Marine Policy 42 (2013) 259–267
Contents lists available at SciVerse ScienceDirect
Marine Policy
journal homepage: www.elsevier.com/locate/marpol
Rights-based management in the Western and Central Pacific Ocean tuna
fishery: Economic and environmental change under the Vessel Day Scheme
Elizabeth Havice n
University of North Carolina-Chapel Hill, Geography Department, Saunders Hall, Campus Box 3220, Chapel Hill, NC 27599-3220, USA
art ic l e i nf o a b s t r a c t
Article history: Defining, strengthening and enforcing rights over fisheries resources is frequently identified as central to
Received 12 October 2012 overcoming ‘the tragedy of the commons’ and associated environmental and economic challenges in
Received in revised form fisheries systems. Though economic theory generally suggests that output control (e.g. quotas) creates
6 February 2013
the strongest incentives for efficiency and conservation, input controls (e.g. on effort) remain common.
Accepted 13 March 2013
This paper explores the rationale for, and implications of, employing a transferable effort scheme in one
of the largest and most valuable fisheries. In 2007, eight Pacific Island countries implemented the Vessel
Keywords: Day Scheme with the aims of strengthening their rights over tuna resources and control over economic
Vessel Day Scheme and environmental trends. Four years since implementation, the scheme has significantly increased
Transferrable effort
economic returns for the island states and generated improvements in data reporting. However, it has
Tuna
not generated a firm limit on fishing effort and its structure has made it difficult to directly target the
Pacific island countries
Western and Central Pacific Ocean biological concerns of individual species within the multi-species fishery. In the future, outcomes of the
Rights based management Vessel Day Scheme will continue to be tempered by the structural limitations of effort-based regulatory
scheme, market conditions in the sector and the willingness of firms and island states to clarify, abide by
and enforce the technical components of the scheme.
& 2013 Elsevier Ltd. All rights reserved.
1. Introduction international dimensions of tuna production systems and manage-
ment schemes have made it particularly complex to develop and
Fisheries management efforts have long been characterized as deploy ‘rights’ over the resource. In 2011, over 2.2 million tonnes of
plagued by the ‘tragedy of the commons’ in which the lack of tuna valued at US$5.5 billion were caught in the region, 1.7 million
recognized and enforceable rights generates a race to fish and related tonnes of which was caught by industrial purse seine vessels [7].
environmental degradation and economic inefficiencies [1–3]. In Of this, over 1.3 million tonnes (60% of total volume) was caught
keeping with this conceptualization, mainstream management inside of the 200 mile exclusive economic zones of the eight
approaches firmly situate rights-based management as a primary Pacific island countries that are Parties to the Nauru Agreement
tool for overcoming environmental and economic problems in fish- (known collectively as the PNA countries): the Federated States of
eries. According to this approach, creating secure, durable and Micronesia, Kiribati, the Marshall Islands, Nauru, Palau, Papua New
tradable ownership rights, creates incentives to reduce capacity, Guinea, the Solomon Islands and Tuvalu. These eight island states
which in turn, increases economic efficiency and profitability [4]. seek to manage tuna resources to generate economic returns in
Of the options for creating ‘rights’, economists and modelers gen- the long-run, not least because for some, tuna licensing fees
erally suggest quota (output control) systems as the most direct route represent a significant source of government revenue. Since the
to ‘efficiency’ because quota holders have incentive to maximize inception of industrial fishing in this region, the PNA countries
economic returns associated with their allocated catch, rather than to have incrementally strengthened rights-based management in
increase the volume of their catch within a given effort allocation an effort to achieve economic and environmental goals. Most
(e.g. during an open season, or number of fishing days) [5,6]. recently, the PNA countries have implemented the Vessel Day
However, in practice, managers often substitute or complement Scheme (VDS) for the purse seine fishery – a transferable effort
quota controls with effort controls in order to meet specific needs program that has been operational since 2007. Given the volume,
(practical, technical, political or otherwise) in a particular fishery. value and multi-jurisdictional nature of the fishery, the VDS is
In the tuna fishery in the Western and Central Pacific Ocean arguably the largest and most complex fishery management
(WCPO), the highly migratory nature of tunas and the arrangement ever to be put in place.
In the years since its implementation, there have been few
n
Tel.: þ 1 91 996 23414; fax: þ1 91 996 21537. publically available assessments of the opportunities and chal-
E-mail address: havice@email.unc.edu lenges of this approach to rights based management, limiting our
0308-597X/$ - see front matter & 2013 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.marpol.2013.03.003
260 E. Havice / Marine Policy 42 (2013) 259–267
understanding of how the transferable effort scheme is shaping 2500
economic and environmental outcomes in the tuna industry, and
the broader lessons that the case lends to effort control
2000
approaches to rights based management. To contribute to filling
these gaps, this paper proceeds as follows.
Section 2 offers a brief overview of conditions leading to the
1500
formation and implementation of the VDS, detailing the economic
US$/MT
and ecological management objectives of PNA countries. Section 3
reviews why the transferable effort scheme was chosen as 1000
opposed to other rights based management approaches, before
Section 4 offers a technical account of the VDS, focusing on what
the scheme controls, its implementation systems and relationship 500
with the Western and Central Pacific Fisheries Commission
(WCPFC), the region’s tuna RFMO (regional fisheries management
organization). Section 5 draws on document analysis and inter- 0
view data from nine interviews with industry representatives,
government officials and international fisheries specialists to offer Fig. 1. Thailand Import Prices, Frozen Skipjack US$/mt (1984–2009), not inflation
a preliminary review of the VDS vis-à-vis the stated objectives of adjusted.
Source: [42].
