November 24, 2015 — The following is an excerpt from a commentary by Stephen J. Hall, David J. Mills, and Neil L. Andrew, written in response to an article published last year in Slate magazine, by Lee van der Voo.

The commentary was published yesterday by CFOOD, a project of the University of Washington involving top marine scientists from around the world, including Dr. Ray Hilborn. CFOOD’s mission is to identify and refute “erroneous stories about fisheries sustainability that appear in mainstream media.”

The commentary addresses issues, most notably fleet consolidation, related to the implementation of catch share systems. 

Writing last year in Slate magazine, Lee van der Voo considered catch shares in the US to be, “one of the coolest vehicles environmental policy has seen in decades,” because they reduce fishing effort, diminish incentives to fish in dangerous weather, can boost the value of seafood, and most importantly, were designed to keep fishing rights with the fishermen and their communities. However this last attribute has not worked for most catch share programs and increasingly these rights are bought by large investment firms and offshore companies that find loopholes in the loosely-regulated catch share laws and regulations.

Van der Voo fears that over the long term catch shares will increase costs, fishermen will earn less because of higher rental payments owed to, “people in suits,” that own the fishing rights. Consumers would then pay more in this scenario while a handful of investors would become rich.

Atlantic coast clam fisheries are the first example of this cycle: Bumble Bee Foods which has exclusive rights to almost 25% of America’s clams, was recently acquired by Lion Capital, a British equity firm. The Alaskan crab fisheries have also experienced a disconnect in recent years between fishing rights ownership and the people actually harvesting the resource.

Proponents of catch shares need to, “acknowledge that it’s an investment vehicle too, and the fish councils that manage it lack resources and political savvy to keep fishing rights in the US and in the hands of fishermen.”

Comment by Stephen J. Hall, David J. Mills & Neil L. Andrew

In the context of US fisheries, the term “catch shares” refers to a system in which the government grants fishing rights (quotas) to individuals or companies on a de facto permanent basis and establishes a market for buying, leasing or selling those rights. In other parts of the world, this same approach is referred to as Individual Transferable Quotas (ITQs), or Transferable Fishing Concessions (TFCs).

For ensuring the sustainability of fish stocks, catch shares in the US are “one of the coolest vehicles environmental policy has seen in decades.” Yet while the potential of catch shares to reduce fishing mortality to sustainable levels is clear, the long term benefits for fishers and fishing communities are much less so. Van der Voo describes how catch shares in the US clam fishery have accumulated in the hands of a few wealthy investors and offshore companies. Clearly, it is an issue that deserves much greater attention.

Lessons from Experience

The potential pitfalls of catch shares and other schemes to allocate private property rights in fisheries have not escaped scholars. For example, Benediktsson and Karlsdóttir (2011)  describes how the ITQ system in Iceland saw 50% of quota in the hands of 10 companies by 2007, a result that arguably contributed to the country’s financial crisis. Analyses of events in Denmark and Chile point to similar concentrations of quota with marked negative impacts on traditional fishing communities. In Chile, an estimated 68% of people working in the fisheries sector had to share 10% of the quota with the remaining 90% was owned by just four companies.

Rights-based fisheries (RBF), the concept that environmental and economic objectives in fisheries are best served by introducing private property rights, has been a dominating proposition over the last two decades. Zealous promotion of RBF (e.g. Neher et al. 1989, Cunnigham et al, 2009), and experiences such as those described above, has led to equally zealous rebuttal, largely on the grounds of social justice, particularly for small-scale fishers.

In South Africa, that rebuttal ultimately took the form of class action to challenge the prevailing system. Based on ITQs, this system was intended to reduce poverty by creating small-scale fishing enterprises that generated wealth for fisher households. Unfortunately, it was a system that saw 90% of the country’s 50,000 small scale fishers lose their rights. As Isaacs (2011) notes:  

This system failed as many new entrants were allocated unviable fishing rights, most of them were vulnerable, many sold their rights to established companies, and some fell deeper into poverty. At local community level, the wealth-based approach of allocating small quotas to many rights holders resulted in the community elite (teachers, artisans, shop-owners and local councillors) capturing the rights. Many bona fide fishers with limited literacy and numeracy skills were unable to comply with all the formal requirement of the rights allocation process.

In 2007, the courts granted an order requiring the government to develop a new small-scale fishing policy. This new policy was endorsed in 2012. Instead of being based on the principles of individual property rights, the focus was on collective rights granted to communities.

As with the US clam fishery, these examples suggest that, even when measures are put in place to try and avoid unwanted social impacts and retain an equitable distribution of benefits, catch share (rights based) schemes often fail to maintain social justice and the livelihoods of small-scale fishers and fishing communities.

A Confused Debate

Setting a total allowable catch and allocating rights can certainly be an effective way of ensuring the sustainability of a stock, provided that the level is appropriate, ongoing monitoring processes are well designed and there is compliance. Arguably, it is for this reason that many NGOs have convinced philanthropic investors of the merits of this approach. In the last decade, fisheries improvement projects in both the developed and the developing world have become big business; establishing “catch shares” is often a key selling point.

What is not always clear, however, is the extent to which these NGOs, in promoting “catch shares” are also advocating the allocation of private property rights in a market-based system. The language that distinguishes between this strict definition of “catch shares” and other approaches for ‘sharing the catch’ (which, of course, all systems must ultimately do) is terribly blurred.

Exploring this idea, Macinko (2014) argues that a tool (pre-assigned catch, i.e., catch shares) is being confused with an ideology (the sellable, but simplistic notion that private ownership promotes stewardship). everal social movements, for example, feared the now defunct Global Partnership for Oceans’ (GPOs) use of terms such as “community rights” reflected “a new euphemism and language strategy in pursuit of more private and individual access rights regimes.”

A more generous interpretation of the GPO terminology is that, after an early period of advocacy, the pitfalls of “catch shares” with respect to social outcomes were recognized and other ways of sharing the catch were acknowledged. The same interpretation can also be applied to NGOs currently involved in fisheries improvement projects around the world. The proof of that generosity will lie in the approaches that are adopted for inclusion of small-scale fishers. What should those approaches be?

Read the full story at CFOOD