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Fisheries management policy in South Africa : an evaluation of alternative management strategies for… Hutton, Trevor Patrick 2000

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FISHERIES MANAGEMENT POLICY IN SOUTH AFRICA: AN EVALUATION OF ALTERNATIVE MANAGEMENT STRATEGIES FOR THE HAKE AND LINEFISH FISHERIES by Trevor Patrick Hutton M.Phil., The University of Cambridge, 1992 M.Sc, The University of Cape Town, 1993 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY i n THE FACULTY OF GRADUATE STUDIES Department of Zoology We accept t h i s thesis as conforming to the required standard UNIVERSITY OF BRITISH COLUMBIA July 2000 Trevor Patrick Hutton, 2 0.00 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. The University of British Columbia Vancouver, Canada Department DE-6 (2/88) ABSTRACT Recent political changes in South Africa provide an opportunity to explore alternative fisheries management policies. An analysis of common-pool resource management arrangements indicates that the rules governing participation and the allocation of costs and benefits need to be well defined. A multi-disciplinary policy analysis has to consider institutions because they form the basis of rules and rights. M y analysis is developed from the integration of two approaches: (1) a framework analysis based on neo-institutional economics (NIE), which qualitatively predicts whether there are incentives for cooperative strategies, and (2) bio-economic game theoretic methodology that is used to quantify the incentives. The integration of these approaches relies on them being congruent in their predictions, and, as a test, my analysis is applied to two case studies. For the linefishery, the NIE framework predicts that cooperative management is problematic (as controversy exists over the size limits of fish such as geelbek), despite the interest of fishing communities in becoming involved in management. A bio-economic analysis for this species reveals that a difference of R1.2 million could be obtained under non-cooperative strategies versus cooperative strategies over the next five years. For the west coast deep-sea hake fishery, the NIE analysis reveals a history of user participation in management by the trawl sector, a partnership that is struggling to remain legitimate while the government is re-distributing quota to new entrants from a longline sector. The bio-economic game theoretic analysis suggests that a difference of R368 million may accrue to longliners over the next thirty years i f they engage in non-cooperative strategies versus cooperative strategies. A cooperative strategy by the trawl sector results in an additional benefit to both sectors of R605 million, assuming security of tenure that is not assured under the re-structuring. The government will find it hard to replicate the successful agreements of the past with all stakeholders, as it is now economically beneficial for them to behave non-cooperatively. The results indicate that management policies could fail unless policies are 'incentive adjusting'; positive outcomes will prevail when the rules governing participation and the allocation of benefits for shared stocks are well defined and constrained. i i Table of Contents Abstract ii List of Tables vii List of Figures ix List of Acronyms xi Acknowledgements xii CHAPTER I. Introduction 1 1.1 User-participation in management: community and/or user group 4 1.2 Policy evaluation and multi-disciplinary methodology 5 1.3 Thesis structure 8 CHAPTER II. Co-management and its application to South African Fisheries 10 2.1 Introduction 10 2.2 Managing natural resources: Fisheries 11 2.3 Defining co-management 13 2.4 International experiences 15 2.5 A preliminary analysis of co-management arrangements 18 2.6 Fisheries management policy in South Africa 21 2.7 User participation in management: Challenges and opportunities 28 2.7a. Local initiatives and research in South Africa 29 2.7b. Constraints to user involvement in the management of marine resources in South Africa 30 2.7c. Opportunities for shared management arrangements 31 2.8 Summary 31 CHAPTER III. A multidisciplinary analysis and assessment of alternative management strategies 33 3.1 The Neo-Institutional Economic Research Framework 35 3.2. Bio-economic modeling 37 3.2a. Biological models: Age-structured models 37 3.2b. The bio-economic model: calculating the NPV 39 3.3 Integrating the bio-economic assessment with the neo-institutional economic analysis 42 CHAPTER IV. The linefishery and the management of geelbek 48 4.1 Cooperative versus non-cooperative management of shared linefish stocks 51 4.1.a. Target species and the status of the stocks 52 4.1.b. Linefishing sectors and regulations 53 4.2 National Management Associations 56 4.3 Arniston fishing community 56 4.4 Bio-technical and physical characteristics 58 4.5 Characteristics of the market 62 4.6 Socio-economic characteristics 64 4.7 Local knowledge, compliance, monitoring and enforcement 65 4.8 Local decision-making arrangements 66 4.9 Issues raised by the Fishers' Forum 67 4.10. Incentives to cooperate and patterns of interaction 68 4.10a. Fishers and Government 68 4.10b. Fishers, Stakeholders and Government 69 4.11 Outcomes: efficiency, equity and sustainability 70 4.12 The results of the application of the neo-institutional economic analysis... 71 4.13 Modelling the geelbek stock: a bio-economic analysis 72 4.14. Methods 72 4.14a. Fishery Models: Virtual Population Analysis 73 4.14b. Yield Simulation 75 4.14c. Selectivity-at-age 76 4.14d. Bio-economic analysis and predicting game theoretic outcomes 76 4.14e. Calculating the PV of Revenue 78 4.15 Results 80 4.15a. Biological model results 81 4.15b. Bio-economic simulations 84 4.16 Discussion 86 CHAPTER V. The West Coast Deep-Sea Hake Fishery 90 5.1 Cooperative versus non-cooperative management of the West Coast Deep-Sea Hake Fishery 90 5.2 The hake fishing sectors and management 93 5.3 The West Coast Deep-sea (Offshore) Fishery: Bio-technical and physical characteristics 95 5.4 Characteristics of the market 100 5.5 Socio-economic characteristics 100 5.6 Knowledge of the fishery, compliance, monitoring and enforcement 101 5.7 Decision-making arrangements and fisheries management policy in South Africa 105 5.8 National Management Associations and Committees 105 5.8a South African Deep-Sea Trawling Industry Association (SADSTIA).. 105 5.8b The South African Deep-Sea Resource Management Committee 106 5.8c Association of Small Hake Quota Industries (ASHQI) 107 5.9 The Restructuring of the Hake Fishery 108 5.10 Incentives to cooperate and patterns of interaction I l l 5.10a. The fishing industry and the Government (the DEA&T) I l l 5.10b. Fishers, Stakeholders and the Government 113 5.11 Outcomes: efficiency, equity and sustainability 114 5.12 The co-management of the hake fishery: The results of the application of the neo-institutional economic analysis. 116 5.13 Modelling the hake stock: a bio-economic analysis 117 5.14 Methods 120 5.14a. Age-structured model 120 5.14b. Data Utilized , 121 5.14c. Estimation of parameters 122 5.14d. The regression approach 127 5.14e. Bio-economic analysis and predicting game theoretic outcomes 128 5.14f. Calculating the NPV 129 5.16 Results 131 5.16a. Biological model results 131 5.16b. Bio-economic simulations of the West Coast Hake Stock 132 5.17 Discussion 137 CHAPTER VI DISCUSSION 140 6.1 Common pool resources and rights-based fisheries management: Evaluating the results of the multi-disciplinary methodology 140 6.2 The impact of current government initiatives to re-structure the fishing industry 147 6.3 The cost of co-managing South African marine resources 151 6.4 Back to the beginning: rights, rules and responsibility 157 REFERENCES 160 VI LIST OF TABLES 2.1 A list of examples from the literature where a co-management arrangement was reviewed 17 2.2 Attributes employed in the preliminary analysis of co-management arrangements 20 2.3 Results from preliminary analysis of co-management arrangements 21 2.4 A list of the interests groups or industrial bodies which are recognised in terms of the Sea Fisheries Act (1988) 25 3.1 The reliability of the overall methodology (which is based on the integration of the two methods) depends on it being able to make the same predictions 47 4.1 The catches and economic value of South Africa's commercial fisheries in 1994 :.. 52 4.2 The 10 most important South African linefish species 53 4.3 The current linefish regulations for each sector 55 4.4 A summary of recommendations/resolutions emanating from S A M L M A 57 4.5 South African commercial linefish catches, tonnes nominal mass, for 1994 59 4.6 Prices paid for the most common linefish species 63 4.7 Stakeholders in the linefishery by sector or group represented 69 4.8 Maturity-at-age vector for geelbek used in the age-structured model 75 4.9 Fishing mortality for different Biological Reference Points (BRP) and estimated current status of the geelbek stock off South Africa 84 4.10 Results from the model for six alternative scenarios in terms of changes to the output variables 85 4.11 Relationship between discount rate and the additional rent due to non-cooperative management 86 5.1 Demersal landings (t) by various fishing sectors. Also shown in the wholesale value 95 V l l 5.2 Total investment for 1997 in each division of the trawl hake sector 97 5.3 Number of quota holders in the major fisheries sectors and the percentage of quota held by the top 2-5 quota holders in each fishery in 1996 99 5.4 Number of people employed in 1991 and the economic value (1994) of the major South African fisheries 103 5.5 Total remuneration and benefits in the hake trawled sector and the number of people receiving these benefits in 1997 103 5.6 The relationship between 'rights to fish a resource' and 'user-participation in management' during two critical time periods in the history of South African fisheries management policy 112 5.7 Differences between the established industry and new entrants for certain key factors 114 5.8 Estimates for M S Y , B M S Y and B(1996)/K and K. The values of the estimated parameters a, (3 and q are also shown 132 5.9 Relationship between discount rate and the additional rent for a 30 year period under a scenario of cooperative management by both sectors 135 6.1 Summary of two case studies according to the criteria identified in Chapter 2 142 6.2 The results from the two case studies indicating the reliability of the overall methodology to make the same predictions 147 V l l l LIST OF FIGURES 2.1 Spectrum of co-management arrangements '. 14 2.2. Structures emanating from the new Living Marine Resources Act, 1998 27 3.1 Conceptual model from Oakerson (1992), which forms the basis of the qualitative neo-institutional economic analysis 37 3.2 The theoretical outcomes of a two player model as described by Clark (1990). This approach allows for the integration of the neo-institutional economic analysis and bio-economic modelling 46 4.1 The location of Arniston on the southeast Cape coast of South Africa 48 4.2 The distribution of geelbek (Atractoscion aequidens) along the eastern seaboard of South Africa 49 4.3 The fork length-frequency distributions of Atractoscion aequidens 50 4.4 The predictions from the qualitative neo-institutional economic analysis for the management of geelbek (the linefishery) 71 4.5 Mean observed length-at-age and the fitted von Bertalanffy growth curve for Atractoscion aequidens 73 4.6 The estimates of instantaneous fishing mortality (F (year-1)) for each age from the ad hoc tuned VP A analysis 74 4.7 Beverton-Holt stock-recruitment relationship fitted to the V P A 75 4.8 The different selectively curves used for the alternative size limits for geelbek 76 4.9 The three alternative control methods considered in the analysis of management scenarios for the geelbek stock 79 4.10 The total reported geelbek catch along the South African coastline 80 4.11 A typical trajectory of the spawning stock biomass as a percentage of pristine spawning stock biomass 81 4.12 The probability of the spawning stock biomass as a percentage of pristine spawning stock biomass being above or below the criterion for alternative scenarios 82 4.13 Sustainable yield of geelbek stock for different size limits versus fishing mortality 83 5.1 The distribution of Merluccius capensis and M. paradoxus off South Africa 90 5.2 The total catch of hake from 1917 to 1997 in ICSEAF division 1.6 92 5.3 Hake CPUE from 1955 to 1997 in ICSEAF division 1.6 93 5.4 Breakdown of size of the South African deep-sea trawler fleet 96 5.5 Breakdown of age (years) of the South African deep-sea trawler fleet 96 5.6 The number of quota holders and percentage held by the top two major companies 100 5.7 The hake T A C and the number of applicants applying for access to the resource 109 5.8 Inverse relationship between 'number of new entrants' and 'allocation to each entrant (t)' 110 5.9 The predictions from the qualitative neo-institutional economic analysis for the management of west coast deep-sea hake fishery 117 5.10 The hake CPUE from 1955 to 1996 in ICSEAF division 1.6 119 5.11 Selectivity versus age relationship for the trawl gear 124 5.12 The fitted age-structured model predicted catch-per-unit effort to the CPUE data 131 5.13 Relationships between trawl effort and longline effort in terms of total benefits 133 5.14 Relationship between total benefit and the proportion of the quota allocated to the longline sector based on the linear cost assumption 134 5.15 Relationship between total benefit and the proportion of the quota allocated to the longline sector based on the exponential cost assumption 134 5.16 Benefits to the trawl sector and longline sector under different scenarios of non-cooperative strategies and cooperative strategies 136 6.1 The relationships between number of participants, transaction costs, the existence or non-existence of property rights and the discount rate 150 6.2 The new structure for the Chief Directorate M C M as proposed on the 31 May 1999 154 x LIST OF ACRONYMS A A C B O A Agulhas " A " licensed Commercial Boast Owners Association A N C African National Congress C A F Consultative Advisory Forum CD:SF Chief Directorate: Sea Fisheries CPA Cape Provincial Administration D E A & T Department of Environmental Affairs and Tourism FPDC Fisheries Policy Development Committee FTC Fisheries Transformation Council I C L A R M International Center for Living Aquatic Resources Management IFM Institute of Fisheries Management IMTT The Inshore Management Task Team K B C L F A Kalk Bay Commercial Line Fishermen's Association K C F A Kowie Commercial Fishermen's Association M B R I Marine Biology Research Institute M C M Marine and Coastal Management N A C U Natal Anglers and Casters Union NARS National Aquatic Research Systems N D S A U Natal Deep Sea Angling Union N M L S National Marine Linefish System NSC North Sea Centre ORI Oceanographic Research Institute S A A R S A South African Rock and Surf Angling Association S A A U South African Anglers Union S A D S A A South African Deep-Sea Angling Association SADSTIA South African Deep-Sea Trawling Industry Association S A L M I A South African Linefish Management Industrial Association S A M L M A - South African Marine Linefish Management Association SANCOR South African Network for Coastal and Oceanic Research S A U U South African Underwater Union SBDC Small Business Development Corporation S B N L V V "St. Helena Baai Net and Lyne Vissers Vereniging" SECTFA South East Coast Inshore Fishing Association SFAC Sea Fisheries Advisory Committee SFRI Sea Fisheries Research Institute T A C Total Allowable Catch TRMTT Technical Relief Measures Task Team UCT University of Cape Town UPE University of Port Elizabeth W P D S A A Western Province Deep Sea Angling Association xi Acknowledgements I wish to acknowledge the support from my supervisor, Prof. Tony Pitcher. I am grateful for his patience and supervision and most importantly his encouragement. I am indebted to all my committee members for their time, support, input and valuable comments during meetings: Dr. Bob Brown, Prof. Daniel Pauly, and Richard Paisley, as well as Dr. Rashid Sumaila. Part of the research for this thesis was funded by the South African Foundation for Research Development. I wish to thank Dr. De Wet Schutte, Dr. P. Wickens, Mr Andrew Penney and for helpful comments during the process. I also wish to thank Dr. Raakjaer Nielsen (EFM) and Dave Preikshot (Fisheries Centre, UBC) for providing valuable comments for the first part of Chapter 4. Figure 4.3 is a reproduction of Fig. 5 in the Journal of Fish Biology 47, 968.1 wish to thank the Fisheries Society of the British Isles and Academic Press for permission to do this. The Fisheries Centre (University of British Columbia), the Foundation for Research Development, SANCOR and the Marine Biology Research Institute (UCT) provided financial as well as logistical support. I would like to thank Chris Wilke and the Linefish Section of the South African Chief Directorate of Marine and Coastal Management for providing geelbek catch and length-frequency summaries. The Institute for Fisheries Management and Coastal Community Development (IFM) and the International Centre for Living Aquatic Resources Management (ICLARM) are acknowledged for providing financial support for research conducted for Chapter 5. We wish to thank Maria Hauck, Dr. Kevern Cochrane and Dr. Barry Clark for providing comments on Chapter 2. The following organisations: the Fisheries Centre (University of British Columbia) and the Marine Biology Research Institute (UCT) need to be acknowledged for financial as well as logistical support. Rob Leslie, from the Sea Fisheries Research Institute is acknowledged for providing information and valuable advice on the Cape hake resource. I also want to thank Rob Tilney for providing data. The following people have provided tremendous support during my research: Prof. A .C . Brown, Prof. J.G. Field, Prof. A . Leiman, Prof. R. Hassan, G. -M. Lange, M . H . Griffiths, Roy Bross, Andrian Melzer, Dorothee Schreiber, Ben Wessels, Ann Tautz and Leanne Parfett. To Denise and John Chapter I INTRODUCTION This thesis examines alternative policies for the management of South African fisheries that try to reconcile ecological sustainability with equity and economic benefits. Two case studies are analysed in detail. The evaluation of alternative forms of fisheries management policy (such as those presented in Christy 1973, Crutchfield 1982, and more recently Rettig 1995), is not only pertinent to the policy development process in South Africa, but also important considering the crisis in the management of world fish stocks. In addition, any analysis can add to the growing wealth of information on the reasons for these problems (see e.g. Botsford et al. 1997, Charles 1992, Clark 1973, Ludwig et al. 1993, McGoodwin 1990, Pauly 1994, Sissenwine and Rosenberg 1993, Smith 1990, and Symes 1996). The central theme in this thesis revolves around considering the incentives the users of fisheries resources operate under based on the institutional arrangements (specifically the rights and rules of access); (Ostrom 1995). The outcome of their actions determines whether the resource is managed sustainably, whether there is equity in the distribution of benefits, and whether the harvest thereof is economically efficient (Oakerson 1992). Coase (1970) was one of the first to state that fisheries management policy formation or recommendations are useless without an analysis of the underlying institutions. It is becoming more widely accepted that the analysis of institutions (see Eggertsson 1990, North 1990) should form the basis of studies that attempt to understand the key issues in the management of natural resources (Bromley 1991, Ffanna 1994, 1996, in press, Ostrom 1990, 1994). Based on this premiss, Schlager (1990) conducted a detailed institutional analysis on coastal fisheries and their governance and found that when groups of fishers1 possess more complete sets of property rights, they achieve greater success in managing fish stocks. It is with this in mind that I consider fisheries management policy in South Africa. South Africa's coastline is approximately 3000 km long and the nation has an Exclusive Economic Zone (EEZ) of 1 million km . South Africa is a medium-sized fishing country. Its 'Fisher' is used rather than 'fishermen' in this thesis. However, when a certain group refers to itself as, for example 'The Fishermen's Forum', then a member may be referred to as one of the 'fishermen'. 1 status as the 22" leading fishing nation in the world results from the between half a million and one million tonnes offish that were landed annually from 1975 to 1991 (SFRI 1993). The fishing industry is complex in terms of gear types, processing, marketing, capital investment, equipment and infrastructure. The catch contributes to the wealth of the country, by generating foreign exchange and providing employment to sections of the population. In the Western Cape the fishing industry employs more than 25000 people. In 1994, the harvest for the entire fishing industry had an estimated wholesale value of nearly US$ 400 million (Stuttaford 1995). The status of South Africa's fish stocks is variable. Certain stocks such as abalone Haliotis midae, are known to be threatened by overexploitation and illegal harvesting (Griffiths and Branch 1997). Other species, such as the west coast rock lobster Jasus lalandii, are moderately overexploited leading rock lobster researchers (Cockcroft and Payne 1999) to call for conservative management strategies under a precautionary approach as put forward by the F A O (1996). Certain inshore linefish stocks (various species from groups such as the Sparidae, Sciaenidae and Serranidae) are also heavily overexploited. There appears to be little scope to convince users to invest in re-building strategies as they find it profitable to overexploit slow growing species. The previous dispensation in South Africa was based on a system of institutionalised racism where an undemocratic government relied on central control to administer Apartheid policy (Hatchard and Slinn 1995, Giliomee 1995). Recent political changes in South Africa provide the opportunity to explore alternative forms of fisheries management policy, including individual transferable quotas, co-management and community-based management systems. In 1980s and 1990s a growing number of studies explored the concept of co-management in fisheries (Jentoft 1989, Pinkerton 1989a, Berkes et al. 1991, Kuperan and Abdullah 1994, Dubbink and van Vliet 1996, Sen and Raakjasr Nielsen 1996, Pomeroy and Berkes 1997), and these studies and others initiated debates, which influenced policy decisions in South Africa. The first all-party multi-racial elections took place in April 1994 and since then the onus has been on the new government to address the inequalities of the past. Furthermore, South Africa has a rapidly increasing population and a consequent growing need for housing, health care, 2 education and food. It is within this context that I consider future fisheries management policy in South Africa. Unfortunately, as most resources are exploited at maximum levels or overexploited, there is little opportunity for increasing access to new entrants (who were previously disadvantaged). Rather the new government is actively involved in a re-structuring program within the fishing industry (Hersoug and Holm 2000). Thus the government is faced with the problem of addressing equity as well as formulating policies, which reconcile economic and social needs with ecological sustainability (Badenhorst and Payne 1998). Within the fisheries, there is the perception that there is extensive top-down control through the use of technical measures by the central regulatory body (Informal Fishing Sector 1995). With the political emancipation of South Africa this approach is challenged by many of those who claim they have previously been denied access both to fishing opportunities and participation in the management process (Hersoug and Holm 2000). The central theme of the thesis is to explore a transition from management based on central control by the state, to shared management, or what has become termed co-management. Is it realistic to assume all users wish to share in management? What are the opportunities and constraints to greater user participation in management? What are the effects of the current government initiatives to re-distribute access rights in South Africa on the extensive industry-government management partnerships? Thus, in addition to the central theme of considering user participation in management (that is, co-management), the thesis explores the implications of changes in the access rights regime on these alternative forms of institutional arrangements. The market regulation versus co-management dichotomy (Dubbink and van Vliet 1996) is not followed in the thesis; rather market regulation and co-management are not thought of as exclusive (see Townsend (1995). For example, rights holders within individual transferable quota systems can be involved in management partnerships with government authorities2. The present global crisis in fisheries management practices is often attributed to inappropriate institutional arrangements for policy formulation, implementation and enforcement and more Groups of fishers within fishing communities could have these rights as 'virtual' communities as presented by Munro et al. (1998). 3 importantly the lack of legitimacy of management regimes (Jentoft 1989). It is argued (Pinkerton 1988) that under co-management systems, legitimacy would be improved by transferring more responsibility to user groups and including them in the management process. Thus, co-management and derivatives thereof have been presented as beneficial alternatives to the central government control management systems, which currently exist in many countries (Pinkerton 1989a, 1994a). Negotiated formal or informal agreements between participants (user-groups and organizations) and state regulatory institutions could contribute to meeting the objective of democratising the management of South Africa's marine resources. 1.1 User-participation in management: community and/or user group Hutton et al. (1996) identified fisheries development policy documents that reflected a willingness on the part of government to be inclusive, and at the time reported on the growing interest within fishing communities to partake in management. Anthropologists argue (Olson 1996) that through self-identification as coastal fishers, a sense of community and group belonging is constructed and imagined through which resource management rules are evaluated. As such their collective attitude towards regulations provide fishing communities with an identity. The collective attitude toward the state or management authority is often negative (see Davis and Kasdan 1984, Davis 1991), but just because all are opposed to the regulations does not mean that they will collaborate as a homogenous group when provided with the responsibility to manage a resource (Hasler in press). In terms of the distribution of benefits, all communal property systems are characterized by arrangements for the allocation of the resource among co-owners/stakeholders (Bromley 1991, McKean 1992). Yet traditional communal systems are also characterized by communities where there is general homogeneity (sharing culture, knowledge of the resource), facilitated by the rule that a person must live in the community to use the resource (Scott 1993) . The later characteristics of these traditional communal systems are therefore conducive to mutually agreed upon rules by all the members of the group, which provide a means of conflict There is a vast literature on the characteristics of traditional fisheries management systems (see for example Carrier 1987, Dahl 1987, Doulman 1983, Johannes 1978, Ruddle 1988, Ruddle 1989, and Ruddle et al. 1992) 4 resolution (Ostrom 1990). In the context of South Africa it cannot be assumed that fishing communities are able necessarily to distribute the benefits from a newly acquired resource without conflict. Therefore in this thesis user-participation refers to the participation of user groups (e.g. gear associations), or fisher representative groups within fishing communities, not necessarily fishing communities per se. In this regard, studies on user-participation have tended to distinguish somewhat between studies on user-group (such as fisher organizations) and government interactions (see e.g. Castilla and Rivera 1991, Couper and Smith 1997, Jentoft 1989, McCay 1996, Raakjasr Nielsen 1994, and Raakjasr Nielsen and Vedsmand 1997) and studies on fishing communities and government institutional arrangements (see e.g. Black-Michard and Johnson 1986, Christensen et al. 1995, Christie et al. 1994, Pinkerton and Weinstein 1995, and Pomeroy 1991, 1995, Pomeroy and Carlos 1997). 1.2 Policy Evaluation and multi-disciplinary methodology The Fisheries Policy Development Committee (FPDC) was set up by the Minister of Environmental Affairs and Tourism in April 1995. This resulted in a thorough re-examination of the existing system with a view to the development of an equitable approach consistent with the aims of the government's Reconstruction and Development Programme (RDP); (African National Congress, 1994). Key objectives in this programme include, for example, increasing employment, sustainable utilization, increasing user participation in management, earning foreign exchange, economic efficiency and equity in the distribution of benefits. The major limiting factor in terms of the contribution of fisheries to the objectives of the RDP is the production potential of the living marine resources upon which South Africa's fisheries depend (Cochrane 1995). Almost all of these resources are currently fully exploited and, in some cases, overexploited (Cochrane and Payne 1998). There is, therefore, no capacity simply to allow all of those who wish to participate in a fishery to do so (Badenhorst and Payne 1998). The final outcome of the policy development process has been the new Living Marine Resources Act (No 18, 1998) which introduces policy initiatives to re-structure the fishing industry. There still is considerable resentment of the system, user participation in management is still considered by many to be limited, and only a few new entrants to the fisheries have been accommodated (Hersoug and Holm 2000). 5 Within the context of considering alternative management policies for the development of marine policy under the new government, one of the principle objectives of the policy development process was to evaluate the possibilities and constraints for co-management of marine resources in South Africa. Government centered regulation has failed in halting overfishing and has contributed to increased antagonism and conflict among stakeholders (Townsend 1995). In South Africa this is exacerbated, as there is a history of civil disobedience. Therefore, proponents of participatory democracy have advocated a philosophy, which promotes inclusion of users in management of resources, shifting governance away from the state to local communities most affected by resource utilization. Generally when a suggestion is made to include users in management through institutional arrangements such as co-management, the trend is to include representatives of fisher organizations as active participants in fisheries decision-making bodies. In South Africa elements of user participation are present in the form of advisory channels of communication, as well as joint industry-government structures where industry is consulted on a regular basis. The most critical issue, which plagues the success of this process, is what Jentoft (1989) referred to as 'distributional effects'. The central debates have not been about how to manage the resource, and what structures or institutions are needed - but who has a quota or a licence, There is an urgent need to resolve the issue of allocation through negotiation and conflict resolution. A widely accepted system of access is essential to improving the management of the resource and the fisheries. A change in management philosophy which promotes user participation in future fisheries management has been presented as an alternative to past fisheries management policy in South Africa (Hutton et al. 1997). This shift is essential in order to fulfil the basic principles and objectives of the RDP. The implementation of regulations will fail i f they are not perceived as legitimate by the majority of the users. It is possible that co-management could increase the legitimacy of these regulations through the process of promoting cooperation and shared management responsibility (Hauck 1999). Policy evaluations are rare, especially in terms of the concepts and considerations for the implementation of successful fisheries management systems. De Vivero et al. (1997) 6 undertook a review of the alternative management strategies available for fisheries in Spain and considered the policy options of co-management and decentralization. For policy evaluation, the central tenet has to be the study of institutions as exemplified by the study undertaken by Rebert (1993) on the North Pacific longline fisheries. Typically, little attention is paid within formal analyses to the broader socio-economic and political factors, mentioned above, that are critical to the decision-making process (exceptions to this include, for example Barrett and Davis 1984, and Matthews 1993). Only a multi-disciplinary analysis, which is able to truly contextualize all these variables can be used for a policy analysis. Within the context of policy development where multiple objectives need to be met, some studies have considered the multi-objective nature of the decision-making process (Ault and Fox 1989, Bishop et al. 1991, Enriquez and Sylvia 1992, Healey 1984, Walker 1983). This approach was not considered here, rather an attempt was made to predict the outcomes of alternative management strategies irrespective of the objectives of the various interests. One such approach is to use the predictions from a neo-institutional economic analysis (in this case Oakerson's (1992) model), which can be supplemented with game theoretic methodology (such as that applied in Kaitala and Munro 1993). In this thesis, the evaluation of alternative management systems through the use of multi-disciplinary methodology is principally developed from the integration of two approaches. Any multi-disciplinary approach is typically problematic, as most analyses are rooted in disparate disciplines (Robinson 1996). The methodology has been borrowed from neo-institutional economic analysis of common-pool resources (as mentioned Oakerson's (1992) model), which is used to predict cooperative and non-cooperative strategies by participants based on the biological, socio-economic and political attributes. The second part of the method is borrowed from Clark (1983, and others, see for example, Sumaila 1997) and consists of the prediction of game theoretic outcomes, quantified using bio-economic models of the resource. 7 1.3. Thesis Structure In the introduction of the thesis I summarize experiences with alternative management systems in various countries and identify essential factors for the successful implementation of co-management arrangements. Secondly, a key aspect of the thesis is the development of a multi-disciplinary methodology for the evaluation of co-operative verses non-cooperative management, and the use of case studies as illustrative examples. The first case study focuses on the multi-species linefishery in South Africa, which dates back to the 1600's. Schutte's (1993) social survey indicated that the current size restrictions and bag limits of geelbek Atractoscion aequidens, are still major issues in the linefish communities such as Arniston, which compete for access of the resource with other regions. Therefore, Arniston and geelbek are the focus of the linefish case study. In the other case study, the West coast deep-sea hake fishery, two gear sectors, trawling and longlining are included in the analysis. Chapter 2 introduces the fundamental concepts important in the management of fisheries as common property resources and presents a review of international experiences with co-management taking into account its relevance to South Africa fisheries. In addition, a preliminary analysis of the institutional arrangements of these management systems is presented. A modified version of Chapter 2 was published in South African Journal of Marine Science in 1998. As first author, I was responsible for undertaking the literature review, the preliminary analysis of co-management arrangements and writing the paper. The review of fisheries management policy in South Africa was compiled by myself, as I spent a considerable amount of time in South Africa attending meetings of the Fisheries Policy Development Committee and the Portfolio Committee on Environmental Affairs and Tourism in Parliament. The methodology chapter (Chapter 3) has not been published in a peer reviewed journal; however, the basic concepts were included in a poster which was presented at the ICES Confronting Uncertainty Conference in Cape Town in November 1998. The neo-institutional economic methodology presented in Chapter 4 is based on a framework analysis presented in the Institute for Fisheries Management and Community Development (IFM) and International Center for Living Aquatic Resources management (ICLARM)(IFM and I C L A R M 1999). Chapter 4 reviews the first case study, that is the linefishery (specifically 8 geelbek), and apart from collecting data on fish prices, income and ethnic background of fishers, I undertook all the research (the collection of secondary sources of information as well as compiled the data from the semi-structured interviews). The later information was obtained from Steve Lamberth. The first half of Chapter 4 was published in the research report Fisheries Co-management in Africa by Normann et al. (1997). The first half of Chapter 5 (the hake fishery case study), employs the same methodology and I was responsible for the research and writing of the paper (to be published by the IFM and ICLARM). Permission was granted from the IFM to use the results of the study supervised by Dr. Raakjasr Nielsen (IFM). I completed the geelbek population model (an age-structured model in Excel with Visual Basic with Applications) presented in the second half of Chapter 4, and analysed the raw length-frequency data (1985-1997), I obtained from the SFRI (National Marine Linefish System). Further, after obtaining relationships for the selectivity patterns in different fishing regions from the later, I compiled the results and wrote a paper, which has been submitted to Fisheries Research. Similarly, the dynamics of the population of the west coast hake stock was simulated with an age-structured model in Excel with Visual Basic with Applications. However, for the final analysis a Fortran version was used as the Excel version was computationally slow. The original age-structured model in Fortran was developed with Dr. Mike Bergh in 1990 However, the version used for the thesis has been extensively modified by myself to include data for the last decade, an additional sector (longliners), more recent input data (CPUE modified by G L M ) , and algorithms to compute economic variables based on additional input parameters such as price and cost per kg landed as well as the discount rate. The results presented in both case studies (as well as both methods) represents the situation in South Africa as of January 2000. The geelbek case study was followed by the west coast deep-sea hake fishery case study. The input data for each case study does not necessarily cover the same time period as it depended on data availability. The thesis concludes with a general discussion, which considers not only the conclusions from both of the case studies, but also the applicability of the multi-disciplinary methodology presented in the thesis to the evaluation of alternative management policies. In addition, suggestions for policy initiatives and future research, which takes into account the results, are discussed. 