PNA countries and the WCPFC. It demonstrates the dramatic
economic changes that the scheme has initiated and the remaining
economic and ecological benefits and challenges. The conclusion the early 2000s, it was apparent that the Palau Arrangement’s
highlights that effort control can generate significant economic limited entry program was achieving neither economic nor envir-
and ecological changes in the fishery by strengthening rights, but onmental objectives. The access fees that PNA countries were
that the structure of the fishery in question as well as the politics charging fishing fleets hovered stubbornly around 5–6% of catch
associated with the formation, implementation and monitoring of values [11,12] while bigeye and yellowfin tuna populations had
the management approach, play a key role in determining man- begun to be negatively impacted by soaring purse seine catch
agement outcomes. volumes.
Several factors explain these outcomes. First, the ‘rights’ that
the limited entry system initiated were allocated to distant water
2. Rights-based management in the WCPO tuna fishery: fishing nations according to flag, rather than being held and
towards the Vessel Day Scheme controlled by the PNA countries. In effect, this system guaranteed
individual fleets a set number of licenses, eliminating competition
Industrial fishing activity commenced in the WCPO in the between fleets for access and preventing new fleets from entering
1960s when US and Japanese fleets entered the region and fished the fishery [13]. Second, though total vessel number was limited
under open access conditions without regulation or paying licen- under the Palau Arrangement’s license number scheme, vessel
sing fees. By the late 1970s, Pacific island countries and coastal capacity grew through vessel size and technological improve-
states around the world declared their 200 mile exclusive eco- ments, a dynamic known as ‘effort creep’.1 Third, the limited entry
nomic zones (EEZs): their first step towards rights-based tuna system failed to implement a firm limit on entry: it allowed PNA
management. With EEZs established, Pacific island countries countries to license domestic class vessels in addition to the total
deployed their nascent sovereignty over ocean resources to charge license number; when a state did not use its allocation, PNA
licensing fees and regulate fishing activities in their waters. Their countries were permitted to re-sell unused licenses. The Arrange-
claims were recognized internationally in 1982 upon the conclu- ment allowed the Parties to license additional vessels at a 20%
sion of the United Nations Convention on the Law of the Sea premium [13]. As a result, from the late 1990s through the 2000s,
(UNCLOS). purse seine catch volume increased dramatically (Fig. 2).
Recognizing the economic and ecological challenges associated By the early 2000s, the legal imperative for regional manage-
with managing a highly migratory stock through discrete national- ment of the transboundary fishery had emerged. The United
level policies, in the early 1980s, the eight Pacific Island countries Nations Fish Stocks Agreement of 1995 clarified the UNCLOS
with the most tuna-rich waters – and thus, the greatest potential mandate that coastal states and distant water fishing nations
to collectively govern the transboundary fishery – formed a sub- cooperatively manage highly migratory fish stocks in exclusive
regional alliance. They signed the Nauru Agreement, setting their economic zones and on the high seas. It required that regional
sights on negotiating harmonized minimum terms and conditions organizations be set up to facilitate management cooperation
of access for foreign vessels (which were negotiated over the where it did not already exist. Building from work to develop a
following decades) [8], and cooperating to improve historically regional management mechanism already underway by the Pacific
weak bargaining power in fisheries access agreements with the Island Forum Fisheries Agency (FFA), in 1997, Pacific island
aim of increasing rents from fishing activity undertaken by foreign countries, Australia, New Zealand and distant water fishing
fishing interests. nations began negotiations that ultimately led to the formation
In 1990, the PNA countries moved further towards regionally of the Western and Central Pacific Fisheries Commission (WCPFC),
oriented rights-based management by initiating negotiations for a new regional fisheries management organization that would
the Palau Arrangement, which eventually introduced a limited oversee tuna management in the Pacific, including within PNA
entry licensing system that restricted the total number of purse countries’ exclusive economic zones (Map 1). Since WCPFC reg-
seine vessels fishing in PNA waters [9,10]. The loosely formulated ulations were to be jointly agreed upon by coastal states and
capacity control (eventually set at 205 purse seine vessels) was to
generate economic and environmental improvements, not least
because the PNA countries committed to reduce capacity by 10% to 1
Older purse seines hold capacity is between 400 and 800 mt, while newer
improve catch rates, generate licensing scarcity that would drive vessels have 1200–2000 mt. Under the limited entry scheme, each counted as one
fish prices higher and control pressure on resources. However, by vessel.
E. Havice / Marine Policy 42 (2013) 259–267 261
50,000 1600000 Beyond the blunt nature of the effort control scheme, several
potential shortcomings with the scheme were clear from the
45,000 1400000 outset. First, was the potential that the VDS would push fishing
40,000 effort into the unregulated high seas and other non-participating
1200000
EEZs. Second, it was predicted that vessels would increase effort
35,000
on fish aggregating devices (FADs) to increase catch volume per
Days
MT
1000000
30,000 day, yielding higher catches of more vulnerable yellowfin and
800000
bigeye (see below), including juveniles. Finally, shifting to fishing
25,000 days held the potential to increase the total number of vessels (and
600000 thus capacity) since days could be divided among an unlimited
20,000 Effort
number of vessels. This is a significant concern in the VDS (see
Catch
15,000 400000 below) because most fisheries are considered overcapitalized3 and
increasing capacity generates pressure for managers to relax effort
limits [21].
Fig. 2. Total effort (days) and catch (mt) in PNA Waters, 1997–2011.
