Select Committee on European Union Twenty-First Report

Chapter 4: Summary of Conclusions and Recommendations

The Progress of the Common Fisheries Policy since 2002

RECOVERY AND MANAGEMENT PLANS

228.  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.

229.  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.

230.  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.

231.  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

232.  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.

233.  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.

234.  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.

235.  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.

236.  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

237.  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.

238.  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.

239.  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.

240.  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.

241.  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.

242.  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

243.  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.

244.  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.

245.  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.

Ongoing Challenges

MANAGEMENT TOOLS

246.  If the principle of relative stability is to underpin the CFP—as we believe it should—effort restrictions can only be used to complement TACs and quotas. However, we recognise that restrictions on fishing effort, rather than catches, appear to offer a more readily enforceable means of reducing fishing mortality. For this reason, we share the Commission's assessment that this tool has significant untapped potential.

247.  We commend the decision to devolve effort allocation to Member States in the revised cod recovery plan, and strongly support the Commission's proposal to extend this approach to all other effort controls for 2009. In our view, this represents a promising route through which to incorporate a greater element of subsidiarity into the CFP, creating a multi-tiered management system.

248.  Allocating effort at national or sub-national level may in turn create opportunities to tie other conservation tools—such as closures and selectivity measures—into the effort allocation process, thereby aligning fishermen's incentives with conservation goals. Indeed, by rewarding fishermen for complying with technical conservation measures that would otherwise place them at a competitive disadvantage, public authorities can help the industry to tackle a collective action problem. We commend the Scottish Executive for piloting a real-time closure scheme that incorporates all these considerations, and trust that its impact will be evaluated with a view to assessing whether more widespread use should be recommended.

249.  We believe that long-term management plans offer scope to deliver improvements in the way quotas have been working. We envisage that multi-annual plans could incorporate multi-annual TACs for stocks whose biomass does not vary significantly from year to year. We have already indicated that the alignment of TACs for species of fish that are caught together is necessary. An element of risk management should also be built into management plans, providing for pre-planned, automatic adjustments in catch restrictions triggered by predictable emergencies.

DISCARDS

250.  Estimated discard levels of up to 60 per cent speak for themselves: discards pose a pressing challenge for fisheries managers. We urge EU Member States to work towards eliminating discards, and support the incremental approach that the Commission has mapped out, based on maximum allowed by-catch limits and fishery-specific strategies for achieving them. We again see scope for a division of labour whereby targets are set centrally and stakeholders in each fishery are left to devise their own methods of reaching them, subject to vetting and monitoring from the centre.

251.  We support the principle of a discard ban and therefore firmly endorse the Commission's aim of progressively reducing maximum allowed by-catch limits to zero. However, we recommend that if by-catches are to be confiscated in order to protect the principle of relative stability, financial compensation should be made available to cover stowing and landing costs. Without such compensation, fishermen's incentives would in our view be misaligned, posing a serious challenge for those charged with enforcing a discard ban.

252.  The Norwegian experience leads us to conclude that flanking measures designed to prevent situations in which fishermen are tempted to discard would be critical to the successful implementation and enforcement of a discard ban. This could include closures, as in Norway, but should also encompass mechanisms allowing fishermen to buy additional quota to cover their catches—an issue that is addressed in more detail in the next section. Where this is not possible (for example where a low TAC leads to shortages of a particular quota), the feasibility of introducing convertible quota schemes—whereby fishermen are allowed to convert quota for one species and use it to land another—merits consideration. We recognise that such a system would put pressure on relative stability, but anticipate that a carefully calibrated exchange rate could contain the volume of quota converted.

RIGHTS-BASED MANAGEMENT

253.  To the extent that it allows fishermen to acquire the rights they need to run an efficient operation; prompts quota holders to take an interest in compliance; and promotes the right-sizing of fleet capacity through voluntary mechanisms, the trading of fishing rights is clearly beneficial. For these reasons, we regard further moves towards rights-based management at a national level as highly desirable. We note that this is a Member State competence, and does not require modification of the provisions of the CFP.

254.  In the UK, a de-facto trade in fishing rights appears to have emerged through a piecemeal process that has been tolerated but not endorsed by the UK Fisheries Administrations. The result is that the opportunity to link fishing rights to responsibilities—as advocated by the Commission—has not arisen. We believe that the in-year trade in fishing rights among UK quota holders should be recognised by the UK authorities. A control system based on penalty points, under which rights are temporarily suspended and eventually withdrawn in response to infringements (see Paragraph 108 above), could serve to couple rights and responsibilities in the manner envisaged by the Commission.

255.  Permanent transfers of quota entitlements across Member States as well as within them would not be compatible with the principle of relative stability. For that reason, the prevailing practice of in-year leasing of quota between Member States must continue. Member States should nevertheless seek to develop more effective ways of managing such in-year swaps, so as to ensure that the discarding of unavoidable by-catch is minimised.

