User-rights in Australia’s User-rights in Australia’s Northern Prawn Fishery (NPF): Northern Prawn Fishery (NPF):

A Southern Hemisphere, A Southern Hemisphere, Developed Country ExperienceDeveloped Country Experience

Annie Jarrett CEO

Part 1: About the Northern Prawn Fishery

General

•Australia’s largest and most valuable prawn Fishery: GVP $65 - $95 million•Remote, located in Australia’s Far North - 770,000 square kilometres in area

•Managed by Fisheries Management Authority (AFMA) – single jurisdiction; no RMFO’s

•Industrial highly efficient freezer trawlers (20-24 metres)•Fuel & crew highest operating costs (approx 50%)•Strong long-term partnerships - managers, industry, science, NGOs; AFMA/ industry co-management contract

Northern Prawn FisheryAustralia’s Premier Prawn Fishery

General Overview

Effort Distribution - 2013

MULTI-SPECIES DEMERSAL PRAWN TRAWL FISHERY:

•Banana (Merguiensis & Indicus) 2014: 5500 t •Tiger (Semisulcutus & Esculentus) 2014: 1200 t•Endeavour & King•Byproducts – Squid, Moreton Bay bugs, Scallops

•High % bycatch/discards (10/1)

Settings Harvest strategies include TRP: Maximum Economic Yield

(MEY) (2004) & LRP: Maximum Sustainable Yield (MSY)

Escapement: In-season trigger limits – banana & tiger prawn fisheries

Bio-economic stock assessment model –tiger prawns/ indicus

MPA’s; spatial & temporal closures (permanent, seasonal)

FISHING SEASONS:

1 April - 15 June (banana prawn season)

1 August - 30 November (tiger prawn season)

• Limited entry – 52 prawn trawlers; 19 owners

• Fishing rights: Inputs controls (effort units), legislated as Gear Statutory Fishing Rights (SFRs) – boat SFRs (1 per boat)– gear SFRs ( based on headrope length ie 1 centimetre

headrope = 1 gear SFR)

• Quad (4), twin (2), triple (3) or tongue nets

• Mandatory VMS/ TEDs/BRDs/ log books ( 95% using electronic logs)

CURRENT ENVIRONMENT:

Banana prawn fishery: Highly variable recruitment (rainfall dependent): 2014 – 5500 t

Tiger prawn fishery at or above Maximum Economic Yield (MEY):

2014 – 1200 t

GVP fluctuating between $65 and $95 mil l ion (subject to exchange rates)

‘User pays’ management costs - $2.5 mil l ion AUD/year

Well managed - Marine Stewardship Council (MSC) certi f ied - 2012

Banana and tiger fishery catch (tonnes) 1970 - 2014

Fishing Effort: 1970 to 2014

PART 2: THE NPF USER-RIGHTS STORY

WHY USER-RIGHTS?

•Initial over-subscription of fishing licences

•Long history of too many boats catching too few prawns - over-capitalisation and over-fishing

•Adjustment programs:

1985: industry-funded buy back commenced 1990: accelerated buy back - 70,000 effort unit

target 1993: 30% compulsory surrender of effort units 2000 – 2005: internal adjustment through

compulsory reduction of effort (gear) units 2006/07: Govt funded buy back

• Closures & gear restrictions effective for reducing fishing effort but impose economic efficiencies

• Adjustments to balance biological and economic sustainability ongoing into the future

• Implemented rights based management to:

Limit catching capacity & fishing effort - stock sustainability

Improve economic return/profitability Provide flexibility - adapt to change Provide security of access – exclusivity Encourage stewardship of resource

EVOLUTION OF NPF USER-RIGHTS SYSTEM

1965 - 1977:

• Open access fishery• Govt ship building subsidy• Big catches (12,500 T banana prawns – 1974) • Rapid expansion of fleet size/fishing effort/ effort

creep• Annual permits• Ice (wet) boats - 1 stern net

1977 - 1984

• Moratorium on boat numbers (190)• Interim Management Plan• Annual boat licenses• Industry/ Govt committee (NORPAC)• Ice to Freezer boats - 2 nets towed from booms• Some seasonal closures

1984:

• The ‘A’ unitisation system introduced

• ‘A’ units based on boat and engine size (HP) (Individual Transferable Fishing Rights)

• One B (boat) unit & A units to fish

• 133,269 A units; 292 boat units issued under Interim Management Plan

• Annual license

• Recognised by govt, industry, financiers as first legal NPF fishing ‘property right’

1985:

Unitisation scheme incorporated into NPF Management Plan 1985……. BUT

‘That Creep Called Effort’

•‘A UNITS’ NOT SUCCESSFUL AT RESTRICTING CATCHING CAPACITY & EFFORT CREEP

•TIGER PRAWNS OVERFISHED IN 1986 (1990, 1995, 2000)

•DRACONIAN INPUT CONTROLS (CLOSURES, GEAR RESTRICTIONS) IMPLEMENTED FROM 1987 – 1990 TO REBUILD STOCKS. ‘DEATH OF A THOUSAND CUTS’

•30% COMPULSORY REDUCTION OF ‘A’ UNITS IN 1993 TO RETURN PROFITABILITY

•(SADLY – WE REPEATED ‘DEATH BY A THOUSAND CUTS’ SEVERAL TIMES OVER THE NEXT 10 YEARS)

Back to the Drawing Board!

