Memorandum by the New Zealand Government
SUMMARY
1. The efforts by the European Union (EU)
to reform its Common Fisheries Policy (CFP) are commendable. The
2002 CFP reforms have been far reaching, not only in reshaping
the overarching legal framework for fisheries management but also
in initiating a process of ongoing policy and process reforms
that are leading the EU in the direction of conservation and sustainable
use of fisheries resources.
2. The new CFP establishes a good enabling
framework for fisheries conservation, including the necessary
provisions for the EU to utilise fisheries sustainably. If the
EU is to meet its sustainability objectives, New Zealand considers
greater policy coherence will be required within and between the
strands of the CFP, key EU treaties and broader EU policies (eg
trade), and Member States' own national policies.
3. As a party directly affected by the CFP
(economically in EU and world markets, and in international fisheries
more generally), New Zealand is vitally interested in the policy's
implementation and ongoing transformation. New Zealand will also
continue to engage with European Commission ("the Commission")
and Member States on the implications of these changes, in particular
for their trading and fishing partners.
4. The Sub-Committee will also have before
it a separate submission from the New Zealand Seafood Industry
Council.
INTRODUCTION
5. New Zealand welcomes the opportunity
to comment on progress to date with implementation of the 2002
CFP reforms and to consider what further policy and implementation
changes should be contemplated at the EU and Member State level
in both the short-term and beyond 2012.
6. New Zealand's reference points in making
this submission include:
— The adoption of a rights-based quota
management regime in New Zealand almost three decades ago;
— New Zealand's experience as an exporter
of fisheries products to the EU and the rest of the world;
— New Zealand's experience in working
with the EU in international fora, including the United Nations
(UN); Regional Fisheries Management Organisations (RFMOs); Organisation
for Economic Co-operation and Development (OECD); and the World
Trade Organisation (WTO); and
— A desire to see fisheries management
strengthened to ensure fisheries are sustainably utilised in a
manner consistent with the numerous international instruments
on fisheries, development and sustainability to which New Zealand
is party.
7. In some cases, New Zealand-flagged vessels
participate in the same fisheries as EU-flagged vessels (notably
in the Pacific region). New Zealand also has strong relationships
with developing countries in the Pacific region. The contribution
that the EU makes to utilising these fisheries sustainably through
the application of the CFP is therefore of direct interest to
New Zealand.
8. Fisheries production and exports of fisheries
products are important to New Zealand's economic and social wellbeing.
The bulk of New Zealand's production of these goods is exported
and accounts for 4.4% of merchandise exports value. The EU market
accounts for 18% of New Zealand's seafood exports or about €124
million. As a long-time exporter of fisheries products to the
EU, and as a country which has had to compete with subsidised
EU products on world markets, New Zealand has a strong interest
in the evolution of the CFP.
CONSERVATION/MANAGEMENT
A wide range of management tools are available
to fisheries managers. What are your views on the following tools:
Total Allowable Catches
— Effort limitation, including "days
at sea", marine conservation areas and real-time closures
— Rights-Based Management tools
— Technical Conservation Measures
To what extent have current management tools increased
the levels of discards and bycatch? What is your view on how these
problems can best be tackled?
Overview
9. New Zealand adopted a rights-based management
system—the Quota Management System (QMS)—in 1986,
based on Individual Transferable Quota (ITQ). Since that time
the system has evolved considerably to address management issues
not foreseen when the QMS was introduced, and to seek improvements
in the operation of the QMS. The QMS is supplemented by a range
of additional tools that aim to address management issues lying
beyond the scope of the QMS. New Zealand's views and experience
of the management tools listed above are briefly outlined below,
and should be read in the context of our experiences with implementing
the QMS and seeking to address associated management challenges.
Total Allowable catches
10. Most commercial fisheries in New Zealand
are now managed under the QMS. Being an "output-based"
management system, the QMS centres around the setting of sustainable
catch limits. 97 species are divided into administrative stocks
of which there are now 629 within the QMS. Two types of catch
limit are set for each stock: the total allowable catch (TAC)
and the total allowable commercial catch (TACC). The Minister
first sets the TAC. The TAC represents the assessment of the total
amount of fish that can be sustainably removed from a stock in
any one year. It encompasses all extraction from the sea by all
users. Except in limited cases[5]
it must be set with reference to the maximum sustainable yield
(MSY) or the greatest yield that can be achieved over time while
maintaining the stock's productive capacity. The stock might be
fished down to MSY or rebuilt to a level that can produce MSY.
