Sean Pascoe and Dominique Gréboval66
This paper addresses the progress to date of the implementation of the FAO International Plan of Action for the Management of Fishing Capacity. The plan calls for assessment of overcapacity and for taking steps to manage capacity and to reduce it when required - both sustainably and in a way that does not adversely affect other national or international fisheries. Main issues faced in implementation are reviewed - including institutional deficiencies - iand paths to solution are proposed in relation to national and international fisheries. The core issues are discussed in relation to access to all fisheries, to rights and to financial incentives/disincentives. Key institutional and policy implications are also analyzed, especially with respect to establishing management partnerships with stakeholders (building consensus and trust for effective co-management with few players (industrial fisheries) and a larger number of players (small scale commercial and recreational fisheries) or few collaborating States (in the context of Regional Fisheries Management Organizations).
Overexploitation and the unsustainability of fisheries is a major international concern. Recently, considerable attention has been paid to illegal, unregulated and unreported (IUU) fishing and its effect of the world stocks - especially on the high seas. While this is a significant problem, much of the fishing activity that contributes to overexploitation (unhealthy stocks and/or economic waste) occurs in waters that can be controlled, either through the introduction of effective management, or the enforcement of existing management.
The focus of this workshop is on factors that contribute to unsustainability and overexploitation in fisheries. A critical factor identified in previous workshops is the existence of excessive fishing capacity, resulting in unsustainable harvest rates (Gréboval, 2002; Swan and Gréboval, 2004). Indeed, both FAO (1997) and Mace (1997) identified overcapacity67 as the single key problem afflicting marine capture fisheries resources. However, excess fishing capacity is not a factor affecting unsustainability per se, as it is the consequence of the set of economic incentives that result in both overcapacity and unsustainability. Therefore, it is the visible face of overexploitation.
As will be shown later in this paper, the existence of excess capacity does not necessarily result in unsustainability, but does lead to lower production levels than might be achieved, and also a reduction, if not total dissipation, of the economic benefits that may be generated from a fishery. However, overcapacity can also result in stock depletion, and unless capacity is effectively controlled, there exists the potential for unsustainable levels of fishing effort to be developed and exerted.
Capacity management is generally concerned with the explicit control of the level of capital employed in the fishery, unlike effort control which is also concerned with the utilization of this capital on targeted stocks. Cunningham and Gréboval (2001) define capacity management as the implementation of a range of policies and technical measures aimed at ensuring a desired balance between fixed fishing inputs and production from capture fisheries. This may be through direct controls, such as limited entry schemes (eventually including buyback programmes), or indirect controls through developing appropriate incentive systems for capacity to self-regulate.
In response to growing concerns about the relationship between overcapacity and overexploitation, FAO (1999) produced an International Plan of Action for the Management of Fishing Capacity (IPOA-Capacity). This calls for all Member States to achieve efficient, equitable and transparent management of fishing capacity by 2005. The progress in the implementation of the IPOA-Capacity was recently reviewed at global level68. As part of the review, the factors that constrain the effective development of capacity management plans were examined.
In this paper, the relationship between overcapacity and unsustainability will be briefly examined, and the mechanisms available for managing capacity will be reviewed. The progress in the implementation of the IPOA will also be discussed. The main focus of the paper will be on the challenges experienced by Member States, and in particular those that constrained their ability to introduce effective capacity management plans.
2. THE RELATIONSHIP BETWEEN OVERCAPACITY AND UNSUSTAINABILITY
Overcapacity and unsustainability are essentially two facets of the same problem. The fundamental factor leading to the existence of excess capacity is the lack of well defined property rights in fisheries. Without well defined property rights, individuals will increase their effort, and in fisheries without efficient licence limitations, new fishers will enter, provided that greater profits can be earned in the fishery than in other industries or activities. As a consequence, the level of investment in the fishery can exceed that required to harvest the resource at its greatest productivity level (e.g. maximum sustainable yield), and also the level required to harvest the resource to achieve its greatest economic value to society (i.e. the point at which economic benefits, or resource rent, is maximized).
While the lack of property rights can lead to excess levels of capacity building up in fisheries, it doesn't necessarily result in unsustainable harvest levels. In theory, fishers will stop entering the fishery when there are no more economic profits to be gained. This can result in a sustainable level of output that is less than optimal (from either a biological or economic perspective). Difficulties arise, however, if even greater levels of capacity enter the fishery. This may occur if short term catch rates are substantially higher than at their long run equilibrium level. Hence the fishery may appear more profitable than it is under average conditions. The result of induced investments is that the fishery would, in the longer term, be operating at an economic loss, even if some of this capacity may eventually exit the fishery returning to a sustainable (but sub-optimal) level.