Joint govt/ industry WG review of alternative rights-based systems: 1995 – 1997

•ITQs•Time units (fishing days/nights)•Effort Units (combination of time, boat size, hp)

•Gear units (headrope length)

CONCLUSION: Gear Units system based on net size (headrope length) best proxy for catch

Gear Unit Rights System

•Gear units system introduced in 2000. 1 gear unit = 1 cm headrope. No headrope limit – total gear units

•Boat & gear units assigned to each boat - provide exclusive access to the fishery

•Individual transferable effort units (ITEs) - fully transferable & divisible. Option of ‘basket’ rights (company ownership)

•Statutory fishing Rights (SFRs) under NPF Management Plan 1995

•Perpetual right unless Management Plan revoked - existing rights holders get first option under a replacement MP

•‘

Gear Units cont.

• Enforceable - gear units (centimetres of headrope) easily measured on shore & at sea

• Have allowed removal of some inputs (eg headrope limits, longer seasons), improved profitability

• Input substitution/effort creep monitored through annual surveys - changes factored into ‘fishing power model’

• Adjustable. Changes in fishery productivity/effort creep addressed by adjusting the value of the gear unit (headrope length). Facilitated removal of 100 boats between 2000 & 2007 (internal adjustment/ govt buy back)

‘Currency’ of the fishery - used as basis for: restricting fishery effort levels internal & external trading management costs (user pays) levies research levies industry association levies marketing & promotion levies adjustment/restructuring

Gear Units cont.

Governance• Transparent, participatory, accountable legal framework:

– Australian Fisheries Management Authority (Statutory Authority answers to Fisheries Minister)

– Fisheries Management and Administration Acts – NPF Management Plan, Regulations & Directions

• Strong regulatory but collaborative advisory structure:– Management Advisory Committee (NORMAC): fishery managers,

industry, science & NGO’s; – Fishery Resource Assessment Group (NPRAG): fishery managers,

industry, science, economist– Co-management contract: AFMA and NPF Industry Pty Ltd– NPFI responsible for data management, crew member observer program,

fishery budgets, advice on regulatory changes, in-season management (closures/trigger limits)

• Equal opportunity fishery• Many females involved since 1970’s –

skippers, cooks, deckhands (including myself)

• Females comprise 50% of NPF Crew Member Observer monitoring program

• indigenous, non-Australians

Legal Framework• AFMA’s legislation includes Ecological Sustainable

Development (ESD) objective: (social, economic & environmental); Precautionary Principle; EBFM

• Harvest Strategies (target & limit reference points) & Bycatch policies to achieve biological, economic and environmental sustainability

• Equal opportunity/rights, WH&S, 457 Visas, cadetships, CMO program - protecting & up-skilling our workers,

SOCIAL: Profitable fishery attracting new crew, generating stable employment &

long term career paths, higher remuneration & profit sharing (bonuses)

Supply export and domestic markets. 80% of banana prawns to domestic market; 90% of tiger prawns to Japan & China. Market distribution according to fishery yield, price & exchange rates

Alternative career paths : on-shore fleet managers, mothership operators, scientific observers, fisheries managers, marketing & recruitment officers, oil & gas industry

Ownership changed and consolidated under rights based system. Medium to large companies (5-12 boats) own 70% of rights; smaller operators (1-4 boats) own 30% of rights (compared to 50/50 in 2000)

Effects

ECONOMICS:

• NPF important economic contributor to regional

domestic & export economies• Direct and indirect employment, onshore & offshore processing,

repairs and maintenance, retail and food services industries in northern regional Australia

• Operator & fishery profitability impacts on all economies

• User rights have been the sole basis for fisheries adjustment & improving profitability in the NPF egBefore gear units (1998/99) -134 boats. Income/boat $1.1

million AUDAfter gear units (2011/12) - 52 boats. Income/boat $1.78

million AUD

Boat Numbers 1970 - 2015

Gross Value Production 2000 - 2011

ENVIRONMENTAL:

Greatly improved stock status - high banana prawn yield; ‘overfished’ tiger prawns (1986 – 2000) - at or above MEY 2012

Substantially less environmental footprint - < 8% of area fished

50% reduction in bycatch since 1998: turtles, rays, sharks, small bycatch

MSC CERTIFIED (2012)

PART 3: LOOKING BACK & LOOKING FORWARD

4! KEY LESSONS

User rights systems: both a challenge & an opportunity. Can be highly successful or totally disastrous!

No such thing as the ‘perfect’ system – trade-off and balance between social, economic & environmental objectives

‘Rights’ system must ‘fit’ the fishery: type, objectives & operating environment or it will fail (eg the NPF ‘A’ unit system)

Full stakeholder engagement essential in development & implementation of user-rights. Lack of buy-on will result in abuse & failure of rights system

BEST PRACTICEEarlier move to limited entry & user-rights systemPreventing stock depletion &/or over-capitalisation is

easier than reversing it NPF - 30 years, >$200 million AUD in adjustment (internal &

external) programs reversing the problem Get the ‘instrument’ right – changing from one rights-based

system to another can create inequities, uncertainty, legal issues

Earlier & more participatory stakeholder engagement in developing rights-based system

More investment in monitoring effectiveness of, & compliance with, user rights system

CONCLUSIONS User rights have delivered social, economic & environmental benefits to the fishery, the nation & NPF

rights holders

User rights engender stewardship over the resource and encourage responsible fishing practices

User rights can prevent or reverse overfishing & excess capacity

Need to get the ‘rights’ right – clear objectives, ‘fit for purpose’

With rights comes responsibility - good governance and stakeholder stewardship are KEY to success

.

Thank you