FISHERIES TRADING

Tradeable fishing quotas are often introduced to increase the economic efficiency of the industry rather than to ensure the ecological sustain­ability of the fishery. As Fernando Gonzalez Laxe (2005: 4) notes in the journal Marine Policy: 'the individual transferable quota is an economic tool used to guarantee the economic efficiency in a fishery; that is, it is not a tool to guarantee either the biological sustainability or the social equity', so we should not be surprised if an individual transferable quota (ITQ) system does not protect fish species or result in social equity.

In some cases, such as the rock lobster fishery in Tasmania, Australia, biological sustainability is not even a secondary goal. The population of rock lobsters was not endangered when the ITQ system was introduced, as population levels were adequately protected by regulations about the size of lobsters caught, achieved by having pots with appropriately sized escape gaps for smaller lobsters. However, the race to catch the lobsters resulted in 'economic overfishing'; that is, in 'excess' effort being expended. The 'rhetoric of conservation' was used to justify the introduc­tion of an ITQ system which enabled quota owners to reduce crew size and other expenditure to catch lobsters in the most economically efficient way (Phillips et al. 2002: 462).

Outcomes

In many places, transferable fishing quotas have not prevented the decline of commercial fishing species. According to the Australian Department of Agriculture, Fisheries and Forestry (DAFF 2005b), the southern bluefin tuna fishery, which has been managed by a tradeable fishing quota system for 20 years, is overfished, spawning stock are severely depleted, and 'current catches severely limit probability of rebuilding'.

The same kind of outcome has resulted from an ITQ system in Iceland, where Olafur Hannibalsson (1995), a deputy MP, noted in the mid-1990s:

There is no doubt about the fact that by initiating the quota system, authorities hoped to protect the fish stocks, and in particular the cod.

The decline of particular fish species can have significant impacts on eco­logical sustainability as they are part of a complex marine habitat which is in turn part of a wider food chain. When the Norwegian spring­spawning herring and the Barents Sea capelin populations went into decline, the north-eastern Arctic cod lost an important source of food and went into decline. This in turn led to 'crowds of underfed seals' coming into Norwegian coastal waters 'and thousands of dead seabirds' drifting ashore (Hagler 1995: 78).

The orange roughy fishery in New Zealand was often cited as a case study of the success of tradeable fishing quotas, but it has turned out to be a failure. It is now thought that these fish live for some 100 years and that it may take 30 years for them to mature and reproduce. Because this was not known, the total allowable catch was set far too high. By 2000 '[t]wo roughy fisheries have collapsed, and most are now at 10% of their original populations' (Walker 2005).

Such miscalculation about the sustainable level of fishing could occur under any regulatory system, but the market system ensured that the industry was motivated by short-term economic concerns to resist severe cutbacks in the TAC when they were proposed in response to falling populations in the early 1990s.

Profit vs conservation

Although the New Zealand scientists recommended that the orange roughy total allowable commercial catch be substantially cut, to 3400-5900 tonnes in 1993, the minister responsible left it at 14000 tonnes because of pressure from fishing lobbyists. In 2000 the catch was even higher, at over 15000 tonnes. Rather than seeing the need to protect their quotas by ensuring the long-term sustainability of the orange roughy fishery, it seems that quota owners are more interested in 'fishing as much as they can and then moving on to another fishery' (Duncan 1995: 99; Walker 2005).

The race to fish, characteristic of an open fishery with a limited season or a total allowable catch, is not necessarily eliminated in an ITQ fishery. There may still be a race at the beginning of the season when population numbers are highest and fish easiest to catch. Moreover, 'anxiety and uncertainty about the future can cause ITQ share owners to become just as oriented to short-term profits, as opposed to long-term sustainability, as open-access fishermen' (Buck 1995).