It is at this point that a second important factor of unsustainability comes into play, namely barriers to exit. These take two main forms: the lack of alternative employment opportunities and the ‘non-malleability’of capital. In many cases, fishers have nowhere else to go. Similarly, there are few alternative uses for fishing vessels when fisheries are overexploited. As a result, the ‘opportunity cost’69 of both labour and capital is negligible if not zero, and fishers will continue to operate in the fishery as long as they can continue to cover their running costs. This would result in the stocks and economic performances being further depressed.
The resultant low incomes in the sector, the lack of alternative employment opportunities and the non-malleability of capital may attract subsidies from governments. The existence of capacity-enhancing subsidies further exacerbates overexploitation, and therefore can result in unsustainability. Subsidies may either reduce the cost of fishing (e.g. if the cost of capital or fuel was subsidized) or increase the revenues of fishers (e.g. through price support). In either case under relatively free access, they result in increased fishing activity and subsequently increased overexploitation.
A further factor that links overcapacity to unsustainability is technological development. Even with barriers to exit, a sustainable position in the fishery can be achieved, albeit at a substantially lower level than is desirable. However, technological developments may either reduce the cost of fishing or increase the catch per unit of fishing effort. As a result, fishing capacity may expand further even though the level of capital70 in the fishery does not increase, creating further pressures on the stocks.
3. DEALING WITH OVERCAPACITY - INTERNATIONAL APPROACHES
As noted above, capacity management is concerned with the control of the level of capital employed in the fishery, and hence aims at improving both the economic and biological sustainability of the fishery. There are numerous approaches to capacity management, and in many cases combinations of approaches are applied.
The main instruments used in capacity management can be classified as either incentive-blocking or incentive-adjusting measures. Incentive-blocking instruments are largely aimed at preventing further expansion of capacity through command-and-control style restrictions on entry and on fishing activities. Incentive-adjusting instruments, in contrast, provide incentives for fishers to adjust capacity themselves. These approaches have been well documented (e.g. Gréboval and Munro, 1999; Cunningham and Gréboval, 2001; Ward and Metzner, 2002) so will not be discussed in any detail in this paper.
A recent survey was undertaken by FAO to determine the extent to which Member States have adopted some form of capacity management plan, and to identify any constraints or challenges faced during the development and implementation of such a plan. Eighty member States responded to the survey, 14 of which were major producers.71 Details of this survey and the main results are presented in FAO (2004).
Capacity management in some form or another is undertaken in most countries. From the FAO survey, around 80 percent of respondents, and over 90 percent of the major producers, indicated that capacity management has been integrated into their general fisheries management policies. Capacity management measures implemented by Member States varied considerably, ranging from basic entry restrictions to rights-based management (Figure 1). At the most basic level, these involve licensing fishing vessels and limited entry, generally combined with area and/or time closures as well as gear restrictions.
Problems of overcapacity requiring urgent remedial action were identified by around two thirds of the responding States. To address this overcapacity, capacity reduction programmes were being implemented by almost three quarters of the major producers over the next five years, while over half of this group had implemented some form of capacity reduction programme in recent years. These programmes have predominantly involved buy-back of licence and/or vessel.
From the survey, nearly 90 percent of respondents indicated that they employ some form of restriction on either: area, season fished, or gear - restrictions that may be successful in protecting fish stock or productivity, but often worsen the overcapacity problem unless they are accompanied by effective measures to restrict access. Restrictions on access and the level of inputs have therefore been adopted quite widely (by about 85 percent of respondents) and are the most frequently used form of capacity management. A key issue is therefore, the effectiveness of access restrictions - generally reduced, inter alia, by input substitution, technological development and non-compliance as fishers would still have incentives to increase their capacity and fishing effort rather than to match fishing capacity with a set quota.
Figure 1. Fishing capacity management activities undertaken by Member States
Source: FAO, 2004
From the results of the survey, there is some evidence that greater consideration in general is being given to incentive-adjusting management systems such as rights-based approaches and financial incentives. Around 40 percent of the respondents have used some form of individual rights-based approach, while around 50 percent have employed some form of community rights-based approaches. An even greater proportion (around 60 percent) stated that they have applied some form of tax or royalty system, although not necessarily for the purpose of managing fishing capacity.
