[env-trinity] FW: [toeslist] "Collateralized Fish Obligations? Fishery Management And Catch Shares

[Brian Hill]

From: toeslist at yahoogroups.com [mailto:toeslist at yahoogroups.com] On Behalf
Of Riaz Tayob
Sent: Sunday, May 02, 2010 11:59 AM
Subject: [toeslist] "Collateralized Fish Obligations? Fishery Management And
Catch Shares

 



"Collateralized Fish Obligations? Fishery Management And Catch Shares

Sunday 02 May 2010

by: Christine Shearer, t r u t h o u t | Report

photo
(Photo: nurpax)

A program promoted by the National Oceanic and Atmospheric Administration
and Environmental Defense Fund aims to address overfishing, but will small
fishermen get squeezed out of the process?

Multiple studies suggest our world's oceans are being overfished. While
alarming, such studies often eclipse successful examples of sustainable
fishing practices, such as Oregon's Port Orford Ocean Resource Team (POORT).
This community-based organization focuses on both healthy fish stocks and
the economic viability of the town, where operators of small fishing boats
work alongside scientists and researchers to ensure sustainable fishing
methods.

Rather than strengthen and expand efforts like Port Orford, however,
fishermen say the National Oceanic and Atmospheric Administration (NOAA) is
strongly pushing a different program to address overfishing: the
privatization of the seas through "catch shares."

Proposed years ago by the Environmental Defense Fund (EDF), of which NOAA
head Dr. Jane Lubchenco served as vice-chair, and supported by former
President George W. Bush, catch shares is a management program in which
fishermen or investors buy, sell, or trade shares of total fish catch
limits, also known as individual tradable quotas (ITQ). The shares become a
permit, issued for a fixed period, which is renewed if not revoked, limited,
or modified. NOAA would like the program to be national, and is pushing for
its implementation in New England fisheries starting May 1.

According to EDF's website, the program is designed to spur fishermen to
maximize the value of their share, rather than capture the most fish they
can, a neoclassical conception of human nature known as the "tragedy of the
commons". And "as the fishery becomes more efficient, fewer boats and gear
are needed and seasons lengthen."

Fewer boats, however, does not necessarily mean less fish, but could mean
more commercial consolidation and fewer fishermen and fishing communities.
Indeed, critics fear that catch shares may permanently transform our
national fish stocks into a tightly controlled financial trading scheme
dominated by investors and industrial seafood producers. Ironically, since
catch shares are often allocated based on historic catch levels, smaller,
more sustainable fishers are initially eligible for fewer shares than large
commercial fisheries.

Equally controversial is its advocate, EDF, an organization that has
promoted using private investors to address environmental problems. Its
board of trustees consists of directors and investors of private equity
firms, capital management firms, and large financial institutions like
Morgan Stanley that stand to profit from the transformation of natural
resources into tradable market assets. According to journalist Richard
Gaines, EDF's Vice President David Festa has been urging institutional
investors to buy shares of New England groundfish, touting a projected 400
percent return on investment based on experiences with catch shares in other
fisheries.

Indeed, evaluation of existing ITQ fisheries suggest reason for
smaller-scale fishermen to be concerned. According to a study by Ecotrust
Canada, a group that promotes community-based eco-management, the conversion
of British Columbia fisheries into ITQ markets has encouraged speculative
buying and leasing of quotas by "armchair" fishermen and investors, driving
up business costs for working fishermen.

In Alaska, NOAA's National Marine Fisheries Service found that, after
implementation of catch shares, the number of persons holding halibut quota
shares in small Gulf of Alaska communities dropped by 46% from 1995 to 2004.
Most alarmingly, in Iceland quota shares became part of mixed-investment
portfolios containing mortgage-based derivatives, which are now part of that
country's toxic assets. The program was so economically disastrous for small
fishermen that the United Nations Human Rights Commission declared it
illegal; the Icelandic government is considering altering the program, but
must first buy back the now privatized catch shares from investors.

Many fishermen are therefore opposed to the push by NOAA to implement this
program on a national level. Maine fisherwoman Mary Beth de Poutiloff
questions who catch shares really benefit: "The small boat family fleet does
less harm to the resources and the environment, and our money supports
coastal communities. Why is NOAA favoring huge, corporate fleets while the
small boats are practicing sustainable fishing?"