9 Chapter II Co-management and its application to South African fisheries 2.1 INTRODUCTION Fisheries have become characterised by declining total yields, decreases in catch per unit effort, conflicts between sectors and reduced bio-diversity (Parfit 1995, Safina 1995). A classic example is found in the bio-economic collapse of the North cod fishery in Atlantic Canada (Walters and Maguire 1996). For all the stocks world-wide for which data are available, 70% are fully-utilised or over-fished and require urgent attention to halt further declines (Garcia and Newton 1997). These problems have led to calls for privatisation or stricter regulation by government authorities, as these are assumed to be the only solutions providing workable arrangements for resource use and allocation (Berkes 1986). This paper explores co-management as an alternative to stricter government regulations and centralised management, as government-imposed regulations are generally not respected and breaking the law in some fishing industries is common practice (Beddington et al. 1997). The argument is that two main factors influence non-compliance in fishers behaviour. Firstly, amongst harvesters there is a lack of understanding of the exact consequences of their actions (on the resource and on other users); secondly, there is a strong incentive to catch fish before someone else does. That is, the rights and rules (i.e. institutions) governing the total catch of each harvester are inadequate to ensure long term sustainability. Thus the present global crisis in fisheries can be attributed to inappropriate institutional arrangements and a lack of legitimacy of management regimes (Jentoft 1989). The legitimacy of the regulations and enforcement could be improved by transferring more responsibility to user groups by including them in the decision-making process (Pinkerton 1989a). This assumption has spurred a growing interest in co-management, which involves agreements between participants in the fishery and government regulatory agencies. The growing interest in South Africa to increase user participation in management is consistent with this trend (Hutton et al. 1997, Cochrane and Payne 1998). This interest was reflected at the 1996 South African Marine Science Symposium in papers presented by Attwood (1996) and Cochrane et al. (1996) as The Chapter is modified from Hutton, T. and T.J. Pitcher 1998. Current Directions in Fisheries Management Policy: A Perspective on co-management and its application to South African Fisheries. S. Afr. J. mar. Sci. 19: 471-486. 10 well as papers presenting recent research where the concept has been applied to local resource management situations (see Beaumont and Wynberg 1996, Harris et al. 1996, Sowman et al. 1996). The aim of this paper is to explore the concept of co-management, to review the experiences in other jurisdictions and to present a preliminary analysis of co-management arrangements. The relevance of the concept to fisheries management in South Africa is discussed along with the challenges and constraints policy makers face when considering user participation in marine resource management. 2.2. MANAGING NATURAL RESOURCES: FISHERIES Marine fish stocks belong in a category of resources sometimes referred to as 'common-pool resources'4 (see Ostrom 1990, Pinkerton 1993), characterised by: 1. Non-excludibility. It is costly to exclude potential users from access. 2. Subtractibility. Each user's harvest subtracts from the welfare of others. In addition, these resources are renewable and part of complex ecosystems. The fundamental issue is what institutional arrangements are required for the sustainable utilization and management of common-pool resources which have the above characteristics. These arrangements must consider the effects of environmental variability and uncertainty. This would require changes to the current management systems as many of the institutional arrangements for managing fisheries are inappropriate as alluded to in the introduction (see Jentoft 1989). Traditionally, one of the first measures established by government agencies to regulate fisheries were technical measures, such as mesh sizes to achieve biological sustainability and to halt over-fishing. Economic analyses of fisheries based on some of the early work of Gordon (1954) and Scott (1955) led to recommendations for government regulatory authorities to restrict access in order to reduce further economic losses in fisheries . In fact, limited access restrictions in the form of licenses and permits (i.e. rights to fish), have increasingly been applied by governments of coastal nations to try to regulate fisheries (see Mollett et al. 1986). The growing interest in rights-based fishery management systems reached a peak with the introduction of individual transferable quotas (ITQs) in nations such as New Zealand (Crothers 1988, Dewees 1989, Annala 1996), Iceland (Arnason 1993, 1996), and Australia (Campbell 1984). ITQs entrust participants 4 Ostrom (1990) and Pinkerton (1993) refer to shared resources such as fisheries as "common pool resources" in an attempt to avoid the confusion of terminology between the resource and the regime ("common property"). This thesis follows their distinction. 11 with rights to fish a portion of a given stock where the rights are valued and distributed by the market. Many of the rights-based policies which are implemented to achieve economic objectives ignore the social aspects of fisheries management such as the effects on fishing communities. Whereas numerous studies have suggested that the social aspects of fisheries and fishers behaviour should be considered in the design of management systems (Wilen 1979, Healey 1983, Pringle 1985), the neglect of these social aspects has occurred despite recent acquisition of information on the social structure of fishing, fish production, industry and markets (see for example, McGoodwin 1990). Furthermore, fundamental to the understanding of resource management is the fact that people form institutions (rules and rights) around the shared resources they exploit. Thus, central to the arguments for and against rights-based management of common-pool resources and the required institutions, is the concept of 'common property'. . Neo-classical economists such as Gordon (1954) and Hardin (1968) have defined 'common property' as a case where access to the resource is both free and open, and that in order to achieve sustainability, government regulation or privatisation are required. This view is not shared by all, especially those who make different assumptions with regard to human collective behaviour. The neo-institutional economic analysts such as Ostrom (1990) and Bromley (1991), elaborating on the earlier work of researchers such as Acheson (1975), equate common property with alternative forms of collective management of common-pool resources. Essentially, they argue that common property is property held by a defined group who exclude others, and access to the resource is not free and open (Ciriacy-Wanthrup and Bishops 1975, as cited in Berkes 1986). In addition, Bromley (1991) states these situations represent well-defined sets of institutional arrangements concerning who may make use of the resource and also the rules governing the behaviour of the users. Some small-scale near-shore fisheries are more amenable to restricted-access management by local collectives than those targeting migratory stocks or offshore stocks distributed over large areas (ARTC 1996). In these latter circumstances management is outside the control of the local fishers. However, since local fishes exploit these resources, they need to be included in 12 institutional arrangements for the management of these resources (Berkes 1986). Thus when stocks are distributed over wide areas there is no reason why government bodies acting as princial agents cannot bring competing interests together and include them in co-operative management arrangements. 2.3 DEFINING CO-MANAGEMENT The essence of co-management is that the government and the user groups share responsibility for managing the resource. The user(s) group could be in the form of a single community fishing a local resource or an industry organization fishing a stock with a common gear. Alternatively, in the case of shared resources which are widely dispersed, the government could enter into multiple agreements with all the diverse user groups (be they fishing communities or fishers organizations) under the umbrella of multi-party co-management arrangements. The process is facilitated if the user groups are organised and have democratically elected representatives. In terms of defining the concept, co-management in some cases has meant the establishment and implementation of joint decision-making, while in others it has simply meant the creation of advisory boards with no specific decision making authority (Paisley et al. 1994). In fact, very few attempts have been made to systematically evaluate co-management experiences (Berkes et al. 1991). Pinkerton (1993, page 1) defines co-management where: "The basic principle driving these regimes is the involvement of fisher's organizations and fishing communities in management decision-making through power sharing: sharing both between government and locally-based institutions, and among differently-situated fishers". Considering the spectrum of involvement available to user groups (Figure 2.1) some authors define co-management as situations where management is truly shared ('co-operative' in Fig. 2.1). Whereas other researchers define the term more widely to include the practices where the government either consults extensively with user groups or at the other side of the spectrum takes an advisory role (again see Fig. 2.1). This paper uses the broader definition, but accepts that the term co-management should imply that the user groups have some degree of power in the form of a definite influence on the decisions made. 13 ,, Iristructive= •V.'.i,' ; . 0 > ^ . aialoeucji^^^ ' , ; > 1 . , ' i ConMiltative= consults > \ User-group or community self-management i ,, i i ft , • i! i t! | l iV >' .(", ' ' ( t ' i f f 1 ! i 1 ^ s , , '!•< , ' - <M!'t '.^ 2^ ojperative= Joint decision-•!<» i» . v ' f • 'if' I t ' , ' ' 1 «, Government ',!>,)<,),, :>,(*,.• .• ,» •^centralized •• i !.••.»',' <: : < management •:!;!!• !.;, • i'!i!!>;: • •:{!;! •• , ; 111 H I V I LI j t . j ; . i: • > y^W^ory-«endorsement s ' : : ; : ! ' : ! t ! ! ;v i ! ! , ! : ! ! Inforniative= .delegation^ Figure 2:1 Spectrum of co-management arrangements (adapted from Sen and Raakjaer Nielsen (1996) and used to classify examples presented in Table 2.1). Hersoug & Ranes (1996) argue that co-management is often defined too narrowly in terms of its concentration on resource management only, and that any arrangements should deal with the whole scope of basic issues in fisheries management. This includes sales regulations, subsidies, credit and the development of infrastructure. Based on this logic, Hersoug & Ranes (1996) present five dimensions of complexity: 1. The mode of influence (e.g. instructive, consultative, co-operative, etc.?, as presented in Fig. 2.1.)) 2. Scope of issues that shared management covers (e.g. infrastructure, enforcement?) 3. Timing: at what stage of the process are agreements fostered? (e.g. planning, implementation, feedback stages?) 4. Level of interaction (national, regional or local?) 5. The character of representation (with processors, gear groups, sectors or fishing communities?) The character of representation with regard to the definition of community is often one of the most contentious and highly politicized issues that has to be solved if agreements are to be fostered with such groups. Fishing communities are internally differentiated, not homogenous discrete units as is often assumed (Merle Sowman, pers. comm.), which lead to differences in interest in terms of representation. In addition to these issues, co-management is not only about new institutions, but fundamentally about the new relationships which result from implementing such arrangements (Pinkerton 1989a). As a result, the success of co-management is predicated 14 upon social learning and it is naive to think of co-management as a quick fix solution. The process can be time consuming process and there can be extra costs associated with attempting to obtain full representation (Jentoft 1989). Aside from these negative aspects Jentoft and Mikalsen (1994: 228) state that the merits of co-management are that greater participation by user groups in decision making enriches the regulatory process by proving a broader base of information. Inclusion of the users in the decision-making process increases the legitimacy of the regulations. Increased legitimacy results in enhanced adherence to rules and regulations which contributes to a more efficient management system (Jentoft and Mikalsen 1994). 2.4 International experiences Countries' experiences with the concept of co-management vary widely. Some countries such as Australia have included co-management formally within their legislation (e.g. the State of Victoria5). Others such as Canada, Norway, and the U S A apply the concept but do not explicitly state so. Table 2.1 lists a number of documented examples of co-management. The examples in Table 2.1 are ranked according to the type of arrangement depicted schematically in Figure 2.1. Also included in Table 2.1 is an indication of the scale of the geopolitical institution. Examples of co-management experiences are diverse but represent co-operative approaches (Jentoft and McCay (1995). Although the examples are specific few countries represented in Table 2.1 employ just one model consistently for all fisheries, sectors and regions (as is reflected in the replication of countries). Rather, the nations surveyed have a mixture of institutions with a varying degree of user involvement and responsibility (as in Jentoft and McCay 1995), depending on the scale of the fishery. This is the case in Norway which has practiced co-management in the fisheries sector for many years (Jentoft 1989, McCay and Acheson 1987, McGoodwin 1990, Pinkerton 1989a, Hersoug & Ranes 1996). Regulatory councils on both regional and national levels place user groups in positions within the fisheries management decision-making process. A diverse mixture of institutions is also found in the USA where user participation in fisheries management is practiced within the regional Fisheries Management Councils. Beyond the 3 Fisheries Act No. 92, 1995, Part 6: "Co-management", page 74-83. 15 mandated participation by representatives of state and federal agencies, the councils include commercial and recreational fishermen, consumers, processors or members of the public (Jentoft 1989). User participation occurs at other levels in the USA, such as in the management of the Great Lakes fisheries and the co-operative management between Indian Treaty Tribes, the states and federal government agencies in the Pacific Northwest6. This variety of institutional arrangements can be explained by the fact that fisheries management systems seldom result from an intended design. Instead, they evolve gradually, through processes of "muddling through' and often as ad hoc responses to crises (Lindlblom, as cited in Jentoft and McCay 1995). This occurred in Pacific Canada when the Supreme Court affirmed the rights of First Nations to a priority allocation of fish in 1990. In this context, the Federal government adopted a seven-year Aboriginal Fishing Strategy (AFS) in June 1992 (McDaniels et al. 1994). Components of the strategy included negotiated agreements between the Government of Canada and Aboriginal groups on co-operative management projects (McDaniels et al. 1994). Eighty agreements under this strategy were negotiated in 1992/93. Jentoft and McCay (1995) state that the specific models in each country reflect the broader institutional patterns and practices that prevail. Their argument is, that fisheries management institutions do not originate in an institutional vacuum and must generally relate to their external political environment. This factor is evident in Canada where the fisheries management system has had to conform to a more participatory form of governance. In recent years the Canadian government has attempted to increase user participation in the fisheries management policy process. User groups were originally consulted about their concerns, but decisions were made by the fisheries minister. Whereas more recently in Atlantic Canada, co-management arrangements have been implemented such that industry is involved in making decisions about allocation, monitoring and enforcement (Jentoft and McCay 1995). 6 "Comprehensive Tribal Fisheries Management", Northwest Indian Fisheries Commission. WA, USA. 16 Table 2.1 A list of examples from the literature where a co-management arrangement was reviewed (ranked according to the classification used in Sen and Raakjaer Nielsen (1996), see Figure 2.1). Area Type o f Fishery (or resource) Co-management Arrangement Scale Reference 1. Bangladesh inland water A . instructive national Sen and Raakjaer Nie lsen (1996) 2. Z a m b i a , Lake K a r i b a lake fishery A . instructive nat./reg. Sen and Raakjaer Nie lsen (1996) 3. M a l a w i , Lake C h i u t a seine A . instr. /consult . local Donda (1997) 4. Iceland trawl B . consultat ive regional Hannesson (1988) 5. N e w Zealand various B . consultat ive regional Hannesson (1988) 6. Canada various B . consultat ive regional Hannesson (1988) 7. M a l a w i , Lake M a l o m b e lake fishery B . consultat ive local Sen and Raakjaer Nie l sen (1996) 8. Ph i l ip ines , San M i g u e l B . mult ispecies B . consultat ive regional Sen and Raakjaer Nie lsen (1996) 9. M o z a m b i q u e seine B . consultat ive local Lopes et al. (1997) 10. Washing ton , U S A salmon B . consultat ive local H i l b o r n & Luedke (1987) 11. South Aus t ra l i a (Aus . ) abalone B . consultat ive local Barker & Watk inson (1994) 12. U S A various C . co-operat ive regional Jentoft & M c C a y (1995) 13. Ph i l ipp ines trawl C . co-operative local Pomcroy and P ido (1995) 14. N o r w a y trawl C . co-operat ive regional Maurs tad (1996) 15. Denmark trawl C . co-operative regional Raakjaer Nie l sen & V e d s m a n d (1996) 16. St. L u c i a sea urchin C . co-operative local Smi th and Berkes (1991) 17. Canada , James B a y arctic res. C . co-operative regional Berkes (1989) 18. N o r w a y various C . co-operative national H e r s o u g & Ranes (1996 ) 19. N o r w a y various C . co-operative regional Jentoft & M c C a y (1995) 20. U S A ground fish C . co-operative regional Sen and Raakjaer Nie lsen (1996) 21 . F i j i mult ispecies C . co-operative local Sen and Raakjaer Nie lsen (1996) 22. Uni ted K i n g d o m various C . co-operative regional Jentoft & M c C a y (1995) 2 3 . N o r w a y various C . co-operative regional Eythorsson (1995 ) 24. St. L u c i a , Soufriere beach-seine C . co-operative local B r o w n (1996) 25. Be l i ze lobster C . co-operative national B r o w n (1996) 26. Canada salmon C . co-operative local Pinkerton (1989b) 27. Z a m b i a lake C . co-operative regional Kafumbe (1997) 28. U S A , A l a s k a salmon C . co-operative regional A m e n d (1989) 29. Canada , James B a y A r c t i c res. C . co-operative regional Berkes (1989) 30. Canada , B . C . Skcena R. salmon C . co-operative regional Pinker ton and Weins te in (1995) 31 . Japan various C . co-operative reg./local Pinker ton and Weins te in (1995) 32. Canada , B C (Area C ) c l a m C . co-operative regional Pinker ton and Weins te in (1995) 33. Canada , Kennedy Lake salmon C . co-operative local Pinker ton and Weins te in (1995) 34. A l a s k a , U S A salmon C . co-operative local Pinker ton (1993) 35. Canada , B C sa lmon C . co-operative reg./local M c D a n i e l s et al. (1994) 36. Canada , B a r k l e y Sound sa lmon C . co-operative local Pinker ton (1989b) 37. U S A , N e w Jersey c lams C . co-operative local M c C a y (1989) 38. Canada various C . co-operative reg./local Jentoft & M c C a y (1995) 39. C h i l e benthic D . advisory local M i n n & C a s t i l l a (1995) 40 . Denmark , Kattegat sole D . advisory regional Sen and Raakjaer Nie l sen (1996) 4 1 . Canada , Y u k o n arctic res. D . advisory regional Pais ley et al. (1994) 42 . U S A , K u s k o k w i m Rive r salmon D . advisory local P inker ton and Weins te in (1995) 43 . On tong , Java reef fish E . informative local D o u l m a n (1993) 44. Ph i l ipp ines , San Sa l . Is. reef fish E . informative local Chr i s t i e et al. (1994) 45 . Netherlands flatfish E . informative regional D u b b i n k and van V l i e t (1996) 46. Denmark herr ing E . informative int./nat. Sen and Raakjaer Nie lsen (1996) 47. Faroe Islands wet-fish E . informative national Sen and Raakjaer Nie lsen (1996) 48. Canada arctic res. E . informative reg./local N o t z k e (1995) Involving interest groups or stakeholders in the decision-making process is not simply a question of representation, but also one of scale of involvement and level of participation of user groups. Jentoft and McCay (1995) state that co-management implies delegation of authority rather than decentralisation and certain tasks lend themselves to the latter. For example in the U K , Producer Organizations (POs) are also actively involved in fisheries management. They are allocated 17 sectoral quotas to distribute and administer among their members (Jentoft 1989). Proponents of decentralisation argue that if a federal system of user group organizations is in place, the role of government in fisheries management could be reduced. However i f it is not the case, then the government would have to make up for the structures not in place (Jentoft 1989). In many cases, before user groups were effectively involved they had to be organized not only at the local level, but also at the regional and national level. This was the experiences in the Philippines with community-based coastal resource management where community organization was a large component of the effort to establish co-management arrangements with local government authorities (Pomeroy and Carlos 1997). Non-governmental organizations (NGOs) have played a key role in the implementation of management initiatives, particularly in many co-management projects in Africa. User groups are often poorly organised, or else their organizations are not capable of exercising management responsibilities (Jentoft 1989). Therefore, Jentoft suggests that the process of involving user groups in fisheries management should start with organizational development rather than delegation or decentralisation. Community-based development is on the agenda of international NGOs and there a growing number of cases of co-management arrangements which have significantly involved third parties NGO's in collaboration with the responsible government departments and community organizations. This has been the case in management of Lake Nokoue, Benin (Atti-mama 1997), the fisheries in Luapula Province in Zambia (Kafumbe 1997), Lake Kariba fisheries in Zambia and Zimbabwe (Hachongela et al. 1997), and the beach seine fisheries in Mozambique (Lopes et al. 1997). The main characteristic of these cases is the large investment in the capacity-building which was required to initiate the process. International NGOs traditionally cover the high costs associated with the establishment of such arrangements in countries economic conditions would otherwise inhibit such practices. In the following paragraphs a diagnostic approach is presented where the objective is to consider key factors for the creation of successful co-management arrangements. 2.5 A PRELIMINARY ANALYSIS OF CO-MANAGEMENT ARRANGEMENTS A set of attributes for co-operative management systems are postulated as being key factors for the successful establishment of these arrangements. Examples which are recognised as either been successful or unsuccessful are evaluated in terms of which postulated attributes were present 18 or absent. This is a methodological exploration, which could potentially be expanded. The definition of successful is problematic as the establishment of arrangements is a process. Pinkerton (1989a, 1994) has thus considered it more important to define success in terms of process, although it should be defined in terms of evidence for sustainability in a fishery. The postulated attributes (Table 2.2) are compiled from the work of Pinkerton (1993) and Ostrom (1990). Ostrom's (1990) 'design principles' for the establishment of successful collective management arrangements is also presented in Table 2.2 for comparison, and because these principles were incorporated into the attributes. Adaptations have been made to Pinkerton's (1993) key factors since they are relevant to Government-First Nation Salmon management agreements in British Columbia, Canada. The first three attributes appear to be critical for the establishment of successful co-management arrangements (see Table's 2.2 and 2.3). The reason that these three are deemed critical is because they frame the patterns of interaction between the users of a common-pool resource and the responsible government authorities, with regard to rights and rules, thus forming the foundation of the institutional arrangements. In the preliminary analysis (see Table 2.3) this is evident, as the examples which are considered unsuccessful have institutional arrangements which lack one of the first three attributes listed in Table 2.2. Therefore, the three critical factors for the establishment of successful management arrangements are: defining clear boundaries for the resource, defining the criteria for participation in the fishery and management, establishing rules for the allocation of costs and benefits between the participants. The other attributes (numbers 4-10 in Table 2.2), which are important but not critical, include involving representatives of participants within formal structures such as management boards which establish management plans, creating dispute resolution mechanisms, facilitating information sharing, establishing enabling legislation and negotiated enforcement mechanisms. These attributes are conditions that are key to successful arrangements as cumulative elements as presented in Pinkerton's analysis (1994) . That is, the more attributes (of the type 4-10 in Table 2.2) which are present the more likely the project will be successful. Most of these attributes in one way or another reflect capacity, that is, the user group capability of involvement in management. 19 Table 2.2 Attributes employed in the preliminary analysis of co-management arrangements (Ostrom's (1990) list of 'design principles' for 'common-pool resources' is included, as well as the acronyms present in Table 2.3). Attributes used in this study Ostrom's (1990), 'desien principles' 1. Resource boundaries defined (BD) 1. User group and resource have defined boundaries. 2. Membership and participation defined (CM) . 3. Rules for allocation of costs and benefits (RA). 2. Use rules are appropriate for local conditions. 4. All-party management board/committee (MB). 3. Users have rights to organise independently. 5. Management plans and reciprocal obligations (MP). 4. Users participate in rule modification. 6. Enabling legislation defining control (EL). 7. Mutually agreed upon enforcement mechanism (ES). 5. Users monitor compliance. 6. Users participate in sanctioning. 8. Process for dispute resolution (DR) 7. Access to low cost conflict resolution mechanisms. 9. Information sharing between participants (IS). 10. Federal structure in complex cases (FS). 8. In complex cases the system is organised in a federal structure of nested layers. In the example from the Skeena River (British Columbia, Canada, Table 2.3), one of the key attributes which was not established was the lack of clearly defined rules for membership (attribute CM). Anybody can buy a license to fish recreationally and I could therefore postulate that until a limited license scheme is in place with members accepting the rules, sector conflict will continue. This generalization is applicable to any multi-sector fishery with a recreational sector, although it is difficult to imagine how the public will accept a limited entry system for recreational fisheries. 20 Table 2.3 Results from preliminary analysis of co-management arrangements. Examples were evaluated in terms of the absence or presence of the postulated attributes (see Table 2.2)(Numbers correspond to the examples in Table 2.1). The final column indicates a subjective success rating based on the comments of the referenced authors, where 0 indicates unsucessful arrangements and 4 indicates successful arrangements. Example B D C M R A M B M P E L E S P R IS FS Rat ing and Reference 1. Skeena R ive r , Canada (#30) Y e s N o • Yes Y e s Yes Y e s Y e s Yes Y e s Y e s 0, Pinkerton and Weins te in (1995) 2. Coas ta l communi ty co-ops, Japan (#31) Y e s Y e s Yes Y e s Yes Y e s Y e s Y e s Y e s Yes 4, Pinkerton and Weins te in (1995) 3. Regional Assoc ia t ions , A l a s k a (#28) Y e s Y e s Y e s Y e s Y e s No" / Y e s N o , Yes N o t , 3 , A m e n d (1989) 4. San M i g u e l B a y , Ph i l ipp ines (#8) Y e s N o . Yes Y e s Yes Y e s Y e s Yes Y e s Yes I . Pomeroy and P ido (1995) 5. Lake K a r i b a , Z a m b i a (#2) Y e s Y e s N o ' Yes ' N o Y e s N o N o N o N o 1, Sen & Raakjaer Nie l sen (1996) 6. Lake M a l o m b e , M a l a w i (#7) Y e s Y e s Y e s Y e s Y e s Y e s Y e s Yes Yes , N o 4, Sen & Raakjaer Nie lsen (1996) 7. Cus tomary F i s h i n g Rights , Fi j i (#21) Yes Y e s N o " N o ; N o ' , Y e s ? Y e s N o N o . 1, Sen & Raakjaer Nie lsen (1996) 8. Paci f ic Fisheries, U S A (#20) Y e s Y e s Y e s Y e s Yes Y e s Y e s Yes Yes Yes 3 , Jentoft and M c C a y (1995) 9. Kattegat, Denmark (#40) Y e s Y e s Yes Y e s Yes Y e s Y e s Y e s Yes Y e s 4, Sen & Raakjaer Nie l sen (1996) 10. Dutch Flatfish Fishery (#45) Yes Y e s Yes Y e s Y e s Y e s Y e s 9 ? Y e s 4, Sen & Raakjaer Nie l sen (1996) 1 1. Beach-seine, M o z a m b i q u e (#9) Yes Y e s Y e s Y e s Y e s Y e s Y e s N o ' - Y e s N o 1 3 , Sen & Raakjaer Nie l sen (1996) 12. St. L u c i a , Soufriere (#24) Yes Y e s Y e s Y e s Y e s Y e s Y e s Yes Y e s Y e s 4, B r o w n (1996) 13. Ol i fants R ive r harder fishery, R S A Y e s Y e s Yes Y e s Y e s N o Y e s Y e s Yes Y e s see text, Sovvman et al. 1996 14. Intertidal mussels, K - N a t a l , R S A Y e s Y e s Yes Yes Y e s Y e s Y e s Y e s Y e s Yes see text, Harris et al. 1996 The Japanese coastal fishing community co-operatives are considered successful, and in the case of the analysis every attribute is present. However, the apparent success of these arrangements can also be related to a collectivist culture, and thus this analysis should be evaluated in terms of its general predictive capabilities. This must be taken in consideration when suggesting rules for the establishment of co-management arrangements in South Africa. Even i f a attempts are made to establish co-management arrangements where all the attributes are present, the project may not necessarily result in success. A cultural specific situation, such as the history of inequity in resource allocation could derail the process. However, as a preliminary analysis it does present critical factors for the successful establishment of co-operative management systems 2.6 FISHERIES MANAGEMENT POLICY IN SOUTH AFRICA In the last decade South Africa has gone though major political changes with the introduction of multi-party participatory democracy (Giliomee 1995). The first all-party elections took place in April 1994 and many policies of the new government are aimed at addressing the inequalities of the past (Hutchard and Slinn 1995). Key objectives of the government with regard to fisheries 21 include decreasing unemployment, promoting sustainable use, earning foreign exchange, increasing economic efficiency, increasing equity in the distribution of benefits, and increasing user participation in management (Cochrane and Payne in press, Hutton et al. 1997). Hutton and Lamberth (1997) review the possibilities and constraints of including users at the community level in management of the line-fishery at Arniston on the South Coast (see Chapter 4). Following the first democratic elections in April 1994 it was deemed appropriate for a new fisheries policy to be developed to mirror these changes. A Fisheries Policy Development Committee (FPDC) was set up by the Minister of Environmental Affairs and Tourism in April 1995. The committee consists of representatives from industry, the commercial fishing sector, the regional fishing fora, the provincial governments, labour, the environmental lobby and the recreational sector. Regional fishing forums, which aim to represent fisheries interest groups at 'grassroots' level, are based on the Fishing Forum originally set up in the Western Cape. Hersoug (1996) presents a review of the policy development process and makes reference to including users in the management of marine resources. South Africa has an array of fisheries including commercial, recreational and subsistence sectors, with over 25 000 people employed in the formal commercial sector. Commercial catches are dominated by demersal and pelagic fisheries sectors. These accounted for 88-95% of the reported catch for the period 1975-1991 (SFRI 1993). For a review of the major fisheries in South Africa see Payne and Crawford (1989), and for reviews of the fisheries management process see Bergh and Barkai (1993), ARRITG (1995), Cochrane (1995), and Cochrane and Payne (in press). Since 1948, a series of Sea Fisheries Acts have limited entry by imposing controls and restrictions on fishing including licensing, permit requirements, and quota allocations. The central government has played the major role in assuming responsibility for management of marine resources. At the height of Apartheid (circa 1980s), the Diemont Commission (Diemont et al. 1986) recommended that control of fishing industry should be a central government responsibility. The Sea Fisheries Act of 1988 (No 12) was introduced in 1989. The Act granted extensive discretionary powers to the Minister, who was then responsible for appointing a Sea Fisheries Advisory Committee (SFAC) and a Quota Board. The SFAC had nine members appointed by the minister not as representative of organizations, but in personal capacities based on expertise to contribute towards the functions of the committee. The Minister could recognise an industrial group or interest body in a branch of the fishing industry and these groups had the power to furnish information and 22 advice to the advisory committee or the Minister. Table 2.4 lists the interest groups and industrial bodies that were recognized under the Act. This recognition resulted in organizations such as the South African Deep-sea Trawling Industry Association playing an active role in the management of the deep-sea hake fishery and organizations such as the South East Coast Inshore Fishing Association"(SECIFA) playing an active role in the management of the inshore trawl fishery in partnership with the government. The Quota Board became operative in October 1990 and heralded a new era in the allocation of access rights in sea fisheries (Stander 1995). The Board exerted control over access rights in the hake, sole, pilchard (including bait), anchovy, West coast rock lobster, South coast rock lobster, abalone, and horse mackerel (midwater trawl) sectors making many decisions (from 1990 to 1994) which were highly controversial. Following the first democratic elections in April 1994, a Fisheries Policy Development Committee (FPDC) was set up by the Minister of Environmental Affairs and Tourism in April 1995. The policy development process has been extensively reviewed by Hersoug (1996), Martin and Raakjaer Nielsen (1997) and Cochrane and Payne (1998). The Fisheries Policy development process came to an end in June 1996 and the FPDC submitted a draft fisheries policy to the Minister of Environmental Affairs and Tourism. An independent representative panel was tasked to investigate options for access rights and their suggestions were included and incorporated into the draft fisheries policy. The resultant document was published as a White Paper in June 1997 and was used to produce the Marine Living Resources Bi l l which became the new Act after its passage through Parliament. The White Paper included clauses which stressed the governments willingness to facilitate consultation between government and industry associations, but only if they are self-generative and self-supported. The Portfolio Committee on Environmental Affairs and Tourism was responsible for modifying the Living Marine Resources B i l l 7 and getting it passed by Parliament. The new Living Marine Resources Act came into operation in September 1998. The basic premise of this act stems from the National Constitution; that is, correcting imbalances of the past government will be undertaken within the bounds of sustainable utilization. In Chapter 2 of the Constitution it states that sustainable utilization shall be the overall objective, while promoting justifiable social and economic development. The overall aim of the principles in the Constitution is to address the M a r i n e L i v i n g Resources B i l l ( A s introduced) 1997. Republ ic o f South A f r i c a . Min i s t e r o f Env i ronmenta l Affa i r s and T o u r i s m . B 94-97. 