New Brunswich Telegraph Journal
October 17, 1995
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If the landlubbers in the reading audience will indulge me for another column, I will elaborate a bit further on conserving fish stocks through privatizing marine fish quotas. The primary mechanism for this is assigning individual transferable quotas (ITQs). We only have to look at Canadian experience with ITQs to know it will not work.
Canada was one of the first countries to institute ITQs in fisheries management. In 1982, five years after Canada assumed responsibility for fish management out to 200 miles and three years after the Department of Fisheries and Oceans was established, an ITQ system was put in place for the offshore groundfish fishery. A few years later, DFO extended ITQs to the midshore fleet. There is now intense pressure to impose it on the inshore fishery. In spite of ITQs, we saw the continued buildup of deadly efficient fleets, overfishing, highgrading and underreporting, the need for extensive government enforcement, overbuilding of onshore processing capacity, and fishing efforts targeted on spawning grounds. In short, decimation of groundfish stocks continued unabated.
While ignoring the Canadian experience, ITQ advocates usually point to New Zealand as the shining star of fisheries privatization. Elizabeth Brubaker, in her book Property Rights in Defence of Nature, says, “In New Zealand, which introduced ITQs in the mid-1980s, the system now governs 32 different fisheries. More efficient fishermen have bought out their less efficient counterparts, eliminating the excess capacity that had previously characterized the fleet. And with economic incentives to preserve and enhance the fishery, quota holders are financing research, exploration, enhancement, and policing measures.”
“Although governments frequently set total allowable catches, ITQ systems can become completely self-regulating, with an association of all ITQ holders setting catches and taking on other management responsibilities. Such a shift in responsibility occurred in several New Zealand fisheries in the early 1990s. A further evolution could entail outright ownership of fisheries, removing owners’ obligation to utilize their resources exclusively as fisheries when conservation, tourism or other uses proved more valuable.”
Many philosophical objections could be raised in response to this approach, including the question of who’s efficient and who isn’t. However, in keeping with my focus on the myth that private ownership generates stewardship and a conservation ethic, I’ll address the actual outcome of this system in New Zealand.
Perhaps the most central concern is the state of fish stocks. Neither of the two primary conservation mechanisms -setting of a Total Allowable Catch (TAC), an upper limit on what may be caught, and providing an economic incentive to quota holders to conserve stocks – have been effective. Industry frequently engages in intense political lobbying to override TAC recommendations. Discarding, high-grading, poaching and a flourishing black market are prevalent.
Since quotas are private property, the owners assume their right to either make a profit from it as they wish, or be compensated for what is considered a ‘loss.’ The high cost of buying back quotas as compensation prevents government from reducing the TAC to address overfishing. In the orange roughy fishery, for example, despite an urgent need to reduce the quota from 21,000 tonnes to 5,000 tonnes, the government has been unwilling or unable to buy back the necessary quota from their private owners. Some major coastal species, such as snapper, their biggest finfish earner, are in worse state now than before ITQs were instituted. The May 1993 stock assessment warned that for most of the stocks in the quota management system “it is not known if…catches at the level of current Total Allowable Catch are sustainable…”
Meanwhile, the system has removed access to fish resources from thousands of small-scale subsistence (read: inefficient) fishers and many small or local community businesses along the coast, resulting in economic hardship in the coastal communities. Instead, quotas have been increasingly aggregated to a few larger (read: efficient), urban-based companies and despite a ban on foreign ownership of quota, there is a trend towards increasing foreign control.
Environmental fisheries consultant Leith Duncan says this of New Zealand: “Ownership, far from fostering an attitude of harvesting a renewable but finite resource, seems to encourage a culture in which everything in the marine ecosystem is available for exploitation and maximizing profit…apparent in the widespread and increasing number of offences coming to public attention. These range across all levels of industry, from sophisticated frauds netting companies fat profits, to chartered foreign supertrawlers poaching inside the limits, down to individuals poaching rock lobster and abalone. By some estimates, in some areas 80 per cent of the fish on the domestic market is from the black market…Privatization, then, is not for conservation, but to ensure that those who dominate the market control the resource. In New Zealand this has gone to the extreme, even eliminating the time-honoured custom of ‘home freight,’ in which a fisher gives his family or friends a few fillets from the trip’s catch. Even these fish have to be landed a licenced fish receiver and conveyed by market transaction, not personal gift exchange…The…ITQ system has…given industry the financial security to develop infrastructure, new export markets and also the ability to resist the measures necessary for effective management. It has irreversibly aggregated quota and the right to fish commercially from local people to the large companies and the corporations, and has unjustly transferred a national heritage to the prime benefit of a relatively few owners and shareholders. ITQS have increased the complexity and costs of management but have not been effective in conserving the fisheries nor in protecting the marine environment. Clearly, by any measure, they have been a failure.”
Not quite the pretty picture the theorists paint. Given the Canadian experience to date, we will see all this and more with a wholesale transfer to an ITQ fishery management system. Surely this is not the future we wish for our fishing communities or our fish.