Quota owners who are participating in the fishing effort may feel that they will be in the best position to know when the fishery is about to col­lapse and be able to sell their quota at that time to someone who doesn't know any better. Investors who own quotas may well be more interested in quick returns on their investment than in lower long-term returns. Certainly the fishing crews and contract fishers have no added incentive to conserve the fishing resource in an ITQ system.

Moreover, while public authorities which manage fisheries have an interest in the future of public resources, private owners are concerned firstly with present needs. As quotas are increasingly held by larger fishing companies and non-fishing companies (see next chapter), repay­ment of debt becomes a larger factor in decision making. The shift from owner-operators to shore-based companies and transient fishers who have leased quotas also means that fishing practices change, because the experienced fishing people, who 'have first hand experience with the health of the catch' are no longer calling the shots (Macinko amp; Bromley 2002: 26; Walker 2005).

When tradeable quota systems are being proposed there is an incen­tive for existing fishers to catch as much as possible and report they are catching more than they actually are, so that when quotas are allocated, based on their past catches, they will get a larger quota.

Perpetuating bad practices

Tradeable fishing quota systems focus on efficiency and completely neglect technological inputs and their negative impact, both on the target species and on non-target species and the wider marine environment. According to the Swedish National Board of Fisheries, overfishing is 'the product of both the efficiency of the finding and catching technologies and of the amount used... a 4% increase in efficiency per year would cause a doubling of the fishing mortality rate in 18 years if the fishing effort remained constant' (Swedish National Board of Fisheries 1995).

The aim of tradeable fishing quotas is to make the fleet more econom­ically efficient. The idea that a smaller, more efficient fleet will reduce overfishing is faulty, however.

Which boats are too numerous? The three million canoes, skiffs and workboats that catch most of the world's foodfish and provide a living for about 20 million fishers and their families? Or the few thousand highly-capitalized ships of the industrial fishing corpora­tions whose disproportionate share of the world's catch is destined as much for factory-produced fishmeal (used as animal feed) as it is for human consumption? (The Ecologist 1995)

Some argue that by reinforcing and accelerating the shift of fishing from a small-scale subsistence activity to a globalised, corporate-dominated industry, tradeable fishing quotas are also reinforcing the very causes of overfishing: 'the enclosure of local fishing grounds; the creation of global markets for fish; and the build-up of industrial fishing fleets' (Fairlie et al. 1995: 46).

In the US surf clam tradeable quota system 'the number of boats in the fishery fell from 133 to 48, while the remaining boats tripled their catch'. There was no gain for fish conservation (Parravano amp; Crockett 2000). Hannibalsson (1995) described similar developments in Iceland in the mid-1990s: 'The fleet is larger than ever, measured in tonnage, engine power - and foreign debt. It has to be operated at maximum effort in order to be able to meet financial obligations'.

The larger boats favoured by tradeable fishing quota systems 'fish more intensively, having potentially greater effect on stock levels and on sensitive areas such as coral reefs' (Walker 2005). Fishers who use line and hook have been progressively eliminated while there are more and more large vessels which tend to drag heavy fishing gear across the ocean floor, killing crustaceans, uprooting aquatic plants, 'eroding plants and benthic life, levelling the ground and destroying shelter for the young - in short, transforming the bottom of the sea into a lifeless desert' (Hannibalsson 1995).

Tradeable fishing quotas can also cause a displacement effect: when fishers are forced out of one fishery they often move into another. In the case of the southern bluefin tuna fishery in Australia, when the ITQ system was introduced the number of boats seeking bluefin tuna was reduced by 70 per cent in two years, but many of the boats that once sought the tuna moved to other fisheries, some of which were already being overfished (Duncan 1995: 103).

By-catch

A major problem with fisheries trading is that the quota refers to fish that are caught and brought to shore for sale. Significant quantities of fish are discarded, however, because they are too small or too big or of inferior quality or exceed quota.

When fishing is commercialised in an ITQ system industrial fishing gear tends to be adopted, including commercial trawl nets which 'can catch anything from a shrimp to a whale' as well as 'swordfish, sharks, birds and marine mammals' such as dolphins (Hagler 1995: 77).