Sources: [7,41].
distant water fishing interests, PNA countries had an interest in 2.2. Objectives of VDS
asserting rights over their EEZs to protect against WCPFC agree-
ments that could influence – and perhaps erode – their sover- The transferable effort scheme enables PNA countries, rather
eignty over in-zone resources.2 Since scientific bodies were than distant water fishing nations, to control the allocation of
recommending controlling bigeye and yellowfin mortality, it was fishing effort [22]. The primary objective of the scheme is to
likely that the WCPFC would begin to negotiate conservation increase economic returns to resource-owning PNA countries by
measures that would be applied in not only the high seas but also increasing licensing revenues and generate jobs and infrastructure
in EEZs [14]. in Pacific Island countries. To fulfill socio-economic objectives
prior to the VDS, the PNA countries negotiated an international
arrangement – the FSM Arrangement – that resulted in a new class
of fishing licenses. The FSMA licenses require vessels to undertake
2.1. Choosing a transferable effort management scheme economic activities in the region, such as offloading, provisioning,
infrastructure investments, and employment (e.g. vessel crew) in
Recognizing these dynamics, the PNA countries (with support exchange for access to all eight PNA countries’ waters [23].4
from FFA) began to explore strengthening their rights over tuna Related, the PNA countries also sought to use the VDS to create
resources, a move consistent with an emerging regulatory norm new industry norms by delinking fishing rights from vessel flags.
around rights based management as the cornerstone for over- Under the scheme, fishing firms once confident in their Palau
coming environmental and economic problems in fisheries, Arrangement allocations must annually negotiate with individual
including in multi-species and multi-jurisdictional fisheries like PNA countries for fishing vessels days.
tuna [15–17]. A review of options (contracted by FFA) recom- The biological dimensions of the VDS – both objectives and
mended replacing the vessel number scheme with a vessel day outcomes – are more difficult to define and measure because the
scheme, suggesting that the day-based effort control approach effort control approach does not treat species individually and
would offer PNA countries flexibility to exercise rights over purse because of the relationship between the VDS and WCPFC Con-
seine fishing in their EEZ [18]. The review highlighted that servation and Management Measures. Three main stocks are a part
monitoring costs would be higher than was the case under the of the PNA purse seine fishery: skipjack, yellowfin and bigeye.
limited entry scheme, but that such costs would be manageable According to the most recent stock assessments [25], current
[13]. The next best option was a catch quota system that would fish mortality rates for skipjack are well below fishing mortality
create discrete quotas for each of the three primary tuna species associated with maximum sustainable yield. If recent catch levels
(thus, target species-specific biological concerns). The PNA coun- continue, catch rates are likely to decline and catch should
tries chose the effort control because it could be monitored in real- decrease as stocks are fished down to MSY levels. To limit skipjack
time using mandatory Vessel Monitoring Systems onboard vessels, catch rate decline, the scientific committee has recommended
while a quota scheme would require log sheet and observer data, developing limits on purse seine fishing [25].5 In the Ninth Regular
neither of which is reported in real time. At the time of the Session meeting of the WCPFC, members agreed to a Conservation
decision, the PNA countries were open to shifting towards a catch and Management Measure that had an objective of limiting
quota scheme as data management systems advance [19]. the fishing mortality rate for skipjack at a level no greater than
In sum, the VDS was adopted with the knowledge that it would Fmsy [26].
be less effective than a catch quota system for protecting specific
stocks, but that existing data and monitoring capacity in the region 3
Overcapacity in fisheries is a long run phenomenon that exists when the
would be inadequate to enforce a quota system. Indeed, it is well potential output that could exist under normal operating conditions is different
documented that effort schemes have the disadvantage of being from a target level of production in fishery such as maximum economic yield or
organized around the ill-defined single input of effort – a parti- maximum sustainable yield.
4
cular problem for multispecies fisheries – because there is not a Without licensing incentives, few industry members have been interested in
making non-fishing investments (such as building and operating tuna processing
direct relationship between fishing effort and total catch or catch
plants) in PNA countries, primarily because of the very high costs of doing business
composition, not least because vessels are subject to ongoing there and the challenging business climate. See, Havice and Reed [24], “Fishing for
technical progress [20]. development? Tuna resource access and industrial change in Papua New Guinea”.
Journal of Agrarian Change, vol. 12, No. 2&3; 2012, p. 413–35.
5
Biological conservation of skipjack is not a concern on its own, but scientists
2
There is ongoing debate over whether and how WCPFC decisions apply to suggest that skipjack management must prioritize keeping skipjack above BMSY. In
PNA EEZs. For more on how WCPFC–PNA relations have been navigated specifically current WCPFC negotiations, discussions revolve around the probability of adopting
in the case of the VDS, see below. a target reference point that is double BMSY.
262 E. Havice / Marine Policy 42 (2013) 259–267
20°N
Marshall Is.
Federated States of Micronesia
Palau
Kiribati
Kiribati
Papua New Guinea Nauru
Kiribati
Tuvalu Tokelau
Solomon Is.
20°S
WCPFC Convention Area
VDS Area
PNA EEZs
PNA Countries
High Seas Closures
Tokelau EEZ
Map 1. Jurisdictional boundaries in the WCPFC region.
Yellowfin mortality has increased in recent years, but is still VDS management objectives are closely tied to those of the WCPFC,
estimated to be below maximum sustainable yield. The stock is the jurisdiction of which geographically encapsulates PNA EEZs. In
not considered in an overfished state, however, in the Western 2005, the WCPFC's first tuna Conservation and Management Mea-
Equatorial Pacific where 81% of catch is taken, fishery impacts are sure formalized the relationship between the two. The WCPFC
much higher than general averages. In this area – Region Three of aimed to control the purse seine fishery by limiting effort to 2004
WCPFC statistical area, which includes PNA waters except for levels and recognized the VDS as the management tool to achieve
Kiribati and Tuvalu and with the additions of Indonesia and the this objective within PNA waters (CMM 2005-01, 8 and 10(i)).
