CEA PERU SUSTAINABLE FISHERIES THROUGH IMPROVED MANAGEMENT AND POLICIES

1. CEA PERU SUSTAINABLE FISHERIES THROUGH IMPROVED MANAGEMENT AND POLICIES Lidvard Grønnevet Environment Department World Bank Wednesday June 6, 2007

2. Diagnosis • overcapacity in the fishing fleet and fish plants • economic rents (net benefits) dissipated • inequitable distribution of benefits – widespread poverty in coastal and fishing communities • science and the environment • need to ensure scientific underpinning of decision making and address coastal and marine environmental degradation

3. FOCUS: POLICY RECOMMENDATIONS: • increase net benefits • move towards more equitable distribution of benefits • move towards an ecosystem approach to management

4. Peru Fisheries in a Global ContextMarine and inland capture fisheries: top ten producers countries in 2004

5. Fisheries Management • Dimensions for success in fisheries management: • Economic - meeting wealth and efficiency objectives • Societal - equity objectives; distribution and access • Biological - meeting conservations objectives • Political – stability in relation to political changes • Require institutional capacity to define balance and to implement responsible over time • Require institutional and policy environment that creates incentives to conserve fish and optimize wealth generation • Political commitment and will are essential • (From Bostock 2005)

6. This is the catch level that maximises the amount of fish that can be caught sustainably Profits and resource rents are maximised when the difference between the cost of fishing and the value of fish caught is greatest This is the catch Level that maximises the economic rent Cost of fishing Increasing level of catch / value of catch Catch value curve This is the open access point where costs of fishing equal the value of the fish produced. No resource rents are available Increasing number of vessels / fishing effort

7. What is the resource rent? Resource rents are the super profits available from fishing because the resource naturally renews itself. These super profits are in addition to the normal business returns on capital (e.g. boats) and labor employed.

9. Reasons for overcapacity:Technological advances (and subsidies) combined withFree or ineffective regulation of access to fishingandInsufficient mechanisms for gradual reduction of the fleet as the catch efficiency increases

10. FAO COFI Committee on Fisheries March 2007 Reaffirmed linkages between overcapacity, allocations, overfishing and IUU fishing, agreed that States should match their fishing capacity to sustainable harvesting levels and agreed upon the need to ensure that the urgent actions required in the IPOA-capacity were undertaken expeditiously and that its implementation was facilitated without delay (para. 16).

11. The issue of capacity was addressed, with a number of Members stating that overcapacity was as important an issue as IUU fishing. The Committee reaffirmed linkages between overcapacity, allocations, overfishing and IUU fishing. The need for both national and regional action was highlighted. The Committee agreed that States should match their fishing capacity to sustainable harvesting levels. The Committee agreed upon the need to ensure that the urgent actions required in the IPOA-capacity were undertaken expeditiously and that its implementation was facilitated without delay. Some Members recalled that in addressing the problem of overcapacity, the right of developing States to develop their own fisheries, as well as to participate in high seas fisheries, should be taken into account

12. NORWAY:

13. Limit access and allocate fishing rights • Institute a general framework for the allocation of rights, paying particular attention to • (i) equity in allocation, • (ii) distribution of social benefits • (iii) human welfare issues.

14. Allocate fishing rights: • equity • transparency • social/ economic rationale • A general system of quotas • Review/ refine hake fishery quota system - apply lessons to anchoveta fishery (catch, or effort quotas)

15. Reduce fleet capacity: • Decommissioning/ vessel buyback • Options: • Public financed • Sector financed • Market based • Fiscal reforms - revision of fishing fees (economic incentives to reduce capacity / capture of rents)

16. OECD Organisation de Coopération et de Développement Economiques Organisation for Economic Co-operation and Development DIRECTORATE FOR FOOD, AGRICULTURE AND FISHERIES FISHERIES COMMITTEE DRAFT REPORT ON CAPACITY ADJUSTMENT: THE POLITICAL ECONOMY OF DECOMMISSIONING PROGRAMMES AGR/FI(2006)18/REV

