Towards rights-based fisheries managment in Argentina

_____ 22816 August 2001 V-,__. .u_~n, ' " k rn,4,crit#WS Rural Development Working Paper M s& ; sr y v) osporauffrti, ) J.. . . - :; I 0010. : A rgentina Towards Rights-based Fisheries Management Steven N. Schonberger Juan J. Agar Fisheries and Aquaculture Thematic Group Latin America and Caribbean Region   FISHERIES AND AQUACULTURE THEMATIC GROUP LATIN AMERICA AND CARIBBEAN REGION Argentina Towards Rights-Based Fisheries Management Steven N. Schonberger Juan J. Agar The World Bank Work in progress Rural Development Family  The Fisheries & Aquaculture Thematic Group was established in 1997 to improve portfolio performance by facilitating the coordination of fisheries and aquaculture activities within the World Bank's Rural Development Department, Environmentally & Socially Sustainable Development Network. This is an informal publication of the Rural Development Family of the World Bank. It is intended to encourage the exchange of ideas among Bank staff and all others interested in development issues. This paper carries the name of the author and should be used and cited accordingly. The findings, interpretations, and conclusions are the author's own and should not be attributed to the World Bank, its Board of Directors, its management, or any member countries.  Argentina: Towards Rights-Based Fisheries Management Contents Acknowledgement vi Acronyms and Abbreviations vii Introduction 1 I. Overview of the Argentine Fisheries Sector 5 History of the Argentine Fishing Industry 5 The Resource 7 Demersal Species 7 Pelagic Species 9 Main Crustaceans and Molluscan Species 9 Industrial Structure of the Fishing Industry 10 Harvesting Sector 10 On-Shore Processing Sector 13 Markets 15 Cost Structure of the Industry 18 Legal Framework 20 National Legislation 20 Provincial Legislation 210 Institutional Framework of the Fishing Sector 21 Fisheries Policy 21 Research 26 Monitoring and Enforcement 27 Seafood Safety 28 Foreign Affairs 28 National Senate and Chamber of Deputies 28 Private Sector Organizations 29 iii  Argentina: Towards Rights-Based Fisheries Management II. Implementation of the Quota Management System 31 The Current Management Crisis 31 Overview of the Crisis 31 Causes of the Fisheries Crisis 32 Government's Response to the Crisis 33 Immediate Actions to Address the Crisis 35 Implementation of a Quota Management System 37 Development of a Consensus-Building Implementation Process 37 Development of a Legal and Regulatory Frameworkfor QMS 37 Technical Support to CFP 39 Quality of Quota Rights 42 Transferability and Ownership of Quota 43 Initial Quota Allocation Process 44 Rent Collection and Cost Recovery 47 Fisheries Management Services Under QMS 53 Research 54 Monitoring, Control and Enforcement 56 Transparency in Fisheries Management 62 Coordination with Provincial Authorities in Fisheries Management 63 Management Challenges 63 Management of By-catch 64 Avoidance of Spillover Effects 65 Wider Management Considerations 65 Industry Restructuring 65 Actions to IMprove Profitability and Competitiveness 67 Social Impacts 69 Conservation of Marine Biodiversity 78 Appendix: Theory and Experience with Rights-Based Fisheries Management 83 Access Rights In Fisheries And Their Implications For Management 83 Open Access Regimes 83 Benefits of Rights-Based Management Regimes 86 Resource Conservation 86 Capacity and Effort Reduction 88 Fiscal Impact 89 Social Consequences 90 iv  Argentina: Towards Rights-Based Fisheries Management International Experience with Implementation of Rights-Based Management Regimes 91 Definition of ITQs as Property Rights-Divisibility 94 Allocation of Quota Rights 95 Quota Markets and Trading 96 Rent Extraction Mechanisms 97 Actions to Address Social Impacts 100 References 102 v   Argentina: Towards Rights-Based Fisheries Management Acknowledgement The report benefited from the close collaboration and support of the staff of the Secretariat of Agriculture, Livestock, Fisheries and Food, as well as the willingness of provincial officials, INIDEP, harvesting and processing firms, labor unions and cooperatives and NGOs to share their experience, opinions and concerns regarding the development of the sector. It is the opinion of the team which prepared this report that the willingness of these stakeholders to pool their considerable knowledge and talents to address the current challenge represents Argentina's most important advantage in averting sectoral collapse. vi   Argentina: Towards Rights-Based Fisheries Management Acronyms and Abbreviations CCAMLR Convention for the Conservation of Antarctic Marine Living Resources CDQ Community Development Quota CIC Scientific Research Commission of the Province of Buenos Aires CITEP Research Center for Fishing Technology and Regional Foods CFP National Fisheries Council CONICET National Council for Scientific and Technical Research DFO Department of Fisheries and Oceans (Canada) EEZ Exclusive Economic Zone FAO Food and Agricultural Organization of the United Nations FCC Federal Communications Commission HAACP Hazard Analysis Critical Control Point (Seafood processing safety program) H&G Headed and gutted INIDEP National Institute of Fisheries Research ITQ Individual Transferable Quota IUCN International Union for the Conservation of Nature IVQ Individual Vessel Quota JRA Job Research Assistance MCS Monitoring, Control and Surveillance MERCOSUR Common Market of the Southern Cone (Argentina, Brazil, Paraguay and Uruguay) MEY Maximum Economic