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INTRODUCTION

Background

1. Most of the remaining untouched or underexploited fishery resources in the world are in tropical waters, in areas relatively close to the coastlines of developing countries. The international trend toward extension of jurisdictional claims over coastal fisheries1, the growing awareness, in developing countries, of national sovereignty over natural resources and sensitiveness to foreign domination over the exploitation of natural resources without local participation, coupled with inadequacy of capital and technical expertise in developing countries to develop these resources fully without outside assistance, are factors which have led, in recent years, to a spectacular increase in the number of joint venture arrangements in the fisheries sector throughout the world. Notwithstanding their growing importance as a form of international cooperation in development efforts, there is a dearth of readily available information and of analytical comment on joint ventures in fisheries, although major studies are now in progress in FAO on worldwide aspects of the subject, and on joint ventures in the Indian Ocean Area, in particular.

1 For a survey of claims as of July 1973, see Limits and Status of the Territorial Sea, Exclusive Fishing Zones, Fishery Concentration Zones and the Continental Shelf, FAO Fisheries Circular No. 127 Rev. 1, Rome, 1973

2. It was against this international background that the Fishery Committee for the Eastern Central Atlantic (CECAF) at its Third Session, held in Santa Cruz de Tenerife in December 1972, called for the preparation of a study based on existing joint venture arrangements in the CECAF area and providing guidelines and practical suggestions for the conclusion of future ventures. In implementation of this request, FAO enlisted the services of a consultant, Mr. R. Payne, to assist in the preparation of such a study. The consultant visited several countries in the CECAF area during the months of January and February 1974 and presented a preliminary report of his findings to the CECAF Sub-Committee on Fishery Development held in Dakar in March 1974 (CECAF: FD/74/6, March 1974). Mr. Payne's findings have been used in preparing the first part of the present study.

3. In the following sections, the study first reviews some of the basic factors affecting foreign participation in fisheries, including the distribution of fishery resources and markets in the area and the extent of national jurisdictional claims over coastal fisheries, and then examines the various forms of foreign participation in fisheries of which the joint venture is one form only. The study continues with a discussion of some of the salient features of fisheries joint ventures in the CECAF area and of the attitudes of governments in the area to them, and reviews some of the problems encountered in their conception and operation. Next, a number of comments and guidelines on the formation and operation of fishery joint ventures, in general, are offered. The study concludes with an indication of the part FAO can play in promoting international cooperation in fishery industries development.

Fishery resources and market potential in the CECAF area

4. There is a marked discrepancy between the distribution of human population and that of fishery resources in the CECAF area. The most abundant resources are to be found along the coasts of such sparsely populated areas as Sahara (Rio de Oro) and Mauritania in the north and Angola-Namibia in the south, and in general not along the heavily populated coast of the Gulf of Guinea proper. This separation between resources and markets has been a stimulus for increased fishing in resource-rich areas by countries outside the region2 and more recently the growth of fishing arrangements and joint ventures within the region itself.

2 According to FAO estimates, the catch of non-coastal countries rose during the period 1964 to 1972 from 571 000 tons to 2.0 million tons, compared with a total catch growth in the area of 1.1 million tons in 1964 to 2.9 million tons in 1972

5. In general, the market for fish is still unsaturated; in fact, the imbalance between demand and supply is increasing and the regional fish requirements are expected to show a deficit of one million tons in the near future. Fish coming from the three main sources (the coastal waters, the upper Niger basin in Mali, and the Lake Chad basin) do not meet the demand in heavily populated areas, typically Nigeria, and very substantial amounts of fishery products are still imported from outside the Gulf of Guinea coast, largely in the form of dry cod (stockfish) and more recently frozen fish landed directly by foreign trawlers.

The status of national jurisdictional claims in the CECAF over coastal fishery resources

6. As noted in the introduction to this report, the recent trend of extension of national ' jurisdiction claims to coastal fisheries, and the expectation of further extensions following the conclusion of the Third United Nations Conference on the Law of the Sea now underway in Caracas, has tended to encourage the formation of fisheries joint ventures throughout the word. This is particularly true in the case of the countries in the CECAF area.

7. At the time of writing this report, the claims to territorial waters or exclusive fishery limits of countries in the CECAF area ranged from 12 to 200 miles, most countries having extended their claims within the last seven years, and in many cases within the last three years. The following table lists the present status of claims according to information available in FAO:

State

Territorial Sea

Exclusive Fishing Zone

Fishery Conservation Zone

Cameroon

18 miles (1967)


Congo, People's Republic of

30 miles (1971)


Dahomey

12 miles (1968)


Equatorial Guinea

12 miles (1970)


Gabon

100 miles (1972)


Gambia, The

50 miles (1971)


Ghana

30 miles (1972)

130 miles (1963)0972)

Guinea

130 miles (1964)


Ivory Coast

6 miles (1967)

12 miles (1967)

Liberia

12 miles (1967)


Mauritania

30 miles (1972)


Morocco

12 miles (1973)

70 miles (1973)

Nigeria

30 miles (1971)


Senegal

12 miles (1968)

122 miles (1972)

Sierra Leone

200 miles (1971)


Spanish Sahara

6 miles (1960)

12 miles (1967)

Togo

12 miles (1964)


Zaire

No legislation



8. For established fishery industries, association with local interests in the area has increasingly become the only means of ensuring continued access to traditionally exploited resources. Moreover, overseas interests have shown a certain degree of eagerness to form new ties with local interests, in the hope that they will thus be on the scene when the countries of the region extend their limits, and that they, consequently, will be a jump ahead of would-be competitors who might encounter stiffer conditions after the coastal state had reserved the right of exploitation for itself. For many of the coastal countries, the joint venture has become the preferred mechanism for enlisting the cooperation of overseas partners for the development of a type of fishing in which they have had no - or only little -experience to date.