11. From the TAC, the Minister makes allowances
for recreational and Maori customary non-commercial fishing interests
and all other sources of fishing mortality, including the quantity
required for research and an estimate of the amount taken illegally
each year, before quantifying the TACC for a particular fishing
year. Before setting or varying a TACC the Minister must consult
with all interested parties, including representatives of customary,
commercial, recreational and environmental interests. TACs and
TACCs are reviewed annually.
Rights-Based Management tools
12. The QMS is a rights-based management
system and was introduced in New Zealand because it was seen as
the best way to:
— prevent overfishing, which had reached
critical levels in some inshore fisheries, by limiting catches
to levels that would result in maximum sustainable yield of each
stock; and
— reduce over-capacity and improve
the economic efficiency of the fishing industry in order to maximise
net economic return to the nation.
13. The introduction of the QMS brought
major changes to the nature of the New Zealand fishing industry.
In the lead up to the introduction of the QMS part-time fishers
were removed from the inshore fishery without compensation. Only
full-time commercial fisheries were allocated quota. A substantial
reduction in the number of fishing vessels occurred as a result.
In the early 1990s the QMS provided the security for quota owners
to invest in the buying of deepwater fishing vessels to fish species
such as orange roughy and hoki. The fishing industry continues
to be made up of a small number of large fishing companies plus
many small scale companies and individual fishers.
14. Since its inception the QMS has delivered
significant benefits to New Zealand. Export returns and numbers
employed in the seafood industry have increased, and the QMS has
been an important factor in improving the sustainability of many
of our fisheries that were previously over-fished.
15. The success of the ITQ system in New
Zealand has been attributed to the following four main factors:
a. New Zealand is isolated geographically
with no major shared or straddling stocks.
b. Key fishing industry players were strong
supporters and promoters of the ITQ system right from the start
and were instrumental in getting the system introduced. The system
also enjoyed widespread support from fishery managers and politicians.
c. The Government bought back catch histories
from inshore fishers to reduce TACs in stressed inshore stocks,
so fishers were compensated for catch reductions.
d. At the time of the catch reductions for
the inshore species, the offshore, deep-water species were largely
underexploited. Subsequently, catches from these latter fisheries
increased, which formed a strong economic base for the development
of the New Zealand fishing industry.[6]
16. That is not to say that there have not
been challenges for New Zealand in implementing the QMS. While
many of the basic elements of the QMS remain unchanged since its
adoption over 20 years ago, New Zealand has continued to work
to improve its operation and to ensure the incentives it creates
produce desirable outcomes.
ITQ and Annual Catch Entitlement
17. Each QMS stock is divided into 100 million
quota shares. At the start of the fishing year, the setting of
the TACC for each stock determines the amount of fish (in kilograms)
generated by quota holdings. The Annual Catch Entitlement (ACE)
is generated by quota holdings and represents the amount of a
particular stock that a fisher is allowed to catch in a particular
fishing year without incurring any penalty. Each person's ACE
is equal to his or her share of the TACC as determined by their
quota ownership. Both ITQ and ACE can be divided, aggregated,
leased, bought and sold. For all stocks in the QMS, commercial
fishers must balance their catch with ACE or pay the relevant
deemed value.
Deemed Values
18. Where catches of QMS species are taken
in excess of a fisher's catching rights, the fisher is required
to pay the Ministry of Fisheries an administrative penalty for
that amount of catch. Deemed values are set for each QMS stock.
Deemed values are usually set at a level to provide an incentive
for every commercial fisher to acquire or maintain enough ACE
to cover their catch in a particular year. Interim deemed values
are payable on a monthly basis and are refundable if a fisher
subsequently obtains sufficient ACE to cover the catch. Annual
deemed values are payable at the end of the fishing year and are
not refundable. A deemed value demand may be satisfied by acquiring
ACE or by paying the amount demanded. If a person does not take
one of these courses of action, his or her commercial fishing
permit can be suspended. This catch-balancing regime is administrative
in nature, but set within a criminal offence regime.
