House of Lords - European Union - Twenty-First Report

Select Committee on European Union Twenty-First Report

Chapter 2: The Progress of the Common Fisheries Policy since 2002

44. As part of our inquiry, we invited witnesses to set out their assessment of the impact of the various elements of the 2002 reform of the CFP. In this chapter, we review some of the responses received, and present the conclusions we have drawn from them. With these findings in mind, we move on—in the next chapter—to an examination of ongoing challenges facing fisheries managers, and identify the most promising avenues for future reform of the CFP.

45. The 2002 reform of the Common Fisheries Policy addressed four main elements of fisheries management: the time-scale over which fisheries are managed, through the introduction of recovery and management plans; structural policy; control and enforcement; and stakeholder involvement, through the establishment of Regional Advisory Councils. Each is the subject of a separate section below.

Recovery and Management Plans

46. Under the new basic[15] Regulation governing the CFP, EU Member States acting through the Council may choose to adopt multi-annual management or recovery plans for particular stocks (see Paragraph 28 above). This innovation was introduced in an attempt to promote a longer-term approach to fisheries management, avoiding dramatic variation (usually cuts) in TACs from year to year. The aim was to allow the industry to plan ahead, but also to take the political sting out of the annual Council negotiations on TACs, as it was anticipated that Ministers might find it easier to accept cuts in TACs if they formed part of an ongoing management strategy and therefore did not come as a surprise to national fleets.

47. Six years on, only four recovery plans (for certain cod, hake and nephrops stocks) and four management plans (for certain plaice, sole and cod stocks) have been adopted. A further management plan (for West of Scotland herring) is in preparation, and an international recovery plan for blue fin tuna is being implemented in the Mediterranean. Meanwhile TACs continue to be set for around 130 fish species every year.

Witnesses' Views

ADOPTION OF PLANS

48. Almost all of our witnesses, including representatives of the catch industry, were supportive of the concept of multi-annual management of fisheries (NFFO, Q 181; SFF Q131; European Commission Memorandum, Q 1; DEFRA Memorandum, Para 3). The RSPB emphasised the importance of long-term strategies in breaking "the vicious cycle of annual horse trading that goes on in the Fisheries Council" (Q 207).

49. However, there was frustration at the slow pace with which recovery and management plans were being adopted. Dr Joe Horwood, Chief Fisheries Science Adviser to the Government, noted that while the Common Fisheries Policy stipulates that fisheries should be managed either under a recovery plan or under a management plan, "we are not quite there yet" (CEFAS, Q 9). The RSPB put it less delicately, pointing out that "precious few of the European fish stocks have been subjected to either of these—about 16 per cent in total" (RSPB, Q 207). The Joint Nature Conservation Committee also observed that the plans were taking "a very long time to put in place … and have taken a fair bit of effort" (JNCC Q 300). Meanwhile the UK Government recognised that most species "are still managed on an annual basis" (DEFRA Memorandum, Para 3).

50. The Commission conceded that the number of recovery and management plans adopted had been "limited", even if those in place did focus on the main species. Officials attributed this to capacity shortages on all sides, explaining that "the capacity of the Commission to produce these plans, the capacity of stakeholders within RACs to examine Commission proposals and the capacity of Member States to try to discuss and digest these plans are very limited" (Q 583). They added that while the consultation of stakeholders was "a major step forward" for the CFP, it does require time, not only from the Commission but also from the stakeholders themselves, thereby drawing out the process.

RESULTS DELIVERED

51. Meanwhile, the results produced by the handful of recovery plans adopted since 2002 appear to be mixed (European Commission Memorandum, Q 1). The Commission noted that for most of the cod stock, fishing mortality did not decrease as expected and the stocks have yet to recover. The Northern hake stock has recovered—with the help of good recruitment—but the Southern hake stock remains subject to high fishing mortality.

52. The UK Government's assessment that recovery plans "have delivered some results" was a little more encouraging. It emphasised that the Northern hake stock had recovered, and that after significant reductions in fishing effort, the first indication of a recovery in the North Sea cod stock was becoming apparent (DEFRA Memorandum, Para 3). Dr Joe Horwood, Chief Fisheries Science Adviser to the Government, agreed that fishing pressure on cod in the North Sea "has been reduced very considerably", and that fishing mortality was at "its lowest level for 40 years". Dr Horwood nevertheless emphasised that this had come "at a huge cost, we have cut back our northern white fish fisheries by 60 to 70 per cent which has been a massive problem for the people involved". By contrast there was "very little evidence of progress in the Irish Sea and to the west of Scotland" under the cod recovery plan (Q 9).

53. Robin Rosenkranz, Fisheries Counsellor for the Swedish government, suggested that one reason that recovery plans had "not worked" was that the "European fishing fleet is way too big … compared to the fishing resource we have" (Q 774). He argued that with this "huge overcapacity", it would be very difficult to make recovery plans work "because we will have this pressure. We will always have the exceptions, we will always have these socio-economic concerns" (Q 775).

54. Other witnesses were less pessimistic, suggesting that most plans had not been in place long enough to reach a conclusive verdict on their efficacy. Dr Euan Dunn of the RSPB thus maintained that "it is too early to say, in most cases, whether these long-term management plans or recovery plans are working. The jury is out" (Q 207).

REVIEWING RECOVERY AND MANAGEMENT PLANS

55. This has not stopped existing plans from being "reviewed and improved" (European Commission Memorandum, Q 1). Some witnesses expressed reservations about this process. The RSPB noted that the "cod recovery plan has already been opened up to revision after really being in place for quite a short time" (Q 207). The UK Government pointed out that the effort management regime (days at sea) under the cod recovery plan has been amended significantly almost every year since it was introduced in 2003, in each case with no or minimal evaluation of the effects of the previous year's changes (DEFRA Memorandum, Para 3). They were concerned that there appears to be "no clear monitoring of success, which may make it unclear as to which policies are effective".

56. Witnesses nevertheless offered a number of suggestions for improving the efficacy of recovery and management plans. One recurring recommendation was that plans should be adjusted automatically, on the basis of pre-ordained rules. The RSPB identified a need to "lock as much of the December Council as we can into fixed harvesting rules, so that the ministers cannot play politics with these recovery plans" (Q 207). The Joint Nature Conservation Committee took a similar view, proposing that recovery and management plans "should be more or less automatic: we get the signal from this particular indicator saying the environment or the fish stock is in such a state … and then there is an almost automatic output" (Q 300). The Chief Executive of the Scottish Fishermen's Federation also advocated a more automated approach: "If you know that the rules state that if x happens, if the spawning stock of biomass rises above level y, then there will be a maximum of a 15 per cent increase in the TAC or likewise a match of 15 per cent down, it sort of de-stings the political process", he argued (Q 139). The UK Government, however, cast doubt on whether EU governments would be prepared to surrender their discretion to the extent required. They pointed out that the "Council of Ministers has demonstrated that it is not prepared to make automatic annual 15 per cent cuts in days at sea" (DEFRA Memorandum, Para 3).

57. The UK was also one of a number of Member States lamenting the fact that management plans have been based "almost solely on the biological parameters and have taken little account of social and economic factors." Impact assessments "have been absent or of poor quality" and yet "impacts need to be properly understood to be sure that policies are not giving rise to unintended consequences", the Government argued. They explained that this did not mean that conservation measures should be watered down simply because they will have an impact on the fleets affected, but that the ways in which fishing businesses might react to restrictions (e.g. by intensifying other activities or moving into different areas) needed to be borne in mind (DEFRA Memorandum, Para 3). Dr Horwood of CEFAS offered an illustration, pointing out that effort controls are implemented "on a vessel-based system", meaning that when days at sea (effort levels) are cut, fishermen "cannot just sell up one boat and put two half days on one vessel to increase their own efficiency because then they will lose their days entitlement" (Q 9). This was "an element of economic efficiency that is not addressed by the current [cod recovery] plan", he suggested.

58. The Spanish government expressed a more general dissatisfaction based on the impression that management and recovery plans have "lent more weight to biological criteria than to socio-economic issues". It noted that the plans put in place were "lacking in information with regard to the socio-economic repercussions of their implementation" (Spanish government Memorandum, p 181). It reminded us that the CFP makes provision for socio-economic considerations, and emphasised that "these should not be forgotten or relegated to the background". Sujiro Seam, Fisheries Counsellor for the French government, echoed these concerns, explaining that "we believe that right now, the emphasis is much more on the biological aspects than on the socio-economic aspects, at least when it comes to the proposals from the Commission". The French government's "role and our behaviour afterwards in the negotiation process is to try to put the balance right". In practice this means that when specific plans like recovery and management plans are under discussion, "we consider that the objectives should be set at a level which allows recovery of the stock or management of the stock but at the same time allows our fishermen to conduct their business in a profitable manner", Mr Seam told us (Q 722).