A number of developing countries have begun to complement access restrictions with catch-based management systems, imposing a total allowable catch for individual species. For example, Morocco has implemented such a system for its cephalopod resources. This approach has had the effect of encouraging a race for fish and the development of fishing capacity. Faced with this difficulty, the Moroccan authorities are currently looking into moving the management system towards an individual use right basis (Cunningham, 2004). Similarly in Peru, both industry and government authorities now favour the use of individual transferable quotas (ITQs) despite earlier resistance (Aguero, 2004).
4.CHALLENGES FACING THE IMPLEMENTATION OF CAPACITY MANAGEMENT PLANS
Free and open access is still a predominant feature of many small-scale and artisanal fisheries throughout Asia and Africa. In some cases, free and open access exists as a result of an explicit policy, while in most it exists as a consequence of difficulties relating to institutional capacity. In many countries where access has been limited, problems of overcapacity have still developed. As noted above, problems of overcapacity were identified in around two thirds of the Member States responding to the FAO survey.
While lack of adequate property rights over the resource has generally been acknowledged as a key factor leading to both overcapacity and unsustainability in fisheries, relatively few countries have attempted to address this issue directly. Instead, as identified above, most countries that have adopted a capacity management strategy of some sort have adopted some form of input control based system. These are ‘second best’approaches to capacity management, as they do not directly address the underlying problem. However, managers are faced with other considerations and constraints that limit their ability to introduce rights based systems.
The FAO survey identified a series of issues and constraints relating to the development, and subsequent effectiveness, of such policies. In addition, a series of regional reviews were also conducted to examine capacity management in more detail in Africa (Cunningham, 2004), Southeast Asia (Lindebo, 2004), South America (Aguero, 2004) and Europe (Pascoe, 2004). The key issues and constraints identified by these reviews and the FAO survey are outlined below.
4.1 Employment impacts
In the first International Workshop on Factors Contributing to Unsustainability and Overexploitation in Fisheries (Gréboval, 2002), the lack of alternative livelihoods was identified as the most significant single pressures on fisheries resulting in unsustainable fishing practices. As outlined above, this is often a reason for the development of overcapacity in fisheries, and is often the reason preventing capacity naturally exiting the fishery.
Capacity reduction, where undertaken, does have a negative impact on employment. For example, the scrapping of 132 vessels in 2002 put 1300 Japanese fishermen out of work, and caused significant hardships to others who had been working for tuna related industry. In the EU, 28 000 jobs are expected to be lost because of fishing vessels being scrapped over the period 2002–2006, following the reform of the Common Fisheries Policy (Commission of the European Commission, 2002).
This is a particular problem in many developing countries, where alternative employment opportunities are limited. For example, the fisheries sector in almost all Southeast Asian countries is dominated by small-scale, coastal fishing operations, with more than 75 percent of the total fish catch attributed to these fisheries (Lindebo, 2004). These fisheries play an important role in local employment, food and income provision. In Vietnam, for example, 8 million people rely on fisheries as their primary income source, while an additional 12 million get part of their income or subsistence from fisheries, representing over one quarter of the total population. This problem is not unique to Southeast Asia, as similar constraints in terms of alternative employment apply also in many coastal communities in Africa, Latin America and the Caribbean.
Substantial numbers of fishers employed in small-scale fisheries are not limited to developing countries. Around 260 000 fishers are employed in the Mediterranean as a whole, most of which would be considered small-scale or artisanal fishers (Breuil, 1997). Small scale fishers outnumber larger fishing vessels in nearly every fishing nation.
Although it is recognized that, at least in some cases, catch is in excess of sustainable levels in these countries, with little alternative employment and income generating opportunities in many coastal communities, capacity reduction is not a desirable or feasible option. As a consequence, there has not been a genuine desire to reduce capacity in small-scale fisheries, with attention instead focused on the management of larger scale vessels. The strategy of capping small scale fleets and reducing industrial fleets is de facto in place in many developing countries.
This constraint is recognized by the IPOA-Capacity. Article 22 suggests that States should give due considerations to socio-economic requirements, including consideration of alternative sources of employment and livelihood to fishing communities which bear the burden of reductions in fishing capacity. This may require assistance in developing alternative opportunities in the coastal communities to complement capacity management, or assist in relocation of displaced fishers to more sustainable activities.
Several Member States have developed plans to either generate alternative employment opportunities or to retrain fishers so that they can enter different industries. For example, China's Bureau of Fisheries is planning to move 200 000 fishermen (4 percent of the total) to other jobs by 2007, largely through subsidizing fish farming gear and offering training.
