Rights Based Rights Based ManagementManagement

Promise or Peril for Russia’s Promise or Peril for Russia’s Fisheries?Fisheries?

Bubba Cook, WWF Senior Fisheries Bubba Cook, WWF Senior Fisheries Program Officer Kamchatka/Bering Sea Program Officer Kamchatka/Bering Sea

EcoregionEcoregion

What is Rights Based What is Rights Based Management (RBM)?Management (RBM)?

Under a rights rights-based management Under a rights rights-based management system, those individuals or groups entitled system, those individuals or groups entitled to have access to the fishery are said to have to have access to the fishery are said to have use rightsuse rights; that is, ; that is, the right to use the the right to use the fishery resources while others do not have fishery resources while others do not have the right to use the fisherythe right to use the fishery. .

What is Rights Based What is Rights Based Management (RBM)?Management (RBM)?

Fisheries management systems that assign Fisheries management systems that assign rights to a share of a fishery are specified by:rights to a share of a fishery are specified by: various rights such as access, withdrawal, various rights such as access, withdrawal,

management, exclusion, transfermanagement, exclusion, transfer nature of the shares in the fishery (licenses, effort nature of the shares in the fishery (licenses, effort

units, quota shares)units, quota shares) type of entities that hold rightstype of entities that hold rights rules concerning use of the rightsrules concerning use of the rights

The composition of rights varies with The composition of rights varies with different fisheries and different points in timedifferent fisheries and different points in time

What is Rights Based What is Rights Based Management (RBM)?Management (RBM)?

There are several forms of rights-based There are several forms of rights-based fisheries management mechanisms:fisheries management mechanisms: Input rightsInput rights – effort restrictions, such as time – effort restrictions, such as time

fished, vessel size, amount and type of gearfished, vessel size, amount and type of gear Output rightsOutput rights – right to catch a piece of the – right to catch a piece of the

TAC, such as individual quotas and community TAC, such as individual quotas and community quotasquotas

Access rightsAccess rights – Territorial Use Rights – Territorial Use Rights Fisheries (TURFs) and limited entry licensesFisheries (TURFs) and limited entry licenses

We will look at 3 types of output based We will look at 3 types of output based systems: systems: Individual Fishing Quota Individual Fishing Quota (IFQ), Cooperatives, and Community (IFQ), Cooperatives, and Community ProgramsPrograms

Advantages of RBMsAdvantages of RBMs

end end derby style derby style “race for fish”“race for fish” promote promote economic efficiencieseconomic efficiencies improve improve safetysafety address address allocationallocation conflicts conflicts increase increase utilization/recoveryutilization/recovery rates rates facilitate reduction of facilitate reduction of bycatchbycatch and and

discardsdiscards allow efficiency and consolidation allow efficiency and consolidation

while maintaining while maintaining coastal coastal communitycommunity structures and structures and fleet fleet compositioncomposition

improve product improve product qualityquality

Disadvantages of RBMsDisadvantages of RBMs

debatable debatable stewardshipstewardship results results questionable questionable equity/fairnessequity/fairness

when establishing rightswhen establishing rights less capacityless capacity = fewer jobs/less = fewer jobs/less

income distribution income distribution potentially potentially irreversible decisionsirreversible decisions excessive excessive consolidationconsolidation resulting resulting

from transferability of rights from transferability of rights

““Race for Fish” ProblemsRace for Fish” Problems Gear conflict Gear conflict Economic Economic

inefficiency and inefficiency and waste – (“capital waste – (“capital stuffing,” bycatch, stuffing,” bycatch, lost gear, ghost lost gear, ghost fishing, high discard fishing, high discard mortality, etc.)mortality, etc.)

Low CPUELow CPUE SafetySafety Low ex-vessel pricesLow ex-vessel prices Poor product qualityPoor product quality

IFQ ProgramsIFQ Programs

Quota share (QS)Quota share (QS) is a permit, is a permit, expressed in generic units – Permit expressed in generic units – Permit is considered “permanent” - does is considered “permanent” - does not change from year to yearnot change from year to year

Annually all QS units for a Annually all QS units for a designated area and species are designated area and species are summed – Calculation yields the summed – Calculation yields the Quota Share Pool (QSP)Quota Share Pool (QSP) for that for that area and that yeararea and that year

IFQ ProgramsIFQ Programs

Amount of QS in area held by a person Amount of QS in area held by a person is then divided by the QSP for that is then divided by the QSP for that areaarea

Resulting fraction is multiplied by the Resulting fraction is multiplied by the annual TAC for that area/speciesannual TAC for that area/species

Result is the pounds of fish on the Result is the pounds of fish on the person’s annual IFQ permitperson’s annual IFQ permit

QS/QSP x TAC = IFQQS/QSP x TAC = IFQ IFQ permit is constrained by QS limitsIFQ permit is constrained by QS limits