Effort limitation and Technical Conservation Measures
19. New Zealand's approach to managing fisheries
through the QMS does not use capacity limits—relying on
output controls to ensure catches are kept within sustainable
limits. Under the QMS, quota holders are free to determine the
appropriate level of capacity to harvest their quota. This has
led to significant rationalisation of the commercial fishing industry
in New Zealand as commercial fishers adjust their fishing capacity
and the nature of their operations around annual catch entitlements.
20. In respect of the transfer of fishing
capacity from the New Zealand fishery to other fisheries, New
Zealand works within regional fisheries management organisations
(RFMOs) to develop effective fisheries management measures, including
capacity measures, to ensure the long term sustainability of fish
stocks and ensures that New Zealand-flagged vessels fishing on
the high seas or within the zones of other countries are effectively
controlled. New Zealand works with other countries at the regional
level to ensure that fishing capacity is kept within levels that
are consistent with the long term sustainability of the fish stocks
in the region.
21. While the QMS provides the overall framework
for fisheries management in New Zealand, it is supported by technical
conservation measures which enable more tailored management according
to the characteristics of a fishery or stock.
22. The technical conservation measures
commonly imposed are:
23. Details of these technical conservation
measures can be found in the Fisheries (Commercial Fishing) Regulations
2001 or at the following website:
http://www.fish.govt.nz/en-nz/Commercial/Management+Controls/default.htm.
Marine conservation areas and real-time closures
24. The QMS is the primary tool for managing
fish stocks in New Zealand, but on its own it doesn't address
wider ecosystem or environmental issues associated with fishing.
New Zealand uses other tools in combination with the QMS to provide
these protections. New Zealand considers marine conservation areas
and real-time closures as useful tools, depending on the specific
management objectives and outcomes sought, and has adopted both
of these management tools in certain areas and fisheries.
25. New Zealand is a signatory to the United
Nations Convention on Biological Diversity and is committed to
maintaining the biodiversity on our land and in our waters. This
is being achieved through the New Zealand biodiversity strategy,
which has as its objective that marine habitats and ecosystems
will be maintained in a healthy and functioning state and degraded
areas will be allowed to recover.
Marine Protected Areas
26. Recently New Zealand released a Marine
Protected Areas Policy and Implementation Plan as the key means
of pulling together all the existing tools for protecting marine
biodiversity. This information can be found at the following website:
http://www.biodiversity.govt.nz/seas/biodiversity/protected/mpa_policy.html
27. It seeks to achieve an integrated network
of Marine Protected Areas across the territorial sea and EEZ protecting
10% of New Zealand's marine environment by 2010.
28. The country has been divided into 14
coastal regions to create a network of Marine Protected Areas
(MPAs) that reflect the diversity of New Zealand's marine environment.
Local groups, or forums, will be identifying which areas in each
region should be protected.
29. There will be three types of marine
protection in these regions:
— Marine Reserves—highest form
of protection that prohibits taking anything from the water.
— Other marine protected areas—allows
some activities, but prohibits anything that would significantly
change the overall environment, eg bottom trawling, dredging.
— Other marine protection tools—protects
certain plants or animals in the marine environment.
30. A variety of marine conservation areas
will be integrated into this process:
— New Zealand has established marine
reserves and management areas for customary (indigenous) fishing.
— New Zealand has closed over 1.2 Million
square kilometres of its EEZ to bottom impacting fishing methods
(Benthic Protected Areas closures).
Real time closures
31. New Zealand has a number of fisheries
which are closely monitored throughout the season and closed when
certain limits are met. For example, in the squid trawl fishery
the season often ends once a pre-established limit on the number
of sea-lions captured has been met. Interestingly, this limit
on sealion mortality is combined with a strike rate (estimate
of sealions caught per 100 tows) to determine a maximum number
of tows in the fishery each season before it is to be closed.
Tows are then allocated to fishers according to quota share, allowing
for flexibility in operations during the season and avoiding a
race amongst industry players to use up tows early in the season.
This provides a good example of how a rights-based system can
be combined with other tools to achieve a range of additional
management objectives beyond sustainability of target stocks.