59. Commission officials suggested that the need to prepare impact assessments was one of the factors drawing out the process of adopting recovery plans. They explained that the preparation of impact assessments "is sometimes a complex exercise in which we have to evaluate economic consequences, and data for these evaluations are not necessarily at our disposal" (Q 583). They went on to point out that the economic information required to carry out such evaluations often simply does not exist. The Commission is trying to remedy this, in part through the Data Collection Regulation, but although it can collect recent data, historical data is still missing because there is no tradition of collecting such information (Q 584). Commission officials also identified "a certain shortage of well-trained people on the economic side" to carry out the necessary analysis within the Commission.

60. A third set of suggestions for the future development of recovery and management plans centred on improving co-ordination across management measures. Dr Horwood argued that "it is not a lot of good having a management plan for haddock if it is not really well aligned with the management plan for whiting and for cod, so there is a lot more work to be done in understanding how to develop management plans for fisheries as opposed to a nice simple management plan for a fish" (CEFAS, Q 9). Aaron Hatcher, a Senior Research Fellow at CEMARE, suggested that this might be done by trying "within reason, to set quotas in more or less the proportion in which the fish are going to appear in the fisherman's net" (Q 72). Dr Horwood also emphasised the importance of aligning catch restrictions and effort controls, explaining with reference to the cod recovery plan that because the process of setting effort levels and catch restrictions "went on in a quasi-independent way", it had not proved possible "to reduce the fishing effort to the level which the targets implied, even though the quotas are consistent with the plans" (CEFAS, Q 9).

Committee's Conclusions

61. We support the principle of multi-annual management of fisheries, and believe that—if properly designed—recovery and management plans should facilitate both the industry and the regulators' activities. We recognise that capacity constraints and the need for consultation have held back the speed with which recovery and management plans can be adopted, but believe that the current glacial pace of progress is unacceptable and must accelerate. We therefore urge the Member States and the European Commission to attach greater priority to the adoption of recovery and management plans, and deploy their resources accordingly.

62. We fully concur with those witnesses who emphasised the need to co-ordinate across plans and management measures that affect the same fishery if recovery and management plans are to prove workable and deliver results. This may require adaptation in the working practices of the Commission and the Council, and benefit from the input of the Regional Advisory Councils. With appropriate resourcing, we believe that plans affecting the same fisheries could and should be developed in parallel. This approach need not, therefore, draw out the process of adopting recovery and management plans even further.

63. We concur with the UK Government on the need for impact assessments to be carried out before management and recovery plans are adopted. These should be based on the best available data. The practical implementation of a plan should in our view receive detailed—and insofar as possible, objective—attention before the proposal reaches the Council. If amendments are adopted in Council, impact assessments should be updated accordingly. The aim would be to make carefully considered adjustments that facilitate compliance without compromising conservation goals.

64. While we recognise that some degree of trial-and-error may have been inevitable in drawing up the first few recovery and management plans, we consider that yearly revisions to multi-annual plans undermine their very raison d'être. Automatic adjustments to plans based on fixed harvesting rules should be used to deliver an element of responsiveness without sacrificing predictability—providing that Member States can agree to suspend rules only in genuinely exceptional circumstances.

Structural Policy

65. Although Article 11 of the basic CFP Regulation[16] establishes national fleet references designed to impose a ceiling on the size of Member States' fleets, no mandatory capacity reductions were imposed as part of the 2002 reform. Instead, Member States were charged with adapting the size of their fishing fleets to their fishing opportunities. Article 14 of the Regulation charges the Commission with the task of presenting a yearly summary of the results of Member States' efforts to right-size their fleets. Member States are in turn obliged to send a yearly report to the Commission outlining their progress in this respect. Key conclusions from the Commission's latest report[17] are summarised in Box 7 below:

BOX 7

Member States' efforts during 2006 to achieve a sustainable balance between fishing capacity and fishing opportunities

The majority of Member States' reports did not analyse their fleets in relation to fisheries, as required by the Regulation, but instead described their fleet management systems and trends in national fleet capacity. The Commission recognises that it may have to provide more detailed guidelines in this respect.

During 2006 the fishing capacity of the EU fleet continued its slow but steady reduction at an annual rate of between two and three per cent—the trend for the last 15 years. The Commission notes that this reduction appears too modest when compared to the big reductions in effort required for some major fish stocks, steady technological creep, and the poor economic performance of large parts of the fleet.

The impact of fishing effort measures on capacity reduction has generally been low. The approach adopted during the 2002 CFP reform—to use effort management as the main driving force for fleet adjustment—has not yet yielded the expected results, the Commission notes.

It urges Member States to provide better incentives for capacity adjustment, and stresses that in this respect, European Fisheries Fund Operational Programmes offer an opportunity that cannot be missed.

66. Since the 2002 reform of the CFP, a new structural policy for the fisheries sector has been put in place through Council Regulation 1198/2006, establishing a European Fisheries Fund (EFF) for the period 2007 to 2013. Community financial assistance is disbursed on the basis of National Strategic Plans and Operational Programmes (OPs) that Member States submit to the Commission. In their Operational Programmes, Member States propose to assign funding to activities across five "priority axes" defined in the EFF Regulation. Box 8 outlines the types of actions that are eligible for funding.

BOX 8

European Fisheries Fund Priority Axes

Priority Axis 1: Measures to adapt the EU fishing fleet

(888 million euros, 26.9 per cent of total)

Financial assistance is made available to fishermen and vessel owners affected by measures to combat over-fishing or protect public health. For example, aid can be made available for capacity reductions, improvements in the energy efficiency of vessels (including new engines) or the selectivity of gear, for improving product traceability and quality, or for facilitating the entry of young people into the industry.

Priority Axis 2: Aquaculture, inland fishing, processing and marketing

(1056 million euros, 32 per cent of total)

Financial assistance is made available for purchases that reduce the impact of fishing on the environment, improve human and animal health and safety, or improve the quality of produce. For example, aid can be made available to increase production or improve quality and hygiene in small and medium-sized enterprises.

Priority Axis 3: Collective Action

(929 million euros, 28.2 per cent of total)

Financial assistance is made available to projects which contribute to the sustainable development or conservation of resources, to improving the services offered by fishing ports, to strengthening markets in fishery products and to promoting partnerships between scientists and the fishing industry. For example, aid can be made available for the protection of aquatic fauna and flora, for the development of new markets and promotional campaigns, or for the dissemination of best practice.

Priority Axis 4: Sustainable development of coastal fishing areas

(314 million euros, 9.5 per cent of total)

Financial assistance is made available to support initiatives aimed at diversifying and stimulating economic development in areas affected by a decline in fishing activity. For example, aid can be made available for the development of fishing tourism and ecotourism.

Priority Axis 5: Technical assistance

(112 million euros, 3.4 per cent of total)

Financial aid is made available for the implementation of the administrative and audit requirements imposed by the EFF Regulation. For example, funds can be made available to cover the costs of information dissemination and publicity.

67. The future of structural policy under the CFP may in part depend on the outcome of ongoing World Trade Organization negotiations affecting fisheries subsidies. On 30 November 2007, the Chair of the WTO Negotiating Group on "Rules" circulated a draft text[18] on the subjects covered by the "Rules" chapters of the WTO framework agreement, which include fisheries subsidies. If adopted, that draft agreement would prohibit subsidies that encourage overcapacity, and may thus lead to over-fishing, while permitting subsidies that help to remove capacity in excess of available fish resources. It is proposed that subsidies be categorised into "red" (prohibited) and "green" (allowed) boxes accordingly.

Witnesses' Views

CAPACITY REDUCTIONS SINCE 2002

68. In its written evidence to our inquiry, the Commission painted a discouraging picture. During the 5 years since the 2002 reform of the CFP entered into force, the total fishing capacity of the Community fleet has been reduced by approximately 2 per cent per year in terms of tonnage and power (European Commission Memorandum, Q 7). The reduction is "for the most part the result of public aid for decommissioning", and the trend is "similar to the one observed during the previous 10 years … when capacity reduction targets were in force." In other words, handing back responsibility for reducing fleet capacity to Member States appears to have neither stemmed nor accelerated the rate of adjustment.

