New Zealand s Quota Management System: A History of the First 20 Years Kelly Lock and Stefan Leslie
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1 New Zealand s Quota Management System: A History of the First 20 Years Kelly Lock and Stefan Leslie Motu Working Paper Motu Economic and Public Policy Research April 2007
2 Author contact details Kelly Lock Motu Economic and Public Policy Research Stefan Leslie New Zealand Ministry of Fisheries Acknowledgements This paper was funded by the New Zealand Ministry of Fisheries, but all opinions expressed are those of the authors. A number of people contributed to the writing of this report including James Sanchirico (Resources for the Future), Dan Holland (Gulf of Maine Research Institute), Jo Hendy and Suzi Kerr (Motu Economic and Public Policy Research), Nick Hill (Imperial College, London), Aoife Martin, Stuart Brodie, Bob Johnston, Dave O Dea, Terry Lynch, David Foster, Brian Ashton, Simon Bell and Roland Daysh (all New Zealand Ministry of Fisheries). Motu Economic and Public Policy Research PO Box Wellington New Zealand info@motu.org.nz Telephone Website Motu Economic and Public Policy Research Trust. All rights reserved. No portion of this paper may be reproduced without permission of the authors. Motu Working Papers are research materials circulated by their authors for purposes of information and discussion. They have not necessarily undergone formal peer review or editorial treatment. ISSN ii
3 Abstract New Zealand is a world leader in the use of Individual Transferable Quota (ITQ) to manage fisheries. Although the use of an ITQ system is not unique to New Zealand, no other country has used this system to the same extent as New Zealand. This has meant that, internationally, a lot of interest has been placed on how our system works and the level of success it has achieved. Generally, the New Zealand system is considered to be a success story, yet the system has changed a number of times since its inception in Despite the level of interest in New Zealand s unique ITQ system, the current literature is unable to provide a complete account of the historic and current regulations surrounding it. This paper addresses this gap by documenting how the Quota Management System (QMS) functions and the changes it has undergone since its introduction. Reviewing these changes facilitates a deeper understanding of the system itself, as well as providing insight into its potential limitations. JEL classification Q22, Q28 Keywords Quota management system, individual transferable quota, fisheries, management, New Zealand iii
4 iv
5 Table of Contents 1. Preface 1 2. Setting Catch Levels to Ensure Sustainability Managing Multiple Biological Populations Alteration of QMAs Fisheries Amendment Act Fisheries Act Fisheries Act 1996 Amendment Act Fisheries (Remedial Issues) Amendment Act Multiple Species Stocks Maximum Sustainable Yield (MSY) Maximum Constant Yield (MCY) Current Annual Yield (CAY) Estimation of MSY Total Allowable Catch Total Allowable Commercial Catch (TACC) Alternative TACs for species on the Third Schedule 9 3. Allocation, Trade and Holding of Quota Allocation under the 1983 Fisheries Act Deepwater Quota Inshore Quota Ability to be allocated quota Quota Buy-back scheme Injunctions through Treaty Claims Moratorium on Fishing Permits and Tendering Quota Translating Quota into Fish Quota as a fixed tonnage Quota as a Percentage of TACC The Introduction of ACE Allocation under the 1996 Fisheries Act Fisheries Amendment Act 2004 (No. 2) Fisheries Amendment Act 2004 (No. 3) Quota Trading The Quota Trading Exchange Lack of Central Trading Exchange Leasing Quota and Transferring ACE ACETrader FishStock FishTech Ltd Constraints on Holding Foreign Ownership Maximum and Minimum Holdings Ownership and Trading Patterns 24 v
6 4. Indigenous Rights European Settlement and the Treaty of Waitangi Post Treaty Fisheries Legislation Awareness of Maori Fisheries Claims The Introduction of the QMS Interim Settlement Maori Fisheries Act Maori Fisheries Commission Introduction of Rock Lobster into the QMS Taiapure Final Settlement of Commercial Claims Treaty of Waitangi Settlement Act Allocation of Commercial Assets Key Organisations Te Ohu Kai Moana Trust Te Ohu Kai Moana Trustees Limited (TOKM) Aotearoa Fisheries Limited (AFL) Te Putea Whakatupu Trust Te Wai Maori Trust Te Kawai Taumata Allocation of Assets Quota Settlement Asset Money Income Shares Requirements to Receive Quota Customary Rights Customary harvest allowance Regulation Maori Guardianship Mätaitai Reserves Rahui Recreational and Commercial Fishing Lack of Information on Recreational Fishing Determining Sector Priority Benefits of Recreational Fishing Benefits of Commercial Fishing Ministerial Discretion Legislative Management of Recreational and Commercial Fishing Fisheries Act regulations Soundings Shared Fisheries Policy Development Improving information on catch and value Setting of TAC Prioritising TAC allocations Setting and Adjusting Recreational and Commercial Allocations Management of Specific Local Areas Compensation for Industry Recreational Fisher s Participation in Management Recovering Costs from the Industry 49 vi
7 6.1 Resource Rentals Initial Resource Rentals Altering Resource Rentals Cost Recovery Fisheries Act Research costs Under-recovery and over-recovery of costs Fisheries Act 1996 Amendment Act Fisheries Amendment Act Fisheries Amendment Act (No. 3) Catch Balancing Catch Balancing Surrender Catch Leasing or Buying Additional Quota Borrowing and Banking Bycatch Trade-Off System Deemed Values Catch Balancing after Deemed Values Chatham Island Deemed Value Rates Banking Quota Over-Fishing Thresholds and Tolerance Limits Future Directions Current Areas of Focus Precautionary Approach Deepwater Fisheries Recreational Fishing Objectives-Based Management Outcomes Fisheries Plans Standards Into the Future 66 References 67 Motu Working Paper Series 73 vii
8 Acronyms ACE AFL BMSY CAY EEZ FMA GMITQ ICE IQ ITQ MCY MIO MSY PCH PMITQ POSA PRESA QMA QMS TAC TACC TOKM Annual Catch Entitlements Aotearoa Fisheries Limited Biomass that supports Maximum Sustainable Yield Current Annual Yield Exclusive Economic Zone Fishery Management Areas Guaranteed Minimum Individual Transferable Quota Individual Catch Entitlement Individual Quota Individual Transferable Quota Maximum Constant Yield Mandated Iwi Organisation Maximum Sustainable Yield Provisional Catch History Provisional Maximum Individual Transferable Quota Post-settlement Assets Pre-settlement Assets Quota Management Area Quota Management System Total Allowable Catch Total Allowable Commercial Catch Te Ohu Kai Moana viii
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