Department of Economics, University of Iceland

Ragnar Arnason

Principles of Fisheries Management

DRAFT

A paper prepared for the

Workshop on

Policy and Planning for Coastal Fisheries Resources

University of South Pacific,

Suva, Fiji, January 28 to February 8 2008.

Table of Contents

Page

B. Fundamentals of Fisheries Management 3

1. The fisheries management regime 4

2. The fisheries management system 7

Technical appendix 1

2.1 Biological fisheries management 16

2.2 Direct economic restrictions 23

Technical appendix 2

Technical appendix 3

2.3 Taxes and subsidies 39

Technical appendix 4

2.4 Property rights 49

Technical appendix 5.

Technical appendix 6.

Technical appendix 7.

2.5 Fisheries Management Systems: Conclusions 89

3. Monitoring, Control and Surveillance 91

3.1 Monitoring 92

3.2 Enforcement 95

3.3 The Cost of MCS 96

Technical appendix 8

4. Fisheries Judicial System 105

4.1 The simple theory of violations 105

4.2 Conclusions 113

Technical appendix 9

.References 116

C. Cases of Fisheries management 119

References 153

B. Fundamentals of Fisheries Management

Theoretical fisheries economics, outlined in Section A above, shows that unmanaged fisheries from a common property resource are economically wasteful. In fact, according to the theory, such fisheries generally manage to squander most or all of the attainable economic rents from the fisheries. This theoretical prediction is confirmed by the experience from unmanaged common property fisheries worldwide. Virtually without exception such fisheries are characterized by excessive fishing fleets and fishing effort, overexploited fish stocks and small or no economic rents (FAO, 1993, Arnason, 1993, OECD, 1997).

Thus, theoretical evidence and empirical evidence go hand in hand on this matter. Both clearly demonstrate the need for some judicious interference in the fisheries process if the potential economic benefits of the fisheries are to be realized. This judicious interference or fisheries management is the subject of this chapter.

The chapter is organized broadly as follows. We begin by defining the concept of a fisheries management regime consisting of (i) the fisheries management system, (ii) the monitoring, control and surveillance system and (iii) the fisheries judicial system. Following this, in section 2, the various options for a fisheries management system are discussed and their efficiency properties evaluated. The monitoring, control and surveillance system is considered in section 3 and the fisheries judicial system in section 4. Finally, in section 5, we consider some pertinent aspects of the complete fisheries management regime.

1. The fisheries management regime

All fisheries, whether they are explicitly managed or not, are subject to an overall framework of social institutions. We refer to this institutional framework as the fisheries management regime. Essentially, the fisheries management regime is a set of social prescriptions and procedures that control the fishing activity. In some cases, the fisheries management regime is quite intricate, involving several formal organizations and activities. In others it is quite simple; consisting merely of a few social customs and prescriptions. Irrespective of their complexity, however, all fisheries management regimes must logically comprise the following three basic components:

· The fisheries management system.

· The monitoring, control and surveillance system.

· The fisheries judicial system.

The fisheries management system (FMS) specifies the regulatory framework for the fishing activity. It consists of all the rules that the fishing activity must obey such as gear and area restrictions, fishing licences, catch quotas etc. In many countries, most fisheries rules are based on explicit legislation. In others, they are primarily based on social customs and conventions.

The primary task of the monitoring, control and surveillance (MCS) system is to observe the fishing industry’s activities and to enforce its adherence to the rules of the fisheries management system. Its secondary, but nevertheless very important, task is to collect data about the fishery that can be used to improve both the fisheries management and fisheries judicial systems as well as the monitoring, control and surveillance system itself.

The fisheries judicial system (FJS) is usually a part of the general judicial system. It should be noted, however, that in most societies, formal judicial processes are complemented by informal ones. The function of the fisheries judicial system is to process alleged violations of fisheries management rules and issue sanctions to those deemed to have violated the rules. The fisheries judicial system thus complements the monitoring, control and surveillance activity in enforcing the fisheries management rules.