23 imbalances of the past. As far as governance is concerned Chapter 4.5 (of the Constitution) states that there are resources which are concurrently managed by both national and provincial legislation; however, the management of living marine resources is clearly national. The Act itself begins with a list of Principles by which Ministerial discretion is constrained. One principle which is clearly different from those appearing in previous acts is Principle J: "The Minister and any organ of state shall in exercising any power under this Act, have regard to the following objectives and principles:...(j) the need to restructure the fishing industry to address historical imbalances and to achieve equity within all branches of the fishing industry" (Marine Living Resources Act, No 18, page 14). Two new institutions were created under the Act, the Consultative Advisory Forum (CAF), which has the function of advising the Minister on issues relating to TACs, and the Fisheries Transformation Council (FTC), which has the function of over-seeing the leasing of quotas to 'previously disadvantaged'8 fishers (see Figure 7). The FTC in effect is responsible for allocation to small and medium sized new entrants and fishers that belong to the previously disadvantaged group, whereas the Minister allocates rights to larger interests and the established industry. There are now three steps to the process of acquiring rights to a quota: 1) The establishment of a right (Section 18). This right is established by the Minister and is similar to the 'Right of Exploitation' in the previous Act (Sea Fisheries Act of 1988). It is not clear from the clauses as to who will acquire the right and what the procedure will be and the assumption is that this will become clear when the policy is implemented. 2) The establishment of a TAC (Section 14(1)). A fundamental difference from the previous Act and of great concern to some is the fact that no mention is made of the establishment of the T A C within scientific bounds. Mention is also made of a 'Allowable Commercial Catch' which is assumed to be a subset of the T A C . When setting the T A C , the Minister acts on the advice of the CAF, which is similar to the previous act where he/she acted on advice of the The disadvantaged sector refers to the sector comprising the people who were, on the basis of their racial classification, disqualified by law from enjoyment of a full franchise prior to 1994; i.e. persons classified as African, Coloured or Asian. 24 SFAC. The most critical difference with the new Act however, is the fact that if there is an increase in the TAC, the Minister decides solely who the beneficiaries shall be. 3) The setting and allocation of quotas. Quotas are allocated as portions of the T A C by the Minister to applicants. It is not clear whether the term portions refers to a proportion and thus a particular quota is allocated as a percentage of the T A C or whether it refers to the basic recognition that all quotas are portions of the overall T A C but are allocated as set amounts. The implications of either one of the above interpretations are fundamental in terms of the resultant consequences on the industry and the dynamics of quota allocations and changes in the TAC. As before, the Minister may recognise any industrial group or interest body in a branch of the fishing industry and these groups will have the power to furnish information and advice to the CAF. The Regulations9 based on the Act came into affect on the 1st of November 1998. Table 2.4. A list of the interests groups or industrial bodies which are recognised in terms of the Sea Fisheries Act (1988), as of 23rd October 1992 (Source: Government Gazette No. 4967). Interest Group or Industrial Body Principle Fishery Interests Groups South African Marine Linefish Management Association linefish False Bay Trek Fishermen's Association treknet fishing Maricultuie Association of Southern Africa maricultuie Industrial Bodies South African Deepsea Trawling Industry Association hake demersal trawl fishery Abalone Sea Management Committee abalone South African Seaweed Concessionaires Association seaweed South East Coast Inshore Fishing Association South coast inshore trawl South African Frozen Rock Lobster Packers (Pty) Ltd. West coast rock lobster South African Squid Management Industrial Association squid In the past, structures such as Sea Management Committees have also been created to exchange information and have facilitated consultation. However, not all decisions were made purely by government agencies and on many occasions the established industry had an input greater than 'Regulations of the Marine Living Resources Act, No 18 of 1998. Government Gazette No 19205 of 2nd September 1998. Republic of South Africa, Government Printer, Pretoria. 25 mere consultation. The major fisheries sectors have found the management liaison committees to be ideal interfaces for policy, commerce, and science (Bross, 1986). As key principles are extracted from these experiences, there is a possibility that these local associations will adapt to suit the new policy environment. In summary, co-management is not a new concept in South Africa and was practiced by the minority rule government. However, these processes and structures are not necessarily accepted as legitimate by those disadvantaged in the past. Along with the input provided by the sector associations which was alluded to above, there have already been a diverse range of other cases of active participation by users in both management and research. Examples of this include the tag and release programs under the Oceanographic Research Institute (van der Elst and Bullen 1993), the False Bay beach-seine fishery (Lamberth 1994), stock identification of the yellowtail resource (Penney et al. in prep.), and the contribution of to the National Marine Linefish System (NMLS) provided by fishers (Penney 1993)). Including other types of user groups such as fishing communities directly in resource management was never attempted at a large scale. Defining such groups is often problematic. This became evident in the early 1990's, when the government experimented with the Fishermen's Community Trust System. Although communities were not given the opportunity to catch their own fish, they were responsible for managing, the distribution of the benefits after been allocated a share of the TAC. A function reflective of the tasks they would perform if delegated responsibility for management of marine resources. They would have to be responsible for the distribution of the benefits of these resources. The problem of identifying beneficiaries in the communities led to conflict, and the Supreme Court decided in 1995 to terminate the system. This case highlights the problems that can occur when attempts are made to involve users at the scale of communities in management responsibility. 26 MINISTER OF E N V I R O N M E N T AFFAIRS Ultimate policy - maker Sets total allowable catches (TAC's) MINISTER allocates quota based on advice from C D : M C M Part to Industry etc. and part to the FTC DEPT OF E N V I R O N M E N T AFFAIRS CFIIEF DIRECTORATE : Marine & Coastal Management Responsible for fisheries research (MCM), administration, enforcement and control and providing advice to the Minister THE CONSULTATIVE ADVISORY F O R U M (CAF) Makes resource management recommendations (TAC) to the Minister THE FISHERIES TRANSFORMATION COUNCIL (FTC) Allocates quotas to previously disadvantaged fishers and small and medium size enterprises M A N A G E M E N T ADVISORS (MAs) Advise CD: M C M what advice to give to Minister with regard to allocations. MAs are not formally mentioned in the L M R Act. M A R I N E A N D C O A S T A L M A N A G E M E N T ( M C M , ex-SFRI) Two Directorates focus on research Provides resource data and advice F I S H I N G I N D U S T R Y A S S 0 C I A T I 0 N " | R E S O U R C E W O R K I N G G R O U P S | X Directorate Support Services Administers fisheries. Issues Permits based on quota allocated N O N - G O V E R N M E N T A L SCIENTISTS C O N S E R V A T I O N GROUPS, PUBLIC, OTHER INTERESTED PARTIES Figure 2.2. Structures emanating from the new Living Marine Resources Act, 1998 for the management the marine resources of South Africa. 27 2.7 USER PARTICIPATION IN MANAGEMENT: CHALLENGES AND OPPORTUNITIES In 1995 a national fisheries management policy development process was initiated, with extensive consultation and stakeholder participation in the formulation of a draft fisheries policy in an open and transparent manner. The Fisheries Policy Development Committee (FPDC) was set up by the Minister of Environmental Affairs and Tourism in April of that year, with a mandate to have participation at all levels. The committee consisted of representatives from industry, the coastal provinces (regional forums), the provincial governments, labour, the environmental sector, the recreational sector and the 'informal sector'. Regional fishing forums represented fisheries interest groups at a 'grassroots' level. Within the draft fisheries policy document were specific clauses implying that management authority could, under certain circumstances, be delegated to lower levels. In addition, the clause that deals with user participation addresses guidelines for participation at all levels. Secondly, there is a clause which deals with user participation in management plans. Thirdly, in the section that discusses levels of management and institutional structures, reference is made to the delegation of management responsibility. Lastly, the potential role of the fishing forums and how they can have access to decision-making is dealt with in a section on structures and institutions. This was the situation in June 1995. In May 1997 the White Paper (A Marine Fisheries Policy for South Africa) was released. Efficient consultation is presented as an option (because of concerns with legitimacy) but clauses are included which stipulate the need to minimize costs and bureaucracy in terms of user group participation in management. This is one of the reasons the White Paper re-affirms the government's will to control fisheries at a national level. Co-management is recognised as a potential option for special attention but only in the case of non-mobile marine resources which are near-shore and do not overlap boundaries. The practicality of multi-party co-management arrangements for shared resources appears to be outside of the realm of government policy in the White Paper, probably as result of the need to meet the objective of minimizing bureaucracy which was not highlighted in the draft fisheries policy document. 28 2.7a. Local initiatives and research in South Africa Although, several authors and studies have made reference to the relevance of the concept of co-management in South Africa (ARTC 1996, Hutton et al. 1997, Cochrane and Payne in press), very attempts have been made to apply the concept to management of fisheries and coastal resources (see Beaumont and Wynberg 1996, Harris et al. 1996, Sowman et al. 1996). Some preliminary results have been obtained from cases studies such as the Olifants River harder fishery (Western Cape) and the experiences in the Mapelane Nature Reserve (Kwazulu-Natal). Sowman et al. (1996) in a review of co-management in the Olifants River harder fishery, noted that the project has strengthened relations between the responsible government agencies and the fishing community and thus facilitated both conservation and development. Elsewhere in the Western Cape, there have also been other initiatives such as a proposal for an abalone re-seeding project in Hawston which would involve all stakeholders (Hauck and Sweijd 1996). One of the most progressive projects has been undertaken in Kwazulu-Natal to address the illegal unsustainable subsistence use of intertidal mussels (Harris et al. 1996). A Joint Mussel Management Committee was established with representatives from the community, the Natal Parks Board (NPB) reserve staff and researchers (NPB and University of Cape Town). The need for training to enable all players to participate fully in the process was deemed as essential for the long term success of the project (Harris et al. 1996). Harris et al. (1996) found that, meaningful participation by the community in management and decision making requires that they have the information, skills and confidence to voice their needs and challenge proposals. Within this project, training is taking the form of workshops on committee structure and functioning, literacy training and basic environmental education (Harris et al. 1996). Thus, development of local organizations is critical to the process as identified in the international experiences. The above two case studies are included in Table 2.3, as part of the preliminary analysis, both possessing the essential attributes (first three). I could therefore predict that these arrangements will be successful, although such a conclusion does not capture the complexity of each situation and it is too early to tell. 29 2.7b Constraints to user involvement in the management of marine resources in South Africa On a national level the implementation of new government policy has been plagued by problems, including the ignorance of process and of underlying policy objectives, the uncertainty concerning controls, a lack of co-ordination in terms of implementation, and problems with administration in terms of maintaining control. Some important lessons have been learned with regard to user and public participation. Firstly, communities are rarely homogenous and the word is often used as a political term to designate a following for political action, and an audience for political rhetoric (Thornton and Mamphele 1988). There is no guarantee that a 'community' actually exists. There may in fact be no willingness to cooperate and no coherent social organization. Scott (1993) considers this heterogeneity to prevent people from co-operating, especially when they disagree over fishing rights. Any strategies that are aimed at inclusion must be sensitive to the historical, political, social and economic factors which continue to influence, target communities (F. Khan pers. comm., Environmental Evaluation Unit, UCT). Given the disparities in access to decision-making structures, there is a need to provide disadvantaged users/stakeholders with intervention strategies to empower them, which is particularly necessary in South Africa. Within certain sectors of the population, there is also a general perception of unfair distribution of fishery access rights, a mistrust of authority and a lack of faith in government control,. If co-management agreements are going to involve joint-decision-making they will have to deal with both the exploitation of the resource and its distribution. It is therefore critical that the allocation of resources (i.e. access rights), a political issue and not a technical one, be dealt with as soon as possible. However, there are economic and social legacies such as poverty and illiteracy, which constrain community involvement in decision-making. Also there has been considerable uncertainty as to the role of previous structures and an unwillingness on part of government agencies to devolve power, citing skepticism that other levels of governance can accept responsibility and be accountable for management of local resources. Establishing local organizations with legitimate representation is a thus key stumbling block to facilitating local-level management arrangements. 30 2.7c Opportunities for shared management arrangements The impetus for user involvement exists in that the country has a new constitutional dispensation based on participatory democracy. This supports Jentoft and McCay's (1995) argument that the fisheries management system will come to reflect the overall political framework and ideology in a country. One of the key questions is whether participation will end up being more apparent than real as in Atlantic Canada (Felt 1990). However, government policies aim to be transparent and inclusive in encouraging public participation. There is a true national will to make participatory democracy work and numerous examples exist of negotiated settlements, using the ideals of consensus, compromise, and debate. Thus, the socio-political environment exists to embrace concepts such as co-management within South Africa fisheries management policy. 2.8 SUMMARY 1. Co-management can generally be defined as shared decision-making between a government agencies and user group representative structures. 2. International experiences reflect the diversity of political systems and possess mixtures of institutions with a varying degree of user involvement. In fisheries which are of regional, regulatory councils for example allow user group representative consultative positions. Alternatively, arrangements are established between government agencies and communities, when the resources are locally based. The practices tend to reflect the broader institutional patterns in each country. 3. A preliminary analysis of co-management arrangements points to key attributes which need to be considered if successful systems are to be established. The definition of boundaries (resource and human), and the rules for participation and the allocation of costs and benefits, need to be well established. However, this preliminary analysis does not allow for these alternative management strategies to be evaluated. Therefore in the next Chapter methods are presented which can further qualify and quantify the opportunities and constraints for user participation and cooperative management strategies within South Africa fisheries. 4. The relevance of co-management needs to be evaluated in South Africa. It is not a new concept and there continues to be industry-government interaction, although it is recognised that these have been mostly of a consultative nature with industry representative groups. 31 Involving users at other levels (e.g. communities) in the decision-making process is often a question of representation and user groups are often poorly organised and not capable of exercising management responsibilities. 5. The process should begin with the development of locally-based organizations rather than delegation or decentralisation, however the costs can prohibit government action. This is the case in many of the African examples considered where NGOs have been extensively involved in the implementation of projects. 6. It is likely that user participation in management will be a key part of future fisheries management. Not only does the broad policy environment support it, but there are also good examples where it is currently applied. The most obvious challenge to the success of this policy is the controversial issue of access rights and the lack of capacity within user groups such as fishing communities. These issues are considered within the case studies presented in this thesis. 7. The impetus for user involvement exists in form of a new constitutional dispensation of participatory democracy. If the fisheries management system comes to reflect the overall political framework in the country then some form of user participation in management is inevitable. 32 Chapter III A multi-disciplinary analysis and assessment of alternative management strategies' Multi-disciplinary analyses are rare, especially in terms of the concepts and considerations for the implementation of successful fisheries management systems10. The central tenet has to be the study of institutions, with a focus on the socio-economic dimensions of competing resource, use (see e.g. Gmelch and Orth 1990). Fishing is an economic activity embedded within economies of scale where short-term interests dominate the operational rules of users. The management authority, embedded in a political hierarchy of interests, attempts to enforce sustainable resource exploitation practices, with regulations (Ostrom 1990). These regulations impact directly (most often negatively) on the operational rules of the users, as they aim to achieve long term objectives (Ostrom 1990). Moreover, the rules with regard to distribution of scarce resources (collective choice rules, i.e., access rights) are made within a political arena. That is, the current institutional arrangements (i.e., constitutional rules) require the same management authority to directly influence collective choice rules (Ostrom 1990). The ability of the authority to undertake the distribution of resources in a fair and equitable manner is dependent on the history of prior distribution practices and the current conditions under which the market or non-market institutions operate. Typically, little attention is paid within formal analyses to the social issues, mentioned above, although there a few studies which are more inclusive, for example, Clay and McGoodwin (1994), Davis et al. (1991), Hersoug (1996), Jentoft (1998), Jentoft and Wilson (1998), Maiolo et al. (1992), and Orbach (1980). To a great degree, large economic interests and political patronage can determine the fate of the resource in terms of sustainability and the equitable distribution of the benefits (Hasler in press). Only a multi-disciplinary analysis, "This Chapter includes material presented in Hutton, T. 1998. Management of fish stocks in South Africa: a multi-disciplinary analysis and assessment of alternative management strategies. Presented at the conference on Confronting Uncertainty in the Evaluation and Implementation of Fisheries-Management Systems, 16-19 November 1998, Cape Town, South Africa. International Council for the Exploration of the Sea. Poster. 1 0 It is not common for researchers to include many disciplines in a single study of a fishery or fisheries. Examples of studies, which are an exception to this rule include: Breton (1991), Charles (1989, 1991, 1992), Hart and Pitcher (1998), and Sylvia (1992). 33 which is able to truly contextualize all these variables can be used for a policy analysis. One such approach is to use the predictions from a neo-institutional economic analysis, which can be supplemented with game theoretic methodology. It is postulated that in fisheries the large number of users will create a costly situation in terms of facilitating cooperative management in spite of the optimal long-term benefits of such management arrangements. The prediction is that non-cooperative behaviour will prevail when political uncertainty exists. Political uncertainty over the allocation of rights exacerbates the problem of facilitating cooperative management among competing interests. The reason for this is that the short-term benefits of overexploitation can exceed the long-term benefits of stock renewal in these cases as rights holders have no certainty with regard to the future. This is not necessarily a call for the introduction of private property rights in fisheries with the associated 'windfall gains'. Rather the argument is that within any system the most important factors for successful management are the rules governing participation (i.e., rights) and the allocation of costs and benefits, as was evident from the review in Chapter 2. These rules need to be well defined and mutually agreed upon by all participants (Ostrom 1990). Numerous other studies have attempted to predict the outcomes under alternative management strategies using various approaches. Some have relied more on a 'speculative approach', for example the early work of Smith (1979). Smith's work is based on an assessment of the predicted effects of different development strategies on small-scale fishermen in terms of incomes, numbers of fishermen and also the predicted short and long term effects on the resource. Panayotou (1982) also presented a preliminary qualitative assessment of the effects of alternative management strategies on protein supply, employment, and income in small scale fisheries thus taking into account social effects and the integration of the policies. Other work, for example Pinkerton (1989), has relied more on a comparative speculative approach in which the predicted outcomes are based on other experiences with alternative management arrangements. The assumption made in this work is that similar outcomes can be predicted, for example, local employment will increase because in the examples provided 34 there were increases in local employment after the implementation of the particular alternative management strategy. One of the techniques which has been suggested by others as a useful tool for the prediction of outcomes of biological and socio-economic attributes is a bio-socio-economic modeling approach (see Panayotou 1982, Charles 1989, 1991). This would be based on an extension of quantitative stock assessment techniques, which are used to predict stock productivity under alternative harvest strategies and bio-economic approaches11. The methodology that will be used in this study will be based on a range of approaches. An attempt will be made at first to consider the more quantitative approaches (bio-economic modeling, as is the case in Charles 1989, 1991). However based on the fact that the new objectives in South Africa are based on many social factors which are difficult to quantify, approaches which rely more on a comparative qualitative speculative analysis will be used such as the neo-institutional economic research framework. 3.1 THE NEO-INSTITUTIONAL ECONOMIC R E S E A R C H F R A M E W O R K The neo-institutional economic research framework has been developed from research on common property resources and through the recognition of various systems of property rights. The research framework used in the case studies applies an institutional analysis approach (see Raakjaer Nielsen et al. 1996), a description of which is outlined in IFM/ ICLARM Working Paper No 1. The original analysis is based on the Institutional Analysis and Development framework developed by the Workshop in Political Theory and Policy Analysis (Indiana University, USA). The overall principle is that the underlying rules (institutions) can be separated from the strategy of the organizations (Raakjaer Nielsen et al. 1996). The aim is to examine how institutional arrangements affect the incentives of those exploiting the resource to cooperate and contribute to the management of the resource. The potential exists for users to participate in the formulation, implementation and enforcement of management " The methods used in bio-economic modelling of fisheries are well established - see Conrad (1995) and Bjorndal and Munro (1997) for reviews of this field of study. 35 strategies (Raakjaer Nielsen et al. 1996). This framework has been used for the World-Wide Collaboration Research Project on Fisheries Co-management (1995-1999), co-ordinated by the IFM at the NSC in Denmark and I C L A R M in the Philippines. This initiative links National Aquatic Research Systems (NARS) and other research partners from Asia and Africa with the North Sea Centre and I C L A R M (see Raakjaer Nielsen et al. 1996)12. The aim of the international project is to generate interest in gaining practical experience in research on co-management within fisheries and to examine its applicability as an equitable, efficient and sustainable strategy. In order to identify and describe the key factors which influence institutional arrangements and the organizational behaviour within the arrangements where co-management exists, a common analytical framework is applied (Raakjaer Nielsen et al. 1996). The method involves collecting information for a set of contextual variables comprised of key attributes, such as biological, physical, and technological characteristics, and market and socio-economic information. This information can be collected from secondary sources and/or primary sources using various techniques (see e.g. Pido and Chua 1992, Rhoades 1987). The contextual variable information is combined with information on the decision-making arrangements, such as the rights and rules governing the utilization and access to the resource (Raakjaer Nielsen et al. 1996). The attributes and decision-making rules determine the incentives for users to cooperate, which in turn leads to patterns of interaction among resource users (Raakjaer Nielsen et al. 1996, see Figure 3.1). The interactions between these variables and the outcomes result in a dynamic framework, which can be used as an analysis of co-management arrangements. There is feedback in that these interactions and outcomes can affect both the variables and decision-making arrangements (Figure 3.1). 1 2 Research partners in Africa and Asia include: Malawi, Mozambique, Zambia, Zimbabwe, South Africa, Bangladesh, Vietnam, Philippines, Thailand, Malaysia and Indonesia. The first part of Chapter 4 and the first part of Chapter 5 were contributions to this research. 36 Key contextual variables: biological, physical, technical, market, socio-economic Decision-making arrangements Figure 3.1 Conceptual model from Oakerson (1992), which forms the basis of the qualitative neo-institutional economic analysis. The model is descriptive as it reveals the incentives of the participants to cooperate and the resulting outcomes. More importantly, the model is prescriptive as it can be used to predict the effects of policy initiatives. Raakjaer Nielsen et al. (1996) state that the framework will provide decision-makers with insights into how the system may be altered to achieve a particular outcome in terms of equity, efficiency, and sustainability. A critical aspect of the framework is that it is understood by the reader to be an analysis in itself rather than just a descriptive account of the fishery. The aim in this thesis is to apply the framework, including an analysis of outcomes to two case studies; the linefishery (in particular the geelbek Atractoscion aequidens stock), and the Cape hake fishery in South Africa, specifically the deep-sea hake trawl fishing which targets Merluccius capensis and M. paradoxus off the coast of South Africa. When undertaking the analysis, the aim is also to evaluate the opportunities and constraints for co-management arrangements within the fisheries management process in South Africa. 3.2 BIO-ECONOMIC M O D E L L I N G 3.2a BIOLOGICAL MODELS: AGE-STRUCTURED MODELS An age-structured model is an assessment technique which can take account of the age-structured nature of fish populations, but does not necessarily require estimates of the age-composition of the catches (although the option to incorporate catch-at-age data exists). The Policy initiatives to modify incentives, interactions and outcomes Incentives to coordinate and cooperate Patterns of interactions among resource users Outcomes Outcomes have impacts on contextual variables 37 model can be formulated such that it is able to predict changes in population size and yield under different patterns of selectivity. This approach involves constructing a deterministic age-structured population model in which recruitment is deterministically related to spawner stock biomass (SSB). These simple age-structured models include numbers of individuals at each age, age-specific mass, age-specific fishing selectivity, as well as natural mortality rates and stock-recruitment parameters and yield. Generally age-structured models can be written in a variety of different ways. The choices that must be made are whether the fishing and natural mortalities are assumed to be continuous processes acting simultaneously, or separate discrete time events. The model used here is a discrete time model based on Beverton and Holt (1957, as used also by Hilborn 1990 for example). The general age-structured model can be written simply as: - (Ma + SaFy) Ny+l, a +l = N y , a e (E.l) where Ny^ a is the number of fish in a cohort at the start of year y, M a is the rate of natural mortality on the fish of age class a, S a is the selectivity of the fishery on fish aged a years (0< S a <1), Fy is the fishing mortality for fully vulnerable individuals in year y, i.e., fish with S a = 1 (the year effect for the fishing mortality). To take age effects into account fishing mortality-at-age (Fy > a) is separated into an age-component which is common to all years (age-specific selectivity - S a ) and a year-component which is common to all ages within a particular year (year effect of fishing mortality - Fy). This assumption is justifiable i f the distribution of fish and fishing vessels does not vary substantially from one year to the next (a scenario in which this 'separability' assumption would not be justified, and which might be pertinent to any fishery (Punt 1991)). The separability assumption is based on the following relationship: F y , a = F y S a (E.2) where Fy^ a is the instantaneous rate of fishing mortality on fish aged a during year y, 38 The spawning stock biomass SBBy can be calculated as: Max S S B y = X N y ; a W a (E.3) a=m where SSBy is the spawning biomass at the beginning of the year y, W a is the mass-at-age for a fish m is the age at sexual maturity and the maximum (Max) is equal to the maximum number of age classes. It is assumed further that there is a relationship between the spawning biomass SSBy in one year, and the average recruitment in the following year (Beverton and Holt 1957): Wy+1,1 = («SSBy) / (SSB y+/J) (E.4) where a, (3 are the stock-recruitment relationship parameters. Equations (E.l) - (E.4) define the dynamics of both numbers-at-age and biomass-at-age. It is possible to relate the model to observed data. However additional relationships need to be defined. It is assumed that the available indices of population abundance are proportional to stock biomass (where the abundance index is either CPUE or survey biomass). For the age-structured population model the equation for model-predicted catch (or sustainable yield i f F is held constant) is: Max C y = X W a - S a F y N y , a (1- e ' ( M& + S& F y V(Ma +S a F y ) (E.5) (7=1 3.2b THE BIO-ECONOMIC MODEL: CALCULATING THE NPV Those in decision-making positions often request that analyses are translated directly into economic values. Estimates of yield are obtained from the biological model. Prices and costs (per landed ton) can then be are applied to the estimates of yield in order to obtain profit or rent under alternative scenarios. The long term benefits (the predicted rent per year) under 39 alternative scenarios of resource exploitation can be calculated by computing the Net Present Value (NPV) of the stream of benefits over time. This value depends on the discount rate (5), which is affected by amongst other factors the inflation rate in the economy and the prime interest on money borrowed. Total discounted net present value (NPV, i.e., the long term benefits) can be calculated for a set period of time (T, i.e., T=30 years): NPV - ^ /=0 a + sy (PYt-CYt) (E.6) where: 5 = discount rate t = time P = landing price per ton for each sector Y, = total yield (tonnes) landed at time t, under a scenario C = cost per ton for gear for each sector The discount rate used in this study is 5=0.1 (10%) which is high on a global scale; however it is satisfactory for this study as the South African economy is an emerging market in the world economy. In South Africa the inflation rate on basic food items is in the region of 10% and the prime interest rate on money borrowed is in the region of 20% (the nominal rate), providing an estimate of 10% (for the real interest rate) used in this study. The sensitivity of the results to a range of discount rates (5, 10, 15, and 20%) was also computed. Obtaining the cost data and particularly the short run versus long run marginal cost data can be problematic. For example in South Africa, it is considered impossible to obtain cost relationships considering paucity of information from the demersal trawl sector since the various companies make every effort to remain competitive (Saville 1997). However the longline sector have argued extensively over the last few years that longlining is a more profitable prospect. Thus it is possible to obtain economic data from the longline sector as they are more willing to share information. However the question is, can the short-run 40 marginal cost data for the linefish sector provide some indication of the long run marginal cost data of this sector? Doll (1988) presents short run costs data as the fixed costs plus variable costs of vessels and states that potentially, short run fleet cost data can be obtained from aggregating short run vessel cost data. Doll (1988) also states that in fisheries models a special case exists as the long run fleet cost data is also required. However, in this thesis a simulation model is presented, which is forward projecting. At each time step cost and price information is required. Obviously, in the first time steps (year 1 and 2) the model requires aggregated short run marginal costs data and as the model runs into the 20th time step (for example) it requires the equivalent of aggregated long run marginal cost data. Sumaila (1995) presents a cost function for each vessel which is non-linear (it includes a term (b=0.01)), as this formulation of the cost function ensures strict concavity of individual profit as a function of individual effort. The strictness is important for the sake of convergence. Thus, Sumaila (1995) assumes there is a slight increase in marginal cost with an increase in fishing effort. The aim therefore, in this study is not only to obtain the marginal cost data, but also to ensure concavity of profit as a function of effort so that an optimum exists. Much of the literature contains fisheries bio-economic models of the analytical form, which are then solved to determine the equilibrium solutions. Various derivatives of dynamic bio-economic models have been presented (see Clark 1990, Clark and Munro 1982, 1994, Munro 1981, 1992, 1998, Munro and Scott 1985). These studies present the model as a dynamic maximisation of equation E.6 constrained by the biological model of the resource stock. The results of these studies confirm what has become known as the 'modified Golden Rule' of resource conservation as it provides a rule for determining the extent to which society should invest in a resource. The optimal biomass lies between the biomass at bionomic equilibrium (no rent generated) and the biomass at maximum economic rent. The path taken to the optimal solution is complex (see Clark et al. 1979). The policy implications of the modified Golden Rule are such that it is only rational for a participant in a fishery to invest in the future i f the benefits of the investment accrue to them. It is difficult to include age of fish in these 41 analytical models thus the approach taken here is to use a simulation model, which is forward projecting13. In addition, the bio-economic simulation model is presented in conjunction with a game theoretic analysis. This is undertaken to explore not only the effects of unassigned rights, but also the effects of alternative strategies by the competing interests. The objective of the analysis is to estimate and compare the discounted net present value (the long term benefit) such that one fishing method (e.g. trawl) versus another (e.g. longline) can be evaluated. Or the allocation of fishing effort in one jurisdiction can be compared to the allocation of this fishing effort in another region. Thus the results can be used to evaluate the merits of one gear against another in terms of maximising the net benefits to the country or one region versus another within a game theoretic analysis. Equity of distribution to each gear group or each region is taken into account in the neo-institutional economic (NIE) analysis. However, more importantly the NIE analysis is used in conjunction with the game theoretic modelling as an integrated approach for evaluating policy alternatives as both methods are not only descriptive in nature, but also prescriptive. 