FISHERIES PRIVATIZATION
DFO lectures the world

A previously unpublished article by TONY SEED

HALIFAX (December, 1999) -- Although the fisheries are in deep crisis, the Government of Canada is deploying federal taxdollars, resources and manpower to promoting its policies on the world scale in concert with powerful international financial groups organized through and with the World Bank. It is thereby seeking an international mandate for its anti-national, anti-fishermen policies, the very mandate it lacks at home. It is furthermore providing training and expertise in social management and elimination of small producers and aboriginal peoples. This occurs right at the time when TV and media coverage of government repression this past October of the fishermen of Burnt Church (Esgenoopotitj) First Nation in New Brunswick -- the images of government and RCMP gunboats ramming unarmed Mi'kmaq fishing craft on the open water -- went around the world.

Not more than a month later, leading officials of the Department of Fisheries and Oceans (DFO) were lecturing other coastal states and fisheries monopolies on its own reactionary lessons in implementing a divide-and-rule strategy against what one top-level DFO strategist openly called popular "opposition to the use of ITQ (individual tradable quotas - editor) systems" from "fishermen with no experience with ITQ systems or with low quota holdings, non-fisher community interests, some NGOs and environmental groups".

In mid-November, 1999 a high-level international conference -- FishRights99: Use Of Property Rights In Fisheries Management -- was held in Freemantle, Western Australia to promote privatization and corporatization in the world fisheries, including the Indian Ocean. This conference paralleled another conference, "Indian Ocean Fisheries -- Past, Present and Future", also held in Freemantle, a principal Australian marine base.

The Department of Fisheries and Oceans (DFO) was a lead sponsor. It sent a high-ranking delegation. Invited top-level DFO executives included: Leslie Burke, Director, Economics and Policy, Maritimes Region, DFO; Jacque Robichaud, Director-General of Resource Management, DFO; and Bruce Turris, President, Pacific Fisheries Management Ltd., BC. Neil Bellefontaine, Director-General, Atlantic Region, also reportedly attended.

These individuals conducted day-long workshops and lectures on how to implement Individual Transferable Quotas (ITQ) -- the preferred capitalist system for the program of neoliberal globalization of the world's ocean and the marine fisheries, at the expense of hundreds of thousands if not millions of small and artisanal coastal fisherman. The program is similar to the advocacy of "property rights" and "wise use management" by the pulp and paper and mining interests, especially in western Canada and the United States, for seizure and unfettered plunder of all natural resources on the soil and under the soil, such as forestry.

Official sponsors of the FishRights99 conference included the Government of Western Australia and major seafood monopolies and associations from Australia and New Zealand, such as Lobster Australia, along with the World Bank, the United Nations Food & Agricultural Organization (FAO), and the governments of Iceland, the Netherlands and South Africa.

"It's absolute arrogance and an act of utter madness for DFO to be exporting ITQs at the expense of the taxpayers of Canada," says Peter Stoffer, NDP fisheries critic.

One of the chief themes presented by Leslie Burke, Director, Economics and Policy, Maritimes Region, DFO -- in a day-long workshop entitled "Lecture 6: Policy Adoption, Program Implementation and Implementation Strategy" -- was aimed at generalizing the experience of the DFO with attempting to divert eliminate popular resistance in Nova Scotia to privatization schemes. Here is how Burke prattles on in his abstract cited in the official program of the FishRights99 Conference:

"Opposition to the use of ITQ systems is often significant and may come from fishermen with no experience with ITQ systems or with low quota holdings, non-fisher community interests, some NGOs and environmental groups. Understanding the positions of these groups and developing a strategy to inform stakeholders of the strengths and deficiencies of ITQ systems is critical for their successful introduction."

Burke is also associated with the Atlantic Institute of Market Studies (AIMS), a corporate "think tank" based in Halifax, Nova Scotia that represents the direct interest of finance capital. It is financed by the biggest corporations in Atlantic Canada, including the fisheries cartel (Clearwater, Fisheries Products, High Liner, Empire Co. et al as well as food and supermarket monopolies such), which has popularized his work promoting ITQs (see "AIMS: A Fish Story", shunpiking, May, 1999).

