Rights Based Management

1. Rights Based Management Promise or Peril for Russia’s Fisheries? Bubba Cook, WWF Senior Fisheries Program Officer Kamchatka/Bering Sea Ecoregion

2. What is Rights Based Management (RBM)? • Under a rights rights-based management system, those individuals or groups entitled to have access to the fishery are said to have use rights; that is, the right to use the fishery resources while others do not have the right to use the fishery.

3. What is Rights Based Management (RBM)? • Fisheries management systems that assign rights to a share of a fishery are specified by: • various rights such as access, withdrawal, management, exclusion, transfer • nature of the shares in the fishery (licenses, effort units, quota shares) • type of entities that hold rights • rules concerning use of the rights • The composition of rights varies with different fisheries and different points in time

4. What is Rights Based Management (RBM)? • There are several forms of rights-based fisheries management mechanisms: • Input rights – effort restrictions, such as time fished, vessel size, amount and type of gear • Output rights – right to catch a piece of the TAC, such as individual quotas and community quotas • Access rights – Territorial Use Rights Fisheries (TURFs) and limited entry licenses • We will look at 3 types of output based systems: Individual Fishing Quota (IFQ), Cooperatives, and Community Programs

5. Advantages of RBMs • end derby style “race for fish” • promote economic efficiencies • improve safety • address allocation conflicts • increase utilization/recovery rates • facilitate reduction of bycatch and discards • allow efficiency and consolidation while maintaining coastal community structures and fleet composition • improve product quality

6. Disadvantages of RBMs • debatable stewardship results • questionable equity/fairness when establishing rights • less capacity = fewer jobs/less income distribution • potentially irreversible decisions • excessive consolidation resulting from transferability of rights

7. “Race for Fish” Problems • Gear conflict • Economic inefficiency and waste – (“capital stuffing,” bycatch, lost gear, ghost fishing, high discard mortality, etc.) • Low CPUE • Safety • Low ex-vessel prices • Poor product quality

8. IFQ Programs • Quota share (QS) is a permit, expressed in generic units – Permit is considered “permanent” - does not change from year to year • Annually all QS units for a designated area and species are summed – Calculation yields the Quota Share Pool (QSP) for that area and that year

9. IFQ Programs • Amount of QS in area held by a person is then divided by the QSP for that area • Resulting fraction is multiplied by the annual TAC for that area/species • Result is the pounds of fish on the person’s annual IFQ permit QS/QSP x TAC = IFQ • IFQ permit is constrained by QS limits

10. Calculating QS • Example of QS calculation for fisherman “F-6” • TAC a portion of ABC • TAC = QSP • F-6 holds rights to 8% of QSP • 8% x 30 mmt = 2.4 mmt • Fisherman F-6 has right to harvest 2.4 mmt of fish

11. The Halibut/Sablefish IFQ Model • Allocation of shares to individual vessel owners • Vessel type and size categories • Owner-on-board requirements (some categories) • Limits on leasing/transferability (across categories) • Use/ownership caps (individual and vessel level) • Loan program (for new entry) • Block program (further check on consolidation) • Community purchase program

12. The Bering Sea/Aleutian Islands Crab IFQ/IPQ Model • Harvester IFQs to license holders (90 percent “A shares” which are subject to regional delivery and processor share delivery requirements; and, 10 percent “B shares”–free of landing requirements) • Processor IPQs (with one-to-one correspondence to “A shares”) • 15 harvest cooperatives coordinate catch from 100 vessels across 26 processors • Price arbitration process for A share landings • Captains share allocation (3% of harvest shares) • Use/ownership caps • Liberal transfer and ‘stacking’ allowances • Data collection and comprehensive review

13. IFQ Problems • “Give-away” of public resource • Contrary to competitive and open fishing lifestyle • Initial “windfall profits” considered unfair • Shift of bargaining power to IFQ holders • Consolidation harmed skippers, crews, and fishing communities • Compliance difficult (incentive for highgrading, data fouling, non-reporting)

14. IFQ Benefits • Extended season lengths • Conservation benefits • Consumer benefits • Reduced capital inputs • Fewer operations • Less expensive operations • Improved safety at sea • Increase ex-vessel value, bigger paydays

15. Cooperatives • Three types of authorized fishery cooperatives: • (1) marketing/supply cooperative w/o quota; limited ability to negotiate price or cooperate in harvesting • (2) harvest cooperative with group allocation but only cooperate in dividing the share among vessels • (3) marketing cooperative with quota which can jointly harvest, market and negotiate prices

16. The Bering Sea Pollock Cooperative Model • Allocation of shares to cooperatives (112 harvest vessels in eight processor co-ops plus 14 vessels in one catcher/processor co-op) • Closed class of harvesters and processors • Cooperative/processor associations based on historical landings • Limited mobility to move among cooperatives or deliver to other processors • Use/ownership caps • Sideboards to limit encroachment on other fisheries • High degree of fleet ‘self-management’ through agency approved cooperative agreements

17. Cooperative Advantages • Slow the pace of fishing and reduce capacity, leading to more product at lower cost • Improve communication among fishermen to reduce by-catch and meet market requirements • Greater participation of fishermen in management decision decision-making (co-management) • TAC is shared among members in a way decided by members, not a management agency

18. Cooperative Disadvantages • Agreements sometimes break down due to poor design and changes in government policy • Sometimes difficult for individual fishermen to accept decisions made by the cooperative • Profitability requires reduction in active fishing effort • Increased costs of forming and operating the cooperative • Cooperative formation does not avoid the need for some allocation of the TAC • May reduce diversity of fleets, factions, numbers of communities

19. Community Allocation Programs • Community Development Quota (CDQ) Program – Established as a subset of the AFA pollock and Halibut/Sablefish IFQ program. • IFQ Community Purchase Program – Established as an additional subset under the Halibut/Sablefish IFQ program. • Community Co-management – Various restricted access-based programs.

20. Community-Based Management Elements - CDQ • Benefits to 65 remote coastal communities in Bering Sea/ Aleutian Islands since 1992 • Sets aside 10% of pollock TAC, 7.5% of all other groundfish and crab TACs, and halibut set aside • Since 1992, over $95 million in wages, education, and training benefits provided to over 22,000 western AK residents • 2002 total revenues of the six CDQ groups was about $70 million combined

21. Community-Based Management Elements - IFQ • Communities may establish non-profit corporations to act on their behalf • The non-profits apply to NMFS for authority to receive and hold QS • When the application is approved, the non-profit is certified as a Community Quota Entity (CQE) and enters the QS market • CQEs who hold QS then “lease” annual IFQ permit amounts to community residents • CQEs remain in the market, and buy/sell QS as their finances and interests allow

22. Community-Based Management Elements – Co-management • Partnership arrangement in which fishermen and government share responsibility and authority for management • Fishermen/community given legal authority to manage a fishery • Formal agreements on roles, responsibilities, and rights in management established through consultation and negotiation • Through self-management, community empowered to develop a flexible and creative management strategy

23. Marketing Benefits? • Increasing consumer demand for seafood from sustainable and traceable fisheries. • RBM systems generally provide a more transparent and traceable system that is more likely to be certified under ecological certifications such as the MSC.

24. Are Russia’s Salmon a Good Candidate for an RBM system? • Maybe, maybe not…that is for the Russians to decide. • History of the fate of other industrialized fisheries would support some type of output based controls.