In Europe, a number of measures are being introduced as part of the Financial Instruments for Fisheries Guidance (FIFG) programme. These include individual compensatory payments for fishermen losing their jobs as a result of scrapping or permanent withdrawal of their vessel, funding for retraining to find employment outside the fisheries sector, and support to national early-retirement schemes72 (Commission of the European Commission, 2002). These funds can be used to support boat owners as well as their crews, and they can be used to encourage older fishermen to scrap their vessels. Such schemes could be used by States wishing to direct capacity reductions towards specific groups of boat owners and/or of fishing vessels. Additional funds are available for rural development in fisheries dependent areas that can produce alternative employment opportunities. These include the European Social Fund (ESF) and the European Agricultural Guidance and Guarantee Fund.
Not all countries have the same financial resources as the European Union to support the development of alternative employment opportunities. However, recognition of the need for such development is widespread. A recent review of Poverty Reduction Strategy Papers (PRSPs) from 29African nationsfound that while most (22 out of 29) identified the issue of overexploitation in fisheries as significant, relatively few suggested that the solution to poverty reduction lay in further development of the fishing sector (Thorpe and Reid, 2004). In contrast, most African governments did not see fisheries improving food security and reducing poverty (Thorpe and Reid, 2004).73 Many African States intend to introduce capacity reduction programmes over the next five years, coupled with policies to re-train and re-locate fishers non-fishing activities and areas (Cunningham, 2004).
The need to develop alternative employment opportunities was also highlighted by the FAO Expert Consultation on Catalyzing the Transition Away from Overcapacity in Marine Capture Fisheries (Metzner and Ward, 2002).The group concluded that capacity reduction programmes should explicitly consider means of minimizing the employment impacts of capacity reduction, such as the development and use of alternative skills through training and other programs; the provision of income and other supports during the transitional period; and working with affected communities to set up new development alternatives and specific economic activities for displaced fishers (Metzner and Ward, 2002).
4.2 Conflicting objectives of management
A further factor increasing the difficulty of dealing with overcapacity in many countries is the multi-objective nature of Government fisheries policy. In many cases, maintaining employment in fisheries is an explicit objective of fisheries management. This is particularly the case in small-scale fisheries in developing countries where alternative employment opportunities are limited.
However, employment objectives of fisheries management are not limited to developing countries. For example, a stated goal of the International Baltic Sea Fisheries Commission is to manage the resource while maintaining fishing activity (in terms of numbers of participants) as high as possible (see www.ibsfc.org). Mardle et al (2004) also found fishing and regional employment to be considered more important by fisheries administrators in UK fisheries that sustainability.
As noted in the previous section, capacity reduction is associated with a reduction in employment. Consequently, capacity management in many countries is confronted by a double constraint. First, a limited ability to re-employ displaced fishers resulting in resistance of fishers and communities to embrace capacity management; and second a lack of political will to impose capacity reductions when maintaining employment is an objective of government. Here again, scaling down large scale fisheries may be a solution.
4.3 Institutional capacity
In the FAO survey, several States identified difficulties in their own institutional capacity to manage fishing capacity. This ranged from inadequate knowledge of their resource base and its potential (i.e. the current state of the stocks and potential yields) to inexperience in developing, implementing and enforcing effective capacity management systems. Strengthening national institutional capabilities, especially in capacity management; monitoring, control and surveillance (MCS); capacity measurement and stock assessment, was identified as an area requiring further support. Several States identified the need for workshops and training in these areas.
The ability of States to monitor and enforce fisheries management plans is limited in many countries due to insufficient financial resources, staff and MCS experience. For example, countries like Chile, Peru, Brazil, Argentina and Mexico, have extremely long coasts, which are difficult to monitor with the level of available physical and human capacity (Aguero, 2004). Difficulties in implementing effective MCS systems were also explicitly identified in the African and Asian region (Cunningham, 2004; Lindebo, 2004), and were raised by several Member States in the survey.
Measuring and monitoring fishing capacity has proven to be particularly problematic in many developing countries. Where attempts have been made to register and monitor boat numbers, obtaining reliable measures is also difficult due to the large number and mobility of the vessels, and their wide geographical distribution with many ports and beaches from which they can operate. With many of these fisheries being essentially open access, fishers may freely move from area to area, and in some cases from EEZ to EEZ where enforcement of fishing activity in national waters is limited. For example, in Senegal, the 1997 census estimated that there were around 10 000 artisanal vessels, but many may be registered more than once to allow for their traditional migrations from one fishing ground to another, whereas others are not registered at all as they fish mostly in neighbouring EEZs. Similarly, movement between fisheries makes assessing capacity levels on a fishery or local basis very difficult. Given this complexity, the concept of capacity measurement has been criticized as too theoretical and in need of being adapted for small-scale and artisanal fisheries (Lindebo, 2004). Improvements in MCS systems may help overcome these latter problems, e.g. the participatory systems recently trialed in Africa (Cunningham, 2004). More appropriate stock/fisheries assessment methods are also required.