For instance, draggers are equipped with electronic sensor devices that allow them to home in on a dense body of fish and virtually annihilate it. In theory, immature fish can escape through the mesh of dragger nets; in practice, when fish are densely congregated, the meshes rapidly clog up and everything is hauled up, big or small. Hundreds of millions of immature dead and dying fish have been dumped by draggers in Canadian waters in the past 15 years. (Matthews 1995: 88)

In Australia, only about 90 of the 300 fish species caught in trawl nets 'are commercially valuable leaving 37-58% of the catch to be discarded' (Robinson amp; Ryan 2002: 25). This unintended catch is inevitable since the fishers cannot determine what will be caught in their nets, on their lines or in their traps. Almost all the discarded fish die, yet they are not counted in the quota even though they are lost to the environment. What is more, 'Unrecorded fish mortality can affect the stock that year and create a cycle of setting total allowable catches on incorrect data' (Walker 2005).

The by-catch problem is exacerbated under a tradeable quota system because it leads to a practice called 'high grading'. In order to get the most value from their quota, fishing people don't only throw away those fish that have no sale value and those for which they have no quota, but also the smaller and less valuable fish for which they do have a quota. In this way they maximise the value of their catch and their quota. In Canada, for example, the size of sablefish caught, and kept, increased after an ITQ programme was introduced (Buck 1995; Walker 2005).

In the Pacific, according to the Alaska Marine Conservation Council, the failure to take account of by-catch in the total allowable catch for rockfish was 'a cause among others that drove the groundfish popula­tions precipitously down' (AMCC 2005). In New Zealand there is even speculation that valuable species such as rock lobsters have been kept in the ocean after they have been caught in the expectation of price increases. If they die in the meantime, they are not counted as part of a fisher's quota (Walker 2005).

In some fisheries a quota system is 'notoriously ineffective'. An attempt at introducing an ITQ system in Peru failed because 'the anchovy shoal in vast, easily catchable quantities, and vessels were obliged to discard enormous amounts of dead fish if they stuck to their quota' (Duncan 1995: 103).

Monitoring and enforcement

Fishing quota trading systems provide an incentive to cheat. With open fishing, under-reporting of an individual catch benefits all fishers as it takes longer to reach the official total allowable catch. But in an indi­vidual quota system, under-reporting an individual catch directly and immediately profits an individual fisher, as do poaching and exceeding one's quota. The incentives to cheat are therefore much higher. Yet most ITQ systems rely on dockside monitoring because extra monitoring, such as providing onboard observers, is very expensive (Buck 1995).

Illegal ways of exceeding one's quota include 'fishing out of season and selling fish on the black market, which are widespread in many, if not most, industrialized fisheries. The quantities involved can be quite considerable' (Duncan 1995: 101). There are also cases of catch misre­porting, for example where a valuable quota species such as cod is reported as another species such as saithe (Hannibalsson 1995).

The idea that ownership of fishing rights would ensure that quota owners would police each other is negated by the shift of ownership from owner-operators to investors who pay others to fish for them. Contract fishers have much less incentive to report illegal fishing by others, partic­ularly if they are doing it themselves (Phillips et al. 2002: 465). On top of this, poaching of fish has increased because those dispossessed by not having a quota and those feeling their allocated quota is unfair feel justi­fied in taking what they believe they deserve (Duncan 1995: 102).

The increase of fishing vessels that process the fish at sea, which is occurring under ITQ systems, also 'provides an opportunity to bend the fisheries management rules'. Some commentators have pointed to the way such vessels manage to get a higher yield per catch than land-based factories as evidence that some cheating is occurring. Onboard moni­toring of these trawlers is often sporadic and ineffective. Large trawlers have also been caught landing some of their catch in other countries, for example Icelandic trawlers taking fish to Germany and Britain (Hannibalsson 1995).