69. The Commission stressed that capacity reduction rates in the order of 2 per cent "are insufficient" because they do not compensate for technological progress "which is estimated to increase catching power at similar or higher rates" (Commission Memorandum, Q 7; Supplementary Memorandum, Q 6; JNCC Q 264; RSPB Q 234). "The harvest capacity of the fleet has therefore been stable at best, in spite of nominal capacity reductions" (Commission Supplementary Memorandum, Q 6).

70. According to the Commission, "a significant and permanent capacity under-utilisation and economic underperformance are commonly seen in most Community fleets, and these are clear signs of overcapacity" (Commission Memorandum, Q 7). It warned that "the result of continued overcapacity is excessive pressure on the resource base and strong economic incentives for non-compliance" (Commission Supplementary Memorandum, Q 6). This was graphically illustrated in the evidence given to us by the Swedish government's Fisheries Counsellor, who explained that "it becomes a bit awkward" if vessels "can catch their annual quota in maybe 20 days, which is the case with the low quotas we have at the moment" (Q 791).

71. The Community Fisheries Control Agency's Executive Director concluded that "the 2002 reform has not brought about an important reduction in capacity which is the most fundamental issue which we have to bring about" (Q 666). The Commission appeared to concur, pointing out that while the new system in place since 2002 ensures that nominal capacity cannot increase, "real reductions depend on the will of Member States to establish the balance between capacity and resources. We do not however see real political will among most Member States". This was "indicated by the annual reports from Member States which in nearly all cases fail to analyse the relation between harvest capacity and resources" and by the low priority assigned to fleet capacity reductions in the EFF Operational Programmes submitted by Member States (Commission Supplementary Memorandum, Q 6).

72. Political reluctance in this respect may in part be attributable to a tradition of using fisheries policy "as an instrument of social policy in order to maintain levels of fishing employment"—a practice brought to our attention by Aaron Hatcher of CEMARE, (Q 161). Jürgen Weis, the German government's Fisheries Counsellor, offered a more charitable interpretation, explaining that "over the last years … we have agreed on reductions of [fishing] opportunities by 10 per cent or 20 per cent in certain fisheries and it is impossible to reduce the capacity at the same speed" (Q 719). Sweden's Fisheries Counsellor also recognised that "after building up the fleet with taxpayers' money for 30, 40, 50 years, suddenly we had to change the policy and cut it down to what it was 20, 30, 40 years before." He acknowledged that this "is quite difficult for politicians if they come from coastal regions which have large fishing interests" (Q 780).

73. The UK Government presented a more upbeat assessment of capacity reductions since 2002, insisting that the Commission's overall view that there is an excess of fishing capacity was "somewhat simplistic", because it "looks at the position in the round and does not reflect the variety of results." The Government pointed out that the UK has "delivered a more than 60 per cent reduction in effort in its whitefish trawling fleet, and has reduced overall capacity by 11 per cent in tonnage terms and 8 per cent in engine power from January 2003 to January 2007" (DEFRA Memorandum, Para 43). They also emphasised that "all but two" Member States were operating within the overall fleet capacity limits set for them (DEFRA Memorandum, Para 41).

74. The Commission did recognise the existence of "some exceptions", including the decommissioning that had taken place in the Scottish whitefish fleet. It suggested that while this had been "a painful exercise for those fishermen that decided to leave the industry and take the decommissioning premium, it has proven a successful move overall" (Supplementary Memorandum, Q 6). The Scottish Fishermen's Federation appeared to share this assessment. Bertie Armstrong, Chief Executive of the SFF, explained that after two rounds of decommissioning that took out about 65 per cent of the capacity of the white fish fleet, "we are now seeing—and I offer this as evidence of right-sizing—a degree of optimism in the fleet: people are now making enough money to consider fleet renewal" (Q 161).

75. Decommissioning of vessels in the catch sector, together with lower TACs and stricter effort controls, has had a knock-on effect on the processing sector. Cliff Morrisson, Chair of the Food and Drink Federation's Seafood Group and Technical Adviser to Foodvest, told us that there is no longer enough cod landed in the UK to make bulk processing economically viable (QQ 373-374). Throughout the EU, block producers (who produce fish blocks from which fish fingers, among other products, are made) have thus largely disappeared. Fish blocks are now more likely to be produced in China, we were told (Q 373). Andrew Charles of the Scottish Seafood Processors' Federation testified to the decline in the processing industry in Scotland, and explained that what remains of the industry now "thrives on the back of farmed salmon" (Q 904).

76. The National Federation of Fishermen's Organisations pointed out that "it would be entirely false to think that decommissioning has only taken place in the UK, there have been substantial decommissioning schemes elsewhere"—for example in Ireland, the Netherlands, Spain and Denmark (NFFO, Q 199). At least one Member State claims not to have a problem with overcapacity at all: the German Fisheries Counsellor told us that "at the moment our capacity is hardly sufficient to make full use of our fishing opportunities" (Q 718).

PROSPECTS FOR DECOMMISSIONING

77. The Commission emphasised the importance of Member States making it "attractive for fishermen to leave the industry by putting in attractive and recurrent decommissioning schemes" (Commission Memorandum, Q 7). The European Fisheries Fund offers financial assistance for such programmes, but several witnesses emphasised that the sums available could not bring about the magnitude of change required. The RSPB explained that the "same pot of money" inherited from the Financial Instrument on Fisheries Guidance—the precursor to the EFF—will have to be distributed "across a hugely enlarged European Union", resulting in "a cake which is going to have to be sliced much more thinly than its predecessor and that literally means we are going to be able to do an awful lot less with it" (RSPB, Q 236). A further feature of the EFF is that it "gives much more subsidiarity to Member States on how they deploy the money", meaning that it is up to Member States to choose whether to put EFF money into decommissioning (RSPB, Q 237). The Commission's assessment was that Member States are not making sufficient use of this option (Supplementary Memorandum, Q 6). Commissioner Borg explained that on average, only 20 to 25 per cent of the funds available under the EFF were likely to be used to provide public aid for decommissioning, "and it took some convincing" (Q 650).

78. Other witnesses raised reservations about the efficacy of subsidised decommissioning programmes. The Joint Nature Conservation Committee, for example, warned that "the difficulty with subsidised capacity reduction is that there are quite a lot of vessels sitting around not doing a great deal, waiting for the subsidised capacity reduction to come along". This means that "as soon as you get a subsidised capacity reduction you get a reduction in the available capacity rather than the used one" (JNCC Q 293). The NFFO, however, insisted that "decommissioning does work. It is not one-to-one but the reduction in the English fleet from 1993 onwards and in the Scottish fleet from 2001 … has been a major contributor to the reduction of fishing mortality on cod" (NFFO, Q 199).

79. The attractiveness of the decommissioning schemes on offer may be affected by the availability of other subsidies that reduce vessels' operating costs. The RSPB pointed out that the EFF "can be used to replace engines on fishing vessels" and argued there were "all sorts of ways of using that as a smokescreen to introduce a more efficient engine" (Q 235). It also identified de minimis state aid[19] as "a de facto subsidy for fuel costs in the fishing industry", and insisted that "if you are funding fuel, you are fuelling over-fishing" (Q 239). A different interpretation was offered by the French government, which insisted that France does "not have fuel subsidies", but had instead put in place "a whole package" of subsidies designed to address the general situation of the sector, aiming to bring it back "to a reasonably profitable situation" (Q 724). France's Fisheries Counsellor explained that in a second phase, the French government intended to introduce a "huge decommissioning plan" alongside modernisation subsidies focused on energy efficiency (Q 724). This had been prompted by an awareness that "with the currently high costs of the operation of fishing vessels and the limited stocks to fish we have too many boats" (Q 755).

80. A number of witnesses anticipated that energy prices would offer "a big incentive to reduce capacity" (Jürgen Weis, Q 708). Mr Weis, Germany's Fisheries Counsellor, even suggested that this could "maybe change the conditions so much that it will be much easier to have a fundamental change of the European policy in the end" (Q 708). Sweden's Fisheries Counsellor also identified "a huge change within the fishing fleets around Europe", explaining that "with fuel prices and lack of resources there are probably more fishermen asking for decommissioning money than before" (Q 804). The Commission corroborated these observations, noting that increasing fuel prices had led to a situation where "for the first time we find ourselves in a situation where the industry is asking for adaptation and for decommissioning plans to be offered and the governments hesitate to take action" (Commission Supplementary Memorandum, Q 6).