These three components of the fisheries management regime are strongly interdependent. For example, the fisheries rules specified by the fisheries management system define the necessary monitoring, control and surveillance activity as well as the focus of the fisheries judicial system. Similarly, the extent and quality of the monitoring control and surveillance system have obvious implications for the fisheries judicial system and the relevance of the various rules contained in the fisheries management system.

All three components of the fisheries management regime are crucial to its success. They are, so to speak, links in the same chain. If one of them fails, the fisheries management regime as a whole fails. Thus, for instance, a perfectly designed fisheries management system will accomplish nothing is not supported by a strong monitoring, control and surveillance system. Fishing firms, just like any other profit maximizing firms, are not for long going to follow rules that are not enforced. Indeed, the laws of competition inform us that in an environment of non-enforcement of rules, firms that nevertheless follow the rules will soon be driven out of business by the superior performance of the firms that break the rules. For this reason, a fine fisheries management system will be useless if it is not supported by the appropriate monitoring, control and surveillance activity. Similarly, a well designed fisheries management system, supported by a good monitoring, control and surveillance activity will accomplish very little if the fisheries judicial system fails to provide the necessary back-up for these two systems. If violators of the fisheries management rules are left unpunished, even when spotted and apprehended, they will of course have little incentive to follow the rules.

Hence, it should be clear that to achieve full benefits from fisheries management, all three components of the fisheries management regime ¾ the fisheries management system, the monitoring, control and surveillance activity and the fisheries judicial system ¾ must be appropriately designed, fully functional and well coordinated. This crucial point cannot be overemphasized. Any one of the three basic components of the fisheries management system, however well designed and implemented, will generate precious little social benefits unless supported by the other two components.

We therefore conclude that the design and implementation of an effective fisheries management regime requires full attention to all three of the basic components of the fisheries management regime. Moreover, to co-ordinate the activities of these three components, a single entity must be in charge of the fisheries management regime as a whole.[1] Without a strong coordinating force of this nature, the overall effectiveness of the fisheries management regime is likely to be substantially reduced. This coordinating arrangement may be illustrated with the help of an organizational chart as in Figure 2.2 below.

In many countries, the co-ordination of the fisheries management regime is provided by a Ministry of Fisheries or a Department of Fisheries within another ministry. Note, however, that from an organizational point of view, this coordination function can really be performed by any agency provided it is equipped with the necessary powers. Thus, it does not even have to be a government agency.

2. The fisheries management system

The fisheries management system is basically a set of rules about how the fishery (or fisheries) should be conducted. These rules may be formal¾ for instance in the form of published law and regulations ¾ or they may be informal ¾ a part of the social culture governing fishing behaviour. In most fisheries both types of fisheries management rules, the formal and the informal, apply. Sometimes they conflict in which case the formal fisheries management system may experience adherence difficulties. Generally, the more commercially advanced the fishery, the more important is the role of formal, explicitly expressed fisheries management rules. It is important to realize, however, that even in advanced fisheries where formal fisheries management rules are dominant, there are usually still in existence informal fisheries management rules stemming from an earlier culture but continuing to exert their influence on the behaviour of the fishermen.

This book is about the design of and implementation of fisheries management regimes. It follows that we must inevitably proceed in terms of formal fisheries management rules. This doesn't mean, however, that we should ignore the existence of the informal ones especially as they may impinge on the effectiveness of the formal ones.

Desirable properties

The purpose of the fisheries management system is to contribute to the generation of net economic benefits flowing from the fishery. As discussed in Section A, the crucial component of this objective is the generation of net economic profits or fisheries rents. After all, it is precisely these rents, properly measured, that define society's ability to improve the economic welfare of its members.

This fundamental objective, however, is not as straight-forward as may appear. On closer examination it involves a number of different considerations. Thus, for instance, what is of concern is not the fisheries rents generated by the fishery, but the remaining fisheries rents, when the cost of operating the fisheries management system have been subtracted. It is convenient to refer to the fisheries rents less the cost of fisheries management as net fisheries rent. Thus, the cost of operating the fisheries management system, enforcing the rules and so on, is of great relevance. The same applies to the data requirements of the fisheries management system. data collection and analysis is costly. Therefore, the less data demanding the fisheries management system is the better.

