Lee van der Voo considers catch shares in the US to be, “one of the coolest vehicles environmental policy has seen in decades,” because they reduce fishing effort, diminish incentives to fish in dangerous weather, can boost the value of seafood, and most importantly, were designed to keep fishing rights with the fishermen and their communities. However this last attribute has not worked for most catch share programs and increasingly these rights are bought by large investment firms and offshore companies that find loopholes in the loosely-regulated catch share laws and regulations.

Van der Voo fears that over the long term catch shares will increase costs, fishermen will earn less because of higher rental payments owed to, “people in suits,” that own the fishing rights. Consumers would then pay more in this scenario while a handful of investors would become rich.

Atlantic coast clam fisheries are the first example of this cycle: Bumble Bee Foods which has exclusive rights to almost 25% of America’s clams, was recently acquired by Lion Capital, a British equity firm. The Alaskan crab fisheries have also experienced a disconnect in recent years between fishing rights ownership and the people actually harvesting the resource.

Proponents of catch shares need to, “acknowledge that it’s an investment vehicle too, and the fish councils that manage it lack resources and political savvy to keep fishing rights in the US and in the hands of fishermen.”

Comment by Stephen J. Hall, David J. Mills & Neil L. Andrew

In the context of US fisheries, the term “catch shares” refers to a system in which the government grants fishing rights (quotas) to individuals or companies on a de facto permanent basis and establishes a market for buying, leasing or selling those rights. In other parts of the world, this same approach is referred to as Individual Transferable Quotas (ITQs), or Transferable Fishing Concessions (TFCs).

For ensuring the sustainability of fish stocks, catch shares in the US are, “one of the coolest vehicles environmental policy has seen in decades.” Yet while the potential of catch shares to reduce fishing mortality to sustainable levels is clear, the long term benefits for fishers and fishing communities are much less so. Van der Voo describes how catch shares in the US clam fishery have accumulated in the hands of a few wealthy investors and offshore companies. Clearly, it is an issue that deserves much greater attention.

Lessons from Experience

The potential pitfalls of catch shares and other schemes to allocate private property rights in fisheries have not escaped scholars. For example, Benediktsson and Karlsdóttir (2011) describes how the ITQ system in Iceland saw 50% of quota in the hands of 10 companies by 2007, a result that arguably contributed to the country’s financial crisis. Analyses of events in Denmark and Chile point to similar concentrations of quota with marked negative impacts on traditional fishing communities. In Chile, an estimated 68% of people working in the fisheries sector had to share 10% of the quota with the remaining 90% was owned by just four companies.

Rights-based fisheries (RBF), the concept that environmental and economic objectives in fisheries are best served by introducing private property rights, has been a dominating proposition over the last two decades. Zealous promotion of RBF (e.g. Neher et al. 1989, Cunnigham et al, 2009), and experiences such as those described above, has led to equally zealous rebuttal, largely on the grounds of social justice, particularly for small-scale fishers.

In South Africa, that rebuttal ultimately took the form of class action to challenge the prevailing system. Based on ITQs, this system was intended to reduce poverty by creating small-scale fishing enterprises that generated wealth for fisher households. Unfortunately, it was a system that saw 90% of the country’s 50,000 small scale fishers lose their rights. As Isaacs (2011) notes:

This system failed as many new entrants were allocated unviable fishing rights, most of them were vulnerable, many sold their rights to established companies, and some fell deeper into poverty. At local community level, the wealth-based approach of allocating small quotas to many rights holders resulted in the community elite (teachers, artisans, shop-owners and local councillors) capturing the rights. Many bona fide fishers with limited literacy and numeracy skills were unable to comply with all the formal requirement of the rights allocation process.

In 2007, the courts granted an order requiring the government to develop a new small-scale fishing policy. This new policy was endorsed in 2012. Instead of being based on the principles of individual property rights, the focus was on collective rights granted to communities.