3.3 INTEGRATING THE BIO-ECONOMIC ASSESSMENT WITH THE NEO-INSTITUTIONAL ECONOMIC A N A L Y S I S Game theoretic modelling allows for the analysis of strategic interaction between agents (Osborne and Ruberstein 1994). As more than one agent typically has property rights to fisheries, game theoretic-modelling has been used to consider non-cooperative and cooperative outcomes between agents within alternative fisheries management systems and property rights regimes (Ostrom et al. 1997). A review of game-theoretic models of fishing has been undertaken by Sumaila (1999) who notes that only a few attempts have been made to develop empirical game theoretic model of fisheries14. u Saville (1997) considered the west and south coast hake fisheries, but could not include both the trawl and the longline sectors as the form of his model was not age-structured. 42 In this thesis, 'fisheries management systems' include the typical management aspects of fisheries (data collection, stock assessment, surveillance, monitoring and enforcement) as well as the property rights regime, one critical aspect is the form of the access rights. Within alternative fisheries management systems, the fisheries (the participants thereof) can engage in alternative strategies of non-cooperative versus cooperative actions. Here a 'cooperative strategy' implies a participant cooperates with the management agency and/or other participants within the fishery. Thus a quantitative approach is needed to consider the predicted outcomes of a two agent game theoretic model (see Clark 1981, 1990). Using non-cooperative game theory In many fisheries the specific rules for allocation do not exist for scarce resource, thus fishing units compete for access. The outcome of this competition is often negative leading to overfishing, overcapitalization and conflict between interest groups. Non-cooperative game theory (Nash 1951) allows me to consider the equilibrium outcomes of this competition. Within non-cooperative theory a two-player game suffices as illustrative - revealing the critical trade-offs for situations where there are greater than two players (Nash 1953). Cooperative strategies is used interchangeably with cooperative management throughout this thesis. This is realistic considering that cooperative management is only possible i f participants are willing to engage in binding agreements implying they will behave in a cooperative fashion. Fishers will not enter agreements or obey regulations i f the benefits of non-cooperation are much greater than cooperation. The aim is to isolate the negative effects of these non-cooperative strategies by using non-cooperative game theoretic analysis. This follows from the argument presented by Nash (1951, page 295): "The writer has developed a 1 4 Game theory has been applied to virtually all areas of economics and there is an increase in the number of studies (see references in Sumaila 1999). The contributions in Weintraub (1992) consider the history of game theory based on the classic work of von Neumann and Morgenstern (1944). 43 dynamical approach to the study of cooperative games based upon a reduction to non-cooperative form". The approach is thus similar to that applied in Sumalia (1995)'\ Thus the aim in the thesis is to a) assume binding agreements are not feasible at this stage16. For example, in South Africa various interests are in a real competitive situation for rights to the resource. The aim is to isolate the negative effects of non-cooperation (e.g. biological), and evaluate whether there are economic incentives to cooperate or not. This method is presented in Clark (1981, 1990) and for the sake of simplicity the computation is open-loop. Here 'cooperative' means rebuilding the stock and not depleting it. Clark's (1981) terminology of 'deplete = non-cooperative'' and ''not-deplete = cooperative'' is used in this thesis. b) quantify the loss in potential rent to the government assuming the government does not facilitate binding agreements. It is postulated that the government is at this stage not maximising the total benefits. Thus the proportion (a) to each player can be varied (for example the proportion to the hake versus longline sector in the demersal fisheries) to calculate the total benefits which is a sum of the net benefits to each player: NPV-rotal Benefits = N P V B e n e f i t s Player l(wifh a) + N P V B e n e f i t s Player 2(with 1-a) (E.7) 1 3 Hart (1998) considers the characteristics required for fishers to cooperate in the south Devon inshore fishery after reflecting on the 'Prisoner's Dilemma', (as named by Albert Tucker in an unpublished paper - see references in Rasmusen 1995). 1 6 Thus the aim is not to apply a cooperative game theoretic analysis as in other studies which assume the establishment of binding agreements is feasible (see Amstrong and Flaaten 1991, Kaitala and Munro 1993, Lewis and Cowens 1982, Munro 1979, 1987, 1992, 1994, 1996, Sumaila 1997a, Yeto et al. 1997). 44 The aim is to see whether the maximum is obtained. It does not seem logical to take it further as there are no present concrete plans to set up binding agreements between the competing parties. If there were concrete plans (and binding agreements between the parties was feasible) the methodology that would be needed is a cooperative game theoretic analysis. The methodology of the later is presented in OECD (1997, which presents the outcomes of Munro's (1979) research). Within a cooperative game theoretic analysis equation E.7 above is re-formulated to include the weighted sum of each players net benefits and the objective is redefined to maximize the new formulation as both parties are assumed to belong to the same organization. Within a non-cooperative game theoretic modelling approach (as in Sumaila (1995), where he uses an algorithm to find a solution) the benefits to each player can be generated. Under these conditions it is possible to compute the Nash equilibrium, which is the outcome after each player is maximising on their own, given the supposed actions of the others (FCreps 1990). In this thesis I consider the effects of non-cooperative behaviour and therefore compute the difference between potential cooperative strategies and existing non-cooperative strategies (defined in each case depending on the status of the stock). In this case the payoffs to each player, as well as the total payoffs, are revealed. Thus it is possible to generate the total NPV of economic rent and estimate the maximum value (graphically in this case as the model is not of an analytical form as in Sumaila 1995). Therefore in one of the case studies (the linefishery and geelbek), two regions are chosen as the 'players' ('the Cape' and Kwazulu-Natal), to not only show the consequences on non-cooperative behaviour between the two regions, but to generalize for greater than two players, that is to postulate why each individual fishing unit decides on cooperative versus non-cooperative behaviour. In the other case study (the Deep-Sea West coast hake fishery), two sectors are taken to represent two competing players. Other studies have considered transboundary stocks- two countries, or two regions or two sectors (e.g. Munro 1979, Sumaila 1997a, 1997b). 45 Bio-economic Model iQuantifies tradeoffs and gains to players Quantifies costs and benefits Neo-institutional Economic Analysis Reveals players. Qualifies predicted tradeoffs It also predicts co-operative or non-co-operative behaviour of players. Player I Non-Cooperative D E P L E T E Cooperative C O N S E R V E Non-Cooperative D E P L E T E Player 2 B/2 B/2 Cooperative B C O N S E R V E 0 0 B H/2 5 H/28 H = sustainable exploitation rate,B = sustainable biomass and 5 =discount rate Figure 3.2 The theoretical outcomes of a two player model as described by Clark (1990 and presented in OECD 1997). This approach allows for the integration of the neo-institutional economic analysis and bio-economic modelling. In each of the four scenarios above, the predicted benefits to Player 1 appear in the top right-hand corner and the predicted benefits to Player 2 appear in the bottom left-hand corner. The overall multi-disciplinary methodology applied in thesis is based on the integration of two approaches (Figure 3.2). Firstly, a framework analysis is presented based on neo-institutional economics (NIE), which qualitatively predicts whether there are incentives for non-cooperative versus cooperative strategies by the participants (Figure 3.2). Secondly, game theoretic methodology and bio-economic models are used to quantify the incentives (Figure 3.2). The matrix presented in part of Figure 3.2 is adapted from Clark (1990, also presented in OECD 1997). It is simplified from Clark's (1990) two strategies of 'conserve' or 'deplete'. Furthermore, based on Clark's analysis, the OECD (1997) presents two cases: Case 1. B > H/25 > B/2 (see Figure 3.2) The discount rate (8) is large and larger payoffs are obtained from depletion or not cooperating even if others do. 46 Case 2. B < H/25 (see Figure 3.2) There is an incentive to cooperate and conserve (the discount rates are low and there are only a few players). However, i f the number of players (N) is large then each one receives a payoff of H/5*N. A cheater then receives a much larger share of B, than if he/she cooperates. Thus there are huge incentives to cheat as the number of players becomes large. As far as the structure of the thesis in concerned: firstly, a framework analysis is presented which is based on neo-institutional economics (NIE) which qualitatively predicts whether there are incentives for non-cooperative versus cooperative strategies by the participants. Secondly, game theoretic methodology and bio-economic models are used to quantify the incentives. The integration of these approaches relies on them being congruent in their predictions (Table 3.1). Table 3.1 The reliability of the overall methodology which is based on the integration of the two methods depends on it being able to make the same predictions. Method* Characteristic Prediction from case study Case study 1 Case Study 2 NIE Framework Qualitative Cooperative or Non-cooperative? but the same for both methods* Cooperative or Non-cooperative? but the same for both methods* Bio-economic model and game theoretic outcomes Quantitative • • In order to test the methodology the two approaches are applied to two case studies, which differ significantly, in their characteristics (number of participants, types of gear, geographic range, investment in capital and technology, number of representative groups). Chapter 4 and 5 review the two case studies in detail and apply both methods presented in Table 3.1. This methodology should be used for the evaluation of alternative fisheries management policies in its' totality as intended. 47 Chapter IV The Linefishery and the Management of Geelbek The aim of this Chapter is to apply the neo-institutional economic framework, including an analysis of outcomes of alternative policy options, to the linefishing community in Arniston (Figure 4.1). In addition, a bio-economic game theoretic analysis is applied to one of the linefish stocks, that is geelbek Atractoscion aequidens. The South African 'linefishery' includes as the principle gear types either handlines or rod and reels. The fishery includes boat-based and shore-based recreational, commercial and subsistence components (Taylor 1993, Griffiths et al. in press). The South African boat-based linefishery consists of ^3000 commercial and at least 4000 recreational vessels (5-20m in length) which, target more than 95 economically important species of marine teleost (Griffiths, 1997). Figure 4.1 The location of Arniston on the southeast Cape coast of South Africa. Geelbek Atractoscion aequidens, a medium sized croaker, Fam. Sciaenidae (maximum size 18kg; Biden, 1948), has been among the six most important species ever since the linefishery was first established in the 1800s (Penney et al., 1989). It is found along the entire eastern seaboard of South Africa from Cape Town to northern Kwazulu-Natal (K-Natal, see Figure 4.2) where it exists as three age/ size related sub-populations with juveniles (<51cm) found in the SE Cape, sub-adults (51-87 cm) in the SW Cape and the adults (>90cm) undergoing an annual spawning migration to KwaZulu-Natal. As a result, the stock is shared by fishing communities 48 throughout its «2000 km distribution. The central government is responsible for the management of South Africa's marine resources, which in the case of the linefishery, is effort-based, consisting of limits on minimum size, daily bags, the number of commercial permits and marine reserves. A recent survey of the boat-based fishery revealed that the fishery enforcement agency is inadequate and that non-compliance with management regulations is high (Sauer et al. 1997). Cooperation is therefore essential for effective management of the linefishery. Current catch restrictions for geelbek consist of a bag limit of 10 fish per day for recreational anglers (introduced in 1984) and a minimum size limit for both recreational and commercial fishers. 25' o m l/s Q 15 \ NORTHERN CAPE V i ^ ^ — ^ EASTERN CAPE/ rf~^ / "Transkei" v S(VESTERN CAPEC N 1 L o n d o n West Coast >Qape Town t i — ^ ^ Elizabeth \ £ \ S Cape Degrees east longitude Figure 4.2 The distribution of geelbek [Atractoscion aequidens) along the eastern seaboard of South Africa from the West Coast to northern Kwazulu-Natal (K-Natal). Also shown are the four coastal provinces, the two areas used in this study {'The Cape' and 'K-NataP) and the division of the 'Cape' into 5 regions: - the West Coast, the SW Cape, the S Cape, the SE Cape and the Transkei - as used by Griffiths and Hecht (1995) to describe the life history of the species. A minimum size limit of 40 cm total length (38cm fork length) was first introduced in 1940, but in the absence of biological information this limit was determined arbitrarily. 49 n = 2582 n = 2670 10 5 I I l I 'T I I I I I . I I I I I I T I I I I I I I I f 270 330 390 450 510 570 630 690 750 aiO 870 930 9901050 Size class (30 mm) Figure 4.3 The fork length-frequency distributions of geelbek Atractoscion aequidens for the periods 1985 to 1987 (W) and 1990/1991 (+) in (a) the SW Cape, (b) the S Cape, (c) the SE Cape and (d) Natal. (Figure from Griffiths andHecht, 1995). Based on the large size at sexual maturity for this species (90 cm fork length; Griffiths and Hecht 1995), the minimum size limit was increased to 60 cm in 1992. The size limit was not set at the size at which 50% of the stock are estimated to be mature, as has been done for other linefish species, as this would have excluded the majority of the catch made in the SW Cape (see Figure 4.3). Ever since the amended minimum size limit was implemented, there has been considerable pressure from SW Cape communities at Arniston, Struisbaai and Gansbaai to reduce it to 55cm. 50 Given the economic hardship of commercial fishers in these communities (Schutte 1993, Hutton and Lamberth 1997), and the fact that geelbek is a high value species (landed value of RIO/kg), the resistance to the new size limit is hardly surprising. In the first part of this Chapter 4, the size limit of geelbek is identified as one of the many reasons why the establishment of cooperative management arrangements would be problematic in communities such as Arniston (see also Hutton et al. 1997, Hutton and Lamberth 1997). Nevertheless, a smaller size limit is unlikely to be conducive to long-term sustainability and in addition is expected to detrimentally impact on the catches made in regions which are dependant on the adults e.g. SE Cape and KwaZulu-Natal. Preliminary per recruit analyses indicate that the geelbek stock was already overexploited in 1985 (Griffiths, 1988). 4.1 COOPERATIVE VERSUS NON-COOPERATIVE M A N A G E M E N T OF SHARED LINEFISH STOCKS* The modern linefishery in South Africa is a multi-user and multi-species one that dates back to the 1600s. The national linefishery is so diverse that Cochrane and Payne (1998) state that it could be classified as a number of discrete fisheries. These would include the inshore handline fishery with open boats, the larger component of offshore vessels which remain at sea for several days, the tuna fishery and the squid fishery. In 1994 these were, collectively, the third most economically valuable fishery in South Africa, as valuable as the rock lobster fishery (Cochrane and Payne 1998, see Table 4.1). The linefishery provides employment for approximately 132000 people and contributes about R2.2 billion to the Gross Geographic Product (GGP 1 7 ) of South Africa's coastal provinces (McGrath et al. 1997). Sections 4.1-4.13 of this Chapter have been modified from Hutton, T. and S.J. Lamberth 1997. Opportunities for Co-management: The application of a research framework to a case study from South Africa. Pages 205-232, in: Fisheries Co-management in Africa. Proceedings of a Regional Workshop on Fisheries Co-management Research. 18th to 20th March 1997, Mangochi, Malawi. A . K . Normann, J. Raakjaer Nielsen, and S. Sverdrup-Jensen (Eds.), IFM, Fisheries Co-management Research Project. Research Report No. 12. 1 7 For the provinces: Kwazulu-Natal, Eastern Cape and Western Cape (see McGrath et al. 1997). 51 Table 4.1 The catches and economic value of South Africa's commercial fisheries in 1994 (from Stuttaford (1996) and Cochrane and Payne (1998)) $US 1 = Rand SA 3.57 (exchange rate on 31.12.94). Wholesale Value -Sector Nominal Catch (t) processed US$ millions Demersal and Midwater trawl 188 842 201 Pelagic 315 545 81 Rock lobster 3 190 47 Linefisheries Tuna 4 069 6 Squid-jigging 6 442 19 Handline fishery 12 878 21 Abalone 613 15 The fishing vessels range in size from open row boats of 3-5m long to large decked freezer boats 20m in length (Pulfrich and Griffiths 1988). There is a considerable diversity of vessel types. The largest are most often wooden with single screw inboard diesel engines which are moored within one of the harbours. Among the smaller are the 'ski-boats' which are normally constructed with fibreglass, propelled by twin outboard petrol engines, and launched from trailers. There are at least 412 000 recreational shore anglers, 7000 recreational spearfishers, 24 000 recreational boat anglers, 25 000 commercial boat fishers and 7000 gill-net and beach-seine net fishers active in the fishery for linefish (van der Elst and Atkin 1991, Lamberth et al. 1997, McGrath et al. 1997, Manned / . 1997). 4. la Target species and the status of the stocks Despite the long catch history of certain target species, biological research aimed at the management of these stocks really began only in the late 1970s (Buxton 1993). Of the 95 species identified as important to the fishery, 39 are still listed in need of research (van der Elst and Atkin 1991). The main species reported caught by the linefishery by mass, are snoek Thyrsites atun, kob Argyrosomus spp., silverfish (carpenter) Argyrozona argyrozona, yellowtail Seriola lalandi, hottentot Pachymetopon blochii and geelbek Atractoscion aequidens. The 10 most important linefish species, excluding tuna and squid, in the national commercial catch are listed in Table 4.2. The status of the stocks of these species is provided i f known. Of the 95 important 52 species in linefish catches, only 40 % are considered to have healthy stocks, most of these are elasmobranchs or highly migratory gamefish (van der Elst and Adkin 1991). Table 4.2 The 10 most important South African linefish species, based on average commercial catches in tonnes, from 1991-1995, adapted from Griffiths (1997). Those species 'under review' are currently being assessed by M C M . SPECIES ANNUAL CATCH (t) STATUS REFERENCE Cape Snoek Thyrsites atun 6026 fluctuating? Under review Silver Kob Argyrosomus spp. 954 over-exploited Griffiths (1997) Carpenter Argyrozona argyrozona 923.6 vulnerable Van der Elst & Atkin (1991) Yellowtail Seriola lalandi 683 over-exploited Penney et al. (in prep.) Hottentot Pachymetopon blochii 595.5 fully exploited? Under review Geelbek Atractoscion aequidens 511 over-exploited Griffiths (1997) Slinger Chrysoblephus puniceus 267 over-exploited Griffiths (1997) Panga Pterogymnus laniarius 210 under-exploited Griffiths (1997) White Stumpnose Rhabdosargus globiseps 155 over-exploited? Under review Red Roman Chysoblephus laticeps 90 under-exploited Griffiths (1997) 4.1.b Linefishing sectors and regulations With the publication of the new Sea Fisheries Regulations in October 1992, provision was made for a new series of fish categories reflecting their conservation status, namely critical (four species), restricted (13 species), exploitable (20 species), recreational (24 species) and bait lists (16 species)(Stander 1995). These were based on recommendations put forward by the South African Marine Linefish Management Association (SAMLMA) . Bag limits vary from zero for some species to no limit for others, with differences between the bag limits for the commercial, semi-commercial and recreational sectors (Table 4.3). Closed seasons have been established for four species. Size limits and mass restrictions for certain species have also been revised, depending on recommendations from S A M L M A (Table 4.4). The number of linefish permits was frozen in late 1984. The aim of a gradual attrition of permits has not always occurred as planned. In fact, the number of A - permits rose by 3.1% from the 1991/92 permit year (512) to the 1992/1993 permit year (528))(SFRI 1994). This was due to a number of factors including the change in licence classification of vessels with tuna permits, and the requirement for squid boats to have linefish permits. In the early 1990's a substantial increase in linefish vessels in Kwazulu-Natal was observed. The concern over reef stocks in Kwazulu-Natal prompted the introduction of a moratorium on the transfer of A- and B- permits from the 53 Cape to Kwazulu-Natal with the inception of the 1992/93 year. In a further effort to halt the increase in A-permits, the transfer of A- permits, except between bona fide commercial fishermen with the approval of the Chief Director of Sea Fisheries, was prohibited from November 1992 (SFRI 1995). The lumping and splitting of A- permits has occurred since the Sea Fishery Act came into effect, which allowed for the transfer and sale of permits which are not necessarily tied to a particular vessel. Vessel numbers therefore fluctuate, although the total number of crew nationally on linefish vessels has remained constant. Limiting the total crew size is now the main way effort is controlled in the linefishery. However, the transfer of crew permits to larger vessels has resulted in an increase on overall effort and a change in its distribution since larger vessels remain at sea longer and travel further to previously under-exploited reefs. Larger vessels are also equipped with blast freezers, which allows them to land higher quality fish which can be market internationally. A total of 3097 A- and B- permits were in circulation in 1995. However, these numbers are not a true reflection of total fishing effort. The TRMTT (1996) state that more than 16% of these have defaulted their permit conditions by not submitting any catch statistics whereas 54% of the balance reported a zero catch for that year. In summary, apart from limiting crew size and thus effort, bag and size limits and closed seasons are the basic elements of regulating the fishery along with management control measures such as marine reserves. A national program to evaluate participation in, and management of, the South African marine linefishery was initiated in 1994 (Lamberth and Bennett 1994). The program was divided into four regional projects, encompassing the four coastal provinces. The main objective was to determine fishers' perceptions of management regulations within each of the sectors. This was undertaken to ascertain to what extent their activities are controlled by the current legislation (Lamberth and Bennett 1994). Individual fishers were interviewed, shore and harbour patrols conducted, and catch and effort data were collected (Lamberth et al. 1996). Some of the results of these studies are reported within this Chapter. 54 Table 4.3 The current l inefish regulations for each sector as presented in "Do's and Dont's": 1996 (Department o f Environmenta l Affa i rs and Tour i sm) . UNERSH REGULATIONS PER CRTITCAL RESITOCrEDIJSI" EXPLOnABLE USTt RECREATIONAL BAIT LIST SIZE RESTRICTION SECTOR LIST LIST (CM) Biindlebass Btudger Blueskih Baaidmans Anchovies# 15: Stiepie Potato bass Btic Hottentot Capegumaid Banded galjcen fiansmadam 2ft Cape sirnpncse Great white Dugaaad Carpenter BiHfiste# Carfishes# 2ftCtsjtfBlxktiil shark Dune Dorado Btcktail Qassies# 22: Hottentot Nalalwasse BflStad* ElasmobanchsS Bonze beam Halfbeaks# 25: Natal sturrpnose Poenskop* Engjishnian (excluding great white Capestunpnose Horse mackael 25: River bream Seventy4JxB* Redsturnpixse shark) Gatjoai Chub mackael 25:Silv«iish Redsteenbras** RcckccdsS Geelbek Garrick Mullets# 25:Slinger Roman Hake JanhutYi Pinky 25: WhitestuiTpixse Scdsman Hottentot I<igfches#,exckiding Saidines# 3ft Bronze beam Slinger Javelin gutter btudger and horse Sauries# 3ftDagaaad Westccost-steenbas Kingmackael mackerel Sca&# 3ftE!tShad Zeba Kob Uige-spotpompano Steentjie 30 Roman Panga Mussetaacker Stiepie 3ftSantei7Soldier Queen mackael Nalal knifejaw OitJassfish 3ft Scotsman Redtjcr-tjcr Natolstirrpnose Wdiherring 3ftRedstLimpixse Santer(soldier) RMrheam 3ft Zeba Snapperkob Riversnapper 35:Gatjoai Tinas# Southern pompano 40CatikoSpcaxl White stunpiose Springr 4ftirxkccd Yeflowtail Spotted gutter 4ft Kob Stonebeam 4G Redsteenbras S\\adfish 4tt Severity-four White steenbras 4ft Spotted gutter 4ftSquaetailkcb 4GWestCrjEKt 4ft steenbras 4ft Whifcedged lockcod 4ft Ydlavbdlyiockaid „«J. rTJa olvjp 60.Gedbek 6ft Mussetaacker eaSnoek 6ft White steenbras TftGarrickleavis None SPORT *2 per 5 per person per 10 per person per 10 per person per U n l i m i t e d A N G L E R S AND person per day in total day in total day in total, but SPEARFISHERS day on ly 5 o f the same **2 per species person per day None S E M I - *2 per 5 per person per U n l i m i t e d 10 per person per U n l i m i t e d COMMERCIAL person per day in total day in total, but day only 5 o f the same **2 per species person per day N o n e COMMERCIAL *2 per U n l i m i t e d , U n l i m i t e d 10 per person per U n l i m i t e d person per except *5 shad day in total, but day per person per only 5 o f the same **5 per day in Natal species person per day | Plus all other species not listed under the critical, restricted, exploitable, recreational and bait lists. # Regulations apply to all species of this group Mass restrictions for tuna: Yellowfin: 3.2kg; Bluefin 6.4kg; Big-eye: 3.2kg Mass restriction for swordfish: 25kg 55 4.2 National Management Associations The South African Marine Linefish Management Association ( S A M L M A ) was formally constituted in 1980 and is recognized as a interest group or industrial body under the Sea Fisheries Act of 1988 (Table 2.4). The regulations outlined above are based partly on recommendations made by S A M L M A . The Constitution of S A M L M A defines its role as a co-ordination body for all organisations interested in the promotion, protection and sustained use of the marine linefish resource. There are four categories of membership (scientific institutions, regional conservation and management agencies, the commercial linefishery, and the sport and recreational linefishery); (Brunt 1993). Members from the commercial linefishery sector are drawn from members of the South African Linefish Management Industrial Association (SALMIA). Membership to S A M L M A is by invitation only. The number of members in each category is limited to a maximum of eight, which have to be representative of these sectors. The Association may appoint or invite observers (or advisors) to attend meeting in order to facilitate discussions and improve representation. However, the only means by which individual fishers from the different sectors can have input into the government decision-making process is by indirect involvement through sector representatives at S A M L M A . User participation, although indirect, is thus dependent upon the role that S A M L M A plays in the management of the linefishery. A summary of the major recommendations emanating from this association are provided in Table 4.4. Recommendations made at S A M L M A meetings are sent to the Consultative Advisory Forum (CAF). The C A F are then mandated to provide final advice to the Minister with regard to the recommendations. 4.3 ARNISTON FISHING C O M M U N I T Y Historical Context Arniston is named after a ship wrecked in 1815. However, it is also referred to as 'Waenhuiskrans', (Wagon-house-sea-cliffs). The majority of the present inhabitants of the cottages are descendants from indigenous people and settlers of mixed ethnic origin. These 56 1 s permanent residences belong to the 'Coloured' population group and as such make up the majority of the fishers who use the harbour. The Coloured people live in an residential area adjacent to the harbour and holiday houses, and are referred to as the Arniston fishing community. In this case, the Arniston fishing community are not only defined geographically, but they are also homogenous in terms of ethnicity and their call for political action. The incentive for the present political action and cooperation by the fishing community is to redress previous government policies. The framework for analyses of co-management systems relies on the identification of such incentives to co-ordinate and cooperate (see Figure 3.1 and corresponding text). Table 4.4 A summary of recommendations/resolutions emanating from S A M L M A between November 1991 and March 1995 (Source: S A M L M A Secretariat). Date of SAMLMA meeting Recommendations / Resolutions 27 November 1991 • Minimum size length of white stumpnose to be reduced to 25 cm 8 May 1992 • Agreement on the linefish species lists and implementation of linefish regulations • Restriction of the sale of fish without a permit • Moratorium to freeze the issuing of 'A ' and 'B' permits • Splitting of 'A ' and 'B' permits only if there is no increase in number of crew 22 October 1992 • Bag limit of five per day per person for red steenbras to be implemented • General bag limit of five shad (elf) per person per day to be implemented in Natal • White stumpnose to be transferred to Exploited List • West coast steenbras to be transferred to Restricted List 25 March 1993 • Bag limit of five per person per day for red steenbras for 'A ' permit holders and bag limit of two per person per day for red steenbras for 'B' permit holders and recreational fishermen to be implemented • Minimum size limit of white steenbras be increased to 60 cm 28 October 1993 • Submission of document to SFRI on bait requirements of linefish sector • Potato and brindle bass to be placed on the Critical List with a bag limit of zero • Amendment of regulation 48(2) on the sale of fish by recreational anglers 24 March 1994 • Task Group appointed on the amalgamation and incorporation of different regional regulations 20 October 1994 • Mortality of white steenbras by anglers and trek-net fishers to be reduced by 70% • Reduction of size limit of squaretail kob to 350 mm to be reviewed • Extension of a further year on the moratorium on the transfer o f ' A ' and 'B' permits from one province to another 8 March 1995 • Bag limit of two per person per day for poenskop to be retained • Closed season for poenskop (1 September to 30 November) to be discarded • Bag limit of two per person per day for red steenbras to be implemented • Closed season for red steenbras (1 September to 30 November) to be discarded • SFRI Linefish Working Group to pursue the implementation of rod licences The use of racial categories in this case study reflects the South African reality (Adam 1972). The choice of names is according the dominant preference of the respective group and it is not intended to prejudice the analysis. South African 'Coloured' people distinguish themselves from 'Black' people (e.g. indigenous Zulu and Xhosa people) in contrast to the Anglo-American use of the word (Adam 1972). 57 4.4 Bio-technical and physical characteristics Although, there are annual variations, the main species in the reported annual catch, in mass, landed at Arniston are yellowtail, geelbek and kob. The total catch in kilograms per month for ten boats which fished for more than 100 days was computed for 1993 (Source: N M L S , 1993). It is clear from these data that the catches for the species mentioned above are seasonal. Most of the yellowtail were caught in February, geelbek in March and kob were caught mainly in May of that year. During the months when these species are not targeted most of the catches are made up of 'redfish', sharks, and other species such as carpenter, Argyrozona argyrozona. Species are targeted during different months of the year depending on availability and oceanographic conditions. Table 4.5 shows the commercial linefish catch landings for the entire South African coastline in 1994 and the relative importance of Arniston as a landing site for linefish. About 200t has been recorded as landed annually since 1990 at Arniston harbour with an average of 9 boats launching each day, fishing approximately 184 days per year (Source: NMLS) . On average 75 boats are registered within the Arniston area which report an annual catch in the region of 300-500t (NMLS, Table 4.5). The bulk of the catch is made up of migratory species, but a significant proportion consists of residential reef fish. The over-exploitation of the local reef species is due to the long term effects of local fishing effort (namely from Arniston and Struisbaai, Figure 4.1). These latter species could be managed locally despite being caught elsewhere. This is also true for other species which are harvested locally from the shoreline, for example oysters and octopus, with the latter used as an important source of bait. The migratory species (yellowtail and geelbek) are exploited throughout their geographic distribution by all the sectors (commercial, semi-commercial and recreational), in different regions and thus effort control and management of these species has to be undertaken on a national level. Thus constraints exist that do not allow for any form of locally-based management for these species. Overfishing on a national scale is causing a decline in the major stocks. For example, in 1994 the national kob catch declined by 28%, while the total catch of carpenter declined by 10-20% (Linefish Section, SFRI, 1995). Catches of redfish continued to decline, mostly by 25-30%, as a result of decreased abundance and because effort was concentrated on 58 snoek (Linefish Section, SFRI, 1995). Corresponding decreases in catch per unit effort were recorded within the N M L S by the Linefish Section (SFRI 1995). Table 4.5. South African commercial linefish catches, tonnes nominal mass, for 1994, from Stuttaford (1996). Landing place Snoek Yellowtail Kob Geelbek Carpenter Hottentot Mackerel Sharks Panga White Stmp Hake Slinger Other Total PcrtNoloti 219 6 3 228 Darhcjrjaa 75 25 1 101 Lamberts Bay 732 1 82 815 Bandsbaai 293 27 2 322 Laaplek 212 1 3 3 219 StHetena Bay 3465 13 53 1 2 2 3536 SaldanhaBay 58 2 1 66 11 65 9 212 Yzerfcnteh 847 83 185 1 2 1118 Cape Town 448 206 4 1 1 660 Hart Bay 106 1 19 1 127 Kbrnmelje 449 67 41 26 9 2 4 598 KakBay 95 6 27 7 1 14 4 28 7 31 23 243 GarJcnsBay 17 6 38 43 14 19 6 1 6 8 1 37 196 Hennanus 123 2 1 3 4 4 2 2 5 2 148 Gansbaai 65 ... 