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Mission - OVERVIEW - Departments - Islands Plan - Constitutional Review - FIDC - FLH - FCO - Relationship with UK Factsheet - Government - FISHERIES - Mineral Exploration - Agriculture Background - 2005 REFORMS - Industry Supports Reforms - Political Debate POLICY MEMORANDUMFISHERIES (CONSERVATION AND MANAGEMENT) BILL 2005Published in the Falkland Islands Gazette on 31 May 2005 (volume 16, number 12) to accompany the Fisheries (Conservation and Management) Bill 2005 Introduction The Fisheries (Conservation and Management) Bill 2005, if enacted, will introduce a major item of legislation. It achieves the following objectives: (a) It will give legislative effect to a major review of fisheries policy including the introduction of property rights. (b) The Bill provides the first comprehensive update of the Fisheries (Conservation and Management) Ordinance, since the introduction of the 1986 Ordinance which coincided with the creation of the Falkland Islands Interim Conservation and Management Zone. Policy Review A major review of fisheries policy was undertaken during 2002. This was a far-reaching review. The review addressed fisheries policy, marine farming and port development. Whilst the fisheries policy review focused on fishery resource allocation issues, it also reviewed the mechanics of resource allocation together with other areas where the private sector interacts with the regulatory authority. The key outcome was the proposal to change from the current system of relatively short term licenses to introducing a system based on transferable property rights. Consultation and Process The fisheries policy review process gave widespread opportunities for comment by the fishing industry and the public. The process started with a discussion with the fishing industry in early 2002 to gauge the direction which the review should take. A policy review group incorporating a number of representatives from the fisheries sector was set up. A discussion document together with recommendations on future fisheries policy was prepared in mid-2002 and released for comment by the industry and the public. The results of the public consultation were taken into account and policy recommendations were put forward to ExCo in March 2003. The policy proposals approved by Exco have provided policy direction for part of the Fisheries (Conservation and Management) Bill 2005. Executive Council Decisions Paper 86/03 This paper presented the policy review and policy recommendations to ExCo in March 2003. ExCo supported the principle of a move towards introducing a property rights system. It was also requested that further information be made available to the public. A further ExCo meeting to consider this major policy issue was scheduled. Paper 86/03 This paper returned to ExCo in May 2003. Exco concluded that the Falkland Islands should move to a system based on property rights and that rights should be term rights of up to 25 years duration. ExCo set a number of other parameters in relation to the introduction of property rights. Paper 196/03 The purpose of this paper was to explore what, if any, charges should be made for the initial allocation of fishing rights. It was considered at ExCo in July 2003. ExCo indicated that the government should obtain some value from the sale of rights. Sale proceeds should appear as revenue in a company's profit and loss account and the tax system would collect any revenue due to the government. Paper 197/03 This paper made recommendations on the initial allocation of rights and was considered at ExCo in July 2003. ExCo concluded that each major fishery should be treated separately and that allocation would depend on the level of investment by Falkland Islands companies and the level of exploitation. Whether rights were allocated as transferable rights or provisional quota would depend on a company's level of involvement. Track record would be taken into account. Paper 290/03 This paper addressed the issues of 'Eligibility to hold fishing rights' and went to ExCo in October 2003. ExCo determined that companies eligible to hold property rights must generally be owned by shareholders with Falkland Islands' status and ordinarily resident in the Falkland Islands. The use of Eligibility and Ownership registers was approved. Tests relating to Effective Control, Active Involvement and Efficient Use were agreed. The Introduction of Property Rights The most significant outcome of the fisheries policy review was the recommendation to introduce property rights in the fishery. The Falkland Islands has successfully met many challenges in the management and development of its fisheries resources over the last 20 years. To meet a new generation of challenges the current licensing system based on the allocation of non-transferable, variable duration licenses to individual vessels, is to be replaced by a system of long term individual transferable rights owned by Falkland Islanders. The anticipated gains are enhanced economic performance of the sector because fishing businesses have increased security and flexibility, rapid diversification from harvesting into value added activities and increased international competitiveness as poorly performing companies sell rights to well performing companies. Implementing a rights based