Individual Transferrable Quotas:
New Zealand’s Experience
New Zealand Fisheries Waters
• Large EEZ (4.4
million km2)
• 70% below 1,000 m
• Medium productivity
• Commercial Fisheries
• Non-commercial
Fisheries
Reform Context (early 1980s)
• Classic fisheries issues
–
–
–
–
–
Inshore stocks overfished
Commercial fisheries over-capitalised
Unprofitable, uncompetitive, rent dissipation
Declining recreational fishing
Risk of extending problems to newly developing deepwater
fisheries
New Zealand’s Response
• Objectives of the Quota Management
System
–
–
–
–
–
Primarily economic drivers
Restore profitability to inshore fisheries
Avoid over-capitalisation in new deep-water fisheries
Limit catches to MSY
QMS in place since 1986, after 25+ years experience
everyone has adjusted
Quota Management System (QMS)
• Several refinements have been made
since 1986 but the basic tenets remain:
–
–
–
–
–
Setting catch limits
No discarding QMS species
Individual Transferable Quotas (ITQs)
Markets determine allocation of commercial effort
Monitoring and enforcement
New Zealand's ITQs
•
•
•
•
Species and area specific
Perpetual and transferable
Generate ACE (annual catch entitlement)
Some ownership restrictions
•
•
Maximum holdings (aggregation limits) 10-45% of TACC
No foreign ownership
• Ongoing allocation only via ITQ and ACE
trading
Cost Recovery/Subsidies
• NZ originally considered resource rentals
based on the decision to allocate quota
without tender process
• Now use cost recovery mechanism to charge
quota holders selected government costs
(e.g. observers, fisheries research,
administration)
• No subsidies in QMS system; quota owners
pay c. 30-35% of government costs
Outcomes
• Reflect two primary
policy objectives of
QMS
– Resource
sustainability
delivered
– Economic
performance
improved
Fleet rationalisation
Registered fishing vessels
3000
2500
2000
1500
1000
500
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Quota rationalisation
9,000
Combined total quota owners for 16 selected inshore
species
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
19861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011
Export value/volume
Benefits/Gains
Challenges unique to QMS
• Designing systems to administer and audit QMS
• Required refinements to suit local conditions
and policy requirements
• Social impacts anticipated and managed
– Social dislocation in small coastal fishing
communities
– Growth in large vertically-integrated fishing ports
What general conclusions can be drawn
from the NZ experience?
General conclusions
• QMS objectives focused on economic
efficiency
– NZ’s ITQ design choices reflect this objective
– If you have other management objectives,
… the design of your rights based management
regime would be different
General conclusions
• NZ’s policy design features allowed for
controlled industry restructuring
– Building legitimacy and collaboration is key to success
– Quota allocation on catch history basis
– Strongly specified ITQ (perpetual, tradable and enshrined in
law)
– Provides certainty/security for investment
– Quota ownership limits
Other key considerations
• Avoid disadvantaging competing sectors
• Design policy to encourage collective
responsibility
• Do not overlook importance of integrated
planning