56 31 52 64 59 30 233 2 27 619 Sttusbaa 25 504 39 144 115 6 104 1 30 968 Aniston 28 48 25 46 112 3 32 1 34 329 Stibaai 2 1 200 1 9 44 9 32 15 313 MossdBay 4 4 52 18 3 19 21 7 128 Ptettenbag Bay 32 4 8 1 17 15 8 2 269 44 400 Jeffreys Bay 9 15 1 25 5 1 9 25 10 100 PcrtEfcEbeth 7 8 68 25 135 4 21 70 44 382 Pert Med 3 119 39 87 2 1 89 24 42 406 EastLondcn 1 3 19 15 7 1 29 75 Widccast 1 5 7 15 28 K\AaaJu-Nabl 1 59 74 205 181 520 Tea 7302 825 688 458 615 806 104 502 157 111 450 212 561 1279 1 Vessel types The fishing community at Arniston mainly make use of small wooden deck boats with single screw inboard diesel motors referred to as 'chukkies' moored on a slipway. Although, the total number of vessels operating consistently out of the harbour vary according to whether vessels are in repair or whether some are temporarily moored at Stuisbaai harbour, there are about 15 vessels which are active at the harbour. For each year during 1990-1993, only 10 of these vessels reported fishing for more than 100 days. These 10 vessels have an average age of 19.4 years and 59 an average length of 7.16 m. Eight of them have a crew size of 8 and the other two have a crew size of 6 (Source: National Boat Licence System, 1994). Range of fishing and other physical boundaries The fishers at Arniston make day trips in the 'chukkies' which have a range of 12-15 nautical miles. The harbour at Arniston does not have a breakwater which many other harbours in South Africa possess. Typically harbours have a breakwater and a jetty with fishing vessels either having dockside moorings or shallow water moorings within the breakwater. At Arniston the vessels are launched into the surf with the aid of a tractor. At the end of a days fishing, the vessels are dragged up the slipway with a motorised winch. Thus technical limitations of fishing vessel size and power and the launching facilities at Arniston place an upper limit on the number of days per year that vessels can be launched. Fishing vessels can not be launched on certain days during the winter months when storms produce large swells. Strong winds in the summer from the south-east also reduce the number of days fished. A boundary also exists in that there is no further physical space to place additional fishing vessels on the slipway at Arniston. Local fishing effort is constrained in this manner in addition to the lack of a breakwater. Information from informal interviews conducted in Arniston points to a reluctance on the part of the local fishers within the community to accept an upgrade to the harbour, in the form of a breakwater, as this could result in an influx of outsiders and an increase in local fishing effort. Although, a breakwater would allow an estimated 20-40% increase in effort for the local fishing vessels (the 'chukkies'), the ski-boat effort which is 17% of total, could increase to about 40% of the total effort as is the case in Stuisbaai (Lamberth and Pulfrich 1997). They estimate that this would increase overall fishing effort operating out of Arniston harbour by about 100%. However, these estimates depend on the annual occupancy of the 286 holiday houses and the corresponding influx of ski-boat operators. The predicted increases in local fishing effort is a long standing 60 concern for the local community having first been reported in "The Fishing Industry", completed by the Board of Trade and Industries in 1934 (Fahey et al. 1934)'9. Overall fishing is not a seasonal activity, even though the targeting of certain species and corresponding catch varies seasonally. Crew size is also seasonal, with a mean size nine in summer and six during the winter months, indicating that some of the crew find work elsewhere during the winter or remain unemployed. On the other hand the number of boats landing each day is generally higher in winter which may be an artefact of some of the boats having moorings at Struisbaai during the summer. The fishing vessels are also limited in range in that they have to return to place their catch in freezers or on ice before it deteriorates. Within the national linefishery there are larger deck boats which carry ice and have onboard freezers, whereas size constraints do not allow ice to be carried aboard 'chukkies'. The fish are landed fresh and either placed on ice and transported immediately or stored in freezer facilities at Arniston. Based on the gear and the fishing vessels used, this sector can be classified as 'artisanal', although, this term is not used as a formal categorisation such as the terms 'commercial', semi-commercial' and 'recreational' by the government management agencies. Administrative and legal boundaries Fishing vessels which are moored at Arniston are licensed within the Bredasdorp District registration area, which includes Stuisbaai harbour. In 1993, 68 commercial (A) permits were issued in this area out of a national total of 528 and 104 semi-commercial (B) permits out of a national total of 2663. However, this does not provide a clear indication of the distribution of fishing effort as there is considerable movement between regions. The management of the linefishery is the responsibility of the DEA&T. Within the DEA&T, M C M is the primary research body which is responsible for the assessment of fish stocks. A Linefish Section (now integrated into a Inshore Management Section) within M C M is l 9"The spokesmen of the Coloured Fishermen's Union said they were satisfied with conditions as they were and although they had difficulties, there was nothing of which to complain. If Government provided a breakwater bigger 61 responsible for biological research and the compilation of effort and catch data which is entered into the N M L S . The N M L S is a database administered by this the Linefish Section since 1985. Control and enforcement is undertaken nationally by Fishery Control Officers within the M C M . 4.5 Characteristics of the market The fishing vessels moored in Arniston are registered within the commercial sector. The fish are landed and, depending on the species, weighed and sold individually or in bunches. Although a fish or two is kept back by individual crew on any particular day (termed 'fry'), 50% of the value of a fishers catch goes directly to the owner of the boat to cover costs. The balance is recorded and the crew are paid at the end of the week. If the skipper is not the owner of the boat, 1/3 of his catch is sold to cover the expenses of the boat. Depending on the ownership of the fishing vessel, the buyers vary from the actual owners who reimburse the crew, to middlemen and buyers from the major fishing companies. Those vessels owned by local companies transfer their catches to the respective employees who are responsible for transporting the fish. In Arniston the majority of the catch, over 98%, is sold to three major buyers. The largest, Grey's Marine owns the local factory. The company has its headquarters in Cape Town where it employs 68 people and has recently opened a second factory in Hout Bay worth R1.5 million (see Figure 4.1). A l l of the fish purchased in Arniston are sold locally, within the province and countrywide, depending on demand, although plans are being made to export certain species. Quality export fish are obtained mostly from large freezer boats, none of which are based in Arniston. Relative to the other fish products on the local market some linefish species are of quite high value. The landed value for the most common linefish species is shown in Table 4.6. In Arniston the per capita consumption of fish is estimated to be 7 kg. per year, whereas the per capita consumption of households where fishermen reside is estimated to be closer to 20 kg. per year. On certain days when catches are very low, that is only 'fry' are landed, the entire value of the catch may go to the crew. They are thus excluded from paying the 50% boat share and the owner of the boat receives nothing. boats would be sheltered in the bay and the livelihood of 400 poor Coloured fisherfolk would be threatened" (Fahey etal 1934, page 22). 62 Table 4.6. Prices paid for the most common linefish species. Amounts are shown in Rands SA, where R l = $US 0.22, June 1997). Familv Common name Scientific Name Rands/kg* O S T E I C H T Y H E S Carangidae Y e l l o w t a i l Seriola lalandi 7.50 Maasbanker Trachurus lrachunts 1.00 Centracanthidae W i n d t o y Spicara axillaris 2.00 Che i lodac ty l idae Fingerf in Cheilodactylus fascialus 2.00 Corac in idae Gal joen Dichistius capensis 25.00 G e m p y l i d a e Snoek Thyrsiles atun 2.50 Haemul idae Spotted grunter Pomadasys commersonni 20.00 Org ie Pomadasys olivaceum 1.00 M e r l u c c i i d a e Hake Merluccius capensis 10.50 M u g i l i d a e Harder Liza richardsoni 1.20 Springer harder Mugil cephalus 4.00 Pomatomidae E l f Pomalomus saltalrix 5.50 Sciaenidae K o b Argyrosomus inodorous 11.00 Geelbek Atractoscion aequidens 11.00 B e l m a n Umbrina canariensis 6.00 Scombr idae Boni to /ka tonke l Sarda orientalis 5.00 M a c k e r e l Scomber japonicus 2.50 Scorpaenidae Jacopever Helicolenus dactyopterus 1.30 Senanidae Koester Acanthistius sebastoides 1.00 Y e l l o w b e l l y rockcod Epinephelus guaza 10.00 Sparidae S i lver f i sh Argyrozona argyirozona 4.50 Fransmadam Boopsoidea inornata 2.00 Soldier /Santer Cheimerius nufar 6.00 Dageraad Chiysoblephus cristiceps 11.00 Red stumpnose Chrysoblephus gibbiceps 11.00 Red roman Chiysoblephus laticeps 11.00 Wi ldepe rd Diplodus cervinus 4.00 Dassie Diplodus sargus capensis 4.00 John B r o w n Gymnocrotaphus curvidens 6.00 Whi t e steenbras Lilhognalhus lilhognathus 12.00 Sand steenbras Lithognathus mormyrus 4.00 B l u e hottentot Pachymetopon aeneum 4.50 Hottentot Pachymelopon blochii 4.50 Red steenbras Pelrus rupestris 12.00 Panga Pterogymnus Itmiarius 5.50 Whi t e stumpnose Rhabdosargus globiceps 4.00 Cape stumpnose Rhabdosargus holubi 4.00 Strepie Sarpa salpa 1.00 W h i t e musselcracker Sparodon durbanensis 10.00 Steentjie Spondyliosoma emarginatum 2.00 Tr ig l idae Gurnard Chelidonichthyes capensis 2.00 C H O N D R I C H T H Y E S Cal lo rhynch idae St. Joseph shark Callorhynchus capensis 3.70 Carcharh in idae Bronze whaler Carcharhinus brachyurus 3.70 Hexanchidae Sevengi l l cowshark Notorynchus cepedianus 3.70 Rajidae B i s c u i t skate Raja slrae/eni 2.00 Scy l io rh in idae Pyjama shark Poroderma nfriennum 2.00 Tr iak idae Vaa lhaa i /Soupf in Galeorhinus galeus 3.70 Smooth houndshark Musteliis mustelus 3.70 Spotted gu l ly shark Triakis megalopterus 3.70 Mean price 5 .74 63 4.6 Socio-economic characteristics Arniston is a small town with a total population of 792 (males: 413, females 379). Ethnically this is divided into 623 Coloured people (males: 320, females 303) and 169 white people (males: 93, females: 76) 2 0. Thus, in terms of ethnic groups, 86% of the total population of Arniston consists of Coloured people. As mentioned, the entire so-called, fishing community consists of this group. Statistics for the differences in ethnic background of fishers in the linefishery have been collected for the area between Cape Point and Arniston (Figure 4.1). For boat skippers, 57% were white, 42% Coloured and 1% black, whereas the crew was composed of 33% white, 66% Coloured and 1% black fishers (Lamberth 1997). Indeed, the southwestern Cape linefishery is dominated by Coloured people as far as the number of fishers are concerned and this reflects the demography of this area. Schutte's (1993) socio-economic assessment of thirteen Coloured fishing communities on the west and south coasts included Arniston. He found that the average monthly income in the Arniston fishing community of R831.50 was considerably lower than the average monthly income of R1203.19 obtained from all the 'Coloured' communities surveyed (Schutte 1993). Even this average is less than half of the mean monthly income of R2 800 for all households, that is all population groups, in South Africa. However, in order to obtain an indication of the differences in the distribution of wealth between population groups, the average of R831.50 would have to be compared with the average monthly income of residents in the more affluent white residential area. It is not possible to obtain the classification of vessel ownership in Arniston according to ethnic group from the Boat Licensing System of the D E A & T . However, out of 15 of the 'chukkies' registered in Arniston, three are operated and owned by two companies, while the balance are registered as privately owned. Three 'chukkies' are also owned by one person who does not reside in Arniston. Only five of the privately owned 'chukkies' are registered with owners who reside in Arniston. Since the exact numbers are not known, I can only estimate from the above Source: Central Statistics Service, Republic of South Africa. 64 information that the ownership of most of the fishing vessels in Arniston is not in the hands of the actual fishers in the Coloured community. During informal interviews fishers complained of having no other source of income. Alternative employment in Arniston is limited by its size and the only industry apart from fishing is tourism. The percentage unemployed was estimated to be 6% when Schutte (1993) completed his assessment in 1992. Nationally, the mean annual income of commercial skippers in the linefishery is R54600 per annum while crew members earn an average of R7500 per annum (McGrath et al. 1997). However, crew members in the southwestern Cape, from Cape Point to Arniston, earn on average R13804 per year (Lamberth 1997). This averages to earnings of R l 150 per month per individual fishers, which more than the community's average total household income of R831 per month which was calculated by Schutte (1993). This indicates that fishing is a lucrative profession relative to others in the Arniston Coloured community and it indicates that the families associated with the 192 fishermen are probably among the most affluent. Fishermen of the southwestern Cape, which includes Arniston, earn a slightly greater income than the average national income of fishermen within the linefishery, but in comparison with other commercial fishermen they are low income earners. 4.7 Local knowledge, compliance, monitoring and enforcement Fishers have acquired a local knowledge in terms of knowing which fish will bite, depending on the season and local oceanographic conditions, but do not necessarily know the 'scientific' reasons explaining why this happens. A good example of this is the fishers insistence that temporally and spatially separated different sized shoals of geelbek are separate species, even though genetic morphometric studies have shown that this is not the case (Griffiths and Hecht 1995). With regard to fisher attitudes towards management regulations, fifty boat skippers were interviewed in the Arniston-Struisbaai region and asked as which regulations they supported as effective ways to manage or conserve fish stocks. Support for minimum fish sizes was 36%, 67% for bag limits, 35% for closed seasons and 65% for marine reserves. However, for all the 65 restrictions that applied to species that they targeted they wanted a waiver, but stressed that these restrictions should still apply to the other sectors. Their knowledge of size limits was high, 86% answered correctly to size limits, due to the fact that all the fishing vessels have on board rulers whereas their knowledge of current bag limits (52%) and closed seasons (44%) can be considered low. In turn, many admitted to knowingly disobeying regulations, i.e. 43% keeping undersize fish, 47% exceeding bag limits, especially red steenbras, 46% fishing during closed seasons, especially for elf Pomatomus saltatrix and 100% fishing illegally within the De Hoop marine reserve. The overriding impression is that local fishermen (>50%) do not obey regulations because they choose to ignore them, i.e., they are not perceived as legitimate. There are several complaints within the fishing community of Arniston about the current Regulations. Apart from the informal interviews, this was also evident in Schutte's (1993) social survey. There is discontent with regulations regarding size restrictions for particular species, bag limits, closed seasons and marine reserves, especially De Hoop marine reserve. Locally, the government regulations are enforced by fishing control officers and the harbor master office of the inspectorate are located adjacent to the slipway. Three government staff are responsible for monitoring activities within the harbour as well as enforcing regulations along the coastline adjacent to Arniston. There are fines for infringements of linefish regulations which are clearly posted. For example, landing an 2 1 undersize fish carries a penalty of R50 The local enforcement of these laws is somewhat problematic. This is due to the fact that the local marine inspectors are resident in the community. 4.8 Local decision-making arrangements Local decision-making in terms of resource management is limited, as under the new Living marine Resources Act 1998, management of marine resources in South Africa is the responsibility of central government. Greater participation of local users in management is dependent on a local organisation representing their interests, as any co-management agreements would have to be fostered between some local organisation and the government. The formation 2 1 Equates to $US 11, at the June 1997 exchange rate of $US 1 = R0.22 (Rand SA) 66 of an organisation, the Fishers' Forum, its influence and its current role in local decision-making is critical to the process of facilitating user participation in management. In early 1996, a local Fishers' Forum was set up to fill the partial void that had been created by the loss of the Fishermen's Community Trust. The aim of the Forum is to act as a local organisation which represents the fishers in the Arniston fishing community. Whereas, the main role of the Community Trust was to administer funds, the Fishers' Forum is concerned with fisheries management issues. The formation of the local Forum in early 1996, was also facilitated by developments in the fisheries policy development process during the same time period. The objective of the Forum was to increase the bargaining power of the local community in the policy development process, as issues with regard to access were discussed. The members of the Fishers' Forum are drawn from the Coloured fishing community. This is partly historical as the Fishermen's Community Trust system was only set up in the Coloured community. It is also based on a common interest they share as previously disadvantaged ethnic group. One hundred and ninety two fishermen from the Coloured community were identified and registered by the Fishers' Forum as active in the local fishery in 1996. The incentive for them to cooperate is in order to try and force the new government to redress the inequities of the past. Annual meetings are held to democratically elect a committee of five members and a chair-person. The future formal role of the local Fishers' Forum is uncertain as it has only recently been established and the implementation strategies of the new fisheries policy have not yet been formulated. However, it has the potential to play a critical role in facilitating local user participation in the management of marine resources. 4.9 Issues raised by the Fishers' Forum A number of key issues have been highlighted by the local Fishers' Forum over the last few months. The information has been compiled from meetings with the committee of the Forum. The key issues relate to access and linefish regulations. The contentious issue is the 60cm size limit on geelbek. Requests are frequently made for a reduction of the size limit to 55cm as undersize fish are discarded with loss of income. They claim there are two types or stocks of geelbek; the 'boesman' type which comes earlier in the season and is rounder, and shorter and 67 the longer thinner type which comes later on in the season. Fishers want to fish for 'boesman' type with a limit of 55cm, the logic is that they will never reach 60cm. As far as the size limit for geelbek is concerned, the species is estimated to be overexploited (Griffiths 1997). Shoal size structure is very specific and discard mortality of undersize fish could be reduced if fishers did not target these shoals. A reduction in the size limit for the duration of their fishing season would undermine the intended purpose of the management measure, which is the long term sustainability of the resource. The fishers' perceptions that there are two species of geelbek stems from the temporal separation of size specific shoals, that is different cohorts shoal separately, whereas Griffith and Hecht's (1995) research has shown that they are, indeed, one species and one stock. 4.10 INCENTIVES TO COOPERATE A N D PATTERNS OF INTERACTION 4.10a. Fishers and Government The incentives for fishers to cooperate with the new government vary depending on the characteristics of the particular user group. Indeed, before the formulation of a new policy, there has only been limited interaction between the government and user groups, such as the fishing community in Arniston. The interaction has been limited to the government's role of creating regulations, monitoring and enforcement. This was because D E A & T has not had a policy of consulting directly with fishers at this level. Only recently has the government started to actively pursue a consultation process with fishers in order to develop the new fisheries management policy, and even then only representatives were involved. Nevertheless, I could describe the attitudes of fishers to these changes as mixed. They are aware that real change has occurred and a new policy is going to be implemented. However, they are frustrated with the fact that many changes have not occurred fast enough. Apart from these difficulties there is the serious issue of representation within local political fora. Firstly, in line with the country's new political climate, the Fishers' Forum, which only represents one population group, needs to integrate with the greater Arniston fishing community. Secondly, problems with representation are impeding the formal recognition of local organisations. With the political uncertainty at higher levels of government, i.e. future directions in policy, there is always the potential that leaders are not necessarily acting in the interests of the community and are using local political fora as a means of personal empowerment. 68 4.10b. Fishers, Stakeholders and Government Fishers within the linefishery can be placed into three broad categories: commercial, semi-commercial, and recreational fishers. These three groups and the major differences in their interests can be identified in a community such as Arniston. However, when identifying stakeholders, these broad categories do not provide a complete view of the diversity of sectors and interests groups within the linefishery. A reflection of the large diversity of stakeholders can be observed in Table 4.7. Thus, the responsible management body of the multi-species linefishery, not only has to avoid over-exploitation of the stocks, but it also has to find common ground with regard to other objectives within a myriad of diverse interests in different jurisdictions along the South African coastline. Table 4.7. Stakeholders in the linefishery by sector or group represented. The list is not inclusive, but reflects the diversity of interests, and is compiled from the attendees of the Second South African Marine Linefish Symposium in 1992 and the list of associations officially registered with S A M L M A . Sector or group Interest groups, associations and organisations Official member of represented SAMLMA Commercial 'St. Helena Baai Net and Lyne Vissers Vereniging' yes Agulhas ' A ' licensed Commercial Boat Owners Association yes Kalk Bay Commercial Line Fishermen's Association yes Kowie Commercial Fishermen's Association yes South African Linefish Management Industrial Association yes Recreational Natal Anglers and Casters Union -Natal Coastal Anglers Union -Natal Deep Sea Angling Union -South African Anglers Union yes South African Deep Sea Angling Association yes South African Rock and Surf Angling Association yes South African Underwater Union yes Western Province Deep Sea Angling Association -Management CPA yes agencies NPB yes CD:SF yes SFPJ yes Universities and FRD yes research ORI yes organisations! Department of Ichthyology, Rhodes University -SANCOR yes MBRI , UCT -| Most of these participate in the deliberations even if not official members Source: Beckley and van der Elst (1993) and S A M L M A ' s constitution Including the above stakeholders in management is based on the assumption that the legitimacy of the associated regulations will increase. Thus researchers, such as Jentoft and McCay (1995), state that it is not so much if and why, but how these user groups are going to be more involved. 69 Following this thinking the next logical step is to include individual fishermen or representatives as active participants in fisheries government decision-making bodies. Alternatively, fishers can participate indirectly in the formulation of regulations by having their representatives attend organisations such as S A M L M A as members. Many of the stakeholder/interest groups are official members of S A M L M A (Table 4.7) and thus participate in the formulation of regulations which are sent as recommendations to the government. Representatives from Arniston and other fishing communities could potentially be integrated formally within national management associations such as S A M L M A . However, in such a complex fishery, such as the linefishery, the participation of user groups is limited largely by the characteristics of the system, in that there are many'players'. 4.11 OUTCOMES: EFFICIENCY, EQUITY A N D SUSTAIN ABILITY Under any new co-management system, compliance is likely to improve for regulations when fishers are consulted. If the system makes provision for local monitoring and enforcement, it is likely that those regulations which are considered legitimate will be enforced at a lower cost. However, as a general rule, the more participants involved in decision-making the more the process is potentially delayed. This could have major consequences for efficiency, especially in the case of the linefishery which is complex and has many sectors with diverse interests. As far as equity is concerned, a more dynamic partnership between government, S A M L M A and local organisations, such as the Fishers' Forum, could be fostered in South Africa to improve equity. This could be done by taking advantage of the capabilities of interest groups, complimented by the fisheries administration and scientists, to provide enabling legislation and technical assistance. The long term sustainability of linefish stocks requires immediate cutbacks in effort for most species, although the socio-economic characteristics of the users is such that they can not reduce their income. It also requires a holistic management strategy which takes into account the divergent and competing interests of the various sectors and includes them in the decision-making process. In the short term, setting management goals, based on objective biological reference points using the framework of operational management plans, is critical for biological sustainability (Griffiths 1997). However, once these have been established the sustainable 70 management of the linefish resources will depend on the creation of equitable and efficient institutional arrangements for management. 4.12 THE RESULTS OF THE APPLICATION OF THE NEO-INSTITUTIONAL ECONOMIC ANALYSIS The aim of this first part of this chapter was to consider outcomes of alternative management arrangements in terms of efficiency, equity and sustainability, that is to evaluate the opportunities for an increase in the participation of fishers in the management process in order to create a more democratic system with greater compliance based on improved legitimacy. One of the major problems facing fisheries management in South Africa, especially in the linefishery, is that current regulations are often not obeyed. There are limits on output within the fishery and users compete for access to linefish stocks (Figure 4.4). The result is that stocks such as geelbek are overfished. Key contextual variables: biological, physical, technical, market, socio-economic Decision-making arrangements Possible policy initiatives-reduce participation Introduce output control (reduce competition for access) Incentives to coordinate and cooperate Patterns of j interactions among resource users Outcomes Boat licence system and size limit control No limits on output Users-compete for limited stocks of all linefish species including geelbek. Socio-economic conditions of participants (poor) -incentive to overfish Institutions for user-participation created, participation limited due to nature of system, number of participants and socio-political factors (previous government policies) Geelbek stock status estimated to be at very low levels High value species overfished then low value species Lower income of participants result in worsening of socio-economic conditions Figure 4.4 The predictions from the qualitative neo-institutional economic analysis for the management of geelbek (the linefishery), in terms of incentives to cooperate and outcomes (based on the conceptual model by Oakerson (1992) based on the framework presented in Chapter 3 (Figure 3.1) 71 It is possible that incentive 'adjusting' policy initiatives such as providing users greater security of access via output control measures such as individual quotas (for each fishing unit) could reduce competition for access to the overexploited stocks. However, before such policy suggestions are presented a quantitative analysis is required to analyse the incentives for cooperative versus non-cooperative management for species such as geelbek. 4.13 MODELLING THE G E E L B E K STOCK: A BIOECONOMIC ANALYSIS* In the previous sections the controversy over the size limit of geelbek was identified as an impediment to potential cooperative management arrangements. Any analysis would have to implicitly account for the incentives for users to exploit the geelbek stock on a sustainable basis. Thus the objectives of rest of this Chapter are to: 1) determine the current status of the South African geelbek stock and develop management recommendations for sustainable exploitation using an age-structured model. 2) evaluate the economic impact of the above management recommendations on regions exploiting different life-history stages i.e. the Cape and Kwazulu-Natal. Use a dynamic bio-economic model to analyze the trade-offs in the short term versus the long term, per size limit, per effort regime, per region (see for example: Lowe et al. 1991, Djama and Pitcher 1997). 3) apply game theory to evaluate the consequences of non-cooperation in these two regions (see e.g. Nash 1951, Munro 1990, Sumaila 1997a, 1997b) and to predict whether user groups would comply with recommendations deemed necessary for sustainable utilization. 4.14 METHODS The following basic data were used in the modelling exercise which follows: ¥ Sections 4.14-4.16 of this Chapter are modified from Hutton, T., M . H . Griffiths, U . R. Sumaila and T. J. Pitcher (in press). Cooperative verses non-cooperative management of shared linefish stocks in South Africa: an assessment of alternative management strategies for Geelbek (Atractoscion aequidens). Fisheries Research 72 1) Catch and effort and length frequency data for six statistical.areas (shown in Figure 4.3) for the period 1985 to 1996. 2) Growth parameters, obtained by fitting the von Bertalanffy growth function, using an iterative least squares procedure (using Microsoft Excel Solver routine with the Newtonian algorithm option), to age-length data (n = 558) presented in Griffiths and Hecht (1995) for 1985 and 1986 (Figure 4.5). 3) A length-weight relationship (L = a W b where, a = 8.42 x 10"6, and b = 3.01) - from Griffiths and Hecht (1995). 4) Estimate of Natural Mortality (M=0.5 year"1), obtained using Pauly's (1980) empirical equation and an average sea temperature of 16° C. 1200 r 0 1 2 3 4 5 6 7 8 9 Age (years) Figure 4.5 Mean observed length-at-age and the fitted von Bertalanffy (-) growth curve for Atractoscion aequidens sampled along the eastern seaboard during 1985 and 1986. The parameters of the growth relationship are Leo = 1041.9 mm, K = 0.367 and T 0 = -0.266 yrs (where /; = 588). 4.14a. Fishery Models: Virtual Population Analysis Virtual Population Analysis (VPA) was used to estimate instantaneous fishing mortality. This technique can be used to estimate the magnitude of fishing mortality and the numbers-at-age in a stock from catch data provided M is known (Pitcher and Hart, 1983). The ad hoc tuning procedure was used, that is the model was tuned such that the terminal F's, were set to be equal to the average F for a particular age class (Butterworth et al., 1989). Estimates for Fy,a (see 73 Chapter 3 for symbols) were solved iteratively using Newton's Method. An average instantaneous F=0.65 years"1 was obtained by averaging the F's for ages 2 to 9(+). Figure 4.6 shows the average F's for each age class estimated by the ad hoc tuned V P A . This value of F=0.65 years"1 " was used in the rest of the analysis as the value for the average instantaneous fishing mortality. The numbers-at-age matrix estimated in the ad hoc tuned V P A was used to obtain a stock-recruitment relationship by taking the recruits per year vector at age 1 and total spawning stock biomass for ages 5 to 9 for the period 1985 to 1995. The relationship is shown in Figure 4.7 and it was used in a forward calculating age-structured model. 0.0 1 2 3 4 5 6 7 8 9 Age (years) Figure 4.6 The estimates of instantaneous fishing mortality (F (year"1)) for each age from the ad hoc tuned V P A analysis. The age class, age nine (9), is a plus (+) group, that is all fish older than 9 are in this group. 74 Figure 4.7 Beverton-FIolt stock-recruitment relationship (Spawning Stock Biomass (SSB) versus Recruits) fitted to the V P A estimates of spawning stock biomass and recruits using least squares. The parameters are a= 1344515 and /J = 102 (see equation E.4). 4.14b. Yield Simulation A dynamic pool model was formulated to predict changes in population size and yield under different patterns of selectivity. The aim was to consider changes in the size limit, because the current size limit results in an age of capture of +/- 2.25 years (60 cm) less than the fish at 50% maturity (5 years, approximately 90 cm, see Table 4.8). The result is that fishes are targeting immature fish resulting in the potential for recruitment as well as growth overfishing. Table 4.8 Maturity-at-age vector for geelbek used in the age-structured model. The values are based on Griffiths and Hecht (1995) who found that 50% maturity occurs at age 5 (90 cm) and 100% maturity at age 6 (95 cm). Age (years) 1 2 4 5 6 7 8 9+ Proportion mature 0 0 0 0 0.5 1 1 1 1 In the case where alternative scenarios for effort control are simulated for different areas, Fy is computed to be area specific ('The Cape', Kwazulu-Natal) by multiplying Fy, by the proportion of the catch-at-age data for that area. In order to include stochasticity into the model, a coefficient of variation (COV) of 0.28 was used to add random noise to the recruitment function. The COV was calculated from the standard deviation and the mean of the values for estimated recruitment from 1985 to 1995 from the V P A analysis. 75 4.14c. Selectivity-at-age The selectivity-at-age vectors for the alternative size limits used is shown in Figure 4.8. The values used for each age at alternative size limits were computed from the proportion of that age available to the gear at a particular length and were estimated from the growth curve. That is, if the fish are growing at a rate such that, the length at which a fish reaches 80 cm fork length is equivalent to 4.9 years old, then at age 4 selectivity is 0.75, whereas at age 5 it is equal to 1. 4.14cl. Bio-economic analysis and predicting game theoretic outcomes One way to illustrate trade-offs and alternative management strategies is to consider game theoretic outcomes (scenarios) and make the assumption that each participant is a 'player' in a game. In this case study, two regions are chosen ('the Cape' and Kwazulu-Natal) are chosen as the two players. The aim is to show the consequences of non-cooperative behaviour by the two regions and to generalize for greater than two players, that is, to postulate why each individual fishing unit decides to cooperate or not. Figure 4.8 The different selectively curves used for the alternative size limits for geelbek in the age-structured model. 