Yield MSY Maximum Sustainable Yield NAFMA National Fisheries Management Agency (Australia) NAFTA North America Free Trade Agreement (Canada, Mexico and United States) NOAA National Oceanographic and Atmospheric Agency (United States) NGO Non-Governmental Organization OECD Organization for Economic Cooperation and Development PQS Public Quota Share QMS Quota Management System SAGPyA Secretariat of Agriculture, Livestock, Fisheries and Food SENASA National Animal and Plant Health Service SRNyDS Secretariat of Natural Resources and Sustainable Development SSP Sub-secretariat of Fisheries TAC Total Allowable Catch TACC Total Allowable Commercial Catch TAGS The Atlantic Groundfish Strategy VMS Vessel Monitoring System WWF World Wide Fund for Wildlife vii  I  Introduction In 1998, for the first time in fifteen years, landings and export revenues from the fisheries sector decreased in Argentina. Landings decreased by 17 percent while export revenues decreased by 14 percent respect to 1997 levels. The sector's decline primarily reflects the depletion of the most important commercial species, Argentine hake, but is symptomatic of a more general management crisis throughout the sector. As a result, Argentina's fisheries sector is currently faced with a choice between a return to export revenue and employment growth, and the collapse of the most important commercial marine species. The distinction between these two scenarios is based primarily on the implementation of an effective fisheries management regime. The sector, though small relative to overall GDP, bas grown at an average annual rate of 15 percent over the past 10 years, generating approximately $1 billion in revenues in 1998 - of which almost 90% is exported - and directly employing approximately 25,000 workers. In addition to their direct, commercial benefits, fisheries resources are the basis of Argentina's fishing communities and are key elements of Argentina's marine ecosystem. As in many other countries, Argentina's rich marine resources are being exploited at a rate that significantly exceeds the biological capacity of the resource to reproduce itself. The main groundfish, particularly hake and southern blue whiting, have been severely overfished and their abundance is the lowest on record. Captures of hake were estimated at over 800,000 metric tons in 1997, compared to the established total allowable catch (TAC) of 395,000 metric tons. In addition, low spawning stock biomass levels further diminish recruitment prospects, putting at risk the ability for stocks to recover in the medium term. In the face of an imminent collapse of the hake fishery, the government initiated several actions to avert approaching crisis. In January 1998, the new fisheries law was signed into effect. The law created the Federal Fisheries Council (CFP) and mandated the implementation of a quota management system (QMS) based on individual transferable quota (ITQs). The CFP also instituted area and season closures to reduce the pressure on groundfish stocks, mainly hake. However, the government has not been able to effectively implement either short-term conservation measures nor put i-n place the QMS mandated by law. As a result of concerns for lost employment amongst fisheries workers, the government did not enforce the closures, resulting in further depletion of stocks. Conflicts regarding the interpretation of initial allocation criteria for ITQs, particularly between the ice trawler and freezer factory segments of the fishing fleet, have impeded progress in implementation of the QMS. The delays have increased the likelihood of both biological and economic collapse of the fishery. In order to rebuild stocks, it is likely that very low TACs will have to be established and enforced over the following few years. As a result, the gap between industry capacity and catch levels consistant with recovery of stocks is widening, reducing the likely number of profitable operators and as such increasing the difficulties of effective enforcement and adverse social impacts. The above scenario is not unique to Argentina and as such, Argentina can benefit from the both the successes and failures of other countries with important industrial fisheries. The selection of QMS is consistent with successful experience in other industrial fisheries - in particular New Zealand, Australia and Iceland - where ITQs have provided industry with an incentive to work for a sustainable fishery, reducing Government's role in management. At the same time, the collapse of the Atlantic groundfisheries of Canada and the United States demonstrate the potentially irreversible social  Argentina: Towards Rights-Based Fisheries Management consequences of the failure to take decisive action to conserve commercial stocks due to short-term political concerns regarding industry profitability and employment. While recognizing that each fishery is unique in its biological, economic, social, political and legal context, the World Bank, based on its limited understanding of Argentina's fisheries sector gained from extensive interviews with representatives of industry, workers, national, provincial and municipal governments, scientists and environmentalists, suggests that government consider the following actions consistent with international experience in sustainable fisheries management. The proposed actions, while new to the fisheries sector in Argentina, are consistent with the progressive actions taken in other areas of the economy to ensure sustainable growth.