Philippines – the stock is fully exploited with no potential for Despite that the most recent WCPFC Conservation and Manage-
increased catches. The WCPFC Scientific Committee has reiterated ment Measures apply to skipjack, bigeye and yellowfin manage-
early advice that there be no increase in fishing mortality in this ment, in practice, controlling effort in the purse seine fishery
region [25].6 Like for skipjack, in the Ninth Regular Session meet- through the VDS is primarily an exercise in skipjack management
ing of the WCPFC, members agreed to a Conservation and Manage- since skipjack is the vast majority of take. The VDS is secondarily a
ment Measure that had an objective of limiting the fishing management measure for yellowfin, which represents 20–30% of
mortality rate for yellowfin at a level no greater than Fmsy, and purse seine take. As a result, controlling purse seine effort alone is
members were encouraged to take measures not to increase their not sufficient to address conservation objectives for yellowfin and
catch of yellowfin tuna [26]. bigeye, a challenge for the VDS that was identified from the outset.
Of most concern, bigeye mortality has increased in recent years, To more directly target conservation objectives for bigeye and
and current levels are far in excess of maximum sustainable yield: yellowfin, WCPFC members and the PNA group have turned to
overfishing is occurring and it is possible that bigeye is in an technical measures – many initiated by the PNA countries.
overfished state. The WCPFC Scientific Committee has recom- For example, as part of the Third PNA Implementing Arrange-
mended a reduction of at least 32% in fishing mortality from the ment (3IA) signed in May 2008, the PNA countries introduced an
average 2006–2009 levels [25]. In the Ninth Regular Session annual three month closure on fishing on Fish Aggregating Devices
meeting of the WCPFC, members agreed to a Conservation and (FADs) (later taken up in the WCPFC forum) [27]. The PNA countries
Management Measure that had an objective of reducing the also closed areas of the high seas and strengthened vessel reporting
fishing mortality rate for bigeye to a level no greater than Fmsy, requirements. The measure was justified primarily on conservation
and achieving this objective through a step by step approach grounds (e.g. to control potential illegal activity associated with
through 2017 [26]. transshipment), but it also has the effect of pushing effort into EEZs
Within this context, an objective of the VDS is to promote the where PNA countries can charge for fishing days.
optimal conservation of tuna resources. In practice, the sub-regional In summary, the PNA countries implemented the VDS to
strengthen their rights over the fishery to achieve economic and
biological goals. They selected a transferable effort scheme that
6
Most of the yellowfin catch comes from this region, and catches to the north, limited the number of fishing days, noting that the VDS would
south and east of Region Three are much lower. While tunas are highly migratory, have high, but not insurmountable implementation and monitor-
they do not move enough to be instantaneously mixed. Improved spatial resolution
in models is revealing strong local fishing effects, including in the Western
ing costs and that there could be shortcomings to the program,
Equatorial Pacific, where scientific experts do not think that higher yellowfin particularly around the general nature of the effort control and the
catches can be taken in the long term. potential for capacity growth and effort creep.
E. Havice / Marine Policy 42 (2013) 259–267 263
Table 1
Agreed PAE and days used (fished), 2008–2011.
Sources: [33–36].
Party 2008 PAE Days Used 2009 PAE Days used 2010 PAE Days used 2011 PAE Days used
FSM 6253 n/a 6154 4591 6556 5648 5522 5041
Kiribati 6194 n/a 6485 5687 6470 4528 5450 4376
Marshalls 2727 n/a 2725 456 2652 566 2234 2236
Nauru 1452 n/a 1418 1507 1962 2096 1653 1697
PNG 7907 n/a 8361 7764n 11,959 16,503 10,073 11,613
Palau 595 n/a 608 80 610 32 514 543
Solomons 2361 n/a 2961 2202 2548 2568 2146 1898
Tuvalu 979 n/a 1001 1022 1041 973 877 941
PAE 28,469 23,333 29,713 23,309 33,798 32,913 28,469 28,345
FSMA 3907 3049 3907 3435 3907 5592 3907 5550
US Treaty 3362 5050 3004 7447 3027 8920 2760 7696
TAE 35,738 31,432 36,624 34,191 40,732 47,452 35,136 41,591
3. Technical account of the Vessel Day Scheme from another management year within the same three-year
management period. This provision was eliminated to contribute
The PNA countries amended the Palau Arrangement to imple- to efforts to develop and enforce ‘hard limits’ on annual fishing
ment a Vessel Day Scheme that commenced in December 2007 effort [31]. Once effort is allocated, buyers are not permitted to
[28]. Initially, the VDS was administered and monitored by the trade days that they have purchased.
FFA, however, in 2009, the PNA formed its own secretariat based in Table 1 offers a summary of agreed PAEs, allocations to each
Majuro, Marshall Islands to centralize control over the VDS and Party and the number of ‘used’ vessel days for each management
related regulatory arrangements [29]. In the move, the PNA year. These data were reported, as required, at the annual WCPFC
secretariat shifted VDS monitoring from FFA to Papua New Guinea, Scientific Committee meetings and are the only publically avail-
building from that country’s advanced VMS-based monitoring able data on the allocation and use of fishing days. Though the
system. VDS parameters apply only to purse seine vessels fishing report is presented in very simple form, interpreting the data is
within the exclusive economic zones of the PNA countries (Map). complex. First, in the first 3 years of reporting, PAE and days used
Fishing effort is controlled through a time metric: a fishing day, are mismatched, perhaps because of ‘borrowing’ or ‘carrying
defined in Article 1(iv) of the VDS as a 24 h period during which forward’ of unused days balances between management years.
vessels undertake any fishing-related activity. Since implementa- Data do not reveal if all of the PAE was sold, or if supply outpaced
tion, the definition of a fishing day and, equally important, a ‘non- demand in the first 3 years of the scheme. In 2011, the fourth
fishing day’ has become one of the most contentious issues in the Management Year, borrowing was prohibited, and PAE and ‘days
VDS (see below). used’ are more closely matched near the 28,469 day PAE.
