (ii) Short-term from long-term efficiency: accounting for conservation in the second. When facing multiple objectives or conflictual interests, a relatively frequent situation, a programme is considered “efficient”, or “Pareto-optimal” when no alternative exist that could improve the degree of fulfilment of an objective or the satisfaction of an interest without compromising the others. Efficiency is a condition of optimality but it should not be confused with it.
In fisheries and environmental management contexts, “equity” relates to fairness, justice, e.g. in the allocation of rights or determination of claims. It may also relate to impartiality, freedom from bias of favouritism. It requires that similar options be available to all parties. Equity is a principle of stewardship by governments and the community. A number of sub-concepts have been referred to but may not meet with consensus. Inter-generational equity,for instance, is widely referred to and requires that future generations be given the same opportunity as the present ones to decide on how to use the resources35. It can be sought through avoidance of actions that are not potentially reversible on some agreed time scale (e.g. a human generation), consideration of long-term consequences in decision-making and rehabilitation of degraded physical and biological environments. Lack of intra-generational equity (i.e. equity among segments of the present generation) is recognized as one major source of conflict and source of non-compliance. Intersectoral equity would require, for instance, that the fishery sector be fairly treated when its interests conflict with those of other sectors. Cross-boundary equity may be a condition to successful shared stocks agreements between countries. Intercultural equity is relevant when allocating resources to different cultures or defining rights of minorities (e.g. between indigenous and other populations). Lack of equity leads to dissatisfaction or poverty or both and may lead to poor compliance.
Resource allocation is about property rights, the legal rights to control resources. Property is generally defined as a right on a thing such as an object, a good or a service36. Ronald Coase (1960) views property, instead, as a right to take a specific action such as the right to dump pollutants in the atmosphere or to produce agricultural products in a particular area37.
For lawyers, property is the right to dispose of a thing in every legal way, to possess it, to use it and to exclude everyone else from interfering with it. For economists, property refers to a “bundle” of rights including: (i) access: the right to enter and enjoy non subtractive benefits; (ii) withdrawal: the right to harvest, substract; (iii) management: the right to regulate); (iv) exclusion: the right to defend the property and (v) alienation: the right to transfer, lease, sell all or part of this bundle of rights (Ostrom, 1990; 2000). Some of these rights may be further sub-divided38. The granting or acquisition of all four main rights characterises full property or ownership.
In the Roman Law, property rights compound the right to use a tangible or intangible asset (usus), the right to harvest and appropriate the returns from the asset (fructus)39, the right to give, sell and destroy the asset or its returns (abusus). This latter right is the foundation of complete ownership. Since these rights are valid vis-à-vis anybody, they are also called absolute property rights. From both perspectives, although only one or more of the first three rights (access, management, and exclusion or usus, fructus and abusus) may be transferred for some time, establishing relative property rights (the right to sell remaining with the initial owner), full ownership will only be transferred if all the mentioned four absolute rights together are transferred (Kerrest, 2002).
The theory indicates that the structure of property rights influences the allocation and utilization of resources in specific and predictable ways. The transfer of incompletely specified rights and the resulting attenuation of property − whether intended or not − generates uncertainty about the asset and does not provide the incentives for its optimal use. It reduces the owner's expectations about the uses of the asset (shrinkage of economic options) and therefore decreases its economic value (Furubotn and Richter, 1991).
Resources that can be simultaneously utilised by many users without reduction of the respective availability (non-subtractive or non-competitive use) are considered public resources or public goods (e.g. a maritime landscape, Internet). A public good cannot, in principle, be appropriated although its use could lead to saturation. Attempts to appropriate it (e.g. by coastal developments or aquaculture) often lead to conflict. Whether a resource is public or common depends, however, on the type of use. A coastal area may be considered a public resource system for a set of “non-consumptive” uses (e.g. conservation, diving, bathing, scientific observations) while it would be a common resource for other uses (e.g. fisheries and aquaculture). The concept of sustainable development, for instance, implies that natural renewable resources be treated simultaneously as:
Public resources when considered across time and generations, inasmuch as their use by some generations does not reduce the possibility of use by others, at least under a strong sustainability concept. They need to be enhanced and preserved; and
Common resources, when considered at a given time, inasmuch as the use by some members of the present generation affects the use by other members. They need to be managed.