81. A number of our witnesses expressed concern that ongoing WTO negotiations could limit Member States' ability to grant aid to the fisheries sector, whether under the EFF or through national programmes. The Commission warned that the WTO proposals published in November 2007 "could prevent public authorities from granting support to the fishing sector to ensure the transition to a sustainable state", such as aid to restructuring (Commission Memorandum, Q 9). Furthermore, "the proposed exceptions ('green' box) seem insufficient to allow for the implementation of cleaner technologies, including the replacement of engines, in order to limit emissions harmful for the environment." The Spanish government expressed even stronger reservations, pointing out that under the draft text, "practically all the subsidies for developed countries are banned". It too regarded the proposed exceptions as insufficient, noting that no exceptions had been proposed for artisanal[20] fishing and fishing for shellfish (Spanish government Memorandum, p 185). Dr Euan Dunn of the RSPB explained that "one of the hot issues in the WTO draft at the moment is looking at the extent to which small-scale fishing around the world should be seen as a special case." The position defended by the European Commission in WTO talks is that the European Union's fleets are made up of "something like 75 to 80 per cent small vessels, so they have been arguing to have the same rules applied to them as to developing countries." He took the view that "this is a nonsense really", and argued that there should be no special pleading in that respect for inshore fisheries (RSPB, Q 239).

MEASURING OVERCAPACITY

82. A separate problem identified by witnesses is the measurement of overcapacity. The UK Government pointed out that the Commission was "unable to state the extent of the reduction in capacity that might be needed". Nor had it yet stated "how exactly Member States are to judge the balance between fishing opportunity and fishing capacity" (DEFRA Memorandum, Para 42, 44). Indeed the Government suggested that this "lack of guidance was a contributing factor to the UK report [on progress in achieving a balance between capacity and opportunities] being submitted late in 2007" (Memorandum, Para 45). Other Member States did appear to have a sense of the level of capacity reductions that might be required. The Swedish Fisheries Counsellor told us that the Commission's assessment was of "about 40 or 50 per cent overcapacity" (Q 778). He also used profitability as an indicator, noting that "we have maybe eight per cent profitability … why could we not have a profitability of 40 or 60 or 70 per cent like they have in New Zealand or Canada or Australia?"

83. The Commission did acknowledge a need to "establish methodologies to objectively determine what the adequate fleet size is, so that Member States have common guidance for their analysis and reporting, and to enable the Commission to argue in favour of concrete capacity reductions" (Commission Supplementary Memorandum, Q 6). It went on to suggest that if "fleet overcapacity is clearly and openly displayed, Member States will be better motivated to take action."

84. Aaron Hatcher of CEMARE expressed scepticism with regard to this endeavour, suggesting that "it is very difficult to see how that is going to produce anything worthwhile". He insisted that "what really matters is the level of exploitation, the catches. If we can measure capacity according to output, which is what we mean by capacity, if we can really measure and control that, we can enforce a TAC, in which case there is no need to measure and enforce the capacity" (Q 86). Indeed he went so far as to argue that "over-capacity is really a symptom of the problem rather than a cause. It is ineffective management that allows capacity to get too big." He thus maintained that "if you can control the level of outputs, then market forces will decide on the right level of capacity" (Q 89).[21]

85. The Commission recognised that "effective enforcement is one way to make overcapacity visible and reduce the economic incentives to maintain overcapacity." Rather than waiting for Member States to summon the political will to reduce the size of their fleets, it could therefore "take action to better monitor and enforce compliance", and "watch that rules on fuel subsidies are respected in order to avoid maintenance of fleet capacity which would no longer be able to operate economically" (Commission Supplementary Memorandum, Q 6).

Committee's Conclusions

86. The 2002 reform of the CFP—which handed responsibility for adapting fleet size to fishing opportunities back to Member States—has clearly failed to stimulate the fleet reductions that permanent under-utilisation of capacity and low levels of profitability indicate are required. We note with dismay that the Commission still detects scant political will among Member States to align the size of their fleets to the available resources.

87. It may thus be left to the market to precipitate exits from national fleets—notably through fuel prices. It is imperative that Member States should resist the temptation to offer subsidies that keep uneconomical businesses afloat. We are concerned that state aid rules are being misused in this regard and oppose any relaxation—whether temporary or permanent—of the de minimis regime.[22]

88. Public aid should instead be channelled into attractive decommissioning schemes designed to ease the transition. We urge Member States to heed the Commission's call for a greater emphasis to be placed on fleet capacity reductions in EFF Operational Programmes—this includes seizing the opportunity to re-programme allocations across axes. In our view, EFF funds should primarily be targeted towards decommissioning and the diversification of employment opportunities in coastal regions. We see no role for taxpayer-funded modernisation of the fleet, even where it results in greater energy efficiency, as the economic advantages (reduced operating costs) of modernisation programmes should be sufficient to stimulate private investment in a profitable industry. To the extent that it would enshrine these principles, we would welcome a WTO agreement on fisheries subsidies along the lines proposed in November 2007.

89. We support the Commission's efforts to develop consensual methods of measuring overcapacity in the hope that this will prompt greater peer pressure, but are concerned that this endeavour should not be seized on as an excuse to postpone action. Member States do not need the Commission to tell them which sectors of their fleets are characterised by under-utilised capacity or poor profitability.

90. While we recognise that more effective control and enforcement mechanisms could bring fleet size into balance through the operation of market forces, it is equally clear that overcapacity exacerbates enforcement problems. For that reason, we believe that the two must be tackled in parallel, not in sequence.

Control and Enforcement

91. The present CFP control regime has been in place since 1993. The legislative instrument that underpins it (Council Regulation 2847/1993) has been amended on a number of occasions in the intervening period, but it has not been subject to a comprehensive review. The control regime continues to rest on the basic principle that primary responsibility for enforcing the CFP's provisions lies with the Member States. The Commission can, however, bring infringement proceedings against Member States for failing to exercise their control obligations.

92. The Community Fisheries Control Agency (see Paragraph 31 above) is the main institutional innovation affecting the enforcement of the CFP introduced since the 2002 reform of the CFP. The Agency has been operationally active since January 2007. A further two legislative initiatives affecting control are currently in preparation. One is the draft Regulation establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated (IUU) fishing.[23] The Commission has also announced its intention to present a legislative proposal for a new Control Regulation—replacing the 1993 instrument—in October 2008, with a view to its adoption by the summer of 2009. This overhaul of the CFP's control system has in part been prompted by a withering report from the European Court of Auditors on the control, inspection and sanctions systems relating to the rules on conservation of Community fisheries resources—see Box 9 below. [24]

BOX 9

European Court of Auditors Report on control, inspection and sanction systems

The European Court of Auditors is the "independent guardian" of the EU's financial interests. It produces a number of Special Reports each year focusing on specific areas of EU spending. Its 2007 Report on control, inspection and sanctions relating to the CFP was timed to assess the control of the CFP five years after the adoption of the basic regulation in 2002, and to assist the Commission in recasting the control regulation.

The Court assessed systems in place in the Commission and in the six principal fishing Member States: Denmark, Spain, France, Netherlands, Italy and the United Kingdom (England and Wales). It concluded that:

Catch data are neither complete nor reliable, due mainly to weaknesses in the Member States;

The inspection systems do not provide assurance that infringements are effectively prevented and detected;

The procedures for dealing with infringements are such that not every infringement is followed up and, even when they are, they do not always attract penalties (in the UK, 90 per cent of infringements identified in 2005 were not pursued through the Courts and led only to warnings)

The deterrent effect of penalties is, on the whole, limited

The Commission has insufficient instruments at its disposal to take action against Member States for failure to apply Community legislation

Overcapacity detracts from the profitability of the industry and incites non-compliance.
It recommended that the present control, inspection and sanction systems must be strengthened considerably if the CFP is to achieve its objective of sustainable exploitation of fisheries resources.

Witnesses' Views

CHALLENGES AND DEFICIENCIES

93. The fundamental challenge of enforcing the CFP was put to us most succinctly by Cephas Ralph, Director of Operations at the Scottish Fisheries Protection Agency (SFPA), who explained that "the job of catching fish generally takes place on a fishing vessel out at sea unobserved by anybody and, like most types of human activity, if it is unobserved by anybody then rules are theoretical rather than practical." He suggested that the CFP had originally been devised "from a naïve scientific view of how quotas on fish stocks could be managed. It did not really give any thought to how the rules could be enforced and over time, when faced with wholesale breaking of the rules, the CFP has responded with more technical and complex rules" (SFPA, Q 547).

94. The Commission was equally unforgiving in its assessment, judging that the present control system "is inefficient, expensive, complex" and "does not produce the desired results" (Commission Memorandum, Q 5). However, it took the view that this was largely due to overcapacity and the fact that harvest capacity is much larger than legal catch opportunities, creating "very strong economic drivers for illegal behaviour" (Supplementary Memorandum, Q 4). Better compliance could consequently only be achieved by "simultaneously removing the strong drivers for non-compliance … and strengthening control and enforcement."