regime in a small coastal state is challenging. This markets for rights, a desire to maintain local control of fishing rights, and a dependence on foreign direct investment in the fisheries sector are key considerations in the design of an effective and efficient management regime. Additional considerations include the trade-off between the economic efficiency gains derived from output-controlled fisheries and the relative administrative simplicity of input controlled fisheries. Under the rights based system monitoring of economic performance including the value of rights trades and rents generated will be key performance indicators alongside traditional biological measures of management performance. Falkland Islands expectations of the new regime are based on international experience with rights based systems over the last 30 years. These expectations held establish the basis for benchmarks against which the performance of the system can be judged. First, overall economic performance of the sector is expected to be enhanced, because fishing businesses have increased security of access to the resource and flexibility in the way they decide to structure activities to take advantage of the business opportunities. Second, diversification should occur in the industry as companies, no longer required to invest in vessels, look to invest in value-added activities such as processing and marketing. Third, seafood companies should invest more in research and development because long term rights means that they will benefit from investments that have longer pay-off periods. Fourth, international competitiveness should also increase as poorly performing companies sell rights to better performing companies. No longer will they be forced to stay in a fishery, unable to exit without losing everything. Fifth, as the profitability of the domestic seafood sector increases, government income from personal and corporation tax and resource rents should increased. Fisheries in the Falkland Islands have traditionally been managed using effort limitation. The Bill has been framed with the flexibility to allow fisheries to be declared either in terms of Total Allowable Effort (as now) or Total Allowable Catch. In the first instance, fisheries will continue to be managed using effort controls. The terminology of Individual Transferable Quota systems will be used, and whilst elsewhere these usually refer to catch, in the Falkland Islands the quota will refer to a unit of fishing effort. Companies awarded property rights or quota in a particular fishery will be awarded a proportion of the Total Allowable Effort declared for that fishery. In due course, total allowable catch could be used particularly for the longer lived fish species. Property rights may be allocated either as Individual Transferable Quota or as Provisional Quota, the nature of the fishery will determine which type of right is used. This will be assessed taking into account the levels of biological exploitation and the level of local investment in each fishery. Both Individual Transferable Quota and Provisional Quota generate an annual or seasonal catch entitlement at the start of each season or year. Catch entitlements accommodate the joint venture arrangements which prevail in some of the fisheries but also serve to create a more robust market for trading rights. Catch entitlements are tradable but expire at the end of the fishing season or fishing year. Catch entitlements, rather than Individual Transferable Quota, or as now the fishing license, becomes the day to day currency of the rights based regime. Fishing vessels will still be required to have a fishing license. The fishing license is retained in the new management system to regulate fishing activity with respect to gear type and sizes and mitigation measures to limit the impact of fishing on dependent and associated fish stocks, marine mammals, seabirds and the marine environment. Unlike Individual Transferable Quota, joint venture companies can own catch entitlements even if Falkland Islands' status holders have a minority shareholding. The threshold for local ownership may be set at different levels in different fisheries. This allows existing joint ventures to continue with minimal disruption and gives the security of short term access to fisheries to foreign investors. It is also expected that local companies will be more willing to trade short duration Catch Entitlements rather than Individual Transferable Quota because this trade does not affect a company's long term access to the fishery. In time the Catch Entitlement mechanism should see a faster rationalization of the fishing fleet and effort than would have been the case if Individual Transferable Quotas alone were implemented. The Fisheries Ordinance has always covered mainstream fisheries management and conservation. Whereas in the current system the issue of priority in license applications and long term licenses has been a matter of policy rather than legislation, the new Bill incorporates the issue of access to resources into the main item of Fisheries Legislation. There are still issues which will be the subject of policy decisions, however the process is set out much more tightly in the Bill. The property rights system proposed entails significant change to the operating environment for the private