The PNA countries set a total allowable number of fishing days Second, the difference between TAE and PAE is filled by vessels
(Total Allowable Effort, TAE) to be used in an individual manage- licensed under the FSM Arrangement and the US Treaty. The
ment year within PNA designated waters. TAE initially limited former, as noted above, grants access to all eight PNA country
fishing days to a total no greater than 2004 levels, estimated to be waters in exchange for a range of domestic activities and invest-
33,856 days.7 The 2004 fishing days of two special licensing ments. The Parties agreed to prioritize FSMA fishing days because
classes, FSMA and US Treaty vessels were estimated to be 5387 of the associated domestic development contributions, and capped
days and deducted off of the total sum, leaving 28,469 days the FSMA vessel allocation at 3907 fishing days [13]. The latter is a
available for the rest of the vessels for each management year. multilateral agreement with the US government, US flagged vessel
Once TAE was set, PNA countries allocated it amongst themselves owners and FFA that has historically granted the US fleet 40
according to a formula combining a measure of EEZ productivity licenses with unlimited fishing in FFA waters [32]. Since the US
and effort and catch history. Initially, allocations were expressed as Treaty was signed into force before the VDS and operational until
a percentage and calculated from a formula based 50% on the 2013, it was exempt from restrictions on fishing days. For account-
distribution of the assessed relative biomass of skipjack and ing purposes, the Parties gave a non-binding allocation of TAE to
yellowfin within the waters of the Parties (average taken over a the US fleet based on 2004 effort levels. However, the US fleet size
10 year period) and 50% on the average of the annual distribution has grown from 11 vessels in 2007 to almost 40 in 2012 (in part
of the number of vessel days fishing in the waters of the Parties because of the guarantee of fishing days under the Treaty) [9]. As a
(average taken over a 7 year period) [13]. Since initiation, the result, US fleet demand for fishing days has grown dramatically.
Parties made the allocation formula more flexible allowing the FSMA and US Treaty fishing days have grown precipitously
Parties to give more relative weight to one factor or another, and since the inception of the VDS, posing significant challenges for
then normalizing the total allocation to the agreed upon PAE. the ‘firm’ limit on days. Such days were initially to be taken off of
PAE is transferable between PNA countries in order to take into TAE, leaving fewer days for the rest of the fleets, but to date, this
account fluctuations in the level and pattern of fishing [30]. The principle has not been enacted. In 2012, the PNA countries
‘transferability’ creates a market for effort between the PNA provisionally adopted revised PAE and TAE for 2012 and 2013
members; one of the key innovations of the scheme. Initially, the based on 2010 effort levels (Table 2) [33]. Notably, revised effort is
VDS provided for a three-year management period and individual significantly higher than TAE at the inception of the scheme.
Parties were permitted to transfer up to 100% of their own PAE
7
4. Trends after four years of VDS
Effort data figures and their use in management decisions can be confusing as
the data is recorded through a range of different metrics and fields. In contrast to
the PNA figure, SPC data estimates 2004 effort in days at 30,361 (SPC catch and There is no public review of the VDS, and much of the data
effort database). needed for evaluation is confidential. Document and data analysis
264 E. Havice / Marine Policy 42 (2013) 259–267
Table 2 payments for licenses. Industry payments alone make the vessel
Revised PAE and TAE for 2012 and 2013. day price US$5250, which is 5% above the benchmark rate [39].
Source: [33].
After negotiations are finalized (if they do reach a conclusion), the
Party 2012 2013 specific details of the US Treaty will be publically available and will
be assessed with great interest by other distant water fishing
FSM 5634 6028 nations and fleets that are likely to draw on them in their own
Kiribati 5480 6144 negotiations with PNA countries, not least since the US Treaty is
Marshall Islands 2234 2234
Nauru 1733 1933
one of the few access agreements with publically available details.8
PNG 13,105 14,053 Outside of this unique negotiation, fisheries specialists and
Palau 517 560 industry representatives suggest that the rate of return on licen-
Solomon Islands 2782 3127 sing fees has increased on average from 5–6% of catch value to
Tuvalu 1055 1203
8–13%. However, 'maximum economic yield', how it changes with
Tokelaun – 1000
PAE 32,540 36,282 fish and market dynamics (a primary economic concern of the PNA
FSMA 3907 3907 countries) and relates to 'maximum sustainable yield' (a primary
US Treaty 8256 5515 concern for conservation objectives) have not yet been clarified.
TAE 44,703 45,703 Debate ensues over how much revenue PNA countries can and
Note: Tokelau addition as of 2013 (see below). In US Treaty renegotiations,
should expect to earn from licenses fees under the VDS, with much
preliminary agreement has been for 8000 days, so figures are likely to shift. attention focused on which groups in the sector are capturing the
‘new’ returns associated with recent record breaking skipjack
prices. Skipjack prices dramatically increased between 2006
and interviews reveal trends in the VDS implementation vis-à-vis (pre-VDS) and 2011 when PNA countries were determining the
the objectives set out by the PNA countries and WCPFC Conserva- minimum benchmark price for a VDS fishing day. Simple calcula-
tion and Management Measures. tions illustrate the dynamics emerging, though readers should
be cautioned that figures do not capture cost structures in the
4.1. Economic impact sector (e.g. operating expenses, labor costs, variable fuel costs), nor
the variability of fee structures that emerge from access fee
Measured in price per day, PNA have realized aspirations to negotiating dynamics. These are general estimates because detailed
increase returns on fishing licenses. Since 2007, the value of a data on access fees paid and on industry operating costs and profits
fishing day has increased dramatically. The PNA office has not are not, and unlikely to become, widely available either for use in
made formal figures available, but rough calculations from 2004 access negotiations or in assessments of VDS.
