Sissenwine and Mace: ITQ management In New Zealand 



149 



ITQs because of perceived overfishing, overcapitaliza- 

 tion, and crippling excess regulation. 



Undoubtedly, the success of the Deepwater Enter- 

 prise Allocation system contributed to the decision to 

 use ITQs to solve the perceived problems in the inshore 

 fisheries. Clark et. al. (1988) labeled it as a model for 

 inshore fisheries management. There was also a belief 

 that problems could be solved only by applying some 

 form of output controls (Sandrey and O'Donnell 1985), 

 and that input controls had already been attempted and 

 had failed (Crothers 1988). In fact, it is unclear how 

 seriously input controls had been attempted, or how 

 severely the fisheries were overfished or overcapital- 

 ized.^ Of course, the failures of input controls or over- 

 fishing and overcapitalization are not prerequisites for 

 ITQ management. It is better to put in place a prop- 

 erty rights system, such as ITQs, before problems 

 occur. 



Implementation of ITQ management 

 in New Zealand 



The idea behind ITQ management of fisheries is quite 

 simple. ITQs are intended to conserve the fisheries 

 resource by setting a TAG. They increase economic 

 efficiency by assigning ownership of portions of the 

 TAG, thus eliminating competition between harvesters 

 to obtain the largest possible share of the TAG. By 

 making quota transferable, ownership should eventual- 

 ly rest with the most efficient harvesters, since they 

 should be able to afford to pay the highest price to pur- 

 chase quota. Excess capital is likely to be removed from 

 the fishery as more efficient operators buy up enough 

 quota to make optimal use of the capital that remains 

 in the fishery. 



In New Zealand, implementation of the ITQ manage- 

 ment system began with stock assessments of all of the 



^It is interesting that there were virtually no input controls on New 

 Zealand fisheries during 1963-78 for rock lobsters and scallops and 

 1963-80 for finfish. Even after moratoria on new licenses were im- 

 plemented in 1978 and 1980, there were no additional direct con- 

 trols on fishing effort (e.g., limits on the number of days that could 

 be fished), although there were some indirect controls (e.g., closed 

 areas). 



With regard to overcapitalization, the government estimated that 

 the harvesting sector was overcapitalized by $28 million NZ in 1983, 

 although details of how overcapitalization was defined and how it 

 was estimated are lacking (Anonymous 1984). Investment (book 

 value) in the harvesting sector in 1983 was estimated as $142 million 

 NZ (Bevin et al. 1989). This indicates that the harvesting sector 

 was overcapitalized by about 20%, which is almost certainly less 

 than some North American fisheries (e.g., Mid-Atlantic surf clams, 

 New England groundfish, Pacific halibut). 



Clearly some inshore resources were overfished (e.g., snapper), 

 but it is difficult to evaluate how serious the overfishing problem 

 was in general. Stock assessment information is quite limited, as 

 will be discussed later in this paper. 



fisheries resources to be managed. Initially, this in- 

 volved assessments of 153 management units, com- 

 posed of 26 species-groups in up to 10 management 

 areas per species-group. By April 1990, there were 169 

 management units, composed of 29 species-groups (45 

 species) and 10 major management areas. Forty-seven 

 of these management units are of minor importance 

 (in terms of amount of quota) with TAGs established 

 for administrative purposes only. There are insufficient 

 data to conduct meaningful assessments for most 

 management units. Initially, most of the TAGs were 

 based on one of two methods of estimation: (1) They 

 were equated to landings in the most recent year(s) for 

 which information was available, or (2) they were 

 equated to the product of a trawl-survey biomass 

 estimate and a stock productivity value in the range 

 0.05-0.15. The first method probably produced overly- 

 optimistic estimates of sustainable yields since recent 

 landings were often the highest on record. On the other 

 hand, the second method may have resulted in overly- 

 conservative estimates, since biomass estimates were 

 conservative (due to conservative assumptions about 

 the vulnerability of fish to trawl gear) and a maximum 

 productivity level of 0.15 is low (although there are 

 notable exceptions such as orange roughy). Other 

 methods used to estimate a few of the initial TAGs may 

 have produced reasonable results. These included use 

 of tagging data, yield-per-recruit analysis, and stock 

 reduction analysis. 



For the deepwater fisheries, TAGs generally 

 matched the sum of quota allocations under the Deep- 

 water Enterprise Allocation system. These Deepwater 

 Enterprise Allocations were converted directly to 

 ITQs. In the inshore, a provisional maximum allocation 

 was determined separately for each fishing permit 

 holder as the average catch of that individual's best two 

 out of the three fishing years of October- September 

 1981-82, 1982-83, and 1983-84. These catch histories 

 were the basis for the initial allocation of quota defined 

 in fixed amounts by weight. Since the allocations were 

 based on the average of the best two-out-of -three years, 

 it was likely that the "Sum of Gatch Histories" (SGH) 

 would exceed the maximum annual catch that had oc- 

 curred during the base period. In addition, fishermen 

 were given the right to appeal their allocations if they 

 felt it did not represent their true share of the fisheries. 

 Of the 1800 fishermen notified of their catch histories, 

 about 1400 appealed, and many of these have subse- 

 quently increased their allocations. The appeals pro- 

 cess is still ongoing even though the ITQ system has 

 been fully implemented for more than three years. 



If the SGH was equal to or less than the TAG, per- 

 mit holders were allocated their catch histories as ITQ 

 in perpetuity. TAGs in excess of the SGHs were offered 

 for sale. When the SGH exceeded the TAG, there was 