In some instances, national legislation does not exist to enable effective capacity management. In such cases, developing capacity management plans is not just a case of better stock assessment and fisheries economic analyses, MCS systems or greater financial resources, but also requires legislative reform. Such reform is presently under way in many developing States: to allow for restricted access, to strengthen MCS capabilities, to allow for individual or collective right-based system, or to allow for some form of decentralization and co-management.
The characteristics of the fisheries and the degree of MCS capabilities have greatly influenced the type of capacity management system introduced. Input control-based systems are relatively easier to monitor and enforce than rights based systems such as individual transferable quotas. It is also more relevant to multispecies fisheries. This largely explains the preference for input based systems, particularly in developing countries. The predominance of small scale fisheries also explains the growing interest for decentralization and community-based management in these countries.
In contrast, individual rights-based measures (such as individual catch or effort quotas) have been mostly applied to larger scale fishing operations and single species fisheries. These involve generally fewer vessels in number, making MCS easier than for small-scale fisheries. Such measures are increasing used in developed countries, but are also considered by a growing number of developing countries for specific fisheries.
4.4 Building consensus with stakeholders
From the survey, several States identified difficulties in gaining the cooperation of the industry as a constraint to the implementation of capacity management. Gaining the support of the industry and other stakeholders is essential for ensuring compliance with a capacity management plan (Cunningham and Gréboval, 2001).
Stakeholder involvement can take several forms, ranging from industry participation in management advisory committees, to full devolution of fisheries management responsibility (such as in several New Zealand fisheries). Industry and community collaboration can also be achieved without complete devolution of management responsibility to the community. Development of co-management structures - where industry and other stakeholders have a direct input into the development of the management system through a consultative process - are also increasing.
Stakeholder participation in management advisory committees involves less devolution of management authority to the stakeholders, but ensures that their concerns are included in the development of the management plans. Such management advisory committees are in use in the USA and Australia and are being developed in the EU. In Chile and Peru, Fisheries Committees that include representatives of small-scale fisher associations have an important influence in policy matters (Aguero, 2004). This is similar to experience in Africa in countries such as Ghana, Madagascar or South Africa.
However, involving stakeholders from small-scale fisheries in the development of capacity management plans has proved difficult. With many thousands of fishers, identifying individuals that are representative of the industry as a whole may not be feasible. Ensuring sufficient representation may result in management committees that are too large to function effectively. Further, given limited employment opportunities in fishing communities in developing countries, changes in fisheries management may impinge on the community as a whole. Consequently, consulting communities in the development of capacity management measures is equally important but necessarily complex.
Industry participation in management may not always be positive. Vested interests by fleet owners and processing plants in maintaining current harvest levels can act as a constraint to introducing policies that reduce fleets, effort or catch. In such cases, stakeholder participation will impede the development of effective capacity management plans. This may be particularly the case if participation is industry-wide and disconnected from the management of specific fisheries.
Stakeholder participation (and co-operation) can be affected by the management system in place. For example, ITQs have been found to give fishers a much greater say in fisheries management. The basis for this self-management is secure property rights provided through the ITQ system (Arnason, 2002). ITQs provide a means for resolving conflicts over the distribution of the resource, and are therefore considered key to the development and success of the co-management structure evolving in New Zealand, where fishers are active in research, enforcement and the development of management plans (Bess and Harte, 2000; Hughley, et al., 2000; Yandle, 2003). The Netherlands also has a well-developed co-management system facilitated by the ITQ system (Dubbink and van Vliet, 2000).
Property rights do not necessarily have to take the form of ITQs to enhance community participation. Around 50 percent of the respondent States who have implemented some form of capacity management indicated that they had developed some form of territorial, group or community rights-based system for capacity management. Community based quotas have been introduced in several fisheries. In the Alaskan Pollock fishery, quotas are allocated to co-operatives rather than individuals, and members of the co-operative make collective decisions on how the quota is to be harvested (Mansfield, 2004). Similarly, community quotas have been applied to smaller vessels (in combination with ITQs applied to larger vessels) in the Scotia-Fundy groundfish fishery (Sinclair et al, 1999). Traditional territorial use rights based systems (TURFs) are also still effectively used in many fisheries, and have facilitated community involvement in management through reducing conflict and competition between fishers (Brown and Pomeroy, 1999).