As with the US clam fishery, these examples suggest that, even when measures are put in place to try and avoid unwanted social impacts and retain an equitable distribution of benefits, catch share (rights based) schemes often fail to maintain social justice and the livelihoods of small-scale fishers and fishing communities.

A Confused Debate

Setting a total allowable catch and allocating rights can certainly be an effective way of ensuring the sustainability of a stock, provided that the level is appropriate, ongoing monitoring processes are well designed and there is compliance. Arguably, it is for this reason that many NGOs have convinced philanthropic investors of the merits of this approach. In the last decade, fisheries improvement projects in both the developed and the developing world have become big business; establishing “catch shares” is often a key selling point.

What is not always clear, however, is the extent to which these NGOs, in promoting “catch shares” are also advocating the allocation of private property rights in a market-based system. The language that distinguishes between this strict definition of “catch shares” and other approaches for ‘sharing the catch’ (which, of course, all systems must ultimately do) is terribly blurred.

Exploring this idea, Macinko (2014) argues that a tool (pre-assigned catch, i.e., catch shares) is being confused with an ideology (the sellable, but simplistic notion that private ownership promotes stewardship). everal social movements, for example, feared the now defunct Global Partnership for Oceans’ (GPOs) use of terms such as “community rights” reflected “a new euphemism and language strategy in pursuit of more private and individual access rights regimes.“

A more generous interpretation of the GPO terminology is that, after an early period of advocacy, the pitfalls of “catch shares” with respect to social outcomes were recognized and other ways of sharing the catch were acknowledged. The same interpretation can also be applied to NGOs currently involved in fisheries improvement projects around the world. The proof of that generosity will lie in the approaches that are adopted for inclusion of small-scale fishers. What should those approaches be?

Finding Solutions

Because of the widely differing social, economic and ecological settings in which fisheries occur, there is no single best approach for sharing the catch. Deciding how to make the most of an near shore canoe fishery that spans 500 miles of remote coast and serves both local consumers and a regional trade for dried fish is quite different from deciding how to manage a lake fishery that shows natural boom and bust cycles of fish productivity and meets the needs of a wide range of part time fishers, many of whom migrate to the region for the boom periods. Compare these two examples with the simpler challenges posed by a large-scale offshore fishery with relatively few boats, all of which land in one of a few ports to provide inexpensive fish for urban markets.

It is this diversity of context that led Jentoft et al. (2011) to argue for a “dexterity principle” when searching for solutions. The key to fostering dexterity is to focus first on how the management approach is decided and who participates. To this end, we offer two suggestions from Hall et al. 2013:

1. Promote and support mechanisms that devolve responsibility for management and decision making to levels where incentives for fisheries to meet broader societal objectives are highest. This means putting inclusion, participation and democratic governance at the heart of fisheries governance. One must recognize, however, that when literacy, empowerment, agency and engagement are weak among key constituencies, the prospects for achieving sound and durable reform are poor. In these cases, parallel efforts may be needed to build the requisite capacities and competencies among stakeholders before fisheries reforms are attempted.
2. Give primacy to effective and inclusive stakeholder dialogue over the goals of any fisheries reform and implementation policies. Effective dialogue will be especially important when identifying fisher food security and livelihood concerns such as maintaining fishing options to cope with periodic food shortage or economic downturn. Giving voice to those whose wellbeing is most affected will help ensure that such benefits are not lost in a reform process.

While we share the view that “catch shares” are an important and proven tool in conserving fish stocks, they are not universally appropriate. In deciding on their usefulness in any given context, the broader objectives of the fishery need to be considered from diverse perspectives, along with pragmatic issues of implementation. Some of the more breathless advocacy for catch shares conflates their potential environmental benefits with the societal consequences of different forms of implementation. In doing so, it also sidelines the most important voices for designing and sustaining effective and equitable governance – fishers and their communities.

Stephen Hall was Director of World Fish from 2004 until November 2015. You can contact him here or find him on twitter here.

Neil Andrew is Regional Director for East Asia & Pacific and a Principle Scientist at WorldFish.

David Mills is a Senior Scientist at WorldFish.