AIMS and Burke are among the foremost proponents of "property rights" in the fisheries, by which is meant private monopoly right. This "think tank" has been described as the "Fraser Institute of the East" (which, together with the CD Howe Institute also pushes the privatization agenda) , and is linked with the editorial boards of the Globe and Mail and the National Post as well as leading imperialist agencies in the United States such as the Heritage Foundation.

AIMS has funded and published much information about ITQs, including the controversial article “Behind the Cod Curtain: Perspective on the Political Economy of the Atlantic Groundfishery,” written in 1996 by Burke and Leo Brander, another senior DFO official. They argued that “the fundamental similarity between east coast fisheries management and the Soviet Union derives from the fact that common property was the underlying basis of both ownership systems.” They maintained that they were writing it as “individuals” -- a precious distinction.

Burke and others of his ilk advocate what they demagogically describe as the “tragedy of the commons” scenario -- the reason behind the collapse of the fisheries, from the Soviet Union to Canada, a mysterious malady principally brought about by "state socialism" with "too many fishermen chasing too few fish" as a result of government subsidies. The solution is an anti-social program, a law of the jungle in which society abandons any responsibility for its members: turn the "commons" into private property, drive the small producer out of the fishery and out of the "unproductive" and "unsustainable" rural and coastal communities and Newfoundland outports and reverse "the tragedy". The ITQ system increases profits for corporate fishing interests by increasing the small fishermen’s costs of production and eventually eliminating them entirely from the competition for raw material. What is also left unstated, though well understood -- is that programmatic aim reflects the strategic objectives of the financial oligarchy. It is not merely some "bad" or "short-sighted" policy for the fishery. That aim includes swelling the pool of unemployed labour in the cities in Central Canada through out-migration, which will help drive down the wages of the working class. This is the historic role played by the Maritimes and other depressed regions for the capitalist economy, as a nursery for cheap, unskilled labour. Now, this pressure to migrate is being intensified. The amount of social product extracted from the producers of wealth -- the fishermen and labour -- is increased and, at the same time, the state is provided with a rationale to cut back on social assistance such as Unemployment Insurance needed by the small producer in-between fishing seasons, or to survive federal moratoriums on fishing, funds that can be then made available to the big financial sharks through handouts, low interest loans or invested in areas of the economy reaping higher profits, such as militarization.

DFO is quite clear about this reactionary drive to eliminate "the too many fishers" and enrich the financial oligarchy and the upper crust of the producers.

In another paper (41), C. Annand and F.G. Peacock, DFO Scotia-Fundy, Fisheries Management, analyze how to distribute "surplus wealth or growth" by defining mechanisms "that will, in essence, avoid the political volatility that can accompany stock growth or declines."

Private "property rights" -- in which greater areas of the sea within the "economic zones" of coastal states -- are directly turned over to private corporations -- are also a mechanism to take advantage of the collapse of the bluewater fishing fleet of the Soviet Union in the new conditions prevailing with the rise of the unipolar world. In point of fact, quotas historically originate with the North Atlantic Fisheries Organization, as a means of dividing the offshore resources amongst the fishing powers according to strength. There was no "commons" and the tragedy was caused by plunder and inter-imperialist rivalry for natural resources.

DFO denies that it is preparing an ITQ regime for the lobster fishery which it disguises under the rubric of "community management". Lobster fishermen should be vigilant about DFO's presence in Australia, a presence that included a representative of the snow crab fishery off western Cape Breton in the Gulf of St. Lawrence -- his travel "down under" no doubt financed by DFO -- which is an ITQ fishery. Half of the Australian lobster fishery is now ITQ-based.

ITQs have been used in Iceland for the past two decades, with the fishery increasingly concentrated into a few hands. With the decline of the Soviet fishing fleet, the corporate sector of the Iceland fishery has been ambitiously striving to hegemonize the supply of fish caught in North Atlantic waters -- especially groundfish species which are always in high demand.

The Canadian government’s allocations of individual transferable quotas” (ITQ) have raised tremendous concern, alarm and resistance among small-boat fishermen throughout Atlantic Canada. This is particularly well-understood in Iceland and New Zealand. Their fisheries developed ITQs a decade before DFO implemented them in Atlantic Canada. The numbers of independent rural producers have plummeted farther and faster in those places than in Atlantic Canada. New Zealand provided the particular ITQ model for Canada.