sector. There are also significant changes in the administration of the fishery, particularly in relation to the process of creating, awarding and administering property rights. The new system does not alter the Falkland Islands Government's powers to manage the fishery to achieve conservation targets, if anything these provisions are strengthened. Similarly, the new system does not alter the Government's ability to raise revenue from the fishery. Fees for Individual Transferable Quota and Provisional Quota can be levied in much the same way as license fees are currently levied. Property rights are not necessarily a panacea for fisheries development. Current fisheries policy or what might be more appropriately described as license allocation policy has served well. However, current policy had run its course and was in need of major revision and development. Whilst a range of options were available for policy development, the property rights route seemed apt at this point. A number of the features of property rights systems had been identified as desirable from previous policy reviews. Modernisation The Bill represents the first major reform and re-statement of law relating to fisheries resources and fisheries management. The original Fisheries (Conservation and Management) Ordinance was introduced to coincide with the introduction of the Falklands' Interim Conservation and Management Zone. There have been significant developments in fisheries in the Falkland Islands in the intervening 19 years. Additionally, there have been a number of developments at the international level in that period. The Bill provides for updating the law to reflect these developments. The preliminary part of the Bill (Part I) requires that in utilizing fisheries resources that due account be given to a range of environmental and information principles, together with specific sustainability measures. These reflect developments in International fisheries conservation agreements and law. One particular aspect is the extension of the provisions of the Conservation of Nature and Wildlife Ordinance 1999 to the fishing waters, so as to better protect seabirds. International Co-operation The Bill makes provision for International co-operation in relation to information exchange and combating illegal, unregulated and unreported fishing activities. The Bill formalises existing procedures whereby any fishing vessel officially 'blacklisted' by CCAMLR or other RFMO would not be authorised to fish in Falkland waters. Information including evidentiary material could be exchanged with other countries in support of the objectives of the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas (November 1993) and the Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea (December 1982) relating to the Conservation of Straddling Fish Stocks and Highly Migratory Fish Stocks (December 1995). Disputes Commission Part V of the Bill provides for the establishment of a Disputes Commission. The purpose of the Disputes Commission is to review and adjudicate on certain matters which may be referred to the Commission. It provides a dispute resolution mechanism which can focus on fisheries issues and deal with them in an expeditious manner. Industry Association The introduction of property rights is likely to see greater engagement between the government and industry on some fisheries management issues. Experience elsewhere suggests that strong and dynamic industry associations are likely to develop. The Bill provides for the establishment of a Falkland Islands' Fishing Companies Association. Additionally, provision is made for the application of a levy which may in turn fund the activities of the association. Enforcement and Penalties The provisions in relation to enforcement and penalties are substantially overhauled. In the Bill the powers of Fishery Officers in relation to offending vessels are extended. The circumstances in which the Court may order forfeiture of a fishing vessel upon conviction for certain offences are also extended. Overseas Master Fishing Licenses The Bill introduces the requirement that any overseas person in charge of a fishing vessel operating in Falkland Islands' fishing waters must be in possession of an Overseas Master Fishing License. The license may be revoked if the holder is convicted of an offence under the Ordinance, or if the holder has been convicted of any offence involving violence towards or maltreatment of any member of the crew of a fishing vessel of which he was at the time an officer. The Bill also provides that in the above circumstances a person may be prohibited from holding an Overseas Master Fishing License for a period of up to 5 years, with the prohibition being published in the Gazette. Executive Council Review Provision is made in the Bill for an annual or more frequent review of the fisheries policy. The review provides the opportunity to examine whether objectives are being achieved in relation to the proper utilization, conservation and management of fisheries resources, and associated issues. The review provides an opportunity for ExCo to change any policies of the Falkland Islands in relation to fisheries resources and fisheries management, control and conservation. Copyright: The Falkland Islands Government |
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