EDF senior scientist Rod Fujita, however, says that if fishermen are active
in shaping catch shares regulations, the program can actually work to their
benefit. "A lot of catch shares are built on the idea that those with the
biggest catch history get the biggest shares, but it doesn't have to be that
way. There is a very strong argument to be made that the majority of catch
shares should go to the best stewards of the environment, regardless of how
much fish they catch, because some fishermen choose to remain small because
of their values. And they should be rewarded for their stewardship behavior
rather than punished, and catch shares can be built to accommodate that."

Fishermen, however, say they have historically had little power in shaping
fishery regulations. And many have had a rocky relationship with NOAA, which
recently suffered further blows due to allegations of unjust fishing fines
by the agency and the shredding of NOAA documents in the wake of an
investigation into the fines, costing Dale Jones his job as NOAA director.
Additionally not helping matters is that catch shares will siphon away $10.5
million from cooperative fishery research toward implementation of the $54
million NOAA program, including funding for fish monitoring and observer
data that local fishermen say often excludes their input.

POORT Executive Director Leesa Cobb wonders why the funding is being so
focused on only one management tool: "It seems disingenuous for NOAA to say
that they understand catch shares is only one tool, and then NOAA in turn
allocates $54 million to exclusively develop catch shares. NOAA is not
offering this funding to help (fishery) councils decide how to best manage
for sustainable fisheries, they are only providing this money for catch
shares."

More broadly, many fishermen are concerned that catch shares are vulnerable
to the consolidation of quotas by large commercial fisheries and,
potentially, financial speculators, squeezing out smaller fishermen that
cannot afford to compete. The effect would be not only financial speculation
and possible inflation of fish and fishing prices but also the further
erosion of our country's shrinking ties to generations of more
ecologically-based ways of living, much like small-scale farmers crowded out
by large agri-business.

Fisherwoman Rhonda Maker said that, based on her experience with catch
shares in Alaska, once the program is implemented, "fishing jobs become
scarcer, with little or no chance for new fishermen to advance beyond
deckhand. Because the rights to the fish are consolidated outside of local
communities, profits pass by rather than into local economies."

Indeed, some congressional members are expressing alarm at NOAA's rush to
implement catch shares. At a March 2010 hearing on catch shares by the US
House Subcommittee on Insular Affairs, Oceans and Wildlife, Congressman
Peter DeFazio (D-Oregon) laid out his concerns with the program: "The last
thing I want is Goldman Sachs buying up all the shares of a fishery in three
years, and (having) derivatives of fishery shares being sold on Wall Street.
I don't think (NOAA management) has a clue."

To prevent such market consolidation and financialization, community-based
environmental organizations advocate that catch shares be modified or
complemented with broader marine management "tool kits," tailoring
regulations to specific communities and fisheries to avoid monopolization
and overfishing, and helping small, remaining fisheries survive and grow.
Ecotrust proposes strengthening community fisheries, further integrating
them as fishery co-managers and, where catch shares are implemented, having
transparent quota share trading and direct allocation of some quota shares
to community entities.

Taking a cue from the lessons of Iceland, Food and Water Watch also supports
holding some quota off the market to allocate to vulnerable coastal
communities, to avoid the buying up of quotas by industrialized seafood
production at the expense of more sustainable and local seafood producers.

EDF's Rod Fujita agrees that catch shares should be designed and implemented
thoughtfully. "If that is a social value - you want to preserve the social
value of the fishery and you don't want outside investment - then you can
set up catch shares to preserve those values."

POORT Executive Director Leesa Cobb, however, says NOAA's push for catch
shares has eclipsed discussion of and support for other management tools.
"Unfortunately, the catch share campaign has drowned out all other ideas and
approaches to fisheries management. Another approach, community-based
fisheries management, has gotten a lot less attention even though it offers
a lot of benefits, particularly an enhanced level of stewardship for ocean
resources among community participants."

Mary Beth de Poutiloff said that rather than manage the ocean as a trust,
catch shares encourages it to be viewed as just another stock market. "This
is water real estate."  

Creative Commons License
This work by Truthout is licensed under a Creative Commons
Attribution-Noncommercial 3.0 United States License."

http://www.truthout.org/collateralized-fish-obligations59079

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