Community based management was viewed as an option for managing small-scale fisheries in south east Asia, and has been applied in many inshore fisheries in Asia, Africa and Latin America (see Lindebo, 2004; Cunningham, 2004; and Aguero, 2004). Community based management has also been successful in controlling overexploitation in many inland fisheries (e.g. Bangladesh, Uganda). For these to be successful, management units need to be sufficiently small. For example, in Uganda, a network of about 500–700 Beach Management Units (BMUs) being introduced at the community level (Cunningham, 2004). In Indonesia, fisheries management has also been devolved to local government responsible for managing the fisheries in their areas, allowing greater community participation in decision-making (Satria and Matsuda, 2004). In these cases, formal property rights were not assigned, but the community groups responsible for each area were sufficiently small that they could manage the fishery in common. As pointed out by Mansfield (2004), in such cases, individuals acting collectively will operate the same as a single collective entity (i.e. a sole owner).
Stakeholder participation thus occurs increasingly at two levels according to the policy framework under consideration: at the sectoral level and at the level of specific fisheries defined explicitly as management units. One of the key problem affecting stakeholder participation and the management of fishing capacity at large is, however, that management units are still poorly defined in most countries or not defined in terms that allow for a clear delimitation of managerial responsibilities and participation by primary stakeholders. Fleet mobility (across fisheries and borders) and the related issue of multilevel governance are indeed presenting challenges that are not yet fully understood.
4.5 Technological change
A difficulty confronting capacity management based on inputs is that the productivity of these inputs generally tends to increase over time. For example, in Iceland, productivity was estimated to have increased by roughly 6 per cent a year between 1983 and 1995 (Runolfsson, 1999). Similarly, in the Australian Northern Prawn fishery, productivity is believed to have increased by around 5 per cent a year since the mid 1980s (AFFA, 2003). In Europe, technical change has been relatively low over the last decade, averaging at around 1 percent a year (Banks et al, 2001). However, even low rates of technical change can have a substantial cumulative effect over time.
Technological change is not limited to fisheries in industrialized countries, nor is it limited to industrial fleets. For example, the addition of outboard engines to canoes greatly increases the range over which these small-scale vessels can operate. It also allows them to operate more gear each day, increasing their overall impact on the stock. The use of GPS has had similar effect in many fisheries.
The impact of technical change on fishing capacity depends on the capacity management system in place. With input control based systems, technological change results in increased capacity, and consequently the need for continual capacity reduction programmes. For example, in the Northern Prawn fishery, the increase in productivity identified above has resulted in stock declines and forced the continual imposition of input controls on the fishery by the management agency. These include the shortening of the season in 2002, and a 25 percent reduction in allowable headrope length to try and offset the increase in effort produced by the accumulated effects of technological change (AFFA, 2003).In the Faroe Islands, which is managed by individual effort (days-at-sea) quotas, the total allowable number of fishing days had to be reduced by 17 percent for the largest vessel groups between 1997 and 2002 to compensate for increased efficiency in the fleet as less efficient vessels were removed (Faroe Islands Ministry of Fisheries and Maritime Affairs, 2002).
In contrast, in fisheries managed through a rights-based system of management such as ITQs, technological change can result in improved economic performance as well as maintaining sustainability in the fishery. Such rights based systems provide incentives for capacity to self-rationalize (hence they are considered incentive enhancing mechanisms to use the earlier classification). In the Icelandic fisheries, which are managed through ITQs, the productivity change has been accompanied by a reduction in total fishing capital as individual owners trade their quota shares to rationalize the level of capital invested in the industry. If vessels are discarded in this context, these may nevertheless join other fisheries or EEZs.
Technological change can also aid capacity management through improved MCS systems, such as computerized records of landings and fleet information. Vessel monitoring systems (VMS) are becoming commonplace in many large scale fisheries, and are also being considered in small scale fisheries. For example, in Senegal and in Mozambique, a system was tested that involved a computerized chip attached to a registration plate. Information on the vessel included in the chip, as well as information on catch of that vessel that day, could be sent to a central server over a mobile phone network. In this way the activity of the vessels could be monitored in real time (Cunningham, 2004).
4.6 Export of Capacity
Export of capacity is still a common element of capacity reduction programmes in some regions. In many cases, only the fishing licence is purchased, and the boat is exported to fisheries elsewhere. This was particularly a problem for developing countries, which had access to a large supply of relatively cheap capital as a result of decommissioning in more industrialized countries. The EU is prohibiting export of decommissioned capacity from December 2004 (Pascoe, 2004), although most other States still allow excess capacity to be exported.