95. According to the Commission, "national [control] systems are largely ineffective" and there are limited means at its disposal to put pressure on Member States to take their control obligations seriously (Commission Memorandum, Q 5). The result is uneven enforcement, which was identified as a concern by most of our witnesses, who emphasised the importance of "consistency in the effectiveness of control and enforcement across the Community" (DEFRA Memorandum, Para 32; SFF Memorandum Para 6). The UK Government accepted that this was primarily the responsibility of individual Member States, but saw a role for the Commission in "pursuing vigorously instances of Member States failing to exercise proper controls." Meanwhile the SFF called for a level playing field across the Member States, arguing that "inequitable treatment exists not only in the field of regulation and compliance but also in very different treatment of past transgressions. This is one area where one size must be seen to fit all" (Memorandum, Para 6).

CURRENT AND RECENT INITIATIVES

96. Although most of our witnesses identified serious deficiencies in the enforcement of the CFP, some more promising developments were also brought to our attention. The Commission noted that there had been certain progress, for example in strengthening cooperation among Member States, introducing a satellite monitoring system for the European fleet, and adopting electronic reporting of catches (Commission Memorandum, Q 5). The UK Government saw indications that the Commission had been performing its role in pursuing Member States that failed to exercise their responsibilities "increasingly effectively in recent years" (DEFRA Memorandum, Para 32). Harm Koster, Chief Executive of the Community Fisheries Control Agency, explained that the Commission had brought infringement proceedings against France, Spain and the UK in cases deemed "symbolic of the non-application of the Common Fisheries Policy" (CFCA, Q 665). Because France had already lost a similar court case in 1991, the Commission was able to request that a penalty be imposed by the European Court of Justice. France was thus fined around 80 million euros for failing to enforce rules on minimum landing sizes for hake (Q 665). Meanwhile the Spanish government emphasised that "the aspects mentioned in [the] European Court of Auditors' report refer to the situation existing in 2005". It pointed out that "three years after the verification mentioned in the report was made, some improvements have been made in the control systems, at least as far as the Spanish Administration is concerned, which are not reflected" (Spanish government Memorandum, p 184).

97. We were particularly encouraged by the evidence we saw and heard on a visit to Peterhead in North-East Scotland. Cephas Ralph, the SFPA's Director of Operations, explained that Scotland had had "a very significant historic problem with black fish[25] which relatively recently we have been able to overcome" (Q 530). He attributed that success to the confluence of several factors. A major decommissioning scheme had "removed the over-capacity in the fleet, so that removed the financial imperative on many of the operators to land illegal fish." This was reinforced by legislation requiring the registration of buyers and sellers of first sale fish, which "for the first time … put an onus and responsibility on the person buying fish to account for it in a way that we could come in and audit" and ensured that purchasers were "unable to claim ignorance of the source". According to Mr Ralph, "that pretty much removed the demand side completely for black fish". Cliff Morrison, Chair of the Food and Drink Federation's Seafood Group, also hailed the registration of buyers and sellers as a success, while noting that the legislation had been 13 years in the pipeline: the relevant Directive was adopted in 1992, but it was not until 2005 that the registration of buyers and sellers was made compulsory in the UK. Even now, "not all Member States have yet put this legislation in place … or are policing it as effectively as we are now" (Q 370).

98. By prompting reductions in the level of illegal activity, these two developments in turn paved the way for the introduction of targeted enforcement techniques. Mr Ralph explained that "if the vast majority of a population are breaking the law then targeting does not really work because essentially everyone is at it, but when you come down to a more normal situation where the majority of people are sticking to the law then you can begin to introduce tried and tested police targeting techniques" (Q 531). The SFPA was thus able to focus its efforts to "further reduce the levels of illegal activity".

CULTURE OF COMPLIANCE

99. Mr Ralph was not alone in emphasising the importance of capacity adjustments and demand-side measures in developing a culture of compliance. The CFCA's Chief Executive stressed with reference to Scotland that "if there had not been the decommissioning of an important number of vessels it would have been impossible to create a culture of compliance because one of the elements of it is that a fisherman should have a viable living and must have the legal quantities to support a viable living" (Q 666). He also pointed out that when the Commission had brought infringement proceedings against the UK, it had issued a press release estimating "that about 50 per cent of the cod landed in the UK was black." Large retailers' response to the press release was to ask their providers to certify that they were only supplying legal cod, Mr Koster explained, creating "a big panic in Scotland because no supplier wanted to sign that he was only selling legal fish." Since then the Scottish industry and authorities had done a very good job in fostering a culture of compliance, he added (Q 666).

100. Mr Ralph emphasised that the best indicator of this is that "in many of the cases where we have detected illegal activity it has been fishermen themselves who have come to us and told us that they have suspicions about some operators in particular, and that is an extremely healthy sign" (Q 532). He suggested that this could be ascribed to "those that are left … demonstrating that they are aware that they have a huge stake in this industry" (Q 542). Sweden's Fisheries Counsellor also told us that any number of control policies and controllers would never be as efficient as social control by the fishermen themselves (Q 782). He explained that the Swedish authorities had compiled statistical evidence on the number of unreported landings by the Swedish fleet, and used that to adjust quotas downwards to factor in illegal landings: "we cannot prosecute anyone, but we are collectively penalising them by diminishing the quota" (Q 785). The intended effect would be to incite fishermen to control each other, as those who misreported their landings would incur a collective punishment that affected everyone. Mr Rosenkranz noted that the Polish authorities were trialling a similar experiment (Q 786).

BOX 10

The Scottish Conservation Credits Scheme

In February 2008, the Scottish Executive launched a Conservation Credits Scheme. In return for respecting a system of real-time closures and for signing up to conservation measures such as using more selective fishing gear, Scottish fishermen can receive the same number of days at sea as they received in 2007 (that is, avoid cuts in their days at sea). They can also use their days at sea allowance more flexibly, operating under hours at sea rather than days at sea, which allows them to conserve fuel and run their operations more efficiently.

101. Two other initiatives that attempt to realign fishermen's incentives were brought to our attention by the Scottish Executive and the National Federation of Fishermen's Organisations. The Scottish Executive is introducing a "Conservation Credits Scheme" (see Box 10 above), operating as part of the Cod Recovery Plan, which aims to achieve reductions in cod mortality "in ways other than blanket cuts [in days] at sea" (Q 469). Officials told us that the principle underpinning the scheme is to "reward people for doing the right thing, credit for your conservation measures", by giving "people their 2007 days [at sea] back—so they are not getting a cut—in return for [observance of] real-time closures and selectivity measures. In due course we hope to give more days to people who have more selective gear … we want to give a carrot for outcomes" (Q 469). Meanwhile the NFFO is advocating "Cod Avoidance Plans" (see Box 11 below) that "seek to optimise the fishing activities of the vessel by changing fishery, gear, place and period in order to avoid catching cod, thus contributing towards the Cod Recovery Plan. In exchange, the vessel, or vessels, will obtain a degree of freedom with respect to effort control" (NFFO Memorandum, p.41; NFFO Supplementary Memorandum).

BOX 11

Cod Avoidance Plans

The NFFO explains that the Cod Avoidance Plans it is advocating are designed to address the problem of fishing for species that are not subject to a recovery plan in mixed fisheries that also contain a recovery stock, in this case cod. It envisages that individual vessel operators could volunteer to prepare a Cod Avoidance Plan, demonstrating how it will fish for its allocated quota while avoiding catching cod above quota. The methods incorporated in a plan could include spatial avoidance, temporal or seasonal avoidance, and selective gear. If approved by the Member State authorities, the vessel would be exempt from effort restrictions for the year to which the plan applies. Vessels found to breach their targets would be obliged to revert to the normal effort regime and barred from submitting a Cod Avoidance Plan in the following year.

THE COMMUNITY FISHERIES CONTROL AGENCY

102. When asked to comment on the performance of the fledgling Community Fisheries Control Agency, most of our witnesses took the view that it was too early to assess the contribution it had made (e.g. Commission Memorandum, Q 5; SFPA, Q 555). The UK Government stressed that the Agency was still in its infancy and has a very strictly defined remit. It pointed out that "to date, only one joint deployment plan has been agreed and implemented, that for North Sea cod", and added that while the results of the first exercises had been encouraging it was "too early to assess the impact of those exercises on control systems generally" (DEFRA Memorandum, Para 31). The CFCA's Director, Harm Koster, agreed that it was "a little bit early" to have a full assessment of the operation of the Agency (Q 659).