Both Canada and New Zealand can also share notes on how corporate interests can best profit by forfeiting national sovereignty and a national economy and selling out their 200-mile limits, which they both call "exclusive economic zone" (i.e., a 12-mile territorial sea plus a 188-mile "economic zone") -- as distinct from 200-mile territorial waters.

New Zealand controls the world’s fourth largest coastal fishing zone, and produces about one per cent of the world's catch. As part of its disastrous experiments since 1986 with implementing the ITQ system in the fisheries and privatizing all sources of natural resources not already in corporate hands, New Zealand rented out so much of its vast zone to foreign fishing fleets -- especially from Russia and Taiwan -- that its own fisheries cartel had to purchase fish supplies from others and then find markets that were relatively unrestricted and relatively premium-priced in which to unload the processed products. Since 1986, restructuring in the New Zealand fishing industry has resulted in more quota being held by fewer individuals or companies.

The New Zealand seafood monopoly Sanford Limited, with 18 subsidiaries, 1,500 employees and four international associates, holds an approximate 12 per cent ownership stake in Fisheries Products Ltd. of Newfoundland. Iceland companies are also investing in Newfoundand (NEOS, with Clearwater Fisheries), wanting to use the Canadian province as a stepping stone within the "free trade agreement" to more deeply penetrate the U.S. market.

What is also significant is the increased exchange of experience at the state and academic level between Canada and New Zealand on the aboriginal fisheries. Sanford, for instance, has opposed recognizing aboriginal rights of the Maori people, arguing that they be converted into "property rights" equivalent to that granted to the fishing industry, and hence able to be bought and sold on the market. This is similar to that advocated by the DFO under the Marshall Decision amongst the Mi'kmaq and BC first Nations.

DFO has different "aid" programmes on the west coast of Sri Lanka as well as with India, both on the Indian Ocean, the content of which is unknown to this writer. Tension has been increasing in South Asia, the Middle East and northeastern Africa. This zone (the Indian Ocean, South Pacific) is especially strategic for the naval fleets of the United States which considers the world ocean merely to be a turnpike over which it moves its troops and war materiel, natural resources and manufactured goods. Social control of the peoples and their fishing fleets, however small, in this vital zone, is pre-eminent, given the experience of the damage caused by the small boat "navy" of the Tamil Tigers in Sri Lanka, northeast of the strategic harbour of Trincomolee. Trinco is the greatest natural harbour west of the Phillipines.

What is clear is that the DFO is implementing and popularizing a neo-colonial ITQ fishery on behalf of the international financial oligarchy at the expense of national sovereignty of coastal states and an equitable Law of the Sea based on relations of mutual respect amongst nations. The anti-social, neo-liberal program is being pushed at the expense of small producers and masses of fishermen on the world scale.

The privatization of the fisheries and oceans is a matter of deep concern to all Canadians and people throughout the world. Far from expanding the productive forces and expanding the supply of food for the world's people, these relations of production are destroying marine life and marine ecosystems in the seas and degrading the marine environment and ocean seabed, as a result of overfishing and pollution. It is calculated that in the world’s coastal communities, over a billion people depend on fish as their principal source of proteins. Nevertheless, the inhabitants of Europe, Japan and the United States consume close to 40 per cent of total worldwide production.

World wide, ITQs are condemned for destroying the fish stocks and leading to corporate concentration.

 

For Your Information


FishRights99


USE OF PROPERTY RIGHTS IN FISHERIES MANAGEMENT
11-19 November 1999, Freemantle. Western Australia

At the time of writing, only the abstracts for the papers cited below were available -- TS

SPONSORS
- The Government of Western Australia
- Primary industries and Resources SA
- Fisheries Reearch & Development Corporation
- NSW Fisheries
- Agriculture Fisheries Forestry
- Australian Fisheries Management Authority
- MG Kailis Management Group
- Western Australia Fishing Industry Council Inc.
- Queensland Dept. of Primary Industries
- Austral Fisheries Pfy Ltd.
- Lobster Australia
- Queensland Fisheries Management Authority
- Nor-West Seafoods Pty Ltd
- New Zealand Seafood Industry Council Ltd.
- Sealanes Food Service
- Fisheries and Oceans Canada
- Ministry of Fisheries Iceland
- Ministry of Agriculture, Nature Management and Fisheires, Netherlands
- Ministry of Fisheries, Tangara
- Sea Fisheries, Environment Affairs and Tourism, South Africa
- The World Bank