4.7 High seas and straddling stocks
Free and open access in the high seas has been a major cause of overcapacity in these areas, particularly with tuna fisheries. Attempts have been made by some individual States to reduce their own contribution to overexploitation of high seas resources. For example, as mentioned previously, Japan scrapped 132 tuna vessels in 2002 in a bid to reduce overcapacity in the tuna fisheries. However, despite the efforts of the individual States as well as international organizations to limit capacity, a number of new, large purse-seiners are being built in several shipyards that will increase the fishing capacity of this sector. The potential also remains for increases in fishing capacity by non-tuna vessels that fish on the high seas in areas not covered by regional fishery management organizations (RFMOs). Acceptance of the 1993 FAO Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas by all contracting States will help reduce this problem.
Several Member States raised the issue of straddling stocks as a particular constraint for capacity management. This included issues of assessing the stocks, allocating catches between States as well as lack of control over capacity outside their own borders. Movement of capacity across borders - both legally and illegally - was a further difficulty, particularly in the Asian and African regions.
5. ROLE OF REGIONAL FISHERIES MANAGEMENT ORGANISATIONS
The main role of RFMOs is to address the issues associated with high seas fishing and straddling stocks mentioned above. The IPOA identified strengthening of RFMOs and related mechanisms for improved management of fishing capacity at regional and global levels as a major objective. Articles 27 through 38 of the IPOA are concerned with regional collaboration and participation in international agreements that relate to the management of fishing capacity. This collaboration is at two levels: first, in relation to shared or straddling stocks; and second, in relation to high seas fishing.
Collaboration with RFMOs and the development of appropriate bilateral agreements is well established in all regions. Bilateral agreements are primarily concerned with straddling stocks between adjoining States, but in the North Atlantic extend to areas of high seas also. From the survey, almost two thirds (61 percent of the respondents were members of a RFMO, while a further 10 percent were co-operating non-members of RFMOs.
The primary role of RFMOs and bilateral agreements has been the allocation of the shared resource between the contracting States. Total allowable catches (TACs) of each species are determined by the RFMO, or agreed by the collaborating States, and allocated between the contracting States.
In some cases, more explicit capacity management measures are also imposed. For example, while the main role of Northeast Atlantic Fisheries Commission (NEAFC) is to allocate the agreed TAC between the Contracting Parties, it may also limit the number of boats and effort in line with the fishing opportunities available to that Contracting Party. Similarly, the General Fisheries Commission for the Mediterranean (GFCM) provides advice on the status of the resource, and appropriate measures for its rational management, including advice on area and seasonal closures, TACs, minimum landings sizes and fishing effort. Around nine percent of the FAO survey respondents indicated that capacity reduction measures were being implemented in regional or international fisheries in which they participate (FAO, 2004).
In addition to the RFMOs, a number of other regional organizations exist that encourage and facilitate fisheries management. For example, in West Africa, the Sub-Regional Fisheries Commission (SRFC) hosted a workshop (in collaboration with FAO) to consider capacity issues and facilitate the development of capacity management plans. The South African Development Community (SADC) hosted a workshop focusing on responsible fishing in Southern and Eastern Africa. This workshop dealt with the harmonization of marine fisheries policy in general but the capacity question was inevitably included. Similar workshops have been conducted in Southeast Asia under the auspices of the Southeast Asian Fisheries Development Centre (SEAFDEC).
Substantial progress has also been made with respect to capacity management for fleets exploiting highly migratory species such as tuna. An FAO coordinated project on the potential capacity in the global tuna purse seine fleet found unused capacity in all fisheries for all major tuna species. This project includes direct involvement of RFMOs such as the FFA (Forum Fisheries Agency), as well as individual tuna fishing nations (e.g. Japan). In addition to setting and allocating catch quotas, IATTC, ICCAT and IOTC have adopted measures to limit the number and capacity of tuna fishing vessels. The IATTC has also developed a draft plan for regional management of fishing capacity.The Japanese Government and the international longline industry (OPRT) carried out the buy-back program mentioned previously, in which many large-scale longline vessels were scrapped. The international purse-seine industry (WTPO) has also expressed an interest in limiting expansion in the international tuna purse-seine fleet.
Consideration of capacity issues has also been raised at regional and international economic forums as well as RFMOs. For example, APEC, OECD, G8 and ASEAN have all considered issues of fishing capacity in their Member States.