103. Mr Koster nevertheless identified a number of ways in which joint operations and pooled resources appeared to be adding value. Taking Germany as an example, he explained that its territorial waters stretch into a tiny part of the North Sea, in which little cod fishing takes place. If the Cod Recovery Plan is to be implemented properly, he argued, it makes more sense to deploy Germany's two inspection vessels in the northern North Sea, where most cod fishing takes place (Q 659). Mr Koster also pointed out that in joint operations, vessels operate across national borders, which "gives the industry much more of a feeling of a level playing field." For an individual Member State this also has political advantages, he suggested, "because they will not have their own fishermen on their back who say, 'Yes, but you are much more strict than your neighbour', because this is a joint operation".

104. The CFCA's Director also identified areas for improvement. In the Baltic, he explained, "the sea campaigns which we do are not good enough", because "the main problem is the landing inspections". The Agency is thus asking Member States to exchange more inspectors to reinforce landing inspections, notably in Poland (Q 659). Meanwhile the SFPA's Director of Operations pointed out that the Control Agency's restricted mandate means that "it can only set up a joint deployment programme for stocks which are designated recovery stocks for which a specific recovery programme has been implemented by the EU." Sometimes this can have "a big impact" in making countries work together for the first time, but in Scotland's case it has largely formalised existing co-operation with Denmark and Norway, "so I think it would be very hard to measure any additional benefit for us", he concluded (Q 555).

REVIEW OF THE CONTROL REGIME

105. The Commission envisages that the review of the Control Regulation will result in "an extended mandate" for the CFCA, to include the development of cooperation between Member States and the Commission, extended responsibilities for the coordination of inspections on land, and cross-checking of data (Commission Supplementary Memorandum, Q 4). The Agency's Director explained that extending the CFCA's remit to include inspections on land needed to be considered because controls at sea were very expensive and not necessarily the most efficient way of controlling fisheries (Q 659). Meanwhile the SFPA's Director of Operations suggested that the CFCA "should be allowed to set up joint deployment programmes across any species. It should not be limited to recovery stocks" (Q 557). Others were more cautious about extending the Agency's mandate as part of the overhaul of the Control Regulation. The Spanish government, for example, took the view that "we will have to observe how it tackles the tasks that it is undertaking before thinking of assigning it further tasks and duties" (Spanish government Memorandum, p 184).

106. Among the Spanish government's priorities for the new control regime, by contrast, was a perceived need to "unify, to codify and simplify all the control legislation currently in force" and "lighten the workload", paying more attention to the "quality rather than quantity of data" (Spanish government Memorandum, p 184). The Commission accepted that the current regulatory framework is "fragmented and obsolete" , and explained that it was aiming to "increase the cost-efficiency of the control policy, with a view to reducing administrative costs at the level of operators and at the level of administrations" (Supplementary Memorandum, Q 4). Other witnesses, however, had reservations about the extent to which this could be achieved. The German government's Fisheries Counsellor pointed out that "you can always cut red tape and say, 'I do not control any more and I trust you and the fishermen to do the right thing', but that will not solve the problems" (Q 708). Meanwhile Mr Koster conceded that "the rules are complicated" but insisted that "there are also very deliberate infringements" which could not be attributed to misunderstandings (Q 659).

107. As part of its overhaul of the CFP control regime, the Commission intends to "contribute to the development of a common culture of control through harmonised proportionate sanctions" (Commission Supplementary Memorandum, Q 4). The UK Government accepted that the level of financial penalties applied across the Community can vary widely, even within individual countries such as the UK.[26] But they saw this as a "reflection of the fact that decisions about the level of criminal penalties are a matter for the Courts and not one of Commission competence." By contrast, the Government did acknowledge that there could be "a place for the use of dissuasive administrative sanctions, including financial sanctions, within the controls system" (DEFRA Memorandum, Para 33). The French government's Fisheries Counsellor was more bullish, explaining that "we are in favour of more deterrent sanctions, even though we are very much aware of the difficulties of harmonising sanctions throughout the Union" (Q 727). He outlined the system of administrative sanctions that France had developed in response to the fine it had received in the undersized fish case, and noted that the Commission "considers that this system is more responsive and addresses infringements more adequately" (Q 730).

108. Other witnesses pointed out that the overhaul of the control system would only work if it formed part of a multi-pronged strategy to improve enforcement. The CFCA's Director, for example, noted that "the Commission will now propose again a reinforcement of control but we also need to work on other issues, such as capacity" (Harm Koster, Q 666). The SFPA's Director of Operations warned that "some of the proposals put forward by the Commission are essentially a ramping up and an introduction of greater complexity to that which is already there and my view is that that will not succeed. Simplifying the rules and matching the capacity will in my view succeed" (Q 547). Meanwhile Mr Koster emphasised the importance of working on the demand side: "if the big buyers insist on selling only legal fish I think also that will be very important" (Q 666).

DEMAND-SIDE MEASURES

109. Cliff Morrisson, Chair of the Food and Drink Federation's Seafood Group and Technical Adviser to Foodvest, identified a number of ways in which market forces could help to stamp out illegal fishing. He pointed out that a company like Young's, or any of the FDF Seafood Group's major companies, has a long-term investment in seafood, and therefore needs to make sure that "it is here for tomorrow as well as today" (Q 369). The result was that companies had to take into account investors' concerns as well as those of consumers. Indeed "it is very often the investors coming on the phone asking, 'What is the state of the stocks? Are they in a perilous condition and what does this mean for our companies?'"(Q 368) Companies could in turn exert an influence in particular fisheries by threatening to pull out, Mr Morrisson explained. In the Baltic, for example, where illegal fish has been estimated at 40 per cent of the catch, there has been "a huge debate, not only by Young's but by other major companies, as to whether they should stay in the Baltic or whether they should pull away totally from an EU fishery" (Q 395).

110. Retailers can also exert significant influence. Sainsbury's told us that it had developed a traffic-light sustainability rating system for the species that it sources, as a result of which it now no longer sells any red-rated fish. It is also working with suppliers to move any amber-rated fish to green status (Sainsbury's Memorandum, p 341). Marcin Rucinski, Fisheries Counsellor for the Polish government, suggested that public confidence was becoming more and more important as consumers took more interest in the legality of fish, and stressed the need to broaden responsibility "beyond just fishermen because they do not function in a world of their own" (Q 633).

Committee's Conclusions

111. We refer readers to the European Court of Auditors' report for a detailed catalogue of the many weaknesses in the control and enforcement system underpinning the CFP (see Box 9 above). We note that the Community and its Member States' response to persistent failure in this respect has to introduce layer upon layer of regulation intended to counter fishermen's adverse incentives, and to put in place penalties that Member States do not have the courage to impose.

112. We believe that a more fruitful control regime should be based on measures that reward good behaviour, and thus work with, rather than counter to fishermen's incentives. We see particular promise in initiatives such as the Scottish Conservation Credits Scheme and the NFFO's Cod Avoidance Plans. An alternative is the Swedish government's attempt to adjust quotas by the estimated level of unreported landings, thus creating incentives for fishermen to control each other to avoid collective punishment.

113. Ultimately, however, we concur with those witnesses who emphasised that a culture of compliance can only develop in a fleet that is proportionate to the size of the resource on which it depends. Economic and conservation objectives are more closely aligned in a profitable fleet, whose members develop a vested interest in the enforcement of the rules. Furthermore, it is only when illegal activity has become the exception, rather than the norm, that risk-based, targeted enforcement can start to deliver results.

114. We note and support Member States' reluctance to harmonise criminal penalties. However, we believe that the co-ordination of administrative penalties is necessary. A penalty-points system—whereby infringements are penalised with points, leading to the temporary, and eventually permanent, suspension of fishing rights—could in our view provide a promising basis for co-ordination, delivering the same effect across vessels and fleets.

115. We consider that the CFCA's activities have the potential to build trust among Member States in each others' enforcement activities, and to promote the spread of best practice. We therefore support the extension of the CFCA's remit to include land-based inspections, and recommend that the Agency be allowed to co-ordinate joint deployment plans for all types of stocks, not just those subject to recovery plans. We also see a role for the CFCA in monitoring and reporting on Member States' enforcement activities, with the aim of promoting transparency, and with it, peer pressure.

116. We received overwhelming evidence from our UK witnesses that the compulsory registration of buyers and sellers of first sale fish had all but eliminated demand for black fish. We therefore urge all Member States to ensure that they have transposed the relevant EU legislation and are enforcing it rigorously. We see considerable potential in harnessing the power of the market—including retailers and end-consumers as well as first sale buyers—to bring about change.

