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Icelandic Fisheries Legislation Development and Experience

Icelandic Fisheries Legislation Development and Experience. Presentation November 2005. The Icelandic Fishing Industry. Catches 1,7 – 2,1 million tons Normally 2% - 2,5% of the world’s catches of wild fish Market value of seafood around 2 billion US dollars

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Icelandic Fisheries Legislation Development and Experience

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  1. Icelandic Fisheries LegislationDevelopment and Experience Presentation November 2005

  2. The Icelandic Fishing Industry • Catches 1,7 – 2,1 million tons • Normally 2% - 2,5% of the world’s catches of wild fish • Market value of seafood around 2 billion US dollars • Most important exporting industry in Iceland • 60% of merchandise exports • 40% of total exports of goods and services

  3. Catch in Icelandic Fishing Grounds 1905-2004

  4. PILLARS OF FISHERIES MANAGEMENT • HOW MUCH? • WHO? • HOW (WHERE,WHEN)?

  5. Milestones in Control of Fisheries • 3 miles in 1901 • Icelandic Law on Scientific Conservation of the Continental Shelf Fisheries in 1948 • 4 miles in 1952 • 12 miles in 1958

  6. EFFECTIVE MANAGEMENT IMPOSSIBLE • Capacity Increases • Productivity Gains • In 1975 Foreign Vessels Were Catching • About a Third of the Cod • A Quarter of the Haddock • Half of the Saithe • Half of the Redfish • 50 miles in 1972 • 200 miles in 1976 • UN Convention on the Law of the Sea 1994

  7. PROBLEMS IN SPITE OF EXTENSIONS • HOW MUCH and WHO problems not solved by extensions • 4 years periods in the mid 1970’s: the cod stock less than 1 million tons, the spawning stock of cod less than 200 thousand tons • The problem had become “Icelandic” • The HOW answers did’t solve the problems

  8. Development of Fisheries Management • 1973 - 1974: Quotas in inshore shrimp and scallop fisheries • 1975: Individual quotas in Icelandic herring • 1980: Individual quotas in capelin

  9. Development of Fisheries Management - Groundfish • 1976 - 1983: First TACs and restrictions of fishing efforts. Cod fishery gradually limited from 323 to 215 days a year. • 1983: Spawning stock of cod estimated at an all time low (just over 200000 tonnes) • 1983: Total catch of cod exceeded advice by 100000 tonnes

  10. Quota System Developed • 1984: First individual vessel quotas • Cod, haddock, saithe, redfish, Greenland halibut, plaice, ocean catfish • Allocations based on catches in reference period 1981-1983 • 1985 - 1990: Period of Effort Option • Vessels could choose effort restrictions • Catches still in excess of TAC and advice

  11. 1990: Fisheries Management Act • Only the quota option except for the small boats • Fishing vessels are allocated a fixed quota share of the species subject to TAC • No sunset clause in the legislation indicating a degree of permanence of fishing rights • The law says that the fish stocks are the common property of the Icelandic nation • Transferability of quota shares

  12. ANNUAL CATCH QUOTA • The quota share is multiplied by the TAC to give the quantity which each vessel is authorized to catch of the respective species during a single fishing year (September - August). • This is referred to as the vessel’s annual catch quota and is transferable • 1% quota share = 1% of the annual catch quota

  13. SMALL BOATS SEPARATE • A separate quota regime for most of the smallest boats (6 tons or less, now 15 tons) • Only long-line or hand-line fishing • Full transferability between the small boats • Not possible to transfer from the small boats to the larger vessels • Development from an effort based system to quota

  14. SHOCK ABSORBERS AND REGIONAL POLICY INSTRUMENTS • Up to 12000 tons of cod equivalent ground fish as a shock absorbers and regional policy instruments (normally less than 3% of the total catch) • Response to drastic reductions in stocks in isolated cases • Reactions to regional shocks • Long line preferential allocation • Now phasing out: Small additional allocations to small boats and a special 3000 tons allocation

  15. FLEXIBILITY • Flexibility in annual catches. • For ground fish species other than cod it is possible to exceed the annual quota and have quotas in other species reduced correspondingly. • Limits for each species: 2% of total quota holdings • Limit for total interspecies transfers: 5% of total quota holdings • For most species it is possible to move up to 20% of the annual quota to the next fishing year or move 5% from the next year to the current year.

  16. ANTI DISCARD FEATURES • Discard prohibition clause. • It is possible to land up to 5% of allocated quota (0.5% for pelagic species) without charging it against the quota allocation. • This catch is sold at an auction • 20% of the proceedings go to the company • 80% are used to fund marine research • It is also possible to land undersize fish (10% of each landing) and charge half of it against the quota

  17. LIMITS ON CONCENTRATION AND TRANSFERS • Single or related companies can’t hold more than 12% of the total annual quota (on cod equivalent basis). • The maximum share for each species with limitations is 20%. Exceptions are 12% for cod and 35% for redfish • A vessel can’t catch less than 50% of its annual catch quota for more than 2 consecutive years • It is only possible to transfer 50% of the annual catch quota from a vessel

  18. RESOURCE TAX • 9.5% tax rate on calculated industry wide gross profits phased in from 2004 to 2009. (Initially 6%) • The tax base is calculated as the value of the landings minus estimated cost. The main cost factors are labor, fuel and other operating cost.

  19. TAC DECISIONS • Decisions on total allowable catch (TAC) are taken by the Minister of Fisheries • The decision is based on the advice of the Marine Research Institute. • Special catch rules are applied for cod, herring and capelin

  20. Are There Any Concerns? • Estimations of the stocks are subject to uncertainty • Ecosystem based approach underdeveloped • Pressures from stakeholders and different interests • General limitations of rules • The HOW question forgotten

  21. CONTENTIOUS ISSUES • Methods and management advice of the MRI • Political preferrence of small boats • Concentrations and resistance to change • Pricing of fish in vertically integrated companies • Pricing of fish when quota is rented • The resource tax

  22. EFFECTIVE MANAGEMENT • Decisions on the total allowable catch are followed relatively closly • No “holes” in the system any more. All vessels are subject to quotas

  23. The Cod Stock

  24. Cod:Advice-Quota-Catch and Catch per Unit Effort

  25. Greenland Halibut:Advice-Quota-Catch

  26. Herring:Advice-Quota-Catch

  27. Redfish:Advice-quota-Catch

  28. Haddock:Advice-Quota-Catch

  29. Saithe:Advice-Quota-Catch

  30. Capelin:Advice-Quota-Catch

  31. Offshore Shrimp:Advice-Quota-Catch

  32. INCREASED EFFICIENCY • Focus on reducing waste and earning profits • Fewer people are needed to work in the industry • The standard of living of those who are engaged with the industry has improved

  33. PROFITABILITY HAS IMPORVED

  34. Employment in Fisheries

  35. NEW WAYS OF THINKING • Economic operators have an incentive to emphasize long term interests and they have most at stake in the sustainability of their fishery • Operations can be organised with the market as a point of departure with ever smaller number of people creating ever greater values

  36. THRIVING INDUSTRYSUCCESSFUL EXPERIENCE • Always try to adapt to the markets • Seek the higher end markets • Constant development of new methods and products • High productivity is the basis of survival • The quota regime ha become more and more entrenched • Tensions have subsided • Successful ITQs

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