data (the year from which baseline vessel days were calculated) An equation drawing on annual data allows for a comparison of
are demonstrative. In 2004, total catch in PNA waters was valued average revenue per fishing day in 2006 and 2011 [7,41,42]:
at over US$760 million, which was generated through 33,856 days annual average Bangkok price for frozen skipjack (Fig. 1) multi-
of fishing [7]. At a rate of 6% of value of catch – the rate generally plied by total skip jack purse seine catch taken in PNA EEZs,
accepted as standard on access fees – the average value of a fishing divided by total yearly effort in PNA EEZs. Filling this equation with
day was roughly US$1350 (6% of the total value translates into US 2006 data shows that the average skipjack-based revenue per
$45million in licenses revenues for PNA countries). fishing day was US$21,856. Based on these figures, in 2006, before
Several data points demonstrate that the post-VDS value of a the VDS and still under the 6% of value of catch access fee common
fishing day is far higher than this pre-VDS estimate. First, in July in that time period, the PNA countries would earn roughly US
2011, the PNA countries set a PNA-wide minimum benchmark $1311 per day, leaving US$20,545 of daily revenues for vessel
price for a fishing day at US$5000 that commenced in January owners. In 2011, average skipjack-based revenue per day increased
2012 [37]. International fisheries specialists and industry repre- to US$37,087. Under the minimum benchmark price of US$5000/
sentatives indicated in interviews that with few exceptions, PNA fishing day associated with the VDS, vessel owner daily revenues,
countries were not accepting less than US$5000/day, and that less the VDS fee, increases to US$32,087. Under this scenario,
countries commonly charge prices higher than the benchmark rate vessel owner revenues (less the access fees and not considering
in bilateral negotiations and negotiations with fishing firms. operating costs) have increased by roughly 56%, while PNA
The renegotiation of the US Treaty also provides evidence of the revenues generated from access fees increased by upwards of
increased value of fishing days. For the period ending in 2013, the 280% from the 2006 baseline. Put another way, under the VDS,
Treaty was valued at US$21 million per year, where US$18 million PNA share of the revenue have increased over these two samples
was paid by the US government and the US industry paid US$3 years from 6% to 13.5%, while vessel share of the revenues have
million in licensing fees. This agreement offered unlimited access decreased from 94% to 86.5%. In dollar amounts (rather than
to all FFA countries waters (PNA and non-PNA waters) for 40 percentages), vessels are earning roughly US$11,542 more per
vessels [38]; nearly all 40 US flagged vessels have been active since day than in 2006, while the PNA countries are earning roughly
2009. At the time of writing, the US and the FFA countries were US$3689 more per day than in 2006. Since these figures do not
entering the final stages of US Treaty renegotiations. Though subtract operating costs from total revenue it is difficult to
several major negotiating points had yet to be reconciled before determine profit margins for fishing vessels (especially consider-
a final agreement was reached, to secure sufficient fishing days for ing variable fuel costs), however, PNA countries are likely to seek
the roughly 39 vessels fishing under the US flag, the US Treaty
value had increased to a reported total of US$63 million for 8000
fishing days, of which, industry will reportedly pay US$42 million
[39,40]. These figures indicate that the price per fishing day is 8
The European Union Fisheries Partnership Agreements are also publically
valued at roughly US$7800, and that under current market available. Though values are described here in terms of percentage of catch value,
conditions for fish price, the new terms of the US Treaty guarantee under VDS, fees are negotiated based on price per fishing day. Negotiating day
prices rather than percentage of catch value insulates PNA countries from data
a 17% rate of return on the value of catch for PNA countries [40]. reporting problems and some of the volatility associated with dynamic fish prices,
The PNA Office suggests that the value is lower when the US though there is a potential for missed opportunity on a year by year basis if fish
Department of State contribution is delinked from the US industry prices increase.
E. Havice / Marine Policy 42 (2013) 259–267 265
mechanisms for charging more in access fees under current Despite stated objectives, the VDS has not limited effort
market conditions. (measured in fishing days) to 2004 levels. While PNA countries
There are efforts in progress to use bioeconomic modeling to set TAE near 35,000 days at the start of the VDS, by 2011, the
establish target reference points for maximum economic yield in reported days reported crept to 41,591 [45]. According to SPC data,
the sector, however, calculating MEY is difficult for several reasons. effort in PNA waters was higher roughly 45,730 days [41]. 9 Across
First, though fish prices are currently high, it is difficult to the Pacific, fishing effort in 2011 was the highest in history [42]
ascertain if the VDS has driven prices higher and if it will (Fig. 2).
contribute to keeping them high enough to support current vessel Within this nexus, the total number of purse seine vessels (and
day prices. It is certain, however, that fish prices will continue to thus total fishing capacity) active across the WCPFC region
be volatile. Furthermore, in bioeconomic models, maximum eco- (including in PNA waters) has increased dramatically in recent
nomic yield occurs at a fishing effort that is lower than the fishing years from a stable 180–220 vessel from 1990–2006 under the
effort that generates maximum sustainable yield [1]. Growing limited entry program, to 283 in 2011 under the VDS [42]. The
fishing effort under the VDS (see below) draws into question if Pacific Island fleets have increased significantly in numbers,
the program is generating effort that exceeds maximum sustain- growing to 87 vessels in 2011 [42]. Of this, FSM Arrangement
able yield and maximum economic yield. vessels have increased rapidly. In 2001 there were 16 FSMA
Second, the historical pattern of government-to-government licensed vessels, 30 in 2010, and 37 in 2011. By mid-2012, the
bilateral access complicates economic assessment of maximum PNA countries had licensed 53 FSMA vessels [46]. As a result, 2010
economic yields. Access relations continue to be expressions of effort is estimated to be approximately 18% higher than 2004
complex geopolitical relations; thus, the value of days is about effort. VMS data for 2011 indicate a further increase in effort of 11%
more than just fishing revenues [14]. Third, individual PNA over 2010 and 31% over 2004 levels [47]. At the time of writing,
countries have a wide range of economic aspirations, a fact that several vessels were being constructed for entry into the fishery;
has historically presented challenges to regional cooperation. interviewees suggested that with these and potential for vessels to
Some PNA members are interested in maximizing licensing fees, move from the Indian Ocean and Eastern Pacific, they expect close
while others might be willing to take less on licensing fees if doing to 300 purse seine vessels will be active in the region within the
so could be paired with generating domestic investments in next few years.