Regional Advisory Councils

117. Article 31 of the 2002 CFP Regulation paved the way for the creation of the Regional Advisory Councils. That article laid down the basic role and membership of the RACs, and was followed up by a 2004 Council Decision establishing the seven RACs, their procedures and financing mechanisms.[27] Since then, six of the seven RACs have become operational. Box 12 sets out further details. On 17 June 2008, the Commission published a Review of the functioning of the Regional Advisory Councils.[28]

BOX 12

Regional Advisory Councils

Six Regional Advisory Councils (RACs) have been established to date:

North Sea: 32 Members covering 9 Member States (Belgium, Denmark, Germany, Spain, France, Netherlands, Poland, Sweden and UK)

Pelagic: 60 Members covering 10 Member States (Denmark, Germany, Spain, France, Ireland, Netherlands, Poland, Portugal, Sweden and UK)

North-Western Waters: 55 Members covering 6 Member States (Belgium, Spain, France, Ireland, Netherlands and UK)
Baltic Sea: 42 Members covering 8 Member States (Denmark, Germany, Estonia, Latvia, Lithuania, Poland, Finland and Sweden)
Long-Distance Fleet: 72 Members covering 12 Member States (Denmark, Germany, Estonia, Spain, France, Ireland, Italy, Lithuania, Netherlands, Poland, Portugal and UK)

South-Western Waters: 115 Members covering 5 Member States (Belgium, Spain, France, Portugal and Netherlands)

A seventh, Mediterranean RAC which would probably include Members from Bulgaria, Cyprus, France, Greece, Italy, Malta, Romania, Slovenia and Spain, is yet to be established.

The RACs have an annual budget of €250,000, the majority of which is spent on travel, meetings and the organisation of conferences. A proportion is spent on staff costs, but most RACs have less than two full-time staff.

118. The role assigned to the Regional Advisory Councils is to "advise the Commission on matters of fisheries management in respect of certain sea areas or fishing zones." Each RAC has a general assembly, and an executive committee appointed by the general assembly. The executive committee may have a maximum of 24 members and its role is to manage the work of the RAC and adopt its recommendations. In the general assembly and executive committee, two thirds of the seats must be allotted to representatives of the fisheries sector, such as producers' organizations, and one third to representatives of the other interest groups with an interest in the CFP, such as environmental NGOs.

Witnesses' Views

THE ESTABLISHMENT OF THE RACS

119. Almost all of our witnesses welcomed the establishment of the Regional Advisory Councils, viewing it as a means to secure greater stakeholder involvement in the policy process. Sweden's Fisheries Counsellor, for example, described them as "extremely important" on the grounds that "having acceptance by the fishermen when we make decisions is one of the vital keys to having a system that works" (Q 793). The UK Government declared their strong support for the RACs, and their belief that "they have a vital role in producing a better quality of decision-making under the CFP" (DEFRA Memorandum Para 46). The Scottish Fishermen's Federation took the view that in overall terms, the RACs had been "successful in raising stakeholder involvement", while noting that "the process has yet to mature fully." (SFF Memorandum, Para 10). The French government also made this qualification, noting that "we are very satisfied with the way the scheme is implemented in the areas where it is implemented" (Q 738). Sam Lambourn, Chairman of the North Western Waters RAC, concluded that "in terms of giving the grass roots access to the Commission and putting a human face to the Commission I think that has worked well, it is working well and it is very welcome" (Q 329).

120. Some witnesses also viewed the RACs as a promising precursor to a more regional approach to fisheries management (e.g. Scottish Executive Memorandum, Para 10.1).

121. As well as delivering greater stakeholder involvement, the RACs were welcomed as a channel through which stakeholders could engage with each other, sometimes for the first time. The NFFO noted that the RACs in which the UK participates "have made a promising start, and their growing maturity has enabled them to start the process of moving from confrontation among the stakeholders to cooperation" (NFFO Memorandum, p 41). The Joint Nature Conservation Committee observed that the RACs had "provided a mechanism for non-fishing interests to communicate with the fishing industry at a wider European level" (Dr Clare Eno, Q 294).The Spanish government also recognised "a clearly positive effect" in promoting cooperation among the fishing industries of the different Member States involved in each RAC (Spanish government Memorandum, p 186).

122. Most witnesses emphasised that there was wide variation in the development and performance of the RACs. The Scottish Fishermen's Federation explained that "different RACs are at different stages of their development and each is unique in its circumstance." For example, the "North Sea RAC had an assisted start given the experience of the North Sea Commission; the Pelagic RAC has the apparently simpler task of dealing with single-species fisheries, but the greater complication of dealing with coastal states outside the EU in almost every component pelagic fishery; the NWWRAC has the greatest cultural diversity." The SFF anticipated that this would result "in development proceeding at different speeds" (SFF Memorandum Para 10).

123. The Mediterranean RAC has yet to be formally established, although the French government assured us that the parties involved were "right now in the process of deciding on the last elements which would allow formal establishment of that Regional Advisory Council" (Q 741). Hugo Anderson, Chair of the North Sea RAC, explained that the difficulties encountered in the Mediterranean stemmed from a number of factors, including the fact that "there has never been any cooperation in the Mediterranean area", and that a great number of Member States fish in the Mediterranean (Q 319).

The Performance of the RACs

124. The Scottish Executive took the view that "certain RACs have been more successful than others in influencing and cooperating with the Commission. The role of the North Sea RAC on cod recovery has been a good example of what can be achieved." (Scottish Executive Memorandum, Para 10.1). Other witnesses emphasised the quality of the advice provided by RACs to the Commission, and stressed that "they have done an excellent job with quite meagre support" (Dr Joe Horwood, CEFAS, Q 38). The Joint Nature Conservation Committee praised the "convening of some extremely good workshops" and suggested that "a lot of it is down to the sterling work that is done by the secretariats of some of the RACs in essentially organising a somewhat unlikely group of individuals" (Q 294).

125. The RACs we heard from recognised that their power lay in providing consensual advice to Member States and the Commission. "Giving the Commission non-consensual advice is almost worthless … the discipline is that you must reach consensus on your advice" (Q 310). They also emphasised the importance of using evidence to support their recommendations: "any advice we give has to be evidence-based. We are not lobbyists" (Q 305). Sam Lambourn noted that the North West Waters RAC had "given advice on certain specific issues—mainly technical—that has been accepted by the Commission", and described this as "very satisfactory". Other RACs have not always been so successful—the Pelagic RAC, for example, "gave some advice on herring in the North Sea which the Commission did not take and there were immediate questions as to what is the point of the Pelagic RAC if nobody is listening to us?" But Mr Lambourn emphasised that "generally speaking … the Commission have been very supportive of the RACs" (Q 329). He nevertheless warned that "as a RAC we find we are being asked to advise the Commission on a number of issues and those numbers are increasing. We are finding that we are having to run harder to keep up" (Q 325). Hugo Anderson, Chair of the North Sea RAC, concurred, explaining that "our agenda is very much driven by the Commission's agenda, with all the proposals they send out that they want recommendations on" (Q 343).

126. Some witnesses felt that the RACs' agendas were overly dominated by short-term issues. Dr Euan Dunn of the RSPB argued that "there is still too much focus on the short-term issues, like TACs and quotas. I think the RACs' agenda needs to preoccupy itself with the long-term management issues. That is where they will give added value, because the fishing organisations … are already piling into the TACs and quotas every year and you wonder if the RACs can add much to what is already being done at national level." He pointed out that the RACs "are an international forum. They can deal with boundary issues and trans-boundary issues and they should be looking at the big picture, the long-term management plans" (RSPB, Q 243). The Joint Nature Conservation Committee also took the view that because fishing interests dominate the Regional Advisory Councils, "they tend to be more interested in immediate concerns than horizon scanning", citing the designation of Natura 2000 sites as an example of an agenda that the RACs had engaged with too late (Q 294). The Chairman of the North Western Waters RAC recognised that "we are much better as a RAC at dealing with longer and medium term issues" but explained that "our grass roots want us to deal with the issues that they are confronted with today and tomorrow" (Sam Lambourn, Q 310).