Discarding and bycatch
32. New Zealand's primary tool for management
of bycatch is the QMS based on individual ITQs. TACCs based on
scientific stock assessments are set for bycatch species as well
as target species. The TACC for each fishery is then apportioned
to quota holders as an ACE according to the percentage of quota
each company or individual holds for a fishery. At the end of
the fishing year fishers are expected to balance their catch of
all species, including bycatch species, with an equivalent amount
of catching right (ACE). Fishers will be required to pay "deemed
values", an administrative penalty, for any catch that they
are unable to cover with ACE, which creates an economic disincentive
for the taking of bycatch. This is known as the "catch balancing
regime".
33. The catch balancing regime requires
deemed values to be set at a level that ensures that fishers do
not use deemed values to undermine the QMS, ie that fishers balance
their catch with ACE, rather than deemed values. This is an issue
that the Ministry of Fisheries has recently been working on and
guidelines are now in place for the review of the deemed value
of stocks when certain indicators of this behaviour are present.
34. Discarding of fish is an offence under
the Fisheries Act except under specific circumstances for non-quota
species where reporting requirements have been adhered to and
the discarding is done under the supervision of an observer or
fishery officer. While high-grading and discarding is known to
occur on occasion, it is taken very seriously and prosecuted under
our fisheries legislation. Severe penalties for quota/ACE infringements
as well as concern about potential damage to the resource (in
which quota owners have a long-term vested interest) have been
cited as reasons for reductions in dumping since the early days
of the QMS.
35. Other sustainability measures include
controls to avoid or mitigate bycatch of protected species such
as albatross or Hooker sea lions. Technical measures, such as
area closures and gear restrictions, are also used.
36. In general, bycatch problems appear
to have been reduced by fishers adjusting their catch mix and
methods of operation, by the adoption of industry codes of practice,
and by the implementation of the catch balancing regime that has
evolved to take into account changing circumstances.
Further information
37. For further information please see the
attached report: "New Zealand's Quota Management System:
A History of the First 20 years" (2007) by K Lock and S Leslie.
STRUCTURAL POLICY
Chapter III of Regulation 2371/2002 obliged Member
States to put in place measures to adjust the capacity of their
fleets in order to achieve a stable and enduring balance between
such fishing capacity and their fishing opportunities. To what
extent has this been successful?
38. The capacity management elements of
the reformed CFP will prove central to its success, both within
EU waters and beyond. Over-capacity leads to over-fishing and
economic waste. It also creates incentives for illegal, unregulated
and unreported (IUU) fishing.
39. Commission reporting suggests that overcapacity
remains an issue in EU fisheries. It has noted that decreases
in EU fleet tonnage and power have been offset by a steady increase
in the efficiency of its fishing vessels (CEC, 2006a). This overcapacity
has negative implications not only for EU resources, but globally.
Over a fifth of the EU fleet, by tonnage, operates outside of
EU waters (Earle, 2006). As domestic EU management is tightened
this figure is likely to increase, indicating that a global approach
to capacity management is required in order to prevent displacement
of effort into areas outside Commission jurisdiction.
40. Examples of this displacement effect
include the growth in the number and capacity of EU-flagged vessels
in Pacific region fisheries in the last decade, including since
the 2002 CFP reforms. Such capacity increases have been on the
high seas and under the auspices of bilateral fishing agreements
with Pacific Island countries. This includes tuna fisheries falling
under the Western and Central Pacific Fisheries Commission (WCPFC);
and pelagic fisheries in relation to the South Pacific Regional
Fisheries Management Organisation (SPRFMO), currently under negotiation.
41. While New Zealand recognises the EU's
rights to exploit fisheries on the high seas and to enter into
fishing agreements with coastal states, the scale of the increases
and the fact that they have been accompanied by an increase in
EU vessels operating in joint ventures under flags of non-EU members,
is of concern. Given the environmental commitments set out in
key EU treaties (including Articles 2, 6 and Title XIX of the
Treaty establishing the European Community) and in the reformed
CFP, New Zealand looks to the EU to provide leadership in the
development of capacity and effort management regimes in the WCPFC
and negotiations to establish a SPRFMO.