As with the individual Member States, institutional capacity is also limited at the RFMO level, particularly in Africa and Asia, due to limited financial resources. These organizations rely on contributions from Member States that, themselves, have limited financial resources. As a result, their ability to develop and implement capacity management and capacity reduction programmes has been limited.
The IPOA-Capacity has, to a large extent, been successful in focusing attention onto the causes of, and potential solutions to, the problem of overcapacity in fisheries. Further, it has required Member States to consider how they may implement these solutions, and most have responded by either developing or formalizing some form of capacity management plan. In doing so, a number of constraints to the implementation of capacity management have been identified.
The foremost constraint is the lack of alternative employment opportunities and the related social dimension of the sector. As any form of capacity reduction will result in some fishers being displaced from the fishery, there has been a lack of political will to introduce these measures as one set of problems (overexploited fisheries) will just be replaced by another (unemployment and the resulting social problems). Development of alternative employment opportunities has been identified as a necessary complementary activity to capacity management, whether through rights based systems or input controls.
In some cases, maintaining employment in fisheries is an objective of management, so capacity reduction is not even considered an option. However, it is unclear to what extent this ‘objective’is really driven by the above constraint (i.e. lack of alternative employment opportunities). In many instances this concern and related considerations (preserving fishing communities, regional development, etc.) may best be achieved by reducing the share of large scale vessels). The lack of financial resources to buyback or streamline large scale exploitation is another major constraint.
Institutional deficiencies were also identified, particularly in developing countries. These included inadequate knowledge of the resource and its potential yield, inexperience in developing and implementing management plans, and also insufficient resources to undertake appropriate levels of MCS. With large numbers of small scale fisheries, even basic information on fleet size and activity is both difficult and costly to collect, and many States lack the financial resources to undertake these activities. This extends to some RFMOs involving primarily developing countries, who also lacked the financial resources to develop and implement regional capacity management plans.
Overcapacity and the resultant unsustainability of fisheries resources arise primarily from the absence of secure property rights over the resource. This is the single key factor underlying overexploitation of fisheries. Given this, an obvious solution to the problem of overcapacity is to introduce some form of rights-based system of management. However, institutional capacity constraints have resulted in ‘second best’incentive-blocking measures being applied, where any measures are applied at all. These measures may contain capacity in the short term, but create incentives to increase, rather than decrease, capacity in the longer term. There again, developing countries who are presently attempting to introduce stricter licensing schemes could benefit from the experience gained in developed countries and related technical assistance.
A key advantage of the use of rights based approaches for managing fishing capacity is that they provide a mechanism through with stakeholders can more easily and actively participate in the management process. They provide a means for resolving conflicts over the distribution of the resource, and also provide a means for allocating the benefits from the use of the resource. As a result, they also foster stakeholder participation and support, essential for ensuring compliance with the management plan.Rights-based management systems can take many forms and do not necessarily have to involve ITQs in order to provide benefits to the fishers and communities. These may include territorial use rights (TURFS), community quotas, and community based management (i.e. common management). In all cases, by removing the incentives to compete, and providing a mechanism to allocate benefits from fishing activity, capacity will self-adjust in order to most benefit the holders of these rights (individuals or communities). Financial incentives that impact investment are also revisited in most countries, with a definite trend to the reduction of related subsidies and with a growing number of countries considering some form of rent extraction - in the form of access fees or management cost sharing arrangement.
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66 The views expressed in this paper are solely those of the authors.
67 For the purposes of simplicity, the terms ‘excess capacity’and ‘overcapacity’will be used interchangeably. Pascoe et al (2003) differentiate the terms, with the former relating the actual to potential catch relative to the short run catch-effort relationship, while the latter relates the actual catch relative to the long run catch-effort relationship.
68 Technical Consultation to Review Progress and Promote the Full Implementation of the IPOA for the Management of Fishing Capacity (FAO, 2004).
69 Opportunity cost is a concept used in economics to represent the return a factor of production could generate if used in the next best activity. If there is no alternative use of a factor, then its opportunity cost is zero.
70 In this case we have differentiated capacity from capital. Capital can be considered the stock of physical inputs employed in the fishery while capacity is the ability of this stock of inputs to catch fish. Technical change can therefore increase the capacity of the fleet without changing the level of capital invested.
71 The major producers were those in the top 25 countries in terms of total output, which combined comprised around 80 percent of global marine production.
72 National early retirement schemes for fishermen aged 55 and over who can provide proof of at least 10 years'experience as fishermen and who wish to retire less than 10 years before the national statutory age of retirement.
73 Recent surveys by MacFadyen and Corcoran (2002) also found that PRSPs have made little explicit reference to livelihoods in small-scale fisheries.