76 It is possible in the case of the linefishery where there are large numbers of harvesters participating in the fishery (~3000 commercial and semi-commercial fishing units), that a Case 2 situation exists (see Figure 3.2, and corresponding text in Chapter 3). If the number of players (N) is large then each one receives a payoff of H/5*N when cooperating (see Figure 3.2). A 'cheater' then receives a much larger share, equal to B, than i f he/she cooperates. Thus there are huge incentives to cheat as the number of players becomes large. The possible scenarios for alternative management strategies for geelbek are presented in Figure 4.9. Here, non-cooperative behaviour is interpreted to imply that participants target fish <60cm, whereas cooperation implies they obey the size limit of 60cm. The rationale stems from the fact that fishes admitted to knowingly disobeying regulations, i.e. 43% keep undersize fish. The fundamental assumption that needs to be made is that i f fishers cooperate with the management process they will obey size limits or the chosen effort control restriction. Similarly, for effort control, cooperation implies they would decrease effort by 43%. One widely accepted biological reference point in stock assessment is the estimated current spawning stock biomass (SSB) as a percentage of the estimated pristine spawning stock biomass. In the rest of the paper this is referred to as %SSB/SSB(pristine). The value of 43% for a decrease in effort is not chosen arbitrarily, rather this is the effort reduction needed in order to meet the percentage SSB/SSB(pristine) value of 25%, which is accepted as a threshold (or limit) reference point to lower the risk of stock collapse due to recruitment overfishing. For the effort control option, non-cooperative behaviour implies the participants maintain fishing effort at its current level (i.e. Fm = 1, where Fm is the factor that fishing effort must be reduced by). Lastly, for the combined control, the size limit and effort control scenarios are, combinations of the above size limit and effort control assumptions with regard to non-cooperative and cooperative behaviour, as is illustrated in Figure 4.9. In Munro's (1979) analysis of shared fishery resources, the concept of side payments was included. However in this paper, the problem is transformed from one of how to allocate net benefits to each region to one of deciding how to allocate effort to each region (OECD 1997). 77 4.14e. Calculating the PV of Revenue (PVR) The benefits in the above scenarios can calculated by computing the net present value (NPV), which depends on the discount rate (5); a factor that is affected by, amongst other variables, the inflation rate in the economy and the interest rate charged by financial institutions on money borrowed. Here, I calculate the PV of Revenue (PVR) rather than the NPV for three reasons. First, it is too difficult to include costs as it is a multi-species fishery for which obtaining cost estimates for geelbek-directed effort is problematic. Second, McGrath et al. (1997), the only study of this fishery to include costs, presents only average cost per trip for commercial 'ski-boat' operators coast-wide for all the species. 'Ski-boats' (typically fibre-glass vessels with outboard motors which are trailer drawn) only represent one type of vessel used in the commercial linefishery which targets geelbek, and therefore it is not appropriate to apply McGrath et al.'s (1997) data to this study. Third, it is accepted that the cost components (e.g. fuel and bait) between the two regions do not differ significantly per kilogram landed. Labour costs may differ between the two regions. However, as fishers receive payment as a share of the landed catch, the cost component for labour between the two regions are similar. Hence, using only prices should provide a good picture of the relative bargaining powers of the two regions. To calculate revenue, the fish prices used were RIO/kg in 'the Cape' and R14/kg in Kwazulu-Natal. The results of the analysis will not be biased by the use of PVR rather than NPV as the assumption is that costs are similar in both regions. 78 A. SIZE LIMITS Kwazulu-Natal Non-cooperative Non-cooperative 'The Cape' <60cm <60cm Cooperative 60cm <60cm Cooperative <60cm 60cm 60cm 60cm B. EFFORT CONTROL Kwazulu-Natal Non-cooperative Cooperative 'The Cape' Non-cooperative ^ ^ ^ P m = l Fm=l Fm=0.57 F m = l ^ ^ ^ Cooperative ^ ^ ^ ^ F m = l Fm=0.57 ^ ^ ^ F m = 0 . 5 7 Fm=0.57 C. COMBINED CONTROL Kwazulu-Natal 'The Cape' Non-cooperative Cooperative Non-cooperative Cooperative Fm=l ^<60cm Fm=l <60cm Fm-1 <60cm Fm=0.57 60cm Fm=0.57 60cm Fm=l <60cm Fm=0.57 . 60cm Fm=0.57 60cm Figure 4.9 The three alternative control methods considered in the analysis of management scenarios for the geelbek stock off the coast of South Africa: A . Size Limits, B. Effort Control and C. Combined control. In each scenario, the assumed choices made by Player 1 (Kwazulu-Natal) appear in the top right-hand corner and the assumed choices made by Player 2 ('The Cape') appear in the bottom left-hand corner. The choices include size limits (in cm.) or the factor (Fm) that fishing effort must be reduced by (see Equation E.6). 79 4.15 RESULTS The total catch along the South African coastline for the period 1985-1997 as well as the contribution from 'the Cape' and KwaZulu-Natal are shown in Figure 4.10, however this does allow me to infer what the current status of the stock is. The most relevant factors in stock assessment, apart from uncertainty, are the predicted sustainable yields of a stock under different effort regimes and/or size limits, and the current status of the stock. The stock status is especially important in the case of geelbek because this fish is exploited prior to maturity and is consequently vulnerable to recruitment overfishing - 50 and 100% maturity attained at 5 and 6 years, respectively (Griffiths and Hecht, 1995). Spawner biomasses of 25% and 40% of SSB(pristine) have recently been accepted as threshold and target reference points for linefish species, respectively (Griffiths et al. in press). Since the estimated current spawner stock biomass is low (see below), it was assumed that the initial management goal would be to rebuild the stock to the 25% SSB/SSB(pristine) threshold level as this will reduce the potential for recruitment overfishing. 900 -i 1985 1990 1995 Years Figure 4.10 The total reported geelbek catch along the South African coastline for the period 1985-1997 as well as the contribution from 'the Cape' (the West Coast, the SW Cape, the S Cape, the SE Cape and the Transkei) and Kwazulu-Natal. 80 Thus, the age-structured model was run under different scenarios, the aim is to achieve a value of 0.5 for the probability of the percentage SSB/SSB(pristine) being above or below the target value of 25%. Figure 4.11 shows a typical run where the variation is due to stochasticity in recruitment. In order to obtain probabilities for %SSB/SSB pristine being above or below the 25% criterion, the model was run at least 40 times until the estimate for the probability value stabilized. 50 r 45 -40 -S? 35 -CO 2004 2014 2024 2034 2044 2054 2064 Year Figure 4.11 A typical trajectory of the spawning stock biomass as a percentage of pristine spawning stock biomass (% SSB/SSB(pristine), from the predictions of the age-structured model for the years 2004-2068. In this case the size limit is 60cm and the effort in the entire fishery has been reduced by 43%. The horizontal line shows the threshold value (25% SSB/SSB(pristine)). 4.15a. Biological model results Figure 4.12. shows the results for the alternative scenarios. Reductions in the size limit or reductions in effort results in an increase in the long term %>SSB/SSB(pristine). The only scenario that achieves a probalility value of 0.5 (for the 25% SSB/SSB(pristine) criterion), is the case in which there is both a size limit and effort control, in this case a legal size limit of 60cm and an effort reduction coast-wide of 43%, that is, Fm=0.57 where: Fy = Fm * F (E.8) and since F=0.65, the value of Fy = 0.37 (i.e. a 43% reduction in effort, see Figure 11). 81 Figure 4.12 The probability of the spawning stock biomass as a percentage of pristine spawning stock biomass (%SSB/SSB(pristine)), being above or below the criterion chosen (5%, 10%, 15%, 20% or 25%) for alternative scenarios. Fm is the factor that fishing effort is reduced by (see Equation E.8). Another way of visualizing the effect of alternative scenarios for the management of the geelbek stock is to consider sustainable yield under an equilibrium model (the recruitment variability is removed) for different levels of fishing effort and size limit control. The results are shown in Figure 4.13. A higher yield can be obtained if the fishers obey a size limit of 60cm. The estimated current low stock levels are supported by trends in CPUE. The average catch per boat year has dropped to 2.49% (in the South West Cape), 4.32% (Southern Cape) and 1.46% (in the South Easter Cape) of historical values (1897-1906)(Griffiths, in press). This has occurred even though there has been major technological advances such as combustion engines, nylon lines, echo sounders, electronic navigational aids, onboard freezer facilities and larger vessels, all of which have dramatically increased the harvest capacity of modern vessels (Griffiths in press). 82 700 600 S 500 400 300 5 (1) > » 0> .Q ra c 2» 200 100 0 . . . -<60cm -60cm - - -70cm -80cm • SY-at 60cm SY-at 40cm • F(0.1) X 0.2 0.4 0.6 0.8 1 Fishing mortality F year" Figure 4.13 Sustainable yield (SY) of geelbek stock for different size limits (<40cm, <60cm, 60cm, 70cm and 80cm) versus fishing mortality (F year"1). Also shown is F(0.1) for a 60cm size limit It is predicted that there will be approximately a 300 tonne increase in sustainable yield i f the size limit is obeyed and approximately a 300 tonne increase in the sustainable yield i f there is a reduction in effort even i f the size limit is not obeyed. The fishing mortality for different Biological Reference Points (BRP) and the current status of the geelbek stock are shown in Table 4.9. In Table 4.9, the estimated current spawning stock biomass (SSBCURR) as a percentage of SSB pristine, provides for a measure of stock status, however geelbek have a late age at maturity. The SBCURR is another measure of the amount of spawners, since the late age of maturity needs to be considered. The other factors to consider are fishing mortality at M S Y (FMSY), the fishing mortality at a spawning biomass of 25% of pristine (FSB25) and the fishing mortality at a spawning biomass of 40% of pristine (FSB40). At a 60 cm size limit, the F M S Y » FSB25 or FSB40, implying that in order to reach F.SB25 (the threshold) or FSB40 (the target), the sustainable yield is less than M S Y . An increase in the size limit to 80 cm implies FSB25 can be 83 obtained at the current fishing mortality (FCURR), but this would have significant impacts on 'the Cape' in the short term as indicated in the bio-economic model. Table 4.9. Fishing mortality for different Biological Reference Points (BRP) and estimated current status of the geelbek stock off South Africa. [SSBCURR (current spawning stock biomass); F M S Y (fishing mortality at maximum sustainable yield (MSY)); FSB25 and FSB40, the fishing mortality at a spawning biomass of 25% and 40% of pristine, respectively); F(0.1) (the fishing mortality rate which is 10% of the fishing mortality rate : 0); FCURR (current fishing mortality), B C U R R (current biomass)]. BRP Size limit 40cm 60cm 80cm 1. FSB25 (Threshold) 0.30 (46% FCURR) 0.37 (57% FCURR) 0.60 (93% FCURR) 2. FSB40 (Target) 0.20 (31% FCURR) 0.25 (39% FCURR) 0.4 (61% FCURR) 3. F(0.1) 0.36 (56% FCURR) 0.44 (68% FCURR) 0.65 (100% FCURR) 4. F M S Y 0.39 (60% FCURR) 0.49 (76% FCURR) 0.78 (120% FCURR) Current Status* 5. FCURR N / A 0.65 N / A 6. S B C U R R § 2.0%¥ 6.7%¥ N / A 7. B C U R R N / A 9.5% N / A *Status in 1999 depends on situation in 1997 and 1998 - did some places still land fish smaller than 60cm? Model projects forward for 1997, 1998 and 1999 etc. ^Estimates from V P A (data: 1985 to 1996) give mean of 2.3 % of pristine. In 1980's fish <40cm were landed. ¥Thus if the 60cm size limit has been obeyed the current status of the resource is between 2.3% and 6.7% SSB(pristine), if not (i.e. landed fish are <60cm), it is between 2.0% and 2.3% of the pristine SSB. 4.15b. Bio-economic simulations Bio-economic results were obtained for the three different control measures mentioned earlier and expressed as sustainable yield (SY at equilibrium), PVR (long term - 70 years), PVR (short term - 5 years) and the short term (5 year) average catch. The only result which is presented for all three control measures, to illustrate the tradeoffs, is the PVR (short term - 5 years). Thus in Table 4.10, the PVR (short term), is shown for size limit control (row 4), effort control (row 5), and combined control (row 6). Table 4.10 also illustrates the results for all the output variables for size limits (row 1-4). This is done to illustrate the differences and similarities between the output variables expressed in the results, and to indicate that the PVR (short term - 5 years) suffices as a output variable to show the consequences of non-cooperation in terms of the gains in revenue over the next five years. 84 Table 4.10. Results from the model for six alternative scenarios in terms of changes to the output variables (sustainable yield, the present value of revenue (PVR, 70 years), PVR (5 years) and the short term (5 year) average catch) to each region that targets geelbek in the linefishery. The mean number is shown for each outcome (cooperative versus non-cooperative) as well as standard deviation for the totals for each outcome (n = 200 simulations). The %SSB /SSB(pristine) is shown in italics. Control Measure Outcomes Non-cooperation Cooperation Only the Cape cooperates Only Kwazulu -Natal Co-operates 1. Size Sustainable Total Yield - tonnes 316 ± 30 587 ± 4 5 582 145 315 129 Limit Yield Yield to the Cape - 302 539 537 301 Yield to K - N - 14 47 46 14 2. Size P V R Revenue (R millions) 22.7 ± 1.6 31.4 ± 1.7 31.61 1.8 22.5 1 1.6 Limit (70 years) Revenue to the Cape- 21.5 28.4 28.6 21.3 Revenue to K - N - 1.2 3.0 3.0 1.2 3. Size Av. Catch Total Yield - tonnes 186 ± 15 156 ± 13 157 1 13 185 1 15 Limit (5 years) Yield to the Cape - 178 146 147 178 Yield to K - N - 8 10 10 7 4. Size P V R Revenue (R millions) 7.2 10.6 6.010.5 6.010.5 7.210.6 Limit (5 Years) Revenue to the Cape- 6.8 5.5 5.5 6.8 Revenue to K - N - 0.4 0.5 0.5 0.4 % SSB/SSB(pristine) 1.9% 6.7%, 6.6%, 16.6% 5. Effort PVR Revenue (R millions) 7.2 + 0.5 6.2 1 0,5 6.010.5 7.2 10.5 (5 Years) Revenue to the Cape- 6.8 5.6 5.3 7 Revenue to K - N - 0.3 0.6 0.7 0.2 % SSB/SSB(pristine) 1.9% 10.1% 13.9% 2.8% 6. PVR Revenue (R millions) 7.2 ±0 .5 4.4 1 0.4 4.710.4 7.2 10.5 Combined (5 Years) Revenue to the Cape- 6.8 3.9 3.9 7 Revenue to K - N - 0.3 0.5 0.8 0.2 % SSB/SSB(pristine) 1.9% 24.7% 20.5% 2.8% If I consider non-cooperation versus cooperation for size limit control in terms of the long term sustainable yield (Table 4.10, row 1), it is clear that the long term benefits of cooperation are greater. The biological objectives are met as the %SSB/SSB(pristine) is a greater value than the value under non-cooperative management (6.7%>1.9%). Note that, due to the occurrence of adults in K-Natal, the region is not affected to the same degree as 'the Cape' by the effect of size limit control. In stark contrast when the PVR (short term) or the short term average catch (for size, effort or combined control) is calculated, the benefits of non-cooperation are much greater than those from cooperation in all cases. 85 The biological objectives are also not met. In fact the economic benefits are a gain of R1.2 million from non-cooperation versus cooperative management (R7.2 minus R6 million) for size limit control. The only scenario which achieves the government target of > or «25% SSB/SSB(pristine) is the case where there is combined control (size limit and effort control) and there is cooperation between the parties. In this case a value of 24.7% SSB/SSB(pristine) is obtained. Therefore, for a «23% increase in the long term average %SSB/SSB(pristine)(l .9% to 24.7%), the model estimates that it will cost the government R2.8 million just for geelbek (R7.2 million minus R4.4 million, Table 4.10, row 6). This value of R2.8 million depends on the chosen discount rate. In Table 4.11, the relationship between discount rate and the benefits due to non-cooperative strategies are shown. It indicates that it will cost the government less the higher the discount rate of the participants, which is at first counter-intuitive, but on further reflection, occurs because the participants get less in the future as the discount rate increases and therefore the opportunity cost of changing their practices is lower. Table 4.11 Relationship between discount rate and the additional rent for a five year period (1998-2002) due to non-cooperative management. Discount rate (%) Rand millions 5 2.949 10 2.741 15 2.442 DISCUSSION The objectives of this analysis were to evaluate the status of the stock and consider what size limit and/or effort restrictions would allow it to re-build to achieve the criterion that SSB/SSB(pristine) be >25%. Fishers are not obeying size limits (as indicated in the predictions of the model and the observed length-frequency samples). However, the commercial fishery is regulated principally via size limits and in the long term an increase in size limit may be required to save the stock from collapse. The current effort is too high to meet the 25% SSB/SSB(pristine) 86 criterion. The stock is estimated to be below 10% SSB/SSB(pristine) based on the assumptions of the ad hoc tuned V P A (see Table 4.9). The aim was to include economic factors and consider the effects of the above management restrictions on two regions which fish on these shared stocks. Game theoretic modelling was used to evaluate outcomes of assumed non-cooperative versus cooperative management of fishers in the two regions. The results show that, i f the only consideration is the spawning stock biomass criterion, that is the %SSB/SSB (pristine) must be > or «25%, then the model suggests that the only case where this occurs is where there is combined control (size limit and effort control) and there is cooperation between the fishers in these regions. The %SSB/SSB(pristine) criterion is not achievable unless the government enforces size limits of 70cm or 80cm, which will be opposed by the participants in this fishery. This criterion was deemed to be critical in terms of the risk of recruitment overfishing. In contrast, the sustainable yield provides an indication of long term benefits and the results indicate there will be a ± 300 tonne increase if the size limit is obeyed. If I consider non-cooperation versus cooperation for size limit control in terms of long term sustainable yield, it is clear that the long term benefits of cooperation are greater. Thus, based on these results I would expect cooperation based on higher catches in the long term. In fact the biological objectives are met as the higher %SSB/SSB(pristine), is a greater value than the value under non-cooperative management. The alternative of non-cooperative behaviour threatens the stock, potentially leading to the collapse of the fishery. The above result is not true when the PVR (short term) or the short term average catch (for size, effort or combined control) is calculated. The benefits of non-cooperation are much greater than cooperation in all cases. The biological objectives are also not met. In fact, there is an economic gain of R1.2 million when there is a move from cooperative to non-cooperative management for size limit control. Thus, in terms of its descriptive power, the study shows that if the government insists on its biological objective, then enforcement costs will be very high and transfer payments may have to be made. The only scenario that meets the government target of 25% SSB/SSB(pristine) is a 60cm size limit and 43% decrease in effort. Considering the present status of stock, at the very least, the 60cm size limit should be obeyed even if there is no decrease in effort. 87 The central government is responsible for the management of shared stocks and makes collective choice rules on behalf of license holders who act in their best short term interests. In this case study, the large number of players (licensees) within the linefishery creates a costly situation in terms of facilitating cooperative management in spite of the greater long term benefits that will accrue from such management arrangements. To reiterate, the government has two objectives, namely, sustainability and the maximization of the economic benefits from the fishery (PVR). The outcomes of the combined control (i.e. 24.7% SSB/SSB(pristine)) are significant as this is the long term average. In most other cases the fishery tends to over-fish cohorts and reduce recruitment. For a ~ 23% increase in the long term average %>SSB/SSB(pristine), the model estimates that it will cost the government R2.8 million just for geelbek. If the discount rate is lower, this value increases, which is at first counter-intuitive, but occurs as the stock is gets close to exhaustion the greatest economic benefits can be obtained through a rapid depletion strategy. This cost will be felt in the enforcement needed to achieve such an objective, which may be the only means of saving the stock from collapse under intense fishing pressure. From the bio-economic analysis and game theoretic outcomes I can infer reasons why fishers are not obeying regulations. In this case study, two regions were chosen ('the Cape' and Kwazulu-Natal), with the aim of showing not only the consequences of non-cooperative behaviour between the two regions, but also to generalize for greater than two players, that is to postulate why each individual fishing unit decides on non-cooperative strategies rather than cooperative strategies. It is not in their short term economic interests to conserve the resource or to cooperate. Long term benefits do exist, but high interest rates in South Africa only exacerbate the situation and create a Case 1 situation as defined by the OECD (1997)(Chapter 3, Figure 3.2). Thus short-term economic factors impose major constraints on the potential for co-management of marine resources in South Africa. Along with issues of representation, the latter is identified as a major constraint to the inclusion of users in the management of marine resources. The large number of participants further exacerbates the problem (Case 2 - see OECD (1997), where N » l , Chapter 3, Figure 3.2) as any government wishing to co-opt fishers into obeying regulations and not cheating would have to cover transaction costs, and/or mandate lower interest rates, and/or make transfer payments (subsidize fishers not to catch fish which depends on their opportunity costs). 88 These results (in conjunction with evidence for over-exploitation of most linefish species (Griffiths, in press)), point to the need for a major reduction in commercial fishing effort (particularly part-timers). The new Living Marine Resources Act (No. 18, 1998), provides for such measures i f stocks are threatened with collapse. Thus, in summary, any inclusion of users in a co-management arrangement is not only dependent on the political reality in South Africa, that is, the willingness and ability of the government to share decision-making power, but also on the economic circumstances the participants operate within. The short term economic benefits of non-cooperation and overexploitation exceed the long term benefits of cooperative management (co-management) for fully exploited stocks such as geelbek. Although this is an illustrative example, it is postulated that all shared stocks (most of the linefish species) suffer from the same constraints. It is likely, therefore, that many South African fishing communities are subject to the same economic incentives, thus threatening the long term sustainability of these marine resources. These are important findings in terms of the sustainable utilization of marine resources in South Africa and their management, because it shows that management policies which ignore economic realities will fail unless policies are incentive 'adjusting'. It is assumed that incentives can be 'adjusted' to result in positive outcomes when the rules governing participation (i.e. rights) and the allocation of benefits for shared stocks are well defined and constrained. Otherwise the consequences of unfettered competition for access to scarce marine resources will result in their depletion. 89 Chapter V The West Coast Deep-Sea Hake Fishery 5.1 COOPERATIVE VERSUS NON-COOPERATIVE M A N A G E M E N T OF THE WEST COAST DEEP-SEA H A K E FISHERY" In 1994, the harvest for the entire South African fishing industry had an estimated annual wholesale value of nearly US$ 400 million, to which the demersal and midwater trawl contribute about 50% (Table 4.1, see Chapter 4). The mainstay of the demersal catch consists of hake {Merluccius capensis and M. paradoxus) which occur on the south coast over the Agulhas Bank and are distributed on the west coast of South Africa (Figure 5.1). Reviews of the biology of hake are provided by Botha (1980), Crawford et al. (1987), Payne (1989) and Payne and Punt (1992). The distribution of each species is depth-dependent; M. paradoxus occurs in deep water while M. capensis is a shallow water species (Botha 1973) (Figure 5.1). 10 15 20 25 30 35 1 0 15 2 0 25 30 35 Degrees east fcingrtude Degrees east longitude Figure 5.1 The distribution of Merluccius capensis (Shallow-water Cape hake) and M. paradoxus (Deep-water Cape hake) off the coast of South Africa and Namibia. The ICSEAF divisions are also shown. Sections 5.1- 5.12 are modified from Hutton, T, J. Raakjaer Nielsen, J. and M . Mayekiso. 1999. Government-Industry Co-management Arrangements within the South African Deep-Sea Hake Fishery. Presented at the International Workshop on Fisheries Co-management, Penang, Malaysia, 23-28 August 1999. 90 The aim of this chapter is to apply a research framework based on neo-institutional economics, outlined in I C L A R M and IFM (1998) to a second case study. In addition, a bio-economic game theoretic analysis is applied to the fish stock, in this case hake. In the previous Chapter a similar analysis was applied to the linefishery and the geelbek stock. In this Chapter the research framework presented in Chapter 3 is applied an analysis of outcomes (e.g. sustainability, efficiency) of alternative management strategies for the Cape hake fishery in South Africa, specifically the deep-sea hake trawl fishing which targets Merluccius spp. off the west coast of South Africa. The deep-sea fishery operates on the west coast, and in waters deeper than the 110m isobath on the south coast, whereas a small inshore fishery operates over the shallower Agulhas bank. The aim is to also evaluate the opportunities and constraints for co-management arrangements within the fisheries management process in South Africa. The South African demersal trawl fishery developed in the early 1900s as a sole directed fishery (Muller 1938, De Jong 1974). By the end of the First World War, the hake catch had increased to about 1000 t a year (Payne and Punt 1992). The annual catches only fluctuated a small degree until 1932 when the principally sole-directed fishery began taking a larger amount of hake. By the end of the 1940s, the catch was approaching 60000 t. After 1962, hakes were also targeted by foreign trawlers from several countries. By 1973, some 14 different countries achieved a catch of just under one million tonnes with more than 300 large vessels (Botha 1985). The local fishery reached a peak of 244000 t in 1972 (Figure 5.2). As a result of the fishing pressure in the south east Atlantic, catch rates declined (Figure 5.3). 91 250 r 1917 1927 1937 1947 1957 1967 1977 1987 1997 Year Figure 5.2 The total catch of hake from 1917 to 1997 in ICSEAF division 1.6 (see Figure 5.1, data from Leslie 1998). The International Commission for the Southeast Atlantic Fisheries (ICSEAF) was established in 1972 to investigate and control the international fisheries for hake off South Africa and Namibia (Andrew and Butterworth 1987). The overfishing forced ICSEAF to introduce an observer program and allocate quotas to member nations. In 1975 the minimum mesh size was increased from 102 to 110 mm. In 1977, the South African government declared a 200 nautical mile EEZ, forcing the foreign fleets to withdraw from South African waters (fleets from Japan, Spain, the then Soviet Union and other Eastern bloc countries). With the realization that global quotas were not effective, individual quotas were introduced in 1979. The apportioning of individual quotas was negotiated with the industry and the stakeholders were involved in negotiations as to the proportions they received. With the declaration of the EEZ and a conservative rebuilding strategy (which included the cooperation of the industry), there has been a halt to the declining catch rates observed in the 1960s (Figure 5.3). Annual hake catches by the South African fishing fleet over the period 1982-1991 remained fairly constant, averaging 138000 t per year. The hake T A C has increased to a current annual level of over 150000 t. 92 4 -2 -0 -1950 1960 1970 1980 1990 2000 Year Figure 5.3 Hake CPUE from 1955 to 1997 in ICSEAF division 1.6 (see Figure 5.1; data from Leslie 1998). 5.2 The Hake Fishing Sectors and Management Individual quotas were first granted in 1979, the bulk being allocated to the two major companies and a block apportionment of 5 000 t to South East Coast Inshore Fishing Association (SECIFA) members mainly based in Mossel Bay (the Inshore Sector). The Inshore fisheries' contribution to catches of hake and other demersal species is shown in Table 5.1. In the deep-sea sector, after increasing to seven participants, the number of operators was six by 1984 (Stander 1995). In 1985, the Minister announced the 80:20 rule, undertaking to allocate 80% of any increase in the hake T A C to existing quota holders (South Africa Deep-Sea Trawling Industry Association (SADSTIA) and SECIFA)) in the future (Stander 1995), with 20%o going to new entrants. The formation of the Quota Board increased the aspirations of those keen to enter the demersal sector. The Board appointed a committee to review its guidelines in 1992, with the specific objective of facilitating the accommodation of new entrants, and a decision was made to end the 80:20 rule. The Quota Board (now defunct) was thus able to make new hake allocations (4 000 t 93 divided among four new-entrants in 1993). Excluding allocations made by the Minister, there were forty quota-holders in the hake fishing industry in 1995. The numbers of quota holders have increased more recently under the new governments policy of re-distribution. Current scientific T A C recommendations for the South African hake fishery are based on a dynamic production model estimation procedure which utilizes catch, CPUE and survey biomass data (Butterworth et al. 1989, 1992a). The CPUE trend in the fishery originally showed an increase after a decline in the 1950s to 1970s (Figure 5.3). The CPUE trend has recently been standardized with a General Linear Model (GLM) taking into account changes in power factors, indicating the CPUE has not changed much over the last few years. Thus, under a revised Operational Management Procedure (OMP) in November 1998, a fishing mortality of F0.075 has been chosen as the harvest rate for the stock for 1999 (a harvest strategy which assumes the stock is close to F at MSY) . It is clear from Table 5.1 what contribution the offshore deep-Sea trawl fleet has on landings, capturing 88.3% of the demersal fish in 1994. A new sector in the hake fishery is the longline sector (in addition, greater catches are being made by the handline fishery). The demersal trawl fishery is the dominant fishery; however, i f I consider the number of applicants for longlining, then the trend strongly suggests that the longline sector is a growing element of the hake fishery in South Africa. The trawl-based fishery requires a large capital outlay as the industry has extensive land-based processing facilities, whereas longlining is a less capital-intensive method of fishing than trawling and is seen as a means whereby access to the hake resource can be broadened within the government's objective of redistribution. 94 Table 5.1 Demersal landings (t) various fishing sectors in South Africa for 1994 (Table modified from T A B L E XXVIII in SFRI 1994). The wholesale value is also shown. Species Deepsea trawl Inshore (South Coast) trawl Midwater trawl Longline Total Value Millions Rands Hakes 134104 9569 372 2753 146798 352 Kingklip 2759 105 41 148 3029 48 Soles 1 978 - - 979 11 Redfish 123 630 21 - 111 3 Pomfret (Angelfish) 2126 1 - - 2127 26 Gurnards 293 281 - - 575 1 Jacopever 729 - 2 - 731 1 John Dory 1078 1 8 - 1087 4 Horse mackerel 6951 1527 3576 - 12054 24 Sharks and St.Joseph 46 1471 - - 1517 2 Snoek 6138 11 - - 6149 25 Monk 4953 86 18 - 5057 20 Chub mackerel 2388 7 73 - 2468 5 Buttersnoek 2649 6 88 - 4743 19 Cephalopods 271 302 10 - 583 5 Other + trash fish 494 129 4 - 727 + 1079 Total 167103 15104 4187 2901 190374 546 Percentage contribution 88.3% 8.0%> 2.2%, 1.5% 100% 5.3 The West Coast Deep-sea (Offshore) fishery: bio-technical and physical characteristics Vessel types and factories The deep-sea fleet consists of about 25 wetfish vessels (fish are laid on ice) and 36 factory vessels (with freezers and processing capability). A l l the vessels are stern trawlers. In comparison, in the inshore fishery there are 35 small trawlers with an average length of 23m. Figure 5.4 shows the breakdown of size in the fleet and Figure 5.5 the age composition of the fleet. The vessels have an average age of 20.4 years and an average length of 54.1 m. The average power of the vessels is 1284 kW. The freezer vessels have an average crew size of about 46, whereas the average size of the crew on the wetfish vessels is 25 (Stuttaford 1994). The deep-sea fleet has a combined tonnage of over 50000 GRT which had a replacement value of R400 million in 1993 (SADSTIA/SECIFA 1994). 95 < 30m 2% >70m Figure 5.4 Breakdown of size of the South African deep-sea trawler fleet. The total fixed investment in 1997 for the trawling sector for vessels, equipment, machinery, buildings, vehicles, etc. is estimated at R273 million, with a replacement value estimated at R1022 million (Anon. 1998, Table 5.2). There are 58 land-based factories which were processing fish landed by the trawl fishery (SADSTIA/SECIFA 1994). ">30" "5-10" 11 % 11 % "10-20" 24% Figure 5.5 Breakdown of age (years) of the South African deep-sea trawler fleet. 96 Table 5.2 Total investment for 1997 in each division of the trawl hake sector of the deep-sea hake fishery in South Africa. The 'book' and replacement value (millions Rands) from Anon. (1998). Sector 'Book' value Replacement value (millions Rands) (millions Rands) Catching Division Vessels (91) 101 512 Equipment and buildings 18 25 Processing Division Machinery and Equipment 58 201 Buildings 37 130 Storage Division Building and Equipment 28 63 Distribution Division Vehicles and Equipment 7 29 Other Admin. Equipment 2 5 Buildings 22 55 Other assets 2 T O T A L I N V E S T M E N T 273 1 022 Range of fishing and other physical boundaries The local trawl fishery was initially based at Cape Town, but later in the sixties also became established at the port of Saldanha. The local fishery has traditionally confined its activities to the fishing grounds around Cape Town and to a lesser extent off the southern coast of South Africa. Effort is now directed on the trawl grounds. Most of the trawl grounds off the west coast run north-south along the 200m isobath and are referred to as the "banks". Typically, harbours have a breakwater and a jetty with fishing vessels having dockside access for off loading the catch. Thus a limiting factor is mooring space and new entrants have argued that the established companies have monopolized harbour space and facilities at the major harbours. Harbour facilities large enough for trawlers and/or longliners exist at Port Elizabeth, Mossel Bay, Hermanus, Gansbaai, Hout Bay, Cape Town, Saldanha, St Helena, Veldrift-Laaiplek, Lamberts-Bay and Port Nollorth. The wet-fish vessels are also limited in range in that they have to return to place their catch in freezers or on fresh ice before it deteriorates. The fish are landed on ice and transported immediately or stored in freezer facilities in the factories. Typically, wetfish vessels remain out of port for 6 days (historically three weeks), whereas freezer vessels remain out for two months (historically three months). The shorter period for the wetfish vessels has been driven by market demand for high quality fresh fish. Wetfish vessels typically land 50 t 97 whereas freezer vessels process fillets on board, typically processing a catch of 500 t in 40 days. Based on the gear and the fishing vessels used, and the mechanized processing, this sector can be classified as industrial, although this term is not used as a formal categorization such as the term commercial in South Africa. Administrative and legal boundaries Operators in the hake fishery require boat licences as well as permits in order to exploit hake. Boat licences are issued and refer to the magisterial district the port is located in. Most of the deep-sea trawl fleet are moored at Cape Town and Saldanha Bay and are licensed within their respective registration areas. However, this does not provide a clear indication of the distribution of fishing effort as there is considerable movement between regions. A l l permit holders are required under law to submit catch returns and CPUE data for the region they fish. Another legal boundary are access rights and the right to harvest fish. It has been argued that there is extensive 'concentration' in the hake industry22. It is thus important to consider who holds access to the hake resources off South Africa. When individual quotas were introduced in 1979, 95 % of the quota went to three companies, Irwin and Johnson Limited, Almalgamated Fisheries Limited, and Sea Harvest Corporation Limited. These three firms at that stage were involved extensively in the whitefish industry, had fleets of trawlers, processing plants and distribution networks. Table 5.3 shows the breakdown in the allocation of quota in 1996 for each of the fisheries including hake. Seventy-one percent of the hake quota was held by the two major quota holders in 1996, both of which are public-listed companies. The vertical integration in the industry is extensive with the large companies, catching, processing as well as marketing the fish. In addition, they operate cold storage facilities and have distribution networks for fish products and other perishable foods. Some companies have also diversified into frozen food production. 