fishing, processing and infrastructure [24]. The FAD closure – not explicitly a component of the VDS – has
Fourth, it remains unclear how the market for the final product met with more success, though it is not yet possible to determine
will respond to new norms around the price of fishing days. While the ecological impact of the regulation. The incidence of reported
there is high demand for raw materials in what is generally drifting FAD-related activity was considerably lower during the
considered an overcapitalized tuna processing segment, canned FAD closure in 2010 (5.8%) compared to 2009 (14.0%). During the
tuna markets (the product for which purse seine products are closure, skipjack and yellowfin catches were moderately reduced,
destined) are characterized by downward price pressure and the bigeye catches were strongly reduced and the average size of
industry operates on high volumes and extremely thin margins individual fish caught was higher for all species, particularly
[43]. Increased licensing fees are likely to add pressure to an yellowfin. Overall, the reduction in purse seine FAD effort
already price-sensitive sector. To offset these issues, industry is accounted for 67% of the overfishing that was removed in 2010
undertaking efforts to diversify purse seine catches into more [47]. Despite these apparent improvements, the success of the FAD
profitable market outlets, for example by introducing −40 1C closure is relative. 2011 saw the highest number of FAD sets in the
freezers to direct bigeye and yellowfin catches towards value history of the fishery. If the VDS has created incentives to intensify
added steak and sashimi markets [44]. Finally, PNA countries effort on FADs in order maximize take for each fishing day (a
indicate that they do not need to license more days to extract classic challenge associated with input control), then the closure is
value, but have not clarified the optimal level of day scarcity for likely insufficient to address ecological challenges in the fishery.
achieving economic objectives. To date, there has been high Given the multiple factors that determine stock assessments, it
demand for days, creating incentives for PNA countries to increase, is not possible to determine the biological effects of these changes.
rather than reduce, effort allowances. However, it is clear that fishing effort and capacity have increased,
As a result of these dynamics, it is unlikely that there will be a posing problems for compliance with WCPFC Conservation and
stable maximum economic yield in the fishery. Instead, MEY is Management Measures. Increasing capacity and a growing number
likely to be subject to a range of factors, some outside of PNA of vessels will continue to pressure PNA countries to open more
control. Despite these uncertainties, the VDS, coupled with fishing days and create incentives for vessels to maximize catch for
increased fish prices, has greatly increased the price of fishing in each fishing day. This means that protecting yellowfin and bigeye
PNA waters and the economic returns to the PNA countries by stocks will likely require longer FAD closures, careful attention to
redefining fishing rights around effort and firmly placing control of catch patterns outside of the FAD closure period and perhaps
the fishery into the hands of the PNA countries. PNA countries will innovation for more selective gear types and fishing methods.
continue to research mechanisms for capturing more economic
returns through the VDS.
5. Strengths and challenges associated with the VDS
4.2. Biological impact
The VDS has been associated with a range of advancements and
The VDS economic objectives intertwine – though loosely and setbacks. In addition to the increased value of fishing days,
inconsistently – with the biological objectives of limiting total perhaps the biggest gain has been in data reporting. The WCPFC
fishing effort in the purse seine fishery and addressing yellowfin Scientific Committee indicates that the VDS has had positive
and bigeye mortality rates as per commitments to WCPFC Con-
servation and Management Measures. On the former, the VDS
9
initially set out to limit fishing effort to 2004 levels. On the latter, All figures exclude catch in archipelagic waters. The regulation of archipelagic
waters is outside of the VDS and the WCPFC and is instead at the discretion of
PNA countries and the WCPFC have implemented complementary individual countries because of the high level of sovereignty within these waters. In
measures of seasonal FAD fishing closures and full closure of three 2011, there were 8117 days fished in PNA archipelagic waters, up from 5730 days in
high seas pockets. 2010 and 6462 days in 2009 [41].
266 E. Havice / Marine Policy 42 (2013) 259–267
impacts on the data quality by improving logsheet data and contributed significantly to the increase in effort. It has also been
requiring 100% observer coverage that has enabled the Scientific reported that individual PNA countries have changed their defini-
Committee to extend its stock assessments. Enhanced data have tion of a fishing day in the middle of a management year, which,
revealed that prior to observer coverage, vessels were over- according to one disgruntled industry representative is ‘trickery’
reporting skipjack catches and under-reporting yellowfin and that makes it difficult for industry to make annual plans [51].
bigeye catches. VMS, observer and logsheet reporting have vali- Data monitoring and enforcement ambiguity create confusion
dated vessel activity and helped to interpret tag recapture data. and weaken the VDS. Industry is interested in consistency in order
Further, fleets – with the exception of Japan – have largely to be clear on what they are purchasing when they buy a day,
complied with PNA port-to-port reporting requirements, even detailed prescriptions for managing VMS data and outages, and
for trips through the high seas (prior to the 2010 high sea uniform and transparent policies on EEZ border data. In response,
closures). More complete data coverage has enabled the WCPFC the PNA has committed to a new ‘day’ definition that will go into
Scientific Committee to statistically inflate data, model full cover- effect and be consistently applied beginning in the 2013 manage-
age of fishing activity and correct historical errors [48]. ment year. According to the new definition, there will be no
2011 brought additional VDS advancements. Several PNA coun- portioning into partial days, a fishing day will be based on a 24 h
tries traded vessel days with each other suggesting that the period, and vessels will be charged if there is any fishing activity.