17. Best Practice Guidelines for Decommissioning Schemes • Prevention is better than cure • Clear objectives are essential • Ensure effective post-adjustment management is in place • Decommissioning schemes work well as part of a package of adjustment measures towards sustainable and responsible fisheries • Getting value for money • Achieve effective capacity reductions • Require beneficiaries to pay a proportion of the costs of decommissioning • Stakeholder involvement will improve acceptance and compliance • Undertake ex-post evaluation

18. Equity and governance: • co-management – greater participation and engagement by • civil society – shared vision and common agenda • transparency – public access to key information • management decisions in conformity with scientific advice • licensing, concessions, allocation of rights, EIAs • who captures the benefits? enforce improved regulations • close regulatory loopholes (e.g. Viking fleet) • expand monitoring, control and surveillance • progressively apply environmental standards to fish processing • targeted support for small-scale fishing communities

19. Adopt an Ecosystem Approach to the Management of Fisheries Strengthen the fisheries- and oceans-research capacity of IMARPE for science-based management of marine resources Pursue a precautionary approach in fisheries management Establish a revised system of fishery regulations. Ensure the rational and sustainable harvest of fish stocks: minimum fish size, seasonal closures, and gear restrictions Internalize the environmental costs of the fisheries sector Establish a system of marine reserves

20. Ecosystem Approach to Ocean Management

21. FAO COFI Committee on Fisheries March 2007 Implementing the ecosystem approach to fisheries, including deep-sea fisheries, marine debris and lost and abandoned gear Urged FAO to complete and distribute the technical guidelines on social, institutional and economic considerations in EAF as quickly as possible (para. 73).

22. IMPLEMENTING THE ECOSYSTEM APPROACH TO FISHERIES, INCLUDING DEEP-SEA FISHERIES, MARINE DEBRIS AND LOST AND ABANDONED GEAR In the discussion after introduction of document COFI/2007/8, there was broad agreement that EAF was the appropriate and necessary framework for fisheries management and many Members reported on the progress that they were making in implementation of EAF. Some members considered that the EAF should be based on existing effective management regime and measures, incrementally incorporating ecosystem consideration as knowledge and capacity grow, without prejudice to the application of the precautionary approach. The efforts by FAO to raise awareness of the need for EAF among Members and RFBs and to facilitate implementation were commended. FAO was urged to complete and distribute the technical guidelines on social, institutional and economic considerations in EAF as quickly as possible. On behalf of the Nordic Council of Ministers, Norway proposed that FAO should cooperate with the Council in planning and implementing a conference about EAF, with an emphasis on socio-economic and institutional conditions and implications.

23. COPEINCA ASA – OSLO BØRS LISTING PROSPECTUS Listing of the Company’s Shares on Oslo Børs. 26 January 2007 2.1.4 Environmental issues Current legislation regulates waste and toxic fluids, although gas emissions remain outside the scope of this legislation. In addition the government is currently working on regulations that will include gaseous liquid and solid contamination. As at the date of the drafting of this Prospectus, the Copeinca Group is in compliance with all environmental regulations and is not involved in any proceeding or investigation related to environmental issues.

24. COPEINCA ASA – OSLO BØRS LISTING PROSPECTUS Listing of the Company’s Shares on Oslo Børs. 26 January 2007 1.11 Summary of Risk Factors A number of risk factors may adversely affect the Company. Below is a brief summary of some of the most relevant risk factors described in chapter 2 “Risk Factors”. …………….. 1.11.1 Market risks ….. Current legislation related to environmental issues may change and incur expenses for the Copeinca Group to comply with the environmental regulations.

25. An Estimation of Compliance of the Fisheries of Peru with Article 7 (Fisheries Management) of the UN Code of Conduct for Responsible Fishing by Daniela Kalikoski, Marcelo Vasconcellos and Tony J Pitcher 1 MANAGEMENT OBJECTIVES

26. 3 PRECAUTIONARY PRINCIPLE

27. 4 STOCKS & GEAR

31. Key challenges

32. Conclusions • Clear benefits from sector reform • major political and social challenge • solutions not exclusively within sector – alternative livelihoods, financial sector, engagement of civil society, … • Bank’s strategic advantage • Next steps • possible fisheries component in a broader environmental reform project, but • depends on priorities of the Government of Peru for use of Bank support • CEA elements • estimate the loss of economic rents resulting from overcapacity • quantify the value chains and capture of benefits by different stakeholders

33. Thank you www.worldbank.org/fish