Canadian & DFO Content -- summary excerpts from the programme

See Lecture 6 [Burke] ... (I quote) Opposition to the use of ITQ systems is often significant and may come from fishermen with no experience with ITQ systems or with low quota holdings, non-fisher community interests, some NGOs and environmental groups. Understanding the positions of these groups and developing a strategy to inform stakeholders of the strengths and deficiencies of ITQ systems is critical for their successful introduction.

Also Paper 41 "political volatility"

Invited Participants from Canada:

- Mr Leslie Burke, Director, Economics and Policy, Maritimes Region, Fisheries and Oceans, Canada
- Mr Jacque Robichaud, Director General of Resource Management, Fisheries and Oceans, Canada
- Mr Bruce Turris, President, Pacific Fisheries Management Ltd, Canada

9:05-9:10 Opening Dr Ross Shotton, Fisheries Department, FAO, Italy

9:10am -- 10:30am Lecture 1 — Introducing Property in Fisheries Dr Anthony Scott, University of British Colombia, Canada

9:00am -- 10:00am Lecture 6 — Policy Issues: Policy Adoption, Program Implementation, and Implementation Strategy Mr Leslie Burke, Department of Fisheries and Oceans, Canada

9:25am -- 10:30am Government Scene Setting — Dr Anthony Scott, University of British Columbia, Canada Through the Narrows: From Open Access to Self-Government

10:45am -- 12:15pm Government Perspectives on Rights-Based Management..... Mr Leslie Burke, Maritimes Region, Fisheries and Oceans, Canada — Canadian Experience with Individual Transferable Quotas

Mr Bruce Turris, Pacific Fisheries Management Ltd, Canada A Comparison of British Columbia's Groundfish Trawl and Sablefish ITQ Programs: Similar results from programs with differing objectives, designs and processes

Lecture 1. Introducing Property in Fisheries
Anthony Scott Emeritus Professor Department of Economics, University of British Columbia Vancouver, B.C, Canada

This section will briefly sketch the historical emergence of property rights from open-access and regulation. Then it will outline what property rights mean from an economic point of view, with special emphasis on duration, exclusivity, and transferability. These characteristics will be contrasted with those of the permits and licences held by vessels in a regulated fishery.

Outline

1. Introduction: Some History.

2. Introducing Property

i. what property in the ocean means.
ii. what powers has the holder of a property right?
iii. ownership powers and the market.
iv. what characteristics has a property right?
v. "standard" types of property right.

3. Comparisons with Regulation, of Duration (also permanence and changeability.)

4. Comparisons with Regulation: Exclusivity

i. costs and conservation under regulation.
ii costs and conservation under property rights.

5. Transferability

i. costs under regulation.
ii. costs under property rights.
iii. monopoly and competition.

6. Summary

Lecture 5: Current Property Rights Systems Used in Fisheries Management

Dr Ross Shotton Fisheries Resources Officer, Marine Resources Service, Rolf Willmann Senior Fishery Planning Officer Fishery Policy and Planning Division Fisheries Department, Food and Agriculture Organization of the United Nations (FAO) Rome, Italy

Prior to joining FAO he was the Chief of the Common Property Projects Unit of the Programme Coordinationand Economics Branch, Scotia-Fundy Region, Department of Fisheries and Oceans, Halifax, Canada.