Res nullius/res communis
The concept of common property corresponds to the legal concept of res communis as a “thing which belongs to a group of persons, may be used by every member of the group, but cannot be appropriated by anyone” (Kerrest, 2002). The high seas are a good example of modern res communis. It should not be confused with a system of non-property (or res nullius) in which resources have no owner until they have been captured. “A res nullius is a thing which does not belong to anybody and may be appropriated by anybody” (Kerrest, 2002). However, for the property so generated to be legal, capture must be done in conformity with the relevant regulations. As such regulations could indeed restrict access, res nullius should not be automatically confused with open access. The confusion between res nullius and res communis in the Tragedy of the Commons (Hardin, 1968) has been abundantly clarified, including by Hardin himself (1998), as the Tragedy of unmanaged commons, recognising that the problem was not so much the common pool nature of the resources but the lack of regulation of its access and use.
The 1982 Convention and the CBD recognize the sovereign rights of States over the natural resources placed under their jurisdiction but sovereign rights (a legal institution) and property rights (an economic institution) are apparently not considered synonymous. The following comes mainly from Gerald Moore, pers. com.,40 and Correa, 1995.
Sovereign rights are the rights of independent sovereign States to legislate, manage, exploit and control access to the natural resources under their jurisdiction. They include the right to determine property regimes applicable to those resources. Sovereign rights imply independence and exclusivity. The rights appertain only to the sovereign power concerned even though it may be subject to limitations or restrictions, in particular when States agree to exercise their sovereign rights in a particular way and subject to agreed rules, which then become binding on them. In the 1982 Convention, for instance, the statements recognizing the sovereign rights of States over their natural resources are coupled with affirmations of their responsibilities to manage those resources in such a way as to ensure their conservation. Sovereign rights are not property rights but they imply the right to establish property regimes. In the process of doing so, a State may very well determine that certain natural resources are the property of the State. It may also decide to alienate property, within its system of property law. As a consequence, while the 1982 Convention does not refer to property rights and has not explicitly required their establishment, it has explicitly given to the States the right to do so.
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2 Paper originally presented at the 4th World Fisheries Congress, Vancouver, Canada, May 2004, as an opening to the session on Allocation and Conservation.
3 The views expressed in this paper are solely those of the authors, Serge GarciaFAO Fisheries Department, Fisheries Resources Division, Viale delle Terme di Caracalla, 00100 Rome, firstname.lastname@example.org, and Jean Boncœur, CEDEM, University of Western Brittany, 12 rue de Kergoat, CS 93837, 29238 Brest Cedex 3, France (Jean.Boncœur@univ-brest.fr).
4 Despite and accepting all its scientific and operational shortcomings.
5 According to Ostrom (1990: 46–50), appropriation is the way in which the flow of resource units (e.g. catch) can be allocated in a fixed or time-independent manner so as to avoid rent dissipation and reduce uncertainty and conflict over the assignment of rights. It relates also to the allocation of spatial and temporal access to the resource, accounting for space-time heterogeneity and related uncertainties. Issues of relevance are commitment, equity, compliance, credibility and deterrence.
6 See definition in the Appendix.
7 At the beginning of the 20th century, traditional rights have been voluntarily weakened by national and colonial powers, generalizing a situation of quasi open access and common property (Ostrom, 2000; Weber, 2002).
8 In the long-term, equity, a concept rarely specified, may not be in contradiction with economic efficiency and is implied in the concept of long-term optimal social welfare.
9 Collet (2002) stresses that in traditional societies cooperation, solidarity, participation and democracy, morality (ethics), dignity, stewardship and respect are instruments and processes which are operational in community property rights.
10 Concentration of rights in a few hands is often perceived as a threat to artisanal enterprises, although it has already started, even in the present conditions of ownership, for reasons of economies of scale (Lequesne, 2003).
11 Even when relative quotas are used, quota holders may still exert pressure to ensure the highest allowable catch possible. Such pressure may be attenuated, however, by: (1) transferability, because the market value of the property right (if complete) depends on the state of the resource; and (2) associating the quota holders to the determination of conservation measures in a transparent manner.