Another important attribute of the fisheries management system is its robustness. By this we mean its ability to generate fisheries rents, preferably the maximum ones, under a variety of conditions. Some fisheries management systems may work relatively well under certain conditions but poorly under others. Thus, for instance, the unmanaged competitive fishery generally manages to generate considerable fisheries rents during the early development phase of the fishery when the fish stocks are large and fishing capital employed is still moderate. This is illustrated in Figure 2.3. Accordingly, one might conclude that this fisheries management system is reasonably efficient under these conditions, i.e. large fish stocks and low fishing capital. With time, however, as, the fishery matures, the stock declines and the fishing capital becomes excessive, the unmanaged fishery becomes severely suboptimal as illustrated in Figure 2.3 and is further discussed in Chapter A, section 1.4. This particular fisheries management system is, in other words, not robust.

Finally, the distribution of the benefits generated by the fisheries management system is clearly of great relevance for its ability to generate economic benefits. A fisheries management system that is technically excellent but is perceived to be highly unfair in terms of its distribution of benefits and costs may encounter social hostility and, for that reason, may not turn out to be very effective if nevertheless implemented. More generally, an important attribute of the fisheries management system is its overall social acceptability. A technically good fisheries management system that is not socially acceptable may be of little practical use.

For later reference, it is useful to summarize some of the desirable properties of fisheries management systems as follows:

(a) Effectiveness in generating net fisheries rents

(b) Robustness in the face of variable conditions.

(d) Minimal data needs.

(e) Perceived fair distribution of benefits.

(f) General social acceptability.

The fisheries management system: Definitions

Fisheries management represents the application of specific fisheries management instruments or tools. Typical fisheries management tools are, for instance, fishing gear restrictions, limitations on the number of allowable fishing days during the year, area closures and so on. A particular application of a fisheries management tool, e.g. setting the allowable number of fishing days to a certain number, is called a fisheries management measure.

Thus, the fisheries management tools are like variables or, more precisely, control variables and the fisheries management measures the values that can be chosen for these control variables. Thus, the fisheries management tools are in a sense more fundamental than the fisheries management measures. Moreover the number of the latter is probably infinitely higher. Therefore, at least for classification purposes, it is convenient to define fisheries management systems in terms of the management tools they incorporate rather than the particular applications of these tools, i.e. the actual fisheries management measures chosen. .

The number of possible fisheries management systems

It should be clear that for most fisheries the number of possible fisheries management tools is quite high. Examples of fairly broad categories of fisheries management tools are provided in the Table 2.1. Clearly, it is possible to construct a more finely divided list with substantially more fisheries management tools.

Table 2.1
Some fisheries management tools: A list
1 / Fishing gear restrictions
2 / Fishing area restrictions
3 / Fishing time restrictions (Certain dates excluded from fishing)
4 / Fish size restrictions
5 / Total harvest restrictions (Total allowable catch, TAC)
6 / Individual harvest restrictions (Individual catch quotas)
7 / Taxes and subsidies (The fishing activity subject to taxes or subsidies)
8 / Fishery access restrictions (Fishing licences)
9 / Fishing vessel restrictions (Restrictions on vessels' size, power, equipment etc.)
10 / Fishing effort restrictions (Limited total fishing time)
11 / Sole ownership (exclusive ownership over a fish stock or a part of it)
12 / Territorial use rights in fisheries (TURFs)

Now, fisheries management systems consist of particular combinations of one or more these tools. Thus, obviously, the number of possible fisheries management systems increases very fast with the number of available fisheries management tools. Thus, with only two tools the number of possible fisheries management systems (including no management whatsoever) is four. However, with 12 fisheries management tools as in Table 2.1, the number of possible fisheries management systems (including no management) is 4096.[2] With 20 fisheries management tools the number of possible fisheries management systems become 1.048.576! Given this high number of possibilities, it comes as no surprise that identical fisheries management systems are rarely found around the world.