Calculating QSCalculating QS

Total Allowable Catch

30 mmtABC TAC

Example of QS Example of QS calculation for calculation for fisherman “F-6”fisherman “F-6” TAC a portion of ABCTAC a portion of ABC TAC = QSPTAC = QSP F-6 holds rights to 8% of F-6 holds rights to 8% of

QSPQSP 8% x 30 mmt = 2.4 mmt8% x 30 mmt = 2.4 mmt

Fisherman F-6 has right Fisherman F-6 has right to harvest 2.4 mmt of to harvest 2.4 mmt of fishfish

Quota Share Pool17%

10%

8%

8%34%

23%

F-1

F-2

F-3

F-4

F-5

F-6

The Halibut/Sablefish IFQ The Halibut/Sablefish IFQ ModelModel

AllocationAllocation of shares to individual vessel owners of shares to individual vessel owners Vessel Vessel type and size type and size categoriescategories Owner-on-boardOwner-on-board requirements (some categories) requirements (some categories) LimitsLimits on leasing/transferability (across on leasing/transferability (across

categories)categories) Use/ownership Use/ownership capscaps (individual and vessel level) (individual and vessel level) Loan programLoan program (for new entry) (for new entry) Block programBlock program (further check on consolidation) (further check on consolidation) Community purchaseCommunity purchase program program

The Bering Sea/Aleutian The Bering Sea/Aleutian Islands Crab IFQ/IPQ ModelIslands Crab IFQ/IPQ Model Harvester IFQsHarvester IFQs to license holders (90 percent “A to license holders (90 percent “A

shares” which are subject to regional delivery and shares” which are subject to regional delivery and processor share delivery requirements; and, 10 processor share delivery requirements; and, 10 percent “B shares”–free of landing requirements)percent “B shares”–free of landing requirements)

Processor IPQsProcessor IPQs (with one-to-one correspondence (with one-to-one correspondence to “A shares”)to “A shares”)

15 harvest cooperatives coordinate catch from 15 harvest cooperatives coordinate catch from 100 vessels across 26 processors100 vessels across 26 processors

Price arbitrationPrice arbitration process for A share landings process for A share landings Captains shareCaptains share allocation (3% of harvest shares) allocation (3% of harvest shares) Use/ownership Use/ownership capscaps Liberal transferLiberal transfer and ‘stacking’ allowances and ‘stacking’ allowances Data collectionData collection and and comprehensive reviewcomprehensive review

IFQ ProblemsIFQ Problems ““Give-away” of public Give-away” of public

resourceresource Contrary to competitive Contrary to competitive

and open fishing lifestyleand open fishing lifestyle Initial “windfall profits” Initial “windfall profits”

considered unfairconsidered unfair Shift of bargaining power Shift of bargaining power

to IFQ holdersto IFQ holders Consolidation harmed Consolidation harmed

skippers, crews, and skippers, crews, and fishing communitiesfishing communities

Compliance difficult Compliance difficult (incentive for highgrading, (incentive for highgrading, data fouling, non-data fouling, non-reporting)reporting)

IFQ BenefitsIFQ Benefits Extended season Extended season

lengthslengths Conservation benefitsConservation benefits Consumer benefitsConsumer benefits

Reduced capital inputsReduced capital inputs Fewer operationsFewer operations Less expensive Less expensive

operationsoperations Improved safety at seaImproved safety at sea Increase ex-vessel Increase ex-vessel

value, bigger paydaysvalue, bigger paydays

CooperativesCooperatives

Three types of authorized fishery Three types of authorized fishery cooperatives:cooperatives: (1) marketing/supply cooperative w/o quota; (1) marketing/supply cooperative w/o quota;

limited ability to negotiate price or limited ability to negotiate price or cooperate in harvestingcooperate in harvesting

(2) harvest cooperative with group allocation (2) harvest cooperative with group allocation but only cooperate in dividing the share but only cooperate in dividing the share among vesselsamong vessels

(3) marketing cooperative with quota which (3) marketing cooperative with quota which can jointly harvest, market and negotiate can jointly harvest, market and negotiate pricesprices

The Bering Sea Pollock The Bering Sea Pollock Cooperative ModelCooperative Model

Allocation of shares to cooperativesAllocation of shares to cooperatives (112 (112 harvest vessels in eight processor co-ops plus harvest vessels in eight processor co-ops plus 14 vessels in one catcher/processor co-op)14 vessels in one catcher/processor co-op)

Closed classClosed class of harvesters and processors of harvesters and processors Cooperative/processor associations Cooperative/processor associations based on based on

historical landingshistorical landings Limited mobility to move among cooperatives Limited mobility to move among cooperatives

or deliver to other processorsor deliver to other processors Use/ownership capsUse/ownership caps Sideboards to limit encroachment on other Sideboards to limit encroachment on other

fisheriesfisheries High degree of fleet ‘self-management’High degree of fleet ‘self-management’ through through

agency approved cooperative agreementsagency approved cooperative agreements

Cooperative AdvantagesCooperative Advantages

Slow the pace of fishing Slow the pace of fishing and reduce capacity, and reduce capacity, leading to more product at leading to more product at lower costlower cost

