New Zealand: Fossilized views and changing reality

11 Nov 2017
MB-Y

The Faroe Islands recently rejected changes to fisheries management designed to take their industry to a Quota Management System, while New Zealand and many other nations have embraced transferable quotas

Not so long ago, New Zealand’s fisheries management system has been considered by some, mainly by quota buffs, as one of the best in the world. This, not on the basis of actual, proven results, but because New Zealand has been one of the early enthusiasts of the Quota Management System (QMS), and because its adoption of this methodology was accompanied by a lot of advertising.

There were enthusiastic early reports about the quota management methodology, one of the variants of the management fashion of the time. We had already several times taken issue with the whole quota system, not because it couldn't work, or bring about good total catches and consequently high profits, but because it would hurt small and medium scale individual fishermen, by gradually (or not) deprive them of access to fish resources in favour of major quota holders. These marketable quota systems have been designed by fishery economists, targeting at maximising profits.

Now, who would be eager to advertise the true or fake advantages of the QMS? No doubt, first at all those who hope to make gains of the introduction of this system. The basic idea behind the QMS system is that fishermen own (or lease) the right to catch a certain proportion (quota) of the Total Allowable Catch (TAC) of a certain species of fish. These quotas can be freely traded. Market forces are usually assumed to achieve economically optimal earnings. However, the economic (or, perhaps, socio-economic) question to be asked is where do the revenues go and how are they eventually distributed, if at all, among the fishing industry?

Sustaining TACs is supposed to ensure fishery's sustainability. New Zealand TAC assessments are based on biological and fishing information, whatever available. Presently, TACs are set for more than 640 fish stocks, with the claim to represent around 620,000 tonnes of fish, mostly without empirical stock assessments. Reportedly, "New Zealand’s QMS is a data hungry beast and it is starving." Therefore, claims that New Zealand's "data hungry" fishery management – committed to the most comprehensive QMS, ahead of most other fishing nations – is an outstanding success, simply do not match the facts.

Obviously also, we take issue with the advertised claim that management by quotas represents a "straightforward solution to control commercial fishing effort."

Its advocates still owe us an explanation how management by quotas is controlling fishing effort. And if the intended objective is to control fishing effort why not manage it directly rather than through quotas?

Both quota and Annual Catch Entitlement (ACE) can be bought, sold and leased. When New Zealand fishermen's catch exceeds their ACE, they must either buy more of it, or pay a penalty. One awkward consequence of the QMS is that more money can be made through trading ACE than by actually catching the fish. Unsurprisingly, this empowers absentee quota owners at the expense of fishing people.
In New Zealand, allowances are made from a TAC for customary catch by Māori, recreational fishing and other mortality caused by fishing, for example through poaching. The remainder is the total allowable commercial catch (TACC). Unfortunately, partly because of a lack of scientific data to administer the QMS, three quarters of fish stocks have no formal or detailed assessment, and very few of them have been properly surveyed.

Thus, however risky, most assessments rely on industry self-reported catch and effort data. Only too often, fisheries managers chose to believe highly questionable industry data showing increasing catch per unit effort, rather than scientific surveys, if any, suggesting decline. On the top of it, environmental data showing ecosystem fluctuations are frequently ignored, while funding for stock assessments has significantly decreased.
When tracing the money, which is  obviously the best way to assess the socio-economics of a fishery, some of it may be made or saved by dumping catches for which ACE is unavailable or too expensive, as well as from poaching and faked catch returns. New Zealand’s catch data have been distorted for decades. This comprises massive dumping of unwanted catch and under-reported by-catch, including endangered dolphins and sea lions.

A local manager admitted that: "…discarding is a systemic failure of the current system and something we have not been able to get on top of from day one of the QMS."

Thus, the QMS is not just starved of data: what little data it gets is because New Zealand’s fishermen are trapped in the cycle of non-reporting. The recent government decision to place electronic monitoring equipment on every vessel indicates the gravity of the situation. This, however, does nothing to remove the perverse incentives inherent in the QMS itself.

The QMS system has undermined jobs and livelihoods - just five large companies own over 80% of quota, and 60% of the offshore catch is taken by foreign charter vessels (FCVs) under contract to New Zealand fishing companies. These FCVs arrive with foreign crew, denying employment to New Zealanders, while outsourcing value-added processing and final marketing to Asia and elsewhere.
Concentration of quota in the hands of a few has resulted in many disenfranchised fishing people. There is a sense of hopelessness over their activities and alienation from the management of the resource they depend on. Recently, the Faroese Islands’ fishing industry overwhelmingly rejected a quota management system. They had too many questions and too little evidence to support adoption of the QMS.

It appears that NZ needs to lower the QMS from its undeserved pedestal, acknowledge its limitations and move forward through open and honest debate, also looking beyond its own shores for ideas, as New Zealand is not the only country wrestling with these problems.
There are lessons to be learned from New Zealand’s QMS, and they are not all good. It appears that after 30 years of experience with this system, New Zealand’s fisheries management needs a comprehensive review.