Lecture 6: Policy Adoption, Program Implementation and Implementation Strategy

Leslie Burke, Regional Director, Department of Policy and Economics, Maritimes Region, Dept. of Fisheries and Oceans, Halifax, Nova Scotia, Canada

The initial conditions in a country will greatly affect the policy issues to be addressed in implementing an ITQ system and will include the condition of the resources, the characteristics of the fishing industry, and the country's management capacity but also the legal, economic, social, and political environment. Most fisheries have been pursued in a "non-property" context from there beginning. Property Rights systems, such as those using ITQs, have often been introduced because of problems with this ‘natural' economy including overfishing of stocks, endless allocation disputes, overcapitalisation, and non-competitiveness in markets. Exactly who recognizes the problem and takes responsibility for resolving it varies with circumstances. Those most likely to advocate use of ITQs are fishery managers and practitioners, politicians or their policy advisors, and increasingly, members of the fishing industry.

Opposition to the use of ITQ systems is often significant and may come from fishermen with no experience with ITQ systems or with low quota holdings, non-fisher community interests, some NGOs and environmental groups. Understanding the positions of these groups and developing a strategy to inform stakeholders of the strengths and deficiencies of ITQ systems is critical for their successful introduction.

The policy issues to be addressed in implementing an ITQ system depend on the national legal framework. A framework that prescribes the use of a rights-based management is likely to have addressed a number of important policy issues and to have specified how some implementation issues are to be resolved. An ITQ system can be introduced under a permissive legal framework. Typically, if the law authorises use of limited entry licensing and allocation in the management of fisheries ITQ systems can likely be applied. A wide array of policy issues will have to be addressed in this situation. Finally, the legal framework might prohibit the introduction of ITQ systems. The first step in implementation in this circumstance is to modify the law. This presentation assumes implementation under a permissive legal framework on the basis that it results in the most extensive list of policy issues to be addressed.

Outline

3. Strategies and tactics in the allocation of quotas

4. Resource rent, who benefits

5. Management functions -- roles and responsibilities -- industry and government

6. IQs or ITQs -- The implications of introducing a system without transferability.

7. Concentration of ownership, vertical integration, and concentration rules.

8. The policy process, who are the stakeholders, barriers and aids to reaching agreement

7. The elements of a "Rights-Management" departmental strategy -- within the department and outside.

8. Addressing the concerns and criticisms of opponents

9. Options in new fisheries where there is no history of participation.

Bio-Note. Leslie Burke has 16 years of experience in policy planning and research with the Department of Fisheries and Oceans in Halifax. He currently serves as Regional Director, Policy and Economics for the Maritimes Region. He is involved in many of the department's National and Atlantic wide policy, program, and strategic planning initiatives. Some recent examples include: an evaluation of Canada's Fisheries Management systems, development of a user fee and cost recovery policy for DFO services, and development of a new fisheries information system.

He serves on a number of interdepartmental and intergovernmental bodies that coordinate government policy thrusts particularly in regard to the economic development of Atlantic Canada. He coordinated the delivery of the adjustment and support programs undertaken to respond to the collapse of the demersal fishery for the Department of Fisheries and Oceans in the Maritimes Region. Leslie has authored a number of studies and articles, and has provided policy and operational advice to a number of countries and to the FAO.

Paper #41 — Mechanisms to Address Surplus Growth Within Quasi-Property Right Systems

C. Annand and F.G. Peacock DFO Scotia-Fundy sector, Fisheries Manangement Halifax, Nova Scotia, Canada

Within the Canadian East Coast experience in quasi property rights, principally ITQ's and Enterprise Allocations(EA) little consideration has been given to stock growth situations. IQ/ITQ/EA programs first introduced in 1976 in the herring purse seine fishery now encompass over 50 percent of all fisheries. Historically in Atlantic fisheries ITQs have almost always been introduced in times of declining resources with fleet over-capacity a central theme and rationalization a major goal. More recently within the evolution of ITQ systems new developmental fisheries or fisheries which have experienced growth in stock size or value have become common. Currently there is no established policy or regulatory mechanism to determine when or how surplus wealth or growth is redistributed. License holders acknowledging the possible political volatility associated with access and resource sharing, fishers have initiated solutions through the IFMP process that deal with possible boom or bust scenarios. Thresholds have become a major mechanism of application in several fisheries within the Scotia-Fundy sector as fishing entrepreneurs attempt to design mechanisms that will, in essence, avoid the political volatility that can accompany stock growth or declines. This paper attempts to outline and compare several scenarios where mechanisms have been internalized within the IQ process rather than accepting an externalized process subject to political pressures or rigid rules not in keeping with current situations. The commonality in all plans is a defined mechanism for sharing growth using predefined guidelines in defined circumstances. Use of such approaches respects another ITQ/EA principle of long term stability of management approach.