42. The WCPFC is currently facing the challenge
of how to limit catch and effort for key target stocks that are
currently subject to unsustainable levels of fishing effort—specifically
bigeye and yellowfin tuna, and also swordfish. The development
aspirations of Pacific Island countries are a key factor in the
negotiation of conservation and management measures by the WCPFC
and have inevitably led to tensions with distant water fishing
nations. The increase of EU fishing capacity in the region—either
under EU flags or through joint ventures under other flags—has
largely been conducted in a manner consistent with the international
legal framework and the measures of the WCPFC. There is no doubt,
however, that it has increased pressure on key resources and made
agreement on effective management measures more difficult.
43. It is in this context that New Zealand
is looking to the Commission to play a strong leadership role
on conservation and management measures, including limitations
on the introduction of new capacity, within WCPFC. Poor data reporting
with respect to fishing by EU-flagged vessels undermines the scientific
processes of the WCPFC and increases the need for a more precautionary
approach to fisheries management, including with respect to increases
in fishing effort.
44. In April/May 2007 fishing capacity limits
for pelagic fisheries were agreed in Reñaca, Chile by participants
in the negotiations to establish the SPRFMO as part of voluntary
interim conservation and management measures pending the adoption
and entry into operation of the new Convention. The key measure
for pelagic fisheries was to freeze catch capacity for two years.
While the freeze did not take effect until 1 January 2008, the
EC representative at the negotiations assured other participants
that there would be no dramatic increase in EU-flagged vessels
prior to that date. Latest information suggests, however, that
over the past nine months the number and capacity of EU-flagged
and EU-beneficially-owned vessels entering the pelagic fishery
has increased considerably. While the increase is not contrary
to the letter of the interim measures, the effect has been to
test the credibility of both the interim measures and the wider
SPRFMO negotiations.
45. The SPRFMO capacity increases may reflect
some lack of clarity or effectiveness at the EU level over the
Commission's ability to control member state fishing capacity.
The entry/exit regime established under Chapter III of Regulation
2371/2002 requires Member States to simply "put in place
measures to adjust capacity...to achieve a stable and enduring
balance between fishing capacity and fishing opportunities."
A "stable and enduring balance" is undefined and there
is no minimum requirement for what "measures" are necessary.
It would seem, therefore, that the Commission may be constrained
in its ability to control Member States' fleet movements. If so,
this has potentially serious consequences for the Commission's
ability to give effect to agreed effort and catch limitations
and for the confidence of other States in commitments made by
the Commission on behalf of Member States.
46. The EU's subsidy programme was a key
factor in undermining the EU's pre-2002 capacity management regime
under the Multi-Annual Guidance Programmes (MAGPs). There is a
risk that history could repeat itself as fuel costs and engine
modernisation continue to be eligible for subsidies, which in
some cases are increasing.
47. Against this backdrop of expansion and
lack of clarity in fisheries/structural aid policy, New Zealand
is concerned that the Commission is in the process of considering
exempting the external fleet from the entry/exit regime (CEC,
2006b). Relaxing the constraints on the size of the EU's external
fleet would likely increase pressure on the Commission, which
as has been noted, has had difficulty ensuring Member States manage
their fishing capacity appropriately. While the fleet segment
targets set under the MAGP may have had limited success in preventing
overcapacity, the rules and targets for the external fleet should
be tightened rather than relaxed if the CFP's sustainability objectives
are to be met beyond EU waters.
The new fisheries structural fund, the European
Fisheries Fund (EFF), has now come into force. What has been your
experience thus far with the new instrument?
48. The adoption of the EFF in 2006 represented
a useful continuation of the CFP reform process. Some of the most
positive environmental elements include the codification of the
phase-out of construction subsidies and the end of joint venture
support agreed in 2002. There is also a reorientation of the use
of funds towards sustainable development projects.
49. The level of funding available under
the EFF (€3.8 billion) and direction of some spending still
gives cause for concern, however. Member States rolled back the
original EFF proposal made by the Commission by including engine
modernisation in the final package. Furthermore, State aid rules
were subsequently changed to increase the level of de minimis
aid for fuel that Member States can provide without notifying
the Commission.
50. While it is too early to evaluate the
impacts of these developments and the EFF more broadly, it remains
a cause for concern that subsidies persist at such levels, contributing
to market/trade distortions, overcapacity and overfishing.