'Concentration' refers normally to monopolisation and the subject is controversial despite the fact that the companies are public listed companies. 98 Table 5.3 Number of quota holders in the major fisheries sectors in South Africa and the percentage of quota held by the top 2-5 quota holders in each fishery in 1996. Total number of quota holders shows all quotas in all the different sectors. Statistics for the major quota holders refer to the sum of quotas held by the parent Resource Total number of quota holders Number of major quota holders Quota held by major holders (%) Hake 53 2 71 Pilchard (directed + bait) 56 4 71 Anchovy (reduction) 17 5 78 West Coast Rock Lobster* 103 5 60 South Coast Rock Lobster 8 4 94 Abalone 16- 5 91 Linefish§ 3223 N/A N/A * 1995/96 season -1995/1996 season, increases from 6 in 1994/95. §Not regulated by quota: number given is the sum of A and B licences, plus licences for tuna and squid. These companies are sometimes referred to as "Big Business" by people who are opposed to the 'concentration' in the industry (Informal Fishing Sector 1995). Proponents of change in the industry, particularly those who argue that they have been discriminated against in the past, believe they have strong basis for their requests that there should be considerable re-distribution in the industry. However, Table 5.3, which represents the situation in 1996, does not reflect the more recent change that is occurring in the hake fishery and the industry. Figure 5.6 shows the relationships of the number of quota holders and percentage held by the two major quota holders over the last twenty years. There has been a proliferation of new quota holders since 1994. Correspondingly, the percentage share (to the two major companies) has shown a decline, although the change is more rapid in the last four years. The share held by the largest two companies has been reduced to 63.5% of the total hake T A C . 99 100 140 120 (/> i _ a> 2 100 o ra 80 •*-» o §• 60 >4-O g 40 20 0 1978 •No. of quota holders Share to two major companies (%) 1983 1988 year 1993 1998 80 60 40 20 (/) .22 'c ro o. E o o i _ .2, — E ^ o o <D l _ ro .c w Figure 5.6 The number of quota holders and percentage held by the top two major companies over the last twenty years (Data from Stuttaford 1983, 1991, 1993, 1996 and 1997). 5.4 Characteristics of the market About two-thirds of the demersal catch is landed fresh and processed in extensive shore-based facilities. The balance is processed at sea into marketable products aboard factory ships. The white-fish industry has developed an extensive international market with the development of high value products23. The trawling industry supplies the majority of fresh and frozen seafood consumed in South Africa. Consumers in South African supermarkets now have a choice from a wide selection of natural and processed hake, fillets, steak, loins, portions and sticks, breaded, battered, and sauced products (Kramer 1997). The major fishing companies play a dominant role as they have established markets and a network of contacts. These companies have facilities for storage, processing, and marketing and the products are marketed countrywide as they are transported by road or rail. About 40-50% of The product is marketed internationally under different names: in Italy as Nasello, in France as Merlu de Cap, in Germany as Seehecht, in Australia as smoked cod, in the USA "whiting''' and "Yankee clipper", and in Spain as Lomos y Centros de Merluca (steaks and loins)(Kramer 1997) the catch is exported. Exported prime quality hake had a selling price of RIO.42 per kg in 1996, whereas processed fish on the South African market had an average selling price of R5.99 per kg (in 1996); (Anon. 1998). Line-caught hake can sell for as much as R28 per kg on international markets depending on the exchange rate. Overall revenue from trawling is estimated to be in the region of R725 million per annum (Anon. 1998). The export revenue generated from selling unprocessed and processed hake is estimated to be R327 million for trawling (Anon. 1998). Only 1.5% of the whitefish international market share is represented by South African hake and therefore the industry aims for high quality and consistency of supply in order to stay competitive in the market. 5.5 Socio-economic characteristics The socio-economic reality for all South Africans is dominated by major differences in wealth between ethnic groups, due to the country's complex history. These differences greatly affect the incentives for cooperation and the patterns of interaction between the stakeholders in the hake fishery. Extensive social, economic and political boundaries existed in the past and the consequences are still being felt by the people despite a new political dispensation. Most of the economic wealth now resides with a minority. Issel {Financial Mail - February 1995) states that fishing communities were affected negatively by the laws under the Apartheid system. He argues that this has resulted in most of the previously disadvantaged people seeking employment with the fishing companies. In the past, positions of power in government and business were held by the minority, whereas most of the blue collar workers in all the industries were mostly from the majority. Although this description is rather general, the same effects were evident in the fishing industry as it is embedded in the greater political economy. In many cases, the majority was denied access to certain fishing stocks, permits, licences and/or harbours. In addition, the whole political economy discriminated against their involvement in the fishing industry. The demersal (hake) and midwater trawl industry employs about 8700 people, of which approximately 2800 are employed full time at sea (Table 5.4). Total labour costs (salaries and wages) amount to about R260 million per year which includes bonuses, commissions, and remuneration (Table 5.5). Schutte's (1993) socio-economic assessment of thirteen previously 101 disadvantaged fishing communities on the west and south coasts included many of the fishing communities from which hake is targeted, including Saldanha Bay. Schutte (1993) found that the average monthly income in the Saldanha Bay fishing community (the previously disadvantaged community) of R1409.80 was considerably higher than the average monthly income of all the previously disadvantaged communities surveyed (Schutte 1993). However, this average is less than half of the mean monthly income of R2 800 for all households; that is, all population groups in South Africa. Schutte (1993) also found that fishers complained of having no other source of income. The percentage of people who were unemployed in Saldanha Bay, was estimated to be 9.4% when Schutte (1993) completed his assessment in 1992. The socio-economic differences between the wealthy minority and the previously disadvantaged create a dilemma as far as re-distribution is concerned. Greater access to the hake fishery via less capital-intensive methods such as longlining create new opportunities for the previously disadvantaged to increase their socio-economic status; however, as is indicated in Table 5.4 and 5.5, the companies in the hake industry employ and provide remuneration to many people, including people belonging to the previously disadvantaged. Thus, any redistribution to previously disadvantaged fishers and/or small and medium size enterprises have to take into account the fact that these companies employ 8700 people (Hirshorn 1995). The companies have argued they will be forced to lay off workers, an issue which is of major concern to organized labour. The main unions representing fish-workers and processors are the Food and Allied Workers' Union (FAWU), and the Trawler and Linefishermen's Union. The unions which represent labour, represented the workers during the fisheries policy development process and aligned themselves with industry as there was concern that redistribution would result in job losses. 102 Table 5.4 Number of people employed in 1991 and the economic value (1994) of the major South African fisheries. US$1 - SA Rand 3.57 (exchange rate on 31 December 1994); (from Cochrane and Payne (1998). Fishery Employees (1991) Fishers/crew Onshore - workers Processors (1991) Wholesale value -processed. (1994) US$ - millions Demersal and midwater 2800 5900 201 Pelagic 1000 3700 81 Rock Lobster 2200 1600 47 Linefish, squid, tuna 6200 2000 46 Abalone 140 80 17 Other 7 T O T A L >12340 > 13280 397 Table 5.5 Total remuneration and benefits (Value in million Rands) in the hake trawled sector and the number of people receiving these benefits in 1997. Table adapted from Anon. (1998). Remuneration and benefits Number of people Value (million Rands) A: Salaries & Wages Catching Sector Sea-going 1854 83 Fleet management 906 42 Processing Sector Factory workers 3826 81 Distribution Sector Employees 415 18 Storage Handling Employees 209 5 Administration Employees 282 15 Marketing Employees 56 6 Other Employees 247 8 Sub-total 7 795 259 B: Employee Benefits Pension and Provident Funds 6 697 14 Medical Assistance 4 803 4 Housing Assistance 4 559 6 . Educational Support 3 921 5 Community Activities - 2 Sub-total 27 TOTAL 286 C: Training and Education Investment in training facilities 0.2 Total cost of training 6 819 6 103 5.6 Knowledge of the fishery, compliance, monitoring and enforcement Within the hake industry, the knowledge of the scientific process and management is extensive, especially amongst certain individuals in the industry who work for the major companies (in many cases either the managing directors or the managers of fleet deployment and control). Industry representatives attend and often present at all the major scientific conferences or at least attend the proceedings. The positive relationships that industry managers have had with researchers and the research institutes over the last few years is reflected in Blankley (1991) who reviewed their experiences. There has also been active participation of the industry in courses on fisheries management24. The established industry has consulted with independent scientists in order to verify government stock assessments and have acquired through extensive interaction with these scientists and government scientists a thorough knowledge of the actual assessment process (Schaefer models versus V P A analysis) and the assumptions of the modeling process (e.g. the catch per unit of effort is assumed to be proportional to biomass). Control and enforcement was previously undertaken nationally by Fishery Control Officers within the Marine Control Section of the Chief Directorate. More recently, Marine Control is being integrated into the two separate Directorates of Inshore Resources and Offshore Resources management. Historically, there was little or no inspection of the deep-sea hake fishery. The companies, under their permit conditions, have to log and record their catches and the data are sent to the Department. The industry provided the government with catch, effort, as well as bycatch data and there was close cooperation with the government. The fact that only a few quota holders existed in the hake fishery meant that occasional monitoring both by the government and by companies was practical. The fact that new entrants are resulting in the number of quota holders greatly increasing is going to place a greater strain on the enforcement of regulations in the hake fishery. 24 Fisheries Management and Science (a short course for the S.A. Deep-Sea Trawling Industry, Zoology Department, University of Cape Town, 30-31 January 1991) 104 5.7 Decision-making arrangements and fisheries management policy in South Africa The framework used in the study ( ICLARM and IFM 1998), divides rules into three categories (operational, collective and constitutional). In the new South Africa, the constitutional rules were drawn up by a government of national unity (circa. 1994-1996), and as such take effect through government policy and statutory laws. Collective choice rules are made by the minister responsible for fisheries management. In addition, the minister makes use of various state bodies and agencies which, through the minister, are responsible for the day-to-day implementation of policies (the operational rules). Various officials within state-run agencies are, in effect, delegated some authority by the minister for certain collective choice rules. At another level each fishing unit follows certain operation rules based on the conditions of the permit to fish (obtained from the government). The rules on harvesting rights relate to size of fish, area that can be fished, and type of gear (trawl versus longline). The management of the hake fishery is the responsibility of the Department of Environmental Affairs and Tourism (DEA&T). Within the D E A & T , Marine and Coastal Management ( M C M , ex Sea Fisheries) is responsible for the assessment of fish stocks. A Directorate: Offshore Resources within the (MCM) is responsible for biological research and the compilation of effort and catch data for the hake fishery. The details of the management of marine living resources under the new Living Marine Resources Act, 1998 was covered in Chapter 2. 5.8 National Management Associations and Committees 5.8.a South African Deep-sea Trawling Industry Association (SADSTIA) The South African Deep-sea Trawling Industry Association (SADSTIA) was formally constituted in 1979. The main original members at that stage were Irwin and Johnson Limited, Almalgamated Fisheries Limited (now Atlantic Trawling Limited which is presently part of Sea Harvest Corporation Limited), and Sea Harvest Corporation Limited. Other members included Marine Products, Fernpar, and Viking Fishing. More recently, Radaco Sea Products, Surmon Fishing, and New South Africa Enterprises have become members of SADSTIA. The Constitution of SADSTIA defines membership in terms of companies which operate deep-sea 105 vessels; that is, membership is based on size and tonnage of the vessels. Furthermore, in terms of SADSTIA's constitution, the chairman is nominated from the two largest companies in the Association. Thus, the only means by which individual fishers can have input into the government decision-making process is by indirect involvement through company representatives at SADSTIA. User participation, although indirect, is thus dependent upon the role that SADSTIA plays in the management of the hake fishery. In the past, recommendations made at SADSTIA meetings were sent to the Sea Fisheries Advisory Committee (SFAC). The SFAC was then mandated to provide final advice to the Minister with regard to these recommendations. It is assumed that the Consultative Advisory Forum (CAF) will play a similar role to the ex-SFAC and receive submissions from SADSTIA and interact with the Association in a similar fashion as the SFAC did in the past. In 1997, out of the 151700 t TAC, SADSTIA received 84.95% of the quota as a group, thus representing the main industrial body in the South Africa hake fishery in terms of the percentage access members have to the hake resource. As a collective, SADSTIA is more effective in communicating with the government. Typically, a government department will request that an individual or company be represented by an association which represents a legitimate constituency. An association will act as a collective to increase its share of a resource to the benefit of all its members, or in the case of SADSTIA, request that rights be allocated by set criteria and their rights to the resource be secure so that they can operate without uncertainty. 5.8.b The South African Deep-Sea Resource Management Committee The close cooperation between the established industry and the government (in this case Sea Fisheries) was facilitated by the involvement of South Africa in ICSEAF. The dual representation of South Africa by both government officials and industry in countries such as Namibia and Iberia resulted in a situation where, year after year, the meetings would be attended by the same people. Over the years the meetings would be attended by the same people fostering relationships and trust. The declining CPUE was a cause of concern. Both industry and government were in favour of reducing foreign effort in South African waters; thus, a joint effort existed which created a common purpose. At that stage, only five companies were involved in 106 the industry and extensive government-industry interaction took place though this committee. The first meetings were held in 1982. Since that date the government and industry have met twice a year over the last 16 years to discuss various issues to related to the rebuilding of the hake stock. This led to a request in 1983 by the industry for a lower TAC, and further on in the process Fn.i and F0.2 fishing strategies were chosen as conservative means to rebuild the stock. These were long term decisions and at that stage the industry was concerned with access. It is postulated that the industry wanted to receive the benefits of their conservative approach to management. Bross (1986) highlighted the benefits for the industry of such arrangements. Participation of local users in management is dependent on an organisation representing the interests of the users of the resource. Essentially, the Deep Sea Resource Management Committee forms the basis of a formal successful co-management arrangement between the government and industry which has existed for 16 years. This government-industry institutional arrangement went further than consultation, but it did not represent joint co-management as the government reserved the right to make the final decision on all issues. Based on the classification provided by Sen and Raakjasr Nielsen (1996), it can be ranked as falling on the border between 'consultative' and 'cooperative' (Figure 2.1). Consensus can more easily be obtained with a few participants than when there are many interests groups. The past government-industry interactions were a reflection of how well the private sector could work with the government as there was close extensive dialogue with a small group of participants. 5.8.c Association of Small Hake Quota Industries (ASHQI)) The formation of ASHQI in early 1996 was facilitated by developments in the fisheries policy development process during the same time period and the addition of new entrants to the hake fishery as quota holders. The objectives of the Association are to promote the interests of quota holders with less than 2000 t, make representations to Sea Fisheries on all aspects of small hake quota holders, and create a forum for discussion of matters relating to resource management. The total quota held by all the members was equal to 11655.7 t in 1997. This amount represents 8.2% of the T A C for 1997. More specifically, the association makes use of collective action in 107 order to push the government to allocate more of the T A C to longlining. In addition, the Association is also attempting to negotiate security of tenure for its members, since over the last 5 years the initial members have not had security of tenure and the risk of investment in the fishery is high. Essentially, the incentive for the small hake quota holders to cooperate is to try and force the new government to redress the inequities of the past as many of its members have been previously disadvantaged. The future formal role of ASHQI is uncertain as it has only recently been established and the implementation strategies of the new fisheries policy are still ongoing. However, it has the potential to play a critical role in facilitating user participation in the management of marine resources, in that it represents new participants. 5.9 The Restructuring of the Hake Fishery Without doubt, it can be stated that the issue of access to South Africa's living marine resources has become a politically sensitive topic and is widely debated (see Hirshorn 1995, Blankley and Siegfried 1992, Informal Sector 1995, Strutt 1999). The government's rationale for re-distribution is based on the skewed distribution of resources among the population groups. Clearly, one possible equitable route to follow would be that new entrants enter the fishery by buying quotas which could be made freely transferable. However, based on the inequities in the past, I have to question whether this is a realistic option for re-distribution. In the changing South African socio-political context, two fundamental yet incompatible objectives need to be urgently achieved: (i) redistribution, to satisfy socio-political aspirations and (ii) the necessary security for future investment and maintenance of the fishing industry (Glazewski pers. comm.). Unless there is certainty about future rights to fish and guarantees that these will not be unjustifiably interfered with, the present and new stakeholders will be inclined to act in a manner detrimental to the industry at large. Some form of re-distribution is required as the T A C has not increased although the number of people requesting access to the resource (applicants) has increased significantly over the last 7 years (Figure 5.7). 108 2000 r 1800 -if) 1600 -c 1400 -ro o 1200 -Q. 1000 -Q. o 800 -6 600 -z 400 -200 -0 -applicants •TAC - i 180 - 160 - 140 - 120 CO O - 100 +-» - 80 o < 60 - 40 - 20 - 0 1993 1994 1995 1996 1997 1998 1999 Year Figure 5.7 The hake T A C over the last 7 years and the number of applicants applying for access to the resource during the same time period. A major controversy in the hake fishery and industry is the issue of paper quotas. Typically, new entrants have been given small amounts of quota (<400 t). The allocation to each entrant is decreasing as the number of applicants increases exponentially (Figure 5.8). For example in 1996, the thirteen new entrants received 343 t each. The government allocates out to all successful applicants an equal amount; thus, as the number of entrants increases, the share to each one decreases significantly. If the assumption is that >1000 t is the viable amount for a trawling operation, the new entrants would have to pool resources, which would lead to ineffective business management and loss of autonomy. However, an amount of 343 t was worth R651700 in 1998, i f sold to one of the established companies. Thus, paper quotas are seen by many to be free cash handouts and new entrants make large amounts of money without investing in the fishery i f they sell. The paper quota holders are paid in cash for the quota. Applicants are thus operating in a 'jackpot' process as the rewards for receiving the windfall gains from acquiring new access rights are very high. 109 -r- 100 re o> If) .>> re c £ a a> re c — o 2 Z U o 3 (/> 80 60 40 20 -A- - No. of new entrants (successful applicants in that year) -•—Al loca t i on to each entrant (tons) 1993 1996 1997 Year 1998 1500 1300 1100 900 700 500 300 100 -100 c re c CD . C U re CD o re u O Figure 5.8 Inverse relationship between 'number of new entrants' and 'allocation to each entrant (t)' in 1993, 1996, 1997 and 1998 reflecting the fact that as the number of successful applicants increases their individual share has decreased rapidly. The total amount for allocated in each year, that is 1993, 1996, 1997 and 1998 was 4000, 4463, 3773 and 4400 t, respectively. At the other end of the scale, the small hake quota holders argue they are forced to sell as they cannot control the market (i.e., do not have brand names) and they can not afford the user fees. The paper quota holders also argue that joint venture operations are difficult to negotiate in terms of agreements, as they only have small amounts of quota to bargain with. The small quota holders typically claim that they would like to set up businesses, create job opportunities, and help alleviate unemployment themselves. One means of new entrants gaining access to actual fishing and harvesting is to use longline gear instead of trawl gear (which requires a large investment in trawlers, trawl gear and processing equipment). In 1993, a cooperative Longline Experiment was set up which involved a joint strategy between tuna and squid fishers, and the established industry and government in order to evaluate the bio-economic value of longlining versus trawling. Officially, the Department (DEA&T) has attempted to contain the overall longline quota to a small percentage of the overall T A C , the main reasons being resource considerations (sustainability) and information concerns. The industry has undertaken to re-structure either via the establishment of joint ventures with 110 smaller, previously disadvantaged firms, and/or the promotion of the investment of black empowerment groups and/or the initiation of share schemes with employees. These share schemes have been viewed as insufficient (Hersoug and Holm 2000), as the percentage ownership by the employees has been in the region of ten percent of the overall value of the company. Similarly, the joint-venture agreements between large and small must be validated in terms of fairness of the terms agreed to. Within the Living Marine Resources Act, redistribution is mentioned explicitly; however, companies have taken to restructure the industry by changing the shareholding profile of companies. This results in a transformation of the industry, but at the same time potentially provides greater security of tenure to access rights. Hersoug and Holm (2000) question whether there has been sufficient redistribution to meet the needs of those requesting entry to the fisheries. 5.10 INCENTIVES TO COOPERATE A N D PATTERNS OF INTERACTION 5.10a. The fishing industry and the Government (DEA&T) The incentives for fishing companies to cooperate with the new government vary depending on the characteristics of the particular user group. Fishing firms are more likely invest time and resources in co-management arrangements i f they are to their benefit. The established industry argues that their participation has been significantly threatened in the last few years, especially with the abolishment of the SFAC and the formation of the Consultative Advisory Forum, mainly due to the fact that the established hake industry has no direct representatives on the CAF. The transformation to a new act in South Africa and the questioning of rights has impacted on the previous government-industry cooperative management arrangements that existed in many forms prior to 1994. Industry-Sea Fisheries (INSEF) typically met once a quarter, that is SADSTIA met with government officials to discuss management. Apart from issues of representation, there is a direct correlation between security of tenure (rights to fish) and the investment that the established industry will make in facilitating cooperative management arrangements between themselves and the government. Table 5.6 shows the relationship between 'rights to fish a resource' and 'user-participation in 111 management' (co-management). The established industry will invest resources into a co-management process to a greater degree when security of tenure is guaranteed. An investment in cooperative management assumes the industry will align itself in favour of the longer term objectives of sustainable management. In accepting longer term objectives, short terms gains are forsaken by the industry with the acceptance that longer term gains will accrue to them. However, during periods of uncertainty, when rights to fish are threatened, the industry will invest in attempting to negotiate security of tenure and any process which involves long term management goals (e.g. co-management arrangements) are irrelevant to the real concern of the industry, which is to maintain access the raw material which their production is based on. Table 5.6 The relationship between 'rights to fish a resource' and 'user-participation in management' during two critical time periods in the history of South African fisheries management policy. Security of tenure facilitates participation in co-management as participates can only justify committing to binding agreements promoting sustainable management, if security of tenure results in them receiving the benefits. Attribute Security of tenure before 1994 No security of tenure Post-1998, Act implemented Rights to fish a resource • Rights to fish, i.e. quotas for companies negotiated on catch histories • Alienation of the majority through socio-political and economic system • Participants follow strict legal process - apply for rights through legal representatives • Rights to resource questioned • Threats of litigation by established industry if rights to fish are re-distributed • New group of participants as government processes applicants and makes allocations • Formation of associations of new quota holders • Black investment firms buy into established companies, reflecting both need and political reality. User-participation in management • Close relationship between industry and government due to joint attendance at ICSEAF meetings in the 1970s • Formal arrangement (Deep-Sea Resource Management Committee) initiated by organized industry (the South African Deep-Sea Trawling Industry Association) • Clear objectives and modus operandii • Number of participants small -government personnel work close with industry through structures such as the SFAC and INSEF • Policy creates new bodies (SFAC becomes CAF) • Previous long-term formal and informal relationships are threatened • Changes in state department structures and positions change (Minister and senior officials) • Minister opens door to previously alienated parties (marginalized fishing community) • Adversarial relationship between government and established quota holders • 'Rights to resource' issues & adverse climate result in government-industry interactions to do with management not functioning as efficient as before • Informal relationships between government and new quota holders develop, but no formal relationships are agreed too. Recent additions to the number of quota holders have resulted in a situation where the number of quota holders has increased by an order of magnitude. Whereas, in the past the government had 112 to form a relationship with one group (i.e. the established companies), it now has to form relationships with both the established industry and the new quota holders, in addition to all the other stakeholders in all the other fisheries (e.g. pelagic, rock lobster, abalone, squid, linefish). 5.10b. Fishers, Stakeholders and the Government Stakeholders within the hake fishery can be placed into three broad categories: the established industry, small hake quota holders (principally the new entrants), and rejected applicants. Competition exists between the sectors in the hake fishery for the same stocks and many disincentives for cooperation exist between user-groups. Differences in attitudes are very diverse when comparing the established industry and the new entrants. The heterogeneity stems from differences in experience (advantaged vs. disadvantaged) as well as differences in population groups. Table 5.7 presents the fundamental differences between the two dominant stakeholders, the established industry and the new entrants. There is a large difference in the average size of quota in each of these stakeholder groups, as well as differences in harvesting technique (trawling versus longlining). The clear division of these stakeholders into two associations is very distinct. The established industry predominantly supports the past structures, but argue they are somewhat alienated from the new structures set up under the new Act. The new entrants are opposed to the past structures and the current allocation proportions to the quota holders. These results are similar to those in Strydom and Nieuwoudt (in press) who conducted a postal survey. They found that applicants for quota and new entrants wished to see a rapid redistribution of quota. Irrespective of the scale of involvement, management systems which involve co-management can only be established by formalizing arrangements defining the hierarchical organizational structure and responsibilities of all parties in the process (Lane and Stephenson 1995). For the hake fishery, the most important recommendation that can be made is that the ASHQI should represent the problems experienced by small hake quota holders by being formally incorporated into the process as an integral part of the new fisheries management system. 113 Table 5.7 Differences between the established industry and new entrants for certain key factors such as size of quota, harvesting techniques, operations, affiliations, risk, knowledge, support for previous and new structures and involvement in management (n = number interviewed). Factor Established Industrv (n=5) New Entrants (n=7) 1. Average size of quota (t): 22816 369 2. Harvesting technique: Trawling Paper quota or longlining (1 trawling) 3. Land operations: Processing plant - large factories Export and supply local market Export 4. Membership: SADSTIA ASHQI 5. Level of risk - new investment: Medium to high High 6. Knowledge of management and science: Very high as industry members interact with scientists from the government plus others who independently verify government assessments Medium to low 7. Support for previous structures: Sea Fisheries Advisory Committee Yes Yes No - little representation Allegations of corruption Quota Board 8. Support for new structures: Consultative Advisory Forum Not represented as before Yes (n=4out of 7)*. Fisheries Transformation Council No benefits for this sector Yes (n=4out of 7)*. 9. Support for current allocation proportions Yes No 10. Support management rules Yes Yes 11. Involved in management Extensive consultation and cooperation Consultation *Support from the 4 new-entrants belonging to the previously disadvantaged group. 5.11 OUTCOMES: EFFICIENCY, EQUITY A N D SUSTAIN ABILITY The industry has often argued that it is very difficult to plan meaningfully without being confident about what the future holds with respect to the tenure and form of fishing rights. In the past the granting of quotas on an annual basis did not grant sufficient security of tenure; however, the companies accepted the risk since their relationship with the government was positive. Long-term planning is a prerequisite for a rational programme of investment and market development. Certain members in the established industry claim that future investment is based not on calculation, but on 114 faith and hope for those companies who have held access rights to quota over the last few decades. In spite of high profitability, the average age of the fleet is older than the recommended retirement age of ships and there are demands for fleet replacement (Manuel and Glazewski 1991). This would require an investment of 1 billion Rand (Penzhorn 1992). Still certain folk in the industry remain positive, as is indicated by comments by Kramer (1997, page 199): "Economically, our new government has firmly bound itself to a policy which supports free enterprise, which encourages investment and job creation, which stimulates exports. It also accepts that if we are to be players in a global market, we have to be internationally competitive". As far as equity and greater user participation is concerned, a more dynamic partnership between the government and the main stakeholders (SADSTIA and ASHQI) could be fostered in South Africa to improve equity in representation. Organisations, which represent stakeholders, will have to become part of a nested hierarchy of institutions responsible for management i f they are to be accommodated. Thus, their potential level of participation is not limited by a lack of capacity or inequitable practices, assuming the situation improves, but rather by the extensive scale of the common pool resources which they target. The fundamental problem is that as the number of stakeholders increases, their potential or real participation decreases. In the short term, setting management goals, based on objective biological reference points, within the framework of operational management plans (OMPs) is critical for biological sustainability. There is extreme pressure from the established fishing industry to maintain their quotas; they argue that cutbacks will cause economic hardship. In addition, new entrants have been allowed to fish with longline gear. This could potentially threaten the biological sustainability of the resource i f left unchecked. Badenhorst and Payne (1998) state that the critical aspect of the new government policy should be that re-distribution and empowerment take place without destabilizing the industry or causing a depletion of the hake stocks. Both these conflicting objectives need to be met. 115 5.12 THE C O - M A N A G E M E N T OF THE H A K E FISHERY: THE RESULTS OF THE APPLICATION OF THE NEO-INSTITUTIONAL ECONOMIC ANALYSIS Amongst other factors, the pre-1994 fisheries management system in South Africa was successful because the decision-making process also relied on an autocratic political system which was exclusive, making law enforcement cost effective. There was homogeneity in terms of culture, and both industry and government had access to the latest scientific procedures despite political isolation. The incentives for the parties to collaborate revolved around the declining CPUE trends and there was joint commitment to a rebuilding strategy based on economic rationale. From the industries' perspective a low CPUE equals higher cost; thus, making it imperative for them to be part of a rebuilding strategy. The significant outcome was the halt to the decline in the CPUE, indicating sustainable use of the hake resource. Kramer (1997) claims that the small number of participants in the hake fishery was a significant benefit, arguing that the industry had so much at stake, with no alternative sources of raw material, that they cooperated fully with scientists and administrators toward a common objective. Kramer (1997) stated that as a result, there was a high degree of compliance with restrictive measures such as mesh size regulations and quota limits. The aim of this case study was to consider outcomes in terms of efficiency, equity and sustainability within the South African deep-sea hake fishery considering the fundamental changes that have taken place in the last decade (Figure 5.9). The challenge for the future is to integrate the new complex environment (i.e., the greater diversity) into a system which emulates the simple pre-1994 cooperative management system. 