Forms of foreign participation in fishery development in the countries of the CECAF area

9. As noted above, the geographical \separation between fishery resources and markets in the CECAF area, and the need for added capital and expertise have necessitated some form of foreign participation in the fishery development of most of the countries in the area. The type of and basis for that participation may take several different forms ranging from free fishing by boats of neighbouring countries in each others' waters, based on intergovernmental agreements for reciprocal fishing rights, to active participation of private capital in joint equity ventures. The following are the main forms of participation existing in the CECAF area.

(a) Intergovernmental agreements on reciprocal fishing rights

10. During the period 1960 to 1961, France entered into agreements with many of the newly independent francophone African States, providing that “the vessels of each state would enjoy the same treatment in the ports, waters and reserved waters of the other state, so far as fisheries was concerned, as the national vessels of that state”. Agreements of this sort were entered into, for example, with Dahomey, Gabon, the Ivory Coast and Mauritania, and a similar agreement was negotiated between Morocco and Spain in 1969. Several of these agreements are now no longer in force and have been superseded by new agreements giving greater benefits to the developing country.

11. Some of the countries bordering the Eastern Central Atlantic have concluded arrangements of a more or less formal character permitting the vessels of neighbouring countries (or other countries in the region) to fish in marine waters under their jurisdiction. Arrangements of this kind exist, for example, between the People's Republic of the Congo and Gabon, Cameroon and Nigeria, Nigeria and Dahomey, Liberia and Sierra Leone. It is often difficult to ascertain whether these arrangements are valid agreements or whether fishing by the other country is merely unofficially “tolerated”. Some of the arrangements do not seem to apply anymore, since fishing operations which would be covered by them apparently have to pay fees.

(b) Licensing agreements - intergovernmental

12. Much more numerous are bilateral intergovernmental agreements under which foreign fishing vessels may be licensed to fish against payment of a duty or fee and the rendering, at the same time, of certain services (such as the provision of reports on their catches and other intelligence of importance for the assessment of fish stocks). These agreements specify, in general, the number and CRT of vessels authorized to fish, zone(s) in which they may operate, fishery resources they are permitted to exploit, and conservation measures that must be observed. Special provisions that may be incorporated in such agreements relate to the employment (or training) on board of ships licensed to fish of a specified number of nationals of the coastal country (e.g., in an agreement concluded between Mauritania and France in March 1973), the issue of import licenses by the overseas country for fishery products produced by the coastal country (e.g., for frozen fish produced in Mauritania into Greece, in various bilateral agreements between the two countries which also include the previously mentioned crew employment provision), the obligation to land a certain percentage of their catches (in some instances, of certain species only) in the coastal country.

(c) Licensing agreements with private enterprises

13. A good deal of the original development impetus in the area has been provided by foreign-owned factory ships with offshore bases operating within the national waters of coastal states under licensing arrangements, and smaller shore-based vessels operating very often under contract to small shore factories owned by expatriates. As a result of the growing concern of the coastal states to achieve the maximum benefits for their own economies and to ensure the maximum participation of local interests in the development of this sector of natural resources, the offshore operations have been increasingly required to assume obligations with respect to supplying the domestic market, the establishment of shore-based facilities and the training of local operatives, in addition to the payment of heavier licensing fees. In most cases association with local capital interests in joint venture arrangements has been encouraged, and in one country, Senegal, fishing in Senegalese waters has been closed to all vessels except those by Senegalese nationals or companies at least 51 percent of the shares of which are owned by Senegalese nationals.

(d) International joint ventures

14. The expression “joint venture” is used here in its general sense of an association of two or more parties, whether private or governmental, in order to undertake a commercial project in the fisheries sector, and to share in the risks and profits of that project. The term covers a multitude of different arrangements of varying magnitude and scope. Such arrangements often entail the setting up of a separate joint company in which each of the parties holds a proportion of the capital shares; in this case the arrangement is called an “equity joint venture”. In other cases no such independent company may be formed and the relationship between the parties is governed solely by contractual relations, a so-called “contractual joint venture”.

15. Contractual joint ventures are often used where the laws of the country in which business operations are to be conducted do not recognize the concept of private ownership of property3 Because of their less permanent character, contractual joint ventures are also sometimes used as a preliminary to equity joint ventures, especially where exploratory fishing and survey operations are required to determine the feasibility of establishing a full-scale fishery industry. Licensing agreements as described above, where obligations of training, localisation of labour and establishment of shore facilities are involved, may also be described closely as contractual joint ventures, although in these cases, the element of the sharing of risks and profits is less predominant.

3 UNIDO Manual on the Establishment of Industrial Joint Venture Agreements in Developing Countries, United Nations, 1971, p. 3-6.

16. As a result in part of the concern of coastal countries to ensure real participation of local interests, whether governmental or private, in the development of fisheries industries, to give a degree of permanence to fisheries operations and to make such operations subject in a real sense to national legislative controls, the equity joint venture is increasingly becoming the most common form of joint venture in fisheries, in the CECAF area.

17. Joint ventures are now in operation, most of them established within the past five years or so, in a majority of the countries bordering the Eastern Central Atlantic. Among the overseas countries participating in such ventures through official bodies or private enterprises are Prance, Italy, Japan, the Republic of Korea, Kuwait, the Netherlands, Norway, and the United States of America. Inter-regional ventures formed in recent years, or presently under negotiation, exist between Nigeria and Morocco, Nigeria and Mauritania, Sierra Leone and Liberia, Morocco and Mauritania, to name only a few.

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