What are your views on the possible impact on
EU fisheries structural policy of WTO-level discussions as regards
subsidies in the fishing sector?
51. Subsidies exacerbate pressure on global
fisheries resources and can cause related environmental impacts.
Developed country support to the fisheries industry, by distorting
competition in fisheries and markets, has also reduced developing
country opportunities in a sector so important to their developmental
aspirations.
52. The University of British Columbia recently
estimated global fisheries subsidies to be between US$30-34 billion
per year for the period from 1995-2005 (Sumaila et al,
2006). Even those more conservative estimates, such as that of
the World Bank (US$14-20 billion), are significant. In contrast
with other sectors, such as agriculture, accurate figures are
difficult to derive because of the lack of transparency and notification
to the WTO.
53. The EU is estimated to be the second
largest fisheries subsidiser, as a region, after Asia, with half
of its subsidies contributing directly to overcapacity and overfishing
(Sumaila et al, 2006).
54. The EU is therefore a key player in
WTO fisheries subsidies negotiations. These have the potential
to deliver significant wins for trade, the environment and for
development. They represent a major opportunity to establish binding
global rules on the types of subsidies that are permitted, and
under what circumstances.
55. New Zealand is arguing for a broad ban
on most fisheries subsidies, with a narrow list of exceptions
for benign or positive subsidies such as vessel decommissioning
together with Special and Differential Treatment for developing
countries.
56. The EU, in contrast, advocates a narrow
ban. While it states that it is seeking a major environmental
outcome from the Doha Round overall, in perhaps the most important
area the EU has positioned itself on what New Zealand considers
to be the wrong side of the debate, together with the principal
defenders of subsidies such as Japan, South Korea and Chinese
Taipei.
57. The EU appears to us to be seeking to
use the WTO negotiations to codify the EFF, instead of raising
the bar for itself and the rest of the international community.
As with other areas of the negotiation, the EC and other countries
must be prepared to show flexibilities beyond their existing policy
settings.
58. As a progressive Member State on fisheries
policy, the UK has an important role to play in pressing the Commission
and other Member States to achieve comprehensive and effective
disciplines on fisheries subsidies within the WTO.
59. In New Zealand's view, the WTO fisheries
subsidy negotiations are an area where EU policies would benefit
from greater consistency. The EU has made a number of high-level
EU legal and political commitments which sit uneasily with its
current negotiating position. These include the revised EU Sustainable
Development Strategy (SDS) adopted in 2006, with endorsement from
the EU Council, which calls for further reforms of EU subsidies
"that have considerable negative effects on the environment
and are incompatible with sustainable development, with a view
to gradually eliminating them." Such a roadmap for fisheries
subsidies has not been developed, and the position of the EU in
the WTO is contrary to such calls for reform by EU Heads of States.
REFERENCES
CEC (2006a) Communication from the Commission
to the Council and the European Parliament on Improving the Economic
Situation in the Fishing Industry. COM(2006)103, Brussels,
09.03.2006.
CEC (2006b) "Study on the European Union
external fleet" Open Call for Tenders. Reference No FISH/2006/02.
Earle M (2006) Paying for Unsustainable Fisheries:
Where the European Union Spends its Money. pp. 227-242 in:
Lavigne, D. M. (ed.). Gaining Ground: In Pursuit of Ecological
Sustainability. International Fund for Animal Welfare, Guelph,
Canada, and University of Limerick, Ireland. 425 pp.
Council of the European Union, Renewed EU Sustainable
Development Strategy, Brussels, 9 June 2006. 10117/06
Sumaila, U R, Pauly, D. (eds.), (2006) Catching
more bait: a bottom-up re-estimation of global fisheries subsidies.
Fisheries Centre Research Reports 14(6), pp.2. Fisheries Centre,
the University of British Columbia, Vancouver, Canada.
February 2008
5 The exceptions are stocks whose biological characteristics
mean MSY cannot be estimated (eg squid), enhanced stocks, and
international stocks where New Zealand's catch limit is determined
as part of an international agreement) Back
6
Annala, John H. (1996) New Zealand's ITQ system: have the first
eight years been a success or a failure?, Reviews in Fish Biology
and Fisheries 6, p60. Back
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