COMPOSITION OF THE RACS

127. Concerns were also expressed about the composition of the RACs, particularly about the representation of non-fishing interests, and the recreational, rather than commercial catch sector. The National Federation of Sea Anglers suggested that the composition of RACs "needs some rebalancing to enable everyone with a stake in EU marine resources, including Recreational Sea Anglers, to be involved" (Memorandum, Section 2). The Joint Nature Conservation Committee took the view that "there is still a limited extent of engagement and involvement in the RACs by the environmental groups". While recognizing that this was partly due to the limited manpower at their disposal, "it does mean that the environmental input is somewhat marginalised still" (Q 294). The Chair of the North Western Waters RAC explained that difficulties had been encountered in reaching consensus with the environmental NGOs, because "they have policy positions on various topics and it is very difficult for them to compromise without undermining their stated policy position" (Q 310). He emphasised the importance of the NGOs being able to negotiate and compromise on stated policy positions, "otherwise it is very difficult to have a constructive dialogue" (Q 338). He nevertheless encouraged the environmental NGOs to persist, arguing that "it has been a real education for some Member States' representatives to sit down and talk to environmental NGOs" (Q 338).

128. The RAC representatives we heard from recognised that resources posed an obstacle to the adequate representation of non-fishing interests. Hugo Anderson of the North Sea RAC explained that "it is quite difficult to find someone who has the time to take part" (Q 334). Sam Lambourn noted that NGOs "simply do not have the resources to attend all the meetings in all the venues" (Q 338). Meanwhile Ann Bell, Executive Secretary of the North Sea RAC, lamented that it had been impossible to find a consumer organisation to take part in the North Sea RAC (Q 335). In its recent Communication, the Commission acknowledged that capacity constraints and difficulties in resourcing working group meetings had posed problems for environmental and development NGOs.[29]

129. Some witnesses felt that the geographical remit of some RACs may be too large. The UK Government pointed out that "for the North Western Waters RAC in particular, the fact that it covers such a huge and diverse area has made managing the issues it addresses and arriving at consensus views particularly challenging." (DEFRA Memorandum, Para 48). The RSPB also identified the North Western and South Western Waters RACs as potentially too big (Q 243). In its recent Communication, however, the Commission took the view that overall, the current geographical coverage of the RACs is satisfactory, and there is no need for additional RACs to be set up. It instead urged RACs to make full use of the possibility of establishing sub-divisions to deal with specific issues.[30]

RESOURCING OF THE RACS

130. The resourcing of the RACs was a further problem highlighted by our witnesses. Ms Bell explained that under a decision taken in 2007, the RACs will receive €250,000 per annum indefinitely, rather than seeing their Community funds phased out over five years as had been planned originally (Q 312). However, RACs still require an underwriter to release funds upfront before they can be claimed back from the Commission, and their limited budgets mean that they rely heavily on help in kind from Member States, the Commission and third parties (QQ 313-314). It was pointed out that not all RACs receive the same level of support from third parties, for example the Baltic RAC "does not have any organisation behind it financially so they cannot pay upfront" (Q 320).

131. The UK Government observed that the RACs do not have funding to commission their own research or new analysis or evidence, and explained that they had "sought to help fill this gap in the short term, either by providing government scientists, or by funding new research in support of the RACs' work through DEFRA's Fisheries Challenge Fund" (DEFRA Memorandum, Para 48). They nevertheless emphasised that "this is not a long term solution." The RSPB also emphasised the importance of RACs being able to do their own research and lamented that the Councils were "far too dependent on hand-outs and the goodwill of a few Member States." It confirmed that the North Sea and North Western Waters RACs benefit hugely from the support of DEFRA, which is "almost unique in the amount of support they have given—with the possible exception of Denmark to the Baltic RAC" (RSPB Q 243).

132. The NFFO expressed concern that "the funding of the RACs has not kept pace with the role that is expected of them." It warned that without such support, it would be "difficult to continue the development of long-term management plans", and called for more funding to be made available for the RACs (NFFO Memorandum, p 41). Sam Lambourn, Chair of the North Western Waters RAC, suggested that the future of the RACs "is going to be very much a matter of resources". In his view, "the Commission will have to decide what it wants from these RACs. Does the Commission want good quality advice on an increasing number of subjects? If it does then it cannot be run on a free time, spare time basis by willing volunteers" (Q 346). Meanwhile Ann Bell of the North Sea RAC pleaded for "more flexibility within our budget", explaining that RACs cannot transfer funds across budget lines during the course of the year, but are instead held to their original estimates of how much they will spend under each heading (Q 313).

THE FUTURE ROLE OF THE RACS

133. A minority of our witnesses expressed support for the prospect of the RACs taking on a greater role in future. The Scottish Executive, for example, wished to see "the role of RACs enhanced in the future in terms of genuine participation in fisheries management, such as the development of long term management plans and wider marine environmental policy issues" (Scottish government Memorandum, Para 10.1). The UK Government were more tentative in their views, but did "see scope for RACs to take on a greater role in the future", judging that this could meet a need for "less prescriptive legislation at EU level and more scope for regional variation." (DEFRA Memorandum Para 51). The Swedish government's Fisheries Counsellor suggested that more powers could be transferred to the RACs on a case-by-case basis, "because if they do not feel they have an importance then we will lose them" (Robin Rosenkranz, Q 794).

134. Most of our witnesses, however, felt that it was too early to tell how the RACs might evolve. The Scottish Fishermen's Federation felt that "they are not in a condition yet where they can make rules" (Q 162). The Joint Nature Conservation Committee also felt that they were not "ready to go there yet" (Q 296). The Chair of the North Western Waters RAC acknowledged that "some people are very concerned that we should have more management power rather than just advisory", but took the view that "that is something perhaps we ought to earn." He suggested that if RACs provided good quality advice "it is awfully close to decision" (Q 346). The North Sea RAC's Executive Secretary agreed that "if we can provide good, scientifically based, evidence-based advice to the Commission that has been agreed by consensus, it is very difficult for the Commission or any Member State to actually disagree with us" (Q 347).

135. Some witnesses however, expressed strong reservations about any future transfer of management responsibilities to the RACs. The French government's Fisheries Counsellor, for example, insisted that "we are very much in favour of Regional Advisory Councils in terms of their advisory function, but we are not prepared to go for a further step whereby those Regional Advisory Councils would be given a decision-making or management power at this stage" (Q 738). He emphasised his government's view that "it is not for the RAC to decide on legally constraining instruments, legally binding tools and implement them. The decision-making, the enforcement, the control and the sanction will rest with the public authorities in the Commission and the other institutions here in Brussels and the Member States concerned" (Q 742). The German shared some of these concerns, explaining that "we are not in favour of giving them real management responsibilities" (Q 697). Germany's reservations were based on fears about the implementation of the policy, how RACs would integrate a control system, and whether they would have the power to sanction (Q 704). The Spanish government was even more nervous, proposing that "we must keep an eye on the RACs' proposals since we could end up having a too decentralised and regionalist fisheries policy which opposes the principles of the Common Fisheries Policy" (Spanish government Memorandum, p 187). But it was not only among Member States that we detected reservations. The NFFO argued that "the RACs' strong points are the involvement of the industry but also the involvement of other stakeholders, and they provide a forum, but if you are going to have a system in which the industry is taking responsibility then you could not have other stakeholders involved in that" (NFFO, Q 176). Oceana took the opposite view, arguing that the present composition of the RACs ensures that "environmental views will always be in a minority, with the fishing sector's opinion always being in the majority". This would "need to be resolved" if any decision-making power were given to the RACs, it suggested (Memorandum, Para 29).

Committee's Conclusions

136. The evidence we received suggests that the establishment of the Regional Advisory Councils has been the most positive development to flow from the 2002 reform of the Common Fisheries Policy. We commend all the parties involved—including the Commission, Member States and third parties that have lent RACs their support—for delivering notable improvements in stakeholders' engagement in the policy-making process, thus beginning to address one of the traditional failings of the CFP. In our view, the development of the RACs demonstrates that it is possible to build a credible regional dimension into fisheries management under the CFP.

137. We note that the implications of success have yet to register fully, particularly as regards resources. It seems clear to us that if RACs are to fulfil their potential as advisory bodies, they cannot be forced to rely on patronage to carry out their activities. They should instead be equipped with a budget that allows them to function independently, for example by commissioning their own research. A review of the budget made available to RACs should factor in the pace at which their activities are developing, and examine whether existing budgets could be managed more flexibly. For their part, Regional Advisory Councils should take into account the manpower shortages affecting the representation of non-fishing and recreational fishing interests when determining their internal organisation and their meeting schedules.

138. In the longer term, we favour the development of a policy process in which consensual advice from a RAC is normally heeded by the Commission and the Council. We recognise that the transfer of management responsibilities to Regional Advisory Councils might meet with resistance from certain Member States, and distance RACs from their grassroots members. We therefore take the view that a formal transfer of powers may not be necessary to achieve the desired effect. However, RACs must be allowed to earn authoritative influence if stakeholders' engagement is to be secured and maintained.