Improve communication Improve communication among fishermen to among fishermen to reduce by-catch and meet reduce by-catch and meet market requirementsmarket requirements

Greater participation of Greater participation of fishermen in management fishermen in management decision decision-making decision decision-making (co-management)(co-management)

TAC is shared among TAC is shared among members in a way decided members in a way decided by members, not a by members, not a management agencymanagement agency

Cooperative Cooperative DisadvantagesDisadvantages

Agreements sometimes break Agreements sometimes break down due to poor design and down due to poor design and changes in government policychanges in government policy

Sometimes difficult for Sometimes difficult for individual fishermen to accept individual fishermen to accept decisions made by the decisions made by the cooperativecooperative

Profitability requires reduction Profitability requires reduction in active fishing effortin active fishing effort

Increased costs of forming and Increased costs of forming and operating the cooperativeoperating the cooperative

Cooperative formation does Cooperative formation does not avoid the need for some not avoid the need for some allocation of the TACallocation of the TAC

May reduce diversity of fleets, May reduce diversity of fleets, factions, numbers of factions, numbers of communitiescommunities

Community Allocation Community Allocation ProgramsPrograms

Community Development Quota (CDQ) ProgramCommunity Development Quota (CDQ) Program – – Established as a subset of the AFA pollock and Established as a subset of the AFA pollock and Halibut/Sablefish IFQ program.Halibut/Sablefish IFQ program.

IFQ Community Purchase ProgramIFQ Community Purchase Program – Established – Established as an additional subset under the as an additional subset under the Halibut/Sablefish IFQ program.Halibut/Sablefish IFQ program.

Community Co-managementCommunity Co-management – Various restricted – Various restricted access-based programs.access-based programs.

Community-Based Community-Based Management Elements - Management Elements -

CDQCDQ Benefits to 65 remote Benefits to 65 remote coastal communities in coastal communities in Bering Sea/ Aleutian Bering Sea/ Aleutian Islands since 1992Islands since 1992

Sets aside 10% of pollock Sets aside 10% of pollock TAC, 7.5% of all other TAC, 7.5% of all other groundfish and crab TACs, groundfish and crab TACs, and halibut set asideand halibut set aside

Since 1992, over $95 Since 1992, over $95 million in wages, education, million in wages, education, and training benefits and training benefits provided to over 22,000 provided to over 22,000 western AK residentswestern AK residents

2002 total revenues of the 2002 total revenues of the six CDQ groups was about six CDQ groups was about $70 million combined$70 million combined

Community-Based Community-Based Management Elements - Management Elements -

IFQIFQ Communities may establish Communities may establish

non-profit corporations to act non-profit corporations to act on their behalfon their behalf

The non-profits apply to The non-profits apply to NMFS for authority to receive NMFS for authority to receive and hold QSand hold QS

When the application is When the application is approved, the non-profit is approved, the non-profit is certified as a Community certified as a Community Quota Entity (CQE) and enters Quota Entity (CQE) and enters the QS marketthe QS market

CQEs who hold QS then CQEs who hold QS then “lease” annual IFQ permit “lease” annual IFQ permit amounts to community amounts to community residentsresidents

CQEs remain in the market, CQEs remain in the market, and buy/sell QS as their and buy/sell QS as their finances and interests allowfinances and interests allow

Community-Based Community-Based Management Elements – Management Elements –

Co-managementCo-management Partnership arrangement in Partnership arrangement in

which fishermen and which fishermen and government share government share responsibility and authority responsibility and authority for managementfor management

Fishermen/community given Fishermen/community given legal authority to manage a legal authority to manage a fisheryfishery

Formal agreements on roles, Formal agreements on roles, responsibilities, and rights in responsibilities, and rights in management established management established through consultation and through consultation and negotiationnegotiation

Through self-management, Through self-management, community empowered to community empowered to develop a flexible and creative develop a flexible and creative management strategymanagement strategy

Marketing Benefits?Marketing Benefits? Increasing consumer Increasing consumer

demand for seafood demand for seafood from sustainable and from sustainable and traceable fisheries.traceable fisheries.

RBM systems generally RBM systems generally provide a more provide a more transparent and transparent and traceable system that is traceable system that is more likely to be more likely to be certified under certified under ecological certifications ecological certifications such as the MSC.such as the MSC.

Are Russia’s Salmon a Good Are Russia’s Salmon a Good Candidate for an RBM Candidate for an RBM

system?system?

Maybe, maybe not…that is for the Maybe, maybe not…that is for the Russians to decide.Russians to decide.

History of the fate of other History of the fate of other industrialized fisheries would industrialized fisheries would support some type of output based support some type of output based controls.controls.