GOVERNANCE

256.  The 2002 reform of the Common Fisheries Policy did not tackle what many stakeholders—and this Committee—regard as the over-centralised and stiflingly prescriptive legislative process through which fisheries are managed in the EU. We recognise that the clamour for a "level playing field" from Member States and stakeholders alike may over time have prompted policy-makers to micro-manage in ever greater detail. It is clear, however, that this approach has failed and should now be abandoned.

257.  We were encouraged to hear that the Commission is ready to contemplate a move towards results-based management incorporating a greater degree of subsidiarity. We note, however, that competing visions are on offer as to what this may entail in practice: witnesses were divided, for example, on whether a uniform approach to technical conservation measures—some of the most prescriptive legislation drafted under the CFP—continues to be necessary.

258.  The division of labour we envisage is one where strategic decisions—on target mortality rates, for example, or maximum sustainable yield—continue to be taken centrally in Brussels, while decisions relating to delivery and implementation—determining how targets are to be reached—are delegated to regional forums. These should be organised to reflect the level at which outcomes can be measured, allowing local decision-makers to be held accountable by auditors at national and EU level. Based on these principles, technical conservation measures should not require uniform imposition.

259.  Central monitoring of outcomes, backed by sanctions for poor performance, will be essential to the proper functioning of a more decentralised management system. We note the risk that a regional management model such as we have described might exacerbate enforcement problems. However, we believe that a double-tiered system of penalties, based on the suspension or withdrawal of fishing rights at individual level, and the imposition of fines on Member States who fail to deliver centrally-agreed outcomes, could hardly be less effective than the present, discredited control and enforcement regime.

260.  During the course of our inquiry, we heard forceful arguments in favour of withdrawing from the CFP. We do not regard this as a credible policy option. Unilateral withdrawal from the CFP is incompatible with membership of the EU. As indicated by the Commission, a negotiated withdrawal from the CFP would require unanimous agreement from all Member States to amend the EC Treaty, and subsequent ratification by all Member States of the amended Treaty. In our view, this likelihood is not within the realm of practical policy. We consequently consider that withdrawal from the CFP is not only a false panacea, but a dangerous distraction from the more important task of reforming the policy.

From 2002 to 2012: Reforming the CFP

261.  The Common Fisheries Policy clearly remains in need of major reform, having failed to deliver sustainable fisheries—whether from a biological or an economic point of view. The Commission itself, backed by the Court of Auditors, recognises that the 2002 reform of the CFP has not succeeded in addressing longstanding deficiencies such as persistent overcapacity in the fishing fleets of the Member States, poor compliance, and uneven enforcement. Over-centralization and a top-down management approach have served to alienate stakeholders and thus further undermined the policy.

262.  On the most critical indicator—the state of fish stocks in Community waters, on which the livelihoods of the EU fishing industry ultimately depend—the 2002 reform of the Common Fisheries Policy has failed to turn the tide. Our analysis suggests that Member States' reluctance to trim national fishing fleets to a size commensurate with the fishing opportunities available—or even to allow market forces to do so—remains the root cause of failure in this respect. Fleet over-capacity prompts fisheries ministers to resist the conservation measures prescribed by scientific advice, and creates powerful economic incentives for illegal activity on the part of the fishing industry. Both serve to perpetuate a vicious cycle in which dwindling fish stocks are at risk of being in ever greater disproportion to the size of the fleet.

263.  Looking forward, we believe that urgent action is necessary to break out of this spiral. We urge Member States to resist calls for subsidies to offset fishing vessels' rising operating costs. The increase in the cost of diesel fuel is not a temporary phenomenon, indicating that state aid would only offer temporary relief to the industry, and that taxpayer-funded grants would consequently serve no ultimate purpose. Public aid should instead be channelled into attractive decommissioning schemes and into the economic diversification of fisheries-dependent coastal communities, so as to facilitate voluntary exits from national fleets, and promote the development of alternative employment opportunities. In the absence of such action, we hold out little hope that a new control and enforcement regime will deliver radical improvements.

264.  We believe that there is a very strong case for moving towards a much greater degree of decentralised fisheries management, whereby strategic objectives set centrally are delivered through methods devised at a regional level. We envisage that this would promote both better management, adapted to regional circumstances, and better compliance, through the ex-ante influence of local stakeholders on the regulatory instruments selected. We regard the establishment of the Regional Advisory Councils as a promising step in this direction, and as the most welcome development to arise out of the 2002 reform of the Common Fisheries Policy.

265.  We believe that the core objective of the Common Fisheries Policy should be to bring fishing capacity and fishing opportunities into balance, for which fisheries managers will need a toolkit of measures at their disposal: TACs, quotas, effort controls, and technical conservation measures, including closures. In our view, progress in achieving this balance is dependent upon a fundamental change of emphasis in management style: rather than attempting to micro-manage the implementation of the CFP's provisions from the centre, the Council and the Commission should learn to work more closely with regional management bodies, who should take the lead in devising strategies for delivering the desired outcomes. In our view, this should be the agenda driving the next reform of Common Fisheries Policy, due in 2012.

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