Ecological Economics 31 1999 305 – 316
METHODS
The design of fishing-right systems — the NSW experience
Michael D. Young
CSIRO Land and Water, PMB
2
, Glen Osmond, NSW
5064
, Australia
Abstract
In 1994, the Australian state of New South Wales NSW passed legislation to introduce a fishery share system. In some ways it is similar to the ‘ITQ’, or individual transferable quota, fishery management systems found in New
Zealand, Iceland, Australia, Canada and other countries. The focus of the system, however, is on fisheries rather than species. In most of these fisheries, a combination of input and output controls are used. Special design features include
allotment of shares in the ‘fishery’ rather than in quotas, and a structure that forces adaptive resource management. The system is designed to maximise the probability that fishery use will remain both sustainable and consistent with
social objectives as they change through time. The system’s conceptual framework is of relevance to other fisheries and, also, many other industries that use natural resources.
Consistent with periodically revised management plans, rights to harvest specific amounts of fish or to use certain classes of boats and gear are issued in proportion to the number of shares held in each fishery, ‘‘fishery’’ being flexibly
defined by region and habitat, with or without further specification by gear-type, species group or single species. The management plan might, for example, specify a relationship between number of shares and size of boat or net. Any
quotas are allocated in proportion to the number of shares held. Subject to compliance with periodically reviewed share conditions, rights are perpetual and give each fisher a direct financial interest in the future of the fishery. Shares
are mortgageable and fully transferable. Driven by the management plan, structural adjustment is delegated to the market and individual fishers. A dual property-right structure is used to minimise transfer costs encourage
self-enforcement and compliance. © 1999 Elsevier Science B.V. All rights reserved.
Keywords
:
Design; Input and output; Management plan www.elsevier.comlocateecolecon
1. Introduction
The design of fishing-right systems is still an art. Of all the systems that have been tried, none
can be claimed to be fully effective in conserving and promoting the efficient and equitable ex-
ploitation of fish stocks. This paper reports on the concepts, experiences and observations derived
whilst designing, from first principles, a share- based fishery management system for those
fisheries managed by the Australian State of New South Wales NSW. It was developed by a
This paper is an updated version of a paper with the same title published in Ocean and Coastal Management 281 –
3:45 – 61. 0921-800999 - see front matter © 1999 Elsevier Science B.V. All rights reserved.
PII: S 0 9 2 1 - 8 0 0 9 9 9 0 0 0 8 6 - 5
Working Group
1
comprising officers from NSW Fisheries, the NSW Cabinet Office, the Common-
wealth Scientific Industrial Research Organisation and NSW Treasury.
One of the key ideas embodied in the system is the recommendation that principles used to guide
corporations can be applied to fisheries. Essen- tially, each qualifying fisher is given a bundle of
shares in all the species of fish in a fishery. A share is a formal entitlement to a proportional
share of all the commercial opportunities to profit from use of a fishery. Legally, any changes to
these arrangements must be on a pro-rata basis. The fishery is managed as an interacting whole
rather than by individual species. As set out in a periodically revised management plan, sharehold-
ers are entitled to a share of any gear restrictions and quotas in the fishery. A special kind of lim-
ited entry fishery is created: entry into the fishery or expansion is only possible by acquiring shares
from existing shareholders. As far as I am aware, this is the first time a corporate-like structure has
been used to manage a fishery. The idea, however, has been proposed independently by Townsend
and Pooley 1994.
The legislation resulting from the Working Group’s recommendations, a totally new Fishery
Management Act for NSW, passed through Par- liament in May 1994 and was proclaimed into law
on 16 January 1995. NSW Fisheries, the govern- ment department responsible for the state’s
fisheries, is now in the process of implementing the new framework. Since proclamation of the
Act NSW, 1994b, there has been a change in government with a consequence that implementa-
tion of the Act is on a slower schedule than would be the case if the government which developed the
Act was still in power. Nevertheless, implementa- tion is proceeding in a step-wise manner with
priority being given to single species fisheries. So far, transition to the share fishery system has been
limited to single species fisheries. A prerequisite to transition to share management is introduction
and agreement to a management plan for a fishery.
Interestingly, most opposition to the share sys- tem comes from the new Minister for fisheries
who appears to prefer to manage fishing licences on an individual licence by licence basis without
the strong strategic focus that adaptively managed share fisheries demand. Nevertheless, he has re-
cently offered all fishers the choice between transi- tion to share management and remaining under
the old licence by licence system. As part of this process, environmental representatives have been
appointed to each management advisory commit- tee established to develop management plans for
each fishery. Meeting collectively, these members recently advised the Minister to make two amend-
ments to the Act and implement the share fishery system as originally recommended by the Work-
ing Group. With qualifications associated with the level of charges and fees associated with transition
to the new system, licensed fishers also remain keen
to implement
share-managed fisheries
throughout NSW.
2. NSW fisheries