12 The argument is weak as this risk is, of course, just as high in a conventional management system.
13 Loi d'orientation sur la pêche maritime, Journal Officiel de la République Française 97051 du 19/11/1997.
14 The term was created in November 1967 when Ambassador Arvis Pardo, Permanent Representative of Malta to the United Nations, urged delegates to consider the resources of the oceans beyond national jurisdiction as "the common heritage of mankind".
15 Ostrom refers to appropriation and provision.
16 In many countries, the allocation would probably be done with some expression of a national preference.
17 i.e. the degree of connection between a stock and a particular EEZ.
18 The Tragedy of the Commons (Hardin, 1968) has been recast as the Tragedy of Unmanaged Commons (Hardin, 1998).
19 The freedom of the sea instituting free and open access in the oceans, conveniently elaborated by Hugo Grotius (1609) on the assumption that ocean resources were inexhaustible (there was no scarcity) and ocean property would be too difficult to defend anyway.
20 The inexhaustibility of the sea was assumed by Grotius (1609) and supported by T.H. Huxley. Doubts about this opinion were expressed however by Alfred Marshall who, at the end of the 19th century recognized the productivity of the seas but expressed concern about the impact of the steam trawlers development forecasting that “the future population of the world will be appreciably affected ... by the available supply of fish” (Marshall, 1920).
21 On the African continent the laws expropriating traditional communities were adopted around 1929–1930 (Weber, 2002).
22 Expressed in vessel or catch tonnage.
23 e.g. (1) between high seas and the 200 miles zone; (2) into EEZs; (3) into fisheries; (4) into individual quotas resources.
24 See Glossary in the Appendix, for a definition.
25 The concept of surplus qualified the sovereign rights. They are not completely exclusive as the coastal State shall give to other States access to any surplus it does not have the capacity to harvest itself, i.e. the difference between the national catch and MSY. This provided a mechanism to facilitate access of DWFNs to EEZs and ensure that all stocks are exploited at Maximum Sustainable Yield and it has been used in the past by some fishing nations during fishing agreements negotiations. The problems raised by this provision have been discussed by Garcia et al. (1986). Following the 1995 FSA, however, MSY should be considered as a limit (not to reach) and not as a target, and the concept has lost any practical relevance.
26 The State does not have the right to exhaust (extinguish) the natural renewable resource put under its jurisdiction by the Convention.
27 e.g. the 1999 Barentz Sea Loophole Agreement; the 1994 Convention on the Conservation and Management of the Pollock Resources in the central Bering Sea (Donut Hole Agreement) and the 1995 UN Fish Stock Agreements.
28 Mar Presencial, in Spanish, a concept proposed in 1992 by the Chilean Admiral Martinez and confirmed by President Frei in 1994.
29 The first international fisheries congress was held in 1896 and the first international conventions were established in the late 1800s and early 1900s: North Sea Convention (1882); Spitzbergen Convention 1920); Baltic sea Convention (1929); Whaling Convention (1931). the first international convention for fisheries was proposed in 1900 in Paris, without success (Ciriacy-Wantrup, 1968).
30 Even though they remained formally un-allocated until the 1982 Convention came into force in 1994.
31 i.e. allocating rights and responsibilities at the lowest level possible.
32 The heralded decentralisation, expected to reduce management costs has, itself, costs that are often “forgotten” by its champions.
33 The 1992 UNCED Agenda 21 and CBD, the 1995 FAO Code of Conduct for Responsible Fisheries, the 1995 CBD Jakarta Mandate, the 2002 Reykjavik Declaration33and the 2002 World Summit on Sustainable Development (WSSD).
34 Where appropriate, of course, and after having verified that the local conditions exist for the success of the institutional change.
35 This, in turn, raises inter alia, the difficult question of the socially optimal discount rate.
36 A particular problem is that marine resources are difficult to “own” because of their invisibility, mobility and fugitiveness.
37 Curiously, this approach that has an obvious interest for fisheries is the theory defended by Johann Gottlieb Fichte, at the beginning of the 19th century when defending the concept of a “commercially closed State” in a violent advocacy against economic liberalism and apology of integrated planning (Fichte, 1800).
38 For instance, the right of access might be subdivided by seasons. The right of withdrawal might be subdivided by type of gear or species.
39 The concept of usufruct (usufructus), defined as the right of using the returns of someone else's asset is also potentially useful in fisheries.
40 Former FAO Legal Counsel.