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

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. 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.

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

What is Rights Based Management (RBM)? There are several forms of rights-based fisheries management mechanisms: 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 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 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 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 We will look at 3 types of output based systems: Individual Fishing Quota (IFQ), Cooperatives, and Community Programs

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

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

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

IFQ Programs Quota share (QS) is a permit, expressed in generic units – Permit is considered “permanent” - does not change from year to year 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 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

IFQ Programs Amount of QS in area held by a person is then divided by the QSP for that area 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 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 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 IFQ permit is constrained by QS limits

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

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

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) 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”) Processor IPQs (with one-to-one correspondence to “A shares”) 15 harvest cooperatives coordinate catch from 100 vessels across 26 processors 15 harvest cooperatives coordinate catch from 100 vessels across 26 processors Price arbitration process for A share landings Price arbitration process for A share landings Captains share allocation (3% of harvest shares) Captains share allocation (3% of harvest shares) Use/ownership caps Use/ownership caps Liberal transfer and ‘stacking’ allowances Liberal transfer and ‘stacking’ allowances Data collection and comprehensive review Data collection and comprehensive review

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)

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

Cooperatives Three types of authorized fishery cooperatives: Three types of authorized fishery cooperatives: (1) marketing/supply cooperative w/o quota; limited ability to negotiate price or cooperate in harvesting (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 (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 (3) marketing cooperative with quota which can jointly harvest, market and negotiate prices

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) 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 Closed class of harvesters and processors Cooperative/processor associations based on historical landings Cooperative/processor associations based on historical landings Limited mobility to move among cooperatives or deliver to other processors Limited mobility to move among cooperatives or deliver to other processors Use/ownership caps Use/ownership caps Sideboards to limit encroachment on other fisheries Sideboards to limit encroachment on other fisheries High degree of fleet ‘self-management’ through agency approved cooperative agreements High degree of fleet ‘self-management’ through agency approved cooperative agreements

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

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

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.

Community-Based Management Elements - CDQ Benefits to 65 remote coastal communities in Bering Sea/ Aleutian Islands since 1992 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 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 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 2002 total revenues of the six CDQ groups was about $70 million combined

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

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

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

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