Rights-based Management and Rights-based Management and Buybacks in International Tuna Buybacks in International Tuna

FisheriesFisheries

•IntroductionIntroduction•Rights-based management Rights-based management systems systems •Mechanics of MCS systemsMechanics of MCS systems•EPO tuna fisheriesEPO tuna fisheries•Capacity reduction in the EPOCapacity reduction in the EPO•Costs of a vessel buyback in the Costs of a vessel buyback in the EPOEPO• Buyback design considerationsBuyback design considerations

Fisheries ManagementFisheries Management

• Restrict catches to levels that are Restrict catches to levels that are

sustainable and for which the value of the sustainable and for which the value of the

catch is greater than harvesting costscatch is greater than harvesting costs

• Should take account of other costs that Should take account of other costs that

fishing imposes on societyfishing imposes on society

Introduction

Fisheries ManagementFisheries Management

• Restrictions on total catch, fishing effort, Restrictions on total catch, fishing effort, closed seasons – fishers struggle against closed seasons – fishers struggle against authority and usually win the battle but authority and usually win the battle but lose out.lose out.

• Allocation of harvest rights – areas, Allocation of harvest rights – areas, quotas - incentives to maximize values quotas - incentives to maximize values of rights aligned with conservationof rights aligned with conservation

Introduction

General conclusions of FAO General conclusions of FAO projectproject

1.1. Moratorium on the entry of additional large scale vessels, Moratorium on the entry of additional large scale vessels, 2.2. Allocation criteria and mechanisms for new participants, Allocation criteria and mechanisms for new participants, 3.3. Participation by all tuna fishing nations and entities in Participation by all tuna fishing nations and entities in

RFMOs, RFMOs, 4.4. Improved monitoring of tuna fishing fleet and its activity. Improved monitoring of tuna fishing fleet and its activity. 5.5. Collection of information on activity of vessels that are currently Collection of information on activity of vessels that are currently

not monitored.not monitored.

6.6.Closed regional vessel registers, and global Closed regional vessel registers, and global vessel register, vessel register,

7.7.Buybacks or similar incentives to reduce Buybacks or similar incentives to reduce any over capacity,any over capacity,

8.8.Rights of and incentives for participants in Rights of and incentives for participants in the fisherythe fishery..

9.9. Transparency and participation of stakeholders.Transparency and participation of stakeholders.

Rights based management systems

Examples within national jurisdictionsExamples within national jurisdictions

• Individual transferable quotasIndividual transferable quotas

• Territorial use rightsTerritorial use rights

• Limited entryLimited entry

Rights based management systemsCharacteristic of property rightsCharacteristic of property rights• exclusivityexclusivity

• durationduration

• securitysecurity

• transferabilitytransferability

The more developed these characteristics are The more developed these characteristics are the more the interest of the rights holders the more the interest of the rights holders are aligned with conservation of the stocksare aligned with conservation of the stocks

Application to tuna fisheriesApplication to tuna fisheries

• Extensive movements Extensive movements –›–› limited entry limited entry

or quota systems or quota systems andand management by management by

RFMOsRFMOs

• Excess fleet capacity in most tuna Excess fleet capacity in most tuna

fisheriesfisheries

Rights based management systems

Particular issues for rights based Particular issues for rights based managementmanagement

• to whom do rights belongto whom do rights belong

• how are the rights initially allocatedhow are the rights initially allocated

• who maintains a record of the rightswho maintains a record of the rights

• what system is used to ensure fishers what system is used to ensure fishers do not exceed their rights do not exceed their rights

Rights based management

Allocations by RFMOs to Allocations by RFMOs to individuals or cooperatives?individuals or cooperatives?

• Allocation to states considered best Allocation to states considered best practicepractice

• Examples of allocation to individualsExamples of allocation to individuals– AIDCP DMLs allocated to individual vesselsAIDCP DMLs allocated to individual vessels– IATTC limited entry rights to individual vesselsIATTC limited entry rights to individual vessels

• Neither is a strong property rightNeither is a strong property right

Rights based management systems

Mechanics of MCS with Mechanics of MCS with RBMSRBMS

Limited EntryLimited Entry

• List (register) of those entitle to fishList (register) of those entitle to fish

• Records or inspections of compliance Records or inspections of compliance with any controls on investment in with any controls on investment in capacity increases. capacity increases.