‘tradeable’ dimension of the effort scheme is capable of reflecting To claim a non-fishing day, vessels will have to be only drifting/
seasonal abundance of fish populations and variable demand for floating and have all gear stowed [44]. If these criteria are enforced
access to PNA EEZs. PNA countries have not made details on the uniformly, ‘non-fishing’ days will diminish.
numbers of days traded and their price publically available. An additional challenge has recently emerged for the VDS. Non-
Though industry would like to be permitted to trade fishing days, PNA countries in the region are interested in defining fishing
such a move is unlikely since it would reduce PNA countries’ rights for the purse seine fishery in the same way that the PNA
control over days. Also in 2011, Nauru, Solomon Islands and Tuvalu countries have. In mid-2012, Tokelau joined the VDS, though it is
closed their EEZs upon the exhaustion of their allocated fishing not a Party to the Nauru Agreement. Information on the proce-
days, evidence that these countries are enforcing their allotted PAE dures associated with Tokelau’s entrance into the scheme is not
—a move that, if replicated across the Parties, will impose the day publically available, but Tokelau claimed 1000 fishing days, which
scarcity that might drive prices higher and protect resources [49]. were added to TAE [45]. It does not appear that the PAE formula
Despite these gains, several major challenges persist, two of was used to determine Tokelau’s allocation and on average, annual
which revolve around the technical core of the VDS: the definition effort in Tokelau’s EEZ is well below 1000 days [41], which
of the fishing day. First, fishing days charged per vessel are broken suggests that Tokelau will not be able to sell all of its days for
down according to vessel length. Vessels less than 50 m are fishing in its own EEZ. Instead, the country’s interest joining the
charged for a half a fishing day, vessels 50–80 m are charged for scheme is likely to be to trade/sell its days to those PNA countries
a full fishing day, and vessels greater than 80 m are charged that do not have enough days to meet demand for fishing in their
1.5 fishing days. This metric is based on an analysis of the waters. As a result, Tokelau will earn new revenues by selling days
relationship between vessel length and observed catch per unit to other PNA countries, and those PNA countries purchasing
effort. However, when the PNA calculated initial TAE, they did not Tokelau's days will further expand effort in their EEZs. Other
account for the size difference in vessels. As a result, some Pacific Island countries are likely to be interested in earning new
countries captured a significant benefit from this allocation. For revenues by joining the VDS; if they join in the same manner, the
example, several small vessels fish in PNG's waters; these vessels addition of new vessel days will further increase effort.
get a full fishing day, but PNG has to account for only a half of a In sum, the VDS has generated improvements in data collec-
fishing day, which gives it more days to sell. Arguably, well tion, but faces more work in limiting total effort, creating condi-
capacity regulations, such as employed in the Inter-American tions of licensing scarcity and defining the terms and conditions of
Tropical Tuna Commission, are a more direct approximation of the VDS in ways that are consistent and technically feasible.
vessel capacity.
Second, is the technical definition of a ‘day’. In the original text
of the VDS (quoted above) a fishing day was simply a day when a 6. Conclusions
vessel was not in port; the only exception for being charged a
fishing day was when the vessel was in transit through a PNA The Parties to the Nauru Agreement have incrementally
country's water – an exception primarily for the Japanese fleets strengthened their rights over the shared fishery, culminating in
that have historically been required to return to their home ports the development of a transferable effort scheme known as the
to offload catch [50]. To use the exception, vessels were required to Vessel Day Scheme. The clearest strength of the VDS is that it has
apply in advance, in writing, in a prescribed form. However, shifted control over rights into the hands of the PNA members,
according to several industry informants and international fish- reorganizing industry norms and generating significantly higher
eries specialists, shortly after the implementation of the scheme, licensing fees than was the case under the limited entry program
vessels began to exploit this exception, declaring that they were in that pre-dated VDS. However, the value of a fishing day will
transit while they were likely searching for fish. continue to be influenced by factors outside of PNA countries’
Noting these dynamics, the PNA countries began to redefine control, such as fuel and fish prices and market dynamics.
and specify conditions of a fishing day versus a ‘non-fishing’ day. On the biological front, the reporting requirements associated
The Parties have reportedly added exemptions to being charged with the VDS have improved data provision, enabling the WCPFC
for a fishing day for things like bad weather, transit time, time Scientific Committee to continue to refine biological and bioeco-
in port and mechanical problems. Furthermore, according to nomic models. Despite this victory, the scheme has not developed a
international fisheries specialists, several countries have report- firm cap on effort and has overseen significant increases in effort
edly begun to charge portions of fishing days. In some cases, and capacity. The complementary seasonal FAD fishing closure has
vessels are claiming to fish only half days, or a third of a day and reduced catch of yellowfin and bigeye during the closure, but has
in turn, are debited for their ‘non-fishing’ time, despite that not diminished the overall number of FAD sets. These dynamics
allocation is based on a 24 h day. According to the Scientific point to a general shortcoming of effort control systems as opposed
Committee, such non-fishing/partial fishing day claims have to quota control systems: they are not capable of addressing
E. Havice / Marine Policy 42 (2013) 259–267 267
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