Topic Area: Fisheries
Geographic Area: Australia
Focal Question: What is the role of ITQs in the management of a fishery?
(1) Pascoe, S. 1993. Thalassorama. ITQs in the Australian South East Fishery.
Marine Resource Economics, v.8, pp. 395-401.
(2) Sanger, C. 1986. Ordering the Oceans- The Making of the Law of the Sea.
Zed Books Ltd. London.
Reviewer: Matt Chisholm, Colby '96
The third United Nations Conference on the Law of the Sea (UNCLOS) addressed
the issue of defining property rights of coastal seas in order to manage
and protect fish stocks. Australia took a leadership position at the conference
by pressing the need to define Exclusive Economic Zones (EEZs) which gave
the coastal state the sovereign right to manage and protect their zone.
In the 1970s, Australia gained an interest in defining a coastal zone as
its fishing industry was commercializing within the diverse waters off of
the south eastern shore. The multispecie fishery provided vast populations
to be exploited, and Australia was concerned with foreign fishing vessels
(Japanese, Taiwanese, Soviet and Eastern European fishers) harvesting fish
off their own coast. Australia also supported the 200 mile exclusive zone
because due to its geography, Australia would control the third largest
EEZ in the world. The large EEZ provided an even greater wealth for the
Australian fishing industry.
Australia established a 200 mile exclusive economic zone in 1976 amongst
60 other countries. With foreign vessels prohibited from fishing off of
Australia's coast and a set of defined property rights, Australia then began
to look domestically at what could be done to manage and protect their newly
Initially, the Australian fishing industry relied upon stocks of flathead,
whiting, and most importantly, orange roughy. The survival of the Australian
fishing industry relied on the discovery of alternate stocks which could
be substituted toward when a targeted stock has been fully exploited. The
industry moved toward gem fish in the 1970s when research showed declines
in the stocks of orange roughy. The abundance and profitability of the gem
fish allowed the fishing industry to expand, putting increased pressure
on the fish populations.
Concerns about fishing capacity arose at the end of the decade, and further
research called for a limit on the gem fleet to only 150 vessels in 1985.
A unitisation scheme was also implemented which was basically an non-transferable
permit system where catch units were distributed according to the size and
engine power of the fishing vessel. By 1988 a total allowable catch (TAC)
was established to protect the orange roughy stocks, but it reached an inefficient
and unsustainable conclusion. The TAC set a limit on the number of fish
to be caught; yet because the quotas were not transferable an incentive
to over invest in their catch efforts was created to avoid unfulfilled quotas
and a loss income, a "race for fish" began.
Individual transferable quotas (ITQs) were established in the South East
Australian fishery for orange roughy in 1989. By making the quotas transferable,
rational behavior is facilitated amongst fishers. The quotas can be transferred
which creates efficiencies by using the resources in their highest valued
use. In conditions where there is a surplus of quotas, they can be sold;
therefore not only do the resources go to the highest valued user, the transferability
also avoids the potential losses in income to the fisherman if the quotas
were not transferable. The ITQ system allows for an efficient use of the
resource (fish) while at the same time providing protection to the fish
stocks in order to provide the industry with future resources.
Australia's ITQ system contains vessel catch quotas which are a portion
of a larger total allowable catch. The quotas are transferable, yet licenses
are required to fish thereby restricting access into the industry as another
protective measure. The permits are distributed on a historical catch and
vessel size basis, and must be renewed each year as the TAC is reduced over
time, therefore reducing the amount of harvested stock and allowing the
stocks to naturally replenish. Initially only the orange roughy was regulated
under the ITQ system, but in light of its successes some 15 more species
of fish in the South East fishery were being managed by ITQs by 1992. The
South East fishery lands approximately 100 species of fish of which the
16 regulated species comprise the majority of the total catch.
The South East fishery has had success under the ITQ system, especially
concerning its off-shore fleets. The off-shore fleets target only a single
fish species per fleet which increases efficiencies As knowledge and efforts
are more concentrated, the system is gear specific, meaning that all vessels
must fish with regulated equipment. The choice of equipment is determined
by the desire to protect catches as well as reduce the levels of bycatch
which inevitably occur. The establishment of the EEZ also allows the ITQ
system to be regionally specific (segregating the region into sectors) which
decreases uncertainties within the industry as monitoring and enforcing
becomes easier due to a smaller geographic area and transportation costs
can decrease within and between those regions. The implications of a decreasing
annual TAC and the ability of the industry to adjust to the downsizing are
that the fishery is showing signs of acceptance to the system and a movement
toward sustainable management.
The Australian in-shore fleets are not finding the same successes. The in-shore
waters are much more biologically diverse and bycatch is a problem due to
the large number of fish species located in a densely populated region.
Quota species are not only target fish, but are also bycatch fish which
makes the management of the species more difficult.
Overall the system is a good example of the possibility of sustainable management
within fisheries. Improvements to the fish stocks and the South East fishery
are already evident which is encouraging in the early stages of implementation.
Increases in monitoring and equipment regulation could aid in relieving
the bycatch effects and therefore strengthening the system. The south East
fishery provides a good model to other states in creating an effective system,
especially considering the diversity of the resource base being managed.
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