Mechanics of MCS with Mechanics of MCS with RBMSRBMS

Quota systemsQuota systems

• Register of quota(s) held by Register of quota(s) held by

individualindividual

• System to compare catch to quotasSystem to compare catch to quotas

• Quota balancing systemsQuota balancing systems

Mechanics of MCS with Mechanics of MCS with RBMSRBMS

• Key role of Registers of rights holdersKey role of Registers of rights holders

• Similar to registers of shareholdings in Similar to registers of shareholdings in companiescompanies

• Requires unambiguous rules Requires unambiguous rules concerning any changesconcerning any changes

• Important for those who maintain Important for those who maintain register be arms-length from rights register be arms-length from rights holdersholders

EPO tuna EPO tuna fisheries fisheries exampleexample

Purse seine vessel with a carrying capacity of 2000t of tuna frozen in brine.

A modern longline vessel with a carrying capacity of 400t of ultra low temperature frozen tuna

EPO tuna EPO tuna fisheriesfisheries

WW

WW

WW

WW

GuatemalaGuatemala: Villagran, Perez, : Villagran, Perez,

Sanchez, Jolon, LopezSanchez, Jolon, Lopez..

El SalvadorEl Salvador Salaverria, Sui, BarahonaSalaverria, Sui, Barahona

Costa RicaCosta Rica::

MugMug, Andraka, Andraka

SeguraSeguraPanamaPanama: Mituhasi, Pacheco: Mituhasi, Pacheco

Colombia: Barreto, ZapataColombia: Barreto, Zapata

EcuadorEcuador: Hara, Rendon, Parrales: Hara, Rendon, Parrales

PeruPeru: Valqui, De Paz, : Valqui, De Paz,

Kelez, CalderonKelez, Calderon

Nicaragua: UrteagaNicaragua: Urteaga

EPO tuna fisheriesEPO tuna fisheries

Growth of fleet sizeGrowth of fleet size

A buyback to reduce the EPO fleet A buyback to reduce the EPO fleet sizesize

• Could a buyback be effective? (no replacement)Could a buyback be effective? (no replacement)

• Resolution C-02-03Resolution C-02-03

• Currently no capacity limit for longlineCurrently no capacity limit for longline– but EPO quotas and global scrappingbut EPO quotas and global scrapping

• Even with capacity limit - effort creep – specify Even with capacity limit - effort creep – specify rights more completelyrights more completely

EPO tuna EPO tuna fisheriesfisheries

Choice of reductions in PS and LLChoice of reductions in PS and LL

. .

EPO tuna EPO tuna fisheriesfisheries

.

EPO tuna fisheriesEPO tuna fisheries

Financing a P-S buybackFinancing a P-S buyback• Some guesses at cost of PS buybackSome guesses at cost of PS buyback

• To reduce to RPOA capacity of 158,000 mTo reduce to RPOA capacity of 158,000 m3 3

–need reduction of 70,000 m–need reduction of 70,000 m33

• Recent sales of 1200 mRecent sales of 1200 m33 vessels $5-8.5 vessels $5-8.5 millionmillion

• Purchasing 59 vessels between $300-500 Purchasing 59 vessels between $300-500 millionmillion

• Less expensive to buy places on the RVR Less expensive to buy places on the RVR

EPO tuna fisheriesEPO tuna fisheries

Financing a buybackFinancing a buyback

• As well as active vessels governments As well as active vessels governments have rights to add about 54,000 mhave rights to add about 54,000 m33

• Cost $6-13 million – but more than 50% Cost $6-13 million – but more than 50% not associated with individual right – not associated with individual right – governments could write off.governments could write off.

Considerations in Considerations in designing a buybackdesigning a buyback

Section 6 of paper, butSection 6 of paper, but Dale’s Dale’s presentation will cover in more detail presentation will cover in more detail ..

ConclusionConclusion

• Overcapacity of tuna fleets is difficult to Overcapacity of tuna fleets is difficult to

solve with current approachessolve with current approaches

• Buybacks coupled with rights-based Buybacks coupled with rights-based

management seems a better approachmanagement seems a better approach

• Purpose of paper is to stimulate discussion Purpose of paper is to stimulate discussion

which we hope will be a step in the road to which we hope will be a step in the road to

better management and conservationbetter management and conservation