Paper #34 — Canada's Experiences in ITQ Management

D. Leslie Burke, Regional Director, Policy & Economics Branch, Maritimes Region, Dept. of Fisheries & Oceans

This paper focuses on lessons learned during the implementation and administration of over twenty property rights schemes with widely varying characteristics in Canada. It assesses what Canada has learned based on the slow, pragmatic, fishery-by-fishery approach it has taken to implementation. It suggests a connection between the growth of democratic, market-based societies and the increased use of individual transferable quotas as a management model. The paper outlines the initial allocation process, the prominent use of catch history in defining shares, and appeal processes. An overview is provided of where Canada is now in terms of ITQ implementation. There is a summary of public/media reaction to ITQs relative to the reaction of those who actually use ITQs. The paper discusses key changes in the relationship between government and industry in management of the resource -- partnering. It discusses the legal framework around which ITQs are implemented; identifies strengths and weaknesses in the Canadian system. Finally, the future of ITQs in Canada is discussed -- opportunities and threats/challenges.

Paper #89 — From Social Thought to Economic Reality: The First 25 Years of the Lake Winnipeg IQ Management Program

Gordon S. Gislason G S Gislason & Associates Ltd, Vancouver, Canada

Individual quota (IQ) fisheries management was introduced on Lake Winnipeg in 1972 and became the first IQ fisheries program in Canada. Lake Winnipeg is a large, 15,000 km2 freshwater lake in central Canada that has supported a commercial gillnet fishery for over one hundred years. The annual catch of approximately 4,500 tonnes is taken by over 800 licence holders.

This paper outlines the unique political, management, and resource components in place at IQ program inception and charts the evolution of IQ management over the past 25 years. The Lake Winnipeg IQ program, being one of the first in the world, can provide important lessons for other IQ programs.

The original rationale for IQs had a strong social development and income distribution focus. Initially, all licence holders in a particular area/season were allocated the same size individual quota, quotas were non-transferable, and when a licence holder retired or died, the licence reverted to the Crown. There soon emerged economic problems related to: economic viability, the inability to tap economies of scale, the lack of equity or resale value in fishing businesses, and the aging of the fishermen population.

Fishermen, with strong property rights under IQ management, took a proactive approach in pushing for management changes that would enhance the long term economic sustainability of the fishery. These changes included licence transferability and licence stacking, whereby an operator could acquire more than one licence. To prevent significant control or concentration in the fishery, a limit was placed on the number of quota entitlements that an individual could own.

Paper # 90 — Stronger Rights, Higher Fees, Greater Say: Linkages for the Pacific Halibut Fishery in Canada

Gordon S. Gislason G S Gislason & Associates Ltd, Vancouver, Canada

In 1991, individual vessel quotas (IVQs) were introduced for the 435 licence holders in the Pacific halibut fishery in Canada. At the same time, substantial fees for port monitoring of catches, dedicated enforcement personnel, and other services were introduced. The Halibut Advisory Board (HAB), consisting of elected licence holders, was formed to provide advice to the federal Department of Fisheries and Oceans on regulatory design, program spending and other matters. This paper outlines the evolution and adaptation of rights, fees and accountability for the Pacific Halibut IVQ program.

Non-transferable IVQs were introduced on a trial basis, subject to review after two years. After two years, licence holders endorsed the IVQ program and voted to make IVQs transferable subject to a limit on quota holdings by any one individual. Today, 250 to 275 vessels participate in the fishery.

HAB helped usher in IVQs, but recently it has found that, due to its advisory nature, it cannot achieve true accountability over licence fee levels and fisheries management spending. Licence holders have recently formed a new entity, the Pacific Halibut Management Association, to provide greater accountability to industry.

The Canadian experience suggests several "lessons learned". These include: 1) rights, fees and accountability are inextricably linked, 2) new regulatory and industry institutions may be needed to provide the accountability that industry will expect under stronger property rights regimes, and 3) inevitably licence holders take much greater interest in fisheries management under stronger property rights regimes.



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