116 Key contextual variables: biological, physical, technical, market, socio-economic Decision-making arrangements Possible policy initiatives: provide all quota-holders with greater security in terms of tenure, reduce competition for access. Incentives to coordinate and cooperate Patterns of interactions among resource users Before 1990 Individual quota to established industry Extensive government-industry interactions (joint-management) After 1990 new entrants under re-structuring program Previous institutions for co-management placed on "hold". Competition for access / Resource recovery Access limited Paper quotas and new sector Access to resource broadened Figure 5.9 The predictions from the qualitative neo-institutional economic analysis for the management of west coast deep-sea hake Fishery, in terms of incentives to cooperate and outcomes (based on the conceptual model by Oakerson (1992) as presented in Chapter 3 (Figure 3.1) Extensive interaction both informally and formally existed in the past between industry and the government (Figure 5.9 see Patterns of interactions among resource users). However, the current re-structuring and institutional reformations that are proceeding are impacting on these arrangements. Thus, one of the major problems facing fisheries management in South Africa, especially in the hake fishery, is the issue of access rights and the impact that the re-structuring is having on these past institutionalized arrangements. The past cooperative management is threatened by the longline sector as new entrants identify themselves as a distinct group who are in competition with the established industry (trawl sector) for shares of the resource (Figure 5.9). My aim in the rest of this chapter is to quantify the benefits for cooperative (or non-cooperative) strategies by the competing interests in order to more further evaluate and quantify the incentives for cooperative versus non-cooperative strategies. 5.13 MODELLING THE H A K E STOCK: A BIO-ECONOMIC ANALYSIS In the previous sections I identified a long history of user participation (industry-government) in the trawl-based fishery. As mentioned, this cooperative management is threatened by the 117 longline sector as new entrants identify themselves as a distinct group who are in competition with the established industry (trawl sector) for shares of the resource. Successful trials on the capture of hake by longlines in 1983 led to a rash for concessions (42 in one year). The method resulted in high catch rates, was selective and could be employed on a rough substrate (Stander 1995). Realizing the potential of this new fishery, the authorities in May 1983 prohibited the capture of hake using the longline method (Stander 1995). During 1983 six experimental permits for longlining were issued (for 1500 t of hake) and despite the high catch of kingklip and the warnings from the SFRI, the authorities issued a further six permits to non-hake quota-holders in 1985. The longline operations were to target hake, however Kingklip (the bycatch of the longline permits), were immediately targeted as the species of preference as they were worth four times the value of hake. Prices for landed kingklip were in the region of R8/kg. By 1986 longline catches reached a peak of 10364 t of which hake constituted a mere 16%, the rest comprising mostly of kingklip (Stander 1995). From 1986-1990, the Minister, the Fisheries Advisory Council and Sea Fisheries attempted to formulate measures to satisfy conflicting interests. However, by March 1990 it was clear that the kingklip resource was severely overfished. In June 1990 the Minister announced an end to all longlining. The six non-quota-holders were compensated by means of a hake quota of 240 t each and have since re-grouped into four companies (Stander 1995). In 1993 a cooperative Longline Experiment was set up. The longline experiment involved a joint strategy between tuna and squid fishers (who were longlining), the established industry and government in order to evaluate the bio-economic value of longlining (Anon. 1995, Badenhorst 1995). The parties involved in the experiment were brought together in workshops to evaluate alternative strategies for data collection (see Fowkes and Sowman 1994). It is often suggested that longlining is potentially detrimental to the established trawl-based industry as they target larger fish and thus threaten the large fecund females, reducing the spawning stock biomass (SSB) and thus threatening the long-term productivity of the stock (Anon. 1992, 1993). On the other hand the longline sector question the biological rationale for being precautionary with 118 longlining even though kingklip were over-fished as the trawl fleet target immature fish (65% of the fish landed are less that 0.8kg). Preliminary assessments on both coasts, the west coast and south coast (Geroment et al. 1995a and 1995b, respectively) indicate that a higher yield-per-recruit can be obtained by using longlines. These assessments were based on extensive research undertaken by Japp (1993, 1995a-e, 1996) 20 18 16 >; 14 2 10 8 6 4 2 0 Hi z> Q_ O 1950 • • 1960 1970 1980 1990 2000 Year Figure 5.10 The hake CPUE from 1955 to 1996 in ICSEAF division 1.6 (compare with Figure 5.3 data from Leslie 1998). The figure shows the CPUE trend after it was standardized using a General Linear Model (GLM) taking into account changes in power factors. In Figure 5.3 the original CPUE trend showed a 3% increase over the last few years and it was thought to be due to the conservative policy of the F 0 . i and F0.2 fishing strategies. After standardizing the relationship with a General Linear Model (GLM) taking into account changes in power factors, the revised CPUE over the last few years shows no significant trend (Figure 5.10), thus indicating that the resource is recovering very slowly or the recent longlining could be removing the potential growth that could have occurred. Under a revised Operational Management Procedure (OMP) introduced in November 1998, a fishing mortality of F0.075 has been chosen as the harvest rate for the stock. My aim, in the rest of this Chapter is firstly, to undertake a bio-economic assessment of hake on the west coast (ICSEAF Division 1.6) and secondly to consider alternative management 119 arrangements. Numerous requests have been made to redistribute quotas in South Africa in order to redress the imbalances of the past. The re-distribution of quota to new-comers and previously disadvantaged South Africans is occurring with the creation of a new sector of participants, rather than via the elimination of existing quota holders. New entrants are predominantly entering the fishery via the creation of a longline sector which is exacerbating the problem of facilitating cooperative management as was elucidated in the previous sections of this Chapter. The objective of this analysis is to consider which sector will benefit from cooperative management. Wil l the trawl sector, which took part in past cooperative management arrangements, continue to do so under increased longline effort? Although the hake fishery has traditionally been a trawl-based fishery, the question that needs to be asked is whether the longline fishery will have positive or negative effects on the traditional fishery, and more importantly whether the longline fishery will provide greater benefits to the country. What mix of trawlers and longliners provide the greatest catch and more importantly what mix provides the greatest discounted economic benefits? 5.14 METHODS The surplus production model and ad hoc tuned V P A assessment methods currently used to provide the basis for scientific T A C recommendations for the Cape hake resource off South Africa provide rather different appraisals of the current status and productivity of this resource. These two approaches are based on certain assumptions regarding recruitment, natural mortality and fishing selectivity and both of these assessment methods and others are reviewed by Punt (1988, 1990, 1991, 1992a-b, 1993), who has worked extensively on the alternative modeling approaches for this resource, thus there is no need to repeat his work. The approach in this chapter is to use an age-structured model, which uses CPUE data and has been shown to provide similar results to the production model and the V P A assessments depending on alternative assumptions regarding selectivity of gear (Hutton 1992). 5.14a. Age-structured model An age-structured can be formulated such that it is able to predict changes in population size and 120 yield under different patterns of selectivity. This approach involves constructing a deterministic age-structured population model which assumes that recruitment is deterministically related to spawner stock biomass (SSB); (Hilborn 1990; Butterworth and Punt 1992; Punt 1993)25. These simple age-structured models include numbers of individuals at each age, age-specific mass, age-specific fishing selectivity, as well as natural mortality rates and stock-recruitment parameters and yield. Generally age-structured models can be written in a variety of different ways. The choices that must be made are whether the fishing and natural mortalities are assumed to be continuous processes acting simultaneously, or separate discrete time events. The model used here is a discrete time model based on Hilborn (1990). The general age-structured model is described fully in Chapter 3 (3.2a Biological Models: Age structured models). 5.14b. Data Utilized Annual recorded catch and CPUE data for the South African west coast hake stock are shown in Figure 5.2 and Figure 5.10. The estimated total annual landed hake catch from the west coast is available for the period 1917-1996 and landed catch by fishing method for 1983-1996 (Leslie 1998). Cape hakes consist of two morphologically similar hake species, Merluccius capensis and M. paradoxus (Van Eck 1969). Since it is not easy to distinguish visually between the two species only the total combined species catch is recorded, thus the model is not single-species. Punt (1991) explored the possibility of treating the west coast hake resource as one stock for management purposes and found that the results of two-species trials were not markedly different than single-species cases. This lead him to conclude that single-species models were adequate: Therefore, in this thesis I rely on the single-species method and assume that the results from the bio-economic model for the west coast hake stock are not significantly affected by the single-species approach. Although Cape hake in Division 1.6 have been fished since the turn of the century, comprehensive CPUE are only available from 1955. The catch statistics are usually reported in tonnes landed weight. The two species are undistinguishable, as fish are headed and gutted before being weighed. Therefore catch figures were converted to tonnes whole (nominal) weight for both species combined by multiplying by a factor of 1.46 (Chalmers 1976). Nominal Helser et al. (1996) perform a similar analysis on the U.S. silver hake fisheries although they do no evaluate the alternative management strategies for the fishery by using game theoretic analysis. catches prior to 1972 were increased by 39% to account for discarding of small hake (Andrew 1986). The collection of otoliths for ageing purposes and catch-length frequency data permits the breakdown of the total catch-by-mass into catch-at-age estimates. Length frequency data also exist for the years 1964 to 1977 for the west coast. In principle, these data can be used to estimate catch-at-age for these years. Although survey biomass data are available from 1983, they are not utilized here. Punt (1993) incorporated survey biomass data in his age-structured production model assessments and found in his sensitivity tests that the results scarcely changed when survey biomass data were not taken into account. Andrew et al. (1989) incorporated biomass survey data into their assessment and found that fits to the relative indices of survey biomass and CPUE data hardly changed from fits to the CPUE data alone. Although the biomass estimates have fluctuated over the period since 1983, they show no significant trend. 5.14c. Estimation of parameters Input parameters Four age-specific parameters are needed before the population can be simulated. These include selectivity-at-age (S a), mass-at-age (W a), and mortality-at-age (M a ) . The remaining parameter is age-at-maturity. The estimates of selectivity-at-age, mass-at-age and age-at-maturity were obtained from other sources. The parameter values for the logistic selectivity function are based on the analysis of selectivity-at-age conducted by Punt (1991). The values for the parameters related to growth and maturation were taken from Punt and Leslie (1991). The natural mortality-at-age was assumed to be constant over the age classes considered. There are rarely any data to justify the assumption that mortality is age-specific and it is normally assumed to be the same regardless of age. It must be borne in mind that the hake size mix in the population is dynamic and affected by the survival of the different age classes. As Botha (1980) pointed out, enhanced survival of both species to a large size will increase the rate of cannibalism on younger age classes. However, increased fishing pressure on large hake will correspondingly increase the survival of younger age classes. Therefore it would be important to consider the effects of 122 cannibalism on the age-specific mortality as well, however the paucity of data, precludes such a study. Selectivity-at-age (trawl) The selectivity function is a logistic curve which is assumed to be time invariant. Paucity of data on the selectivity of trawl gear changes over time preclude estimation of the extra parameters that would be required to reflect changes over time. The model used is: S a = 1/(1+e ((-a - Ac)/(5)) (E.9) where S a is the selectivity of the trawl gear on fish of age a, A c is the age-at-50%-selectivity, 5 is a 'steepness' parameter for the selectivity curve. The values Ac = 2yr and 8= 0.25 year 1 are based on an analysis by Punt (1991). However to investigate the effect of decreasing selectivity-at-age for older fish the selectivity function was used (see Figure 5.11): S a = 1/(1+ e «- a - W®) for a<am S a = e (- V ( a - a m)) for a>or = a m (E.10) where a m is the age at which selectivity reaches its maximum value - after this age selectivity-at-age decreases and, v|/ is the exponentially decreasing selectivity coefficient at older ages. 123 1 2 3 4 5 6 7 8 9 Age (year) Figure 5.11 Selectivity versus age relationship for the trawl gear showing the effect of increasing The values for the parameters \\j and a m were chosen to be 0.1 and 5 years, respectively. The selectivity estimates obtained by Hutton (1992) in his analysis are similar to selectivity-at-age estimates for the trawl fishery reported by Armstrong and Japp (1992). In both studies the function for selectivity-at-age is dome-shaped. Armstrong and Japp (1992) postulate that the decrease in selectivity at older age classes is probably caused by the movement of large hake out of the commercial fishing grounds. The possible reasons why the older fish are not being captured by the fishery are that larger fish may be migrating offshore and therefore are not available to the fishery or they may also be moving on to "rough ground"; and or the fishery may be targeting particular size classes (e.g. for market reasons) by fishing at certain depths. Selectivity-at-age (longline) As with trawl gear, the selectivity function of the longline gear is a logistic curve which is assumed to be time invariant. Paucity of data on the selectivity of longline gear changes over time preclude estimation of the extra parameters that would be required to reflect changes over time. The model used is: 124 Sl a = 1/(1+e ( ( - a - A c t ) / ^ ) (E . l l ) where S l a is the selectivity of the longline gear on fish of age a, A c t is the age-at-50%-selectivity, ST is a 'steepness' parameter for the selectivity curve (longline). The values ACT = 5yr and ST= 0.5 year 1 are based on catch-at-age data from Leslie (1998). Mass-at-age Growth parameters were obtained from Punt and Leslie (1991). The length-weight relationship was obtained from Punt and Leslie (1991). The relationship between mass and age is calculated from the following function: W a = A(Loo(l-e - K ( a - T „ ) ) ) b (E.12) (i.e. a von Bertalanffy age-length relationship imbedded in a standard mass-length relationship) where W a is the mass-at-age for a fish aged exactly a-1, Loo is the asymptotic length of fish in cm (Leo = 230 cm), K is the rate at which length approaches Loo (K = 0.046 year"1) and, T 0 is the age at zero length (T 0 = -0.825 ) and A = 0.0055 and b = 3.084 The values for the parameters related to growth and mass-at-length (see above) were selected on the basis of the results of Punt and Leslie (1991). They found that the difference between the two species for both maturation and growth is not particularly marked and that it is justifiable to use one set of growth/maturity parameter values when performing assessments. Mortality- and maturity-at-age For most estimation procedures mortality is assumed to be constant, either M= 0.3 year 1 or M= 0.5 year 1 . In order to be consistent with previous assessments of the resource (e.g. Andrew 1986), a value of M= 0.3 year 1 was chosen for the assessments. The age-at-maturity data were obtained from Leslie (1998). Fifty percent maturity occurs at about age 3.5 (41.5cm) and 100% maturity at age 7 (69.6cm). 125 Parameters estimated by the model The parameters which are obtained by fitting the model to the available data are the catchability coefficient (q), the relationship between the biomass and index of abundance (CPUE) and the two stock-recruitment parameters a and f5. The first step in the process is to obtain a set of initial age-class numbers, N y ]. This is done by setting the initial age-distribution equal to that of the deterministic un-exploited equilibrium (denoted by *) level for the stock (i.e. the age-structure corresponding to F y = 0, for y<1917), therefore: - • , , « - x - (E.13) M is the natural mortality and Max 5*1= X SB i N * y , a W a (E.14) where N * y a is the equilibrium number of fish of age a at the start of year y R* i is the average equilibrium recruitment SB*i is the spawning biomass at equilibrium. By substituting equation (E.12) into equation (E.13) it is possible to obtain a relationship for spawning biomass at equilibrium (SB*i) in terms of average equilibrium recruitment (R*i): Max a-\ , , E V M r a=m (E.15) Max a-\ . . W a e " Z j (E.16) a=m 126 gives R * l = SB*; / y (E.17) For the Ricker stock-recruitment relationship: R * l = a S B * y t ? -^SB* y (E.18) Equations (E.17) and (E.18) can be solved for the average equilibrium recruitment (R*i) and the equilibrium spawning biomass (SB*i). The result is: A similar derivation can be done for the Beverton-Holt stock-recruitment relationship giving the following relationship for the average equilibrium recruitment (R*i) level: Equation (E.19) and (E.20) can be substituted into equation (E.13) to compute the initial conditions for both stock-recruitment relationships: The assumption that the hake stock was at equilibrium at its carrying capacity at the start of 1917 would seem to be realistic, because catches prior to 1917 were negligible. 5.14d. The regression approach Once the input parameters and the necessary starting conditions specified, an exploitable 127 R * l =/n(ay)/(/?Y) (E.19) R * l = («y-/J)/(Y) (E.20) a-\ (E.21) biomass sequence can be calculated and compared to the observed index of exploitable biomass (i.e. CPUE). The simulated and observed indices of abundance (CPUE) are incorporated into an objective function of the form: 1996 SS= X Un (q BEy) - In (Cy / Ey)]2 . (E.22) ^=1955 The use of logarithms in the objective function is based on the assumption that the dominant noise in the model is in term C y / E y , i.e., the choice of the error in the model is 'observational error', and that this noise may arise from catchability fluctuations. Changing environmental factors, seasonal migration and behavioral/distributional changes tend to produce inter-annual catchability fluctuations. The catchability is expected to be influenced by many of these factors, each of which may well be independent and have a multiplicative effect. The central limit theorem implies that the sum of the logarithms of the magnitudes of these factors approaches a normal distribution, and therefore taking logarithms is the most appropriate transformation to use in the objective function. The minimization procedure A M O E B A (Numerical Methods, Cambridge 1988) was used to find the parameter values which would provide the best fit. The Beverton-Holt form of the stock-recruitment relationship was used in all the models. As demonstrated in Hutton (1992), the parameters estimated for this form of the stock-recruitment relationship has lower standard errors than the Ricker stock recruitment relationship. 5.14e. Bio-economic analysis and predicting game theoretic outcomes As before, in the previous Chapter, one way to illustrate trade-offs and alternative management strategies is to consider game theoretic scenarios. Again, in such scenarios, each participant is assumed to be a 'player' in a game. Two sectors of the west coast deep-sea hake fishery, namely the trawler and longline sectors are defined as players, to not only show the consequences on non-cooperative behaviour between the two sectors, but also to demonstrate why each individual fishing unit may end up behaving in a non-cooperative (and deplete) rather then a cooperative 128 manner (conserve). An important assumption to make, which is essential to binding agreements, is that if participants are to participate in the joint management process (thus obey mutually agreed upon regulations) they are going to have to be convinced to buy-in to the process. This is the case especially when management decisions will affect them negatively in the short term. Fishing companies, which target hake will not enter agreements or obey regulations if the benefits of non cooperation to them are greater than the benefits to them from cooperation. The assumptions are that under the current re-structuring, the non-cooperative strategy by the trawl sector will be to maintain fishing effort at its current levels (F= 0.3 year"'), and the cooperative strategy will be to reduce fishing effort (F = 0.25 year"1). In 1998 after extensive negotiations the trawl sector accepted a reduction in their quota of 8000 t (which equates approximately to the latter effort reductions, that F reduced by 0.05 year"1). For the Longline sector the non-cooperative strategy will be to increase F beyond their current quota limits (for example, F= 0.1 year"1), whereas a cooperative strategy will be to maintain their effort at the effort level required to meet their current quota (which equates approximately to the longline sector effort being F = 0.05 year"1). Over the last five years participants have made numerous requests for an increase in their share of the total TAC. In South Africa the discount rate (S) is high and larger payoffs are obtained from depletion or not cooperating even if others do. Even so many of the companies in the trawling sector seem to have taken a long term view of their involvement with the resource, investing large amounts of capital in gear, trawlers and processing facilities. In the past, the number of participants in the hake fishery has been small (< 10), and I postulate that the trawl sector have an economic incentive to cooperate (as was evident from the history and current events in South Africa). 5.14f. Calculating the NPV It is important with in the current analysis to translate the benefits of alternative management strategies directly into economic values. Estimates of yield can obtained form the biological model. Prices and costs per landed tonne are applied to the estimates of yield in order to obtain profit or rent under alternative scenarios. The long term benefits (the predicted rent per year) 129 under alternative scenarios of resource exploitation can be calculated by computing the Net Present Value (NPV) of the stream of benefits over time (see equation E6, Chapter 3). Within the hake fishery, the reliability of economic data has to be considered as the economic data used was based on the Longline Experiment which began in 1993, when 3000t were allocated to be longlined. Data were collected in 1995, 1996 and 1997 (three consecutive years). The economic data from the experiment consisted of: • Sales price per kilogram hake caught; • Landing cost per kilogram hake caught; • Total cost per kilogram hake caught; • Net income before interest and tax per kilogram hake caught; • Return before interest & taxation on capital investment. In this analysis two variants were considered for the cost data: a linear cost function (cost versus effort increases linearly) and an exponential cost function (cost versus effort increases exponentially). The cost data for each sector were obtained from Anon. (1998). The cost for landing a kg. of hake for the longline fleet is R5.75 and the cost for landing a kg. of hake for the trawl fleet is R5.00 at the current effort levels. Therefore by assuming that the cost is zero at F =0 a relationship can be obtained for cost versus F. Thus for the linear cost function: Cost (trawl) = 16.667 R/kg. * F(trawl) Cost (longline) = 32 R/kg. * F(longline) And similarly for the exponentially increasing cost function: Cost (trawl) = 32 R/kg. * F(trawl) L 5 Cost (longline) = 64 R/kg. * F(longline) 1 5 Price was assumed to be constant, the data for prices for each sector were obtained from Anon. (1998). The price paid for longline caught fish is R8.50 R/kg (average for 1995-1997) and the price paid for trawl caught fish is R6.75 R/kg (average for 1996-1997). 130 5.16 RESULTS 5.16a. Biological model results An age-structured production model (observed CPUE data were fitted) was constructed to simulate changes in F for trawlers and longliners. The CPUE model versus observed CPUE is shown in Figure 5.12. 20 r 2 -0 ' 1 1 1 1955 1965 1975 1985 Year Figure 5.12 The fitted age-structured model predicted catch-per-unit effort (solid line) to the CPUE data (•) . The model is tuned to observed trawl catches (1917-1996) and observed longline catches (1983-1990 and 1994-1996). The estimates for M S Y , B M S Y and B ( 1 9 9 6 ) / K and K (the pre-exploited biomass) are shown in Table 5.8. In addition, the values of the estimated parameters a, (3 and q are also shown in Table 5.8. The estimates for M S Y are lower than those obtained by Punt (1993) , however his analysis was based on the CPUE trend before it was modified by the G L M . The estimates of the current status of the stock (i.e the current biomass as a proportion of the unexploited biomass, B ( 1 9 9 6 ) / K ) indicate that the stock is fully exploited as this proportion is <20%. 131 Table 5.8 Estimates for M S Y , B M S Y and B(1996)/K and K (the pre-exploited biomass). The values of the estimated parameters a, (3 and q are also shown. Biomass units are in '000 tonnes. Parameter Estimate M S Y 111.49 BMSY 1095.61 B(1996)/K 0.1940 K 1517.73 a 1.48 x 10 9 P 6.26 x 10" <7 1.41 x 10"" 5.16b. Bio-economic simulations of the West Coast Hake Stock Figure 5.13 shows the total benefits under different configurations of trawl and longline effort under equilibrium conditions. An increase in longline effort provides greater benefits, but only under conditions where trawl effort has been reduced. The current allocation to longliners is approximately 10% depending on the number of longline permits issued. This would generate a NPV of approximately R2000 million over the next 30 years. Strydom and Nieuwoudt (in press) calculated that an annual rent of R279 million is generated by the South African hake industry. Thus R184 million would be generated from the west coast (where two-thirds of the TAC is harvested). This computes to a NPV of R1742 million, which is slightly less than the R2000 million estimated in this study. However, Strydom and Nieuwoudt's (in press) rent estimates are based on the price paid to paper quota holders and their values may actually underestimate the potential rent. Figure 5.14 and 5.15 indicate that maximum benefits can be obtained i f approximately 50% of the quota is allocated to longliners. This is the result of the simulation model which calculates 132 the NPV after the fishery is transformed from its present situation to that indicated in Figure 5.14 and 5.15, thus the total NPV differs from the total benefit values in 5.13 which represent an equilibrium condition. When comparing the results shown in Figure 5.14 and 5.15 there is not much difference between the linear versus exponential cost function therefore the rest of analysis is based on the linear cost function. It is important to note that the total allowable quota differs according to different configurations of trawl and longline effort as the two sectors have vastly different selectivity functions. R millions o g °. d Longline Effort d Figure 5.13 Relationships between trawl effort and longline effort in terms of total benefits. 133 </> c o 1 or i > Q. Z C CQ 0.2 0.4 0.6 Proportion to longliners 0.8 Figure 5.14 Relationship between total benefit (NPV - Rands millions), and benefit to the trawl sector and longline sector and the proportion of the quota allocated to the longline sector. The relationship is based on the linear cost assumption. 5000 r Trawl -*— Longline - a — Total 0.2 0.4 0.6 0.8 Proportion to longliners Figure 5.15 Relationship between total benefit (NPV - Rands millions), and benefit to the trawl sector and longline sector and the proportion of the quota allocated to the longline sector. The relationship is based on the exponential cost assumption. The potential for cooperation between the two sectors also needs to be quantified. The discount rate is high, but there is still reason for the established industry to conserve as the investments are in the order of millions of Rand. Since longline operators investments are less and their 134 future is more uncertain it is postulated that they may not have the same incentives to conserve and engage in cooperative strategies. The greatest benefits to the trawl sector occurs if there is a reduction in fishing effort (from F=0.3 to F=0.25 year"1) under an assumed cooperative strategy, that is they reduce their current quota by about 10000 t (Figure 5.16). The stock status remains unchanged (CPUE - 4.81 t/std day compared to current estimate of 4.8 t/std day). The value of R605 million which is the difference obtained under cooperative strategies compared to non-cooperative strategies depends on the discount rate. In Table 5.9, the relationship between discount rate and the benefits due to cooperative strategies are shown. As the discount rate increases the benefits decrease. However, a cooperative management strategy still remains the best strategy as far as the trawl sector is concerned. The greatest benefits (R368 million over 30 years) accrues to the longliners i f they cheat (a non-cooperative strategy) and double F, however these benefits are only achieved if the trawl sector reduces effort (Figure 5.16). This benefit will be felt as the cost of enforcement the government would have to spend if they wish to maintain longliners at their current effort levels. What is of interest is the fact that the scenario in which longliners cheat also provides the greatest economic benefits to society as a whole (R227 million more than the cooperative strategy for both sectors over 30 year, Figure 5.16). The tradeoff is that the CPUE which is a reflection of stock status shows a slight decline (a CPUE of 4.06 t/std day compared to current estimate of 4.8 t/std day). Table 5.9 Relationship between discount rate and the additional rent for a 30 year period (1998-2028) under a scenario of cooperative management by both sectors. Discount rate (%) Rand millions 10 605 15 332 20 202 135 Non-cooperative Trawlers Cooperative Longliners Non-cooperative Trawl = R1258 million Total = R2297 million (CPUE = 2.56) Longliners = R1059 million Trawl = R1827 million Total = R3129 million (CPUE = 4.06) Longliners = R1302* million Cooperative Trawl = R1333 million Total = R2086 million (CPUE = 3.13) Longliners = R755 million Trawl = R1968 w million Total = R2902 million (CPUE = 4.81) Longliners = R934 million # - Greatest benefits to trawl sector i f reduce F (from F=0.3 to F=0.25), reduce quota by 10 OOOtons, stock status remains unchanged. * Greatest benefits to longliners i f "cheat" and double F - benefits only achieved i f trawl sector reduces effort, this scenario also provides the greatest benefits to society as a whole however the CPUE which is a reflection of stock status shows a slight decline Assumptions Trawl sector non-cooperative strategy: F= 0.3 Trawl sector cooperative strategy: F = = 0.25 Longline sector non-cooperative strategy: F= 0.1 Longline sector cooperative strategy: F = = 0.05 Figure 5.16 Benefits to the trawl sector and longline sector under different scenarios of non-cooperative strategies and cooperative strategies for the west coast deep-sea hake fishery. The CPUE (t/ std day) after a 30 period are also shown for each scenario in order to indicate the status of the resource. 136 5.17 DISCUSSION Trawling versus longlining Officially the Department (DEA&T) has attempted to contain the overall longline quota to a small percentage of the overall T A C , the main reasons being resource considerations (sustainability) and information concerns. As the number of participants increase the less chance exists that the information being obtained from the fishery is reliable. The Department is also aware of the market constraints. Marine and Coastal Management (ex-SFRI) have attempted to place more attention on assessing the impact of longlining using age-structured models and establish a more effective monitoring and control system before the overall longline quota is increased further. M C M also plans to continue to collect socio-economic information, thus the overall quota is constrained along the lines of the original experiment. From the analysis, it appears that the Department is aware of the fact that longline effort can only be increased under a strategy where trawl effort is reduced! The fundamental question is what proportion of the overall hake deep-sea quota for area 1.6 (West Coast) will be allocated to be longliners? The government declared in 1998 that the longline quota would be 4400 t. There were 800 applicants for longline permits in 1998 and 1200 in 1999. At the beginning of 1999, the deep-sea fleet were fishing against 40% of their quotas, and a judicial review was underway in the High Court. Announcements in March 1999 indicated the reduction of the trawl quota would be 20%, from 80000 t to 64000 t. It was not clear whether the 14000 t difference will be trawled or longlined. During May a decision was made to allocate 10000 t from the trawl sector to the Minister which would be given to previously disadvantaged and small and medium sized enterprises, in most cases longliners. It appears that the government is hesitant to make decisions that will affect each sector as they are not fully aware of the economic effects under different configurations of trawl and longline effort. The results of the Longline experiment were based on "what i f - scenarios, that is hypothetical changeovers entirely to longlining assuming the changeover could be completed in 137 1 year (i.e. trawling in 1996 to be followed by longlining in 1997), a very unlikely scenario (Anon. 1998). During this period (only 1 year) trawling had profits of R752 m pa with employment figures of 7795 people whereas it was predicted that longlining would result in profits of R894 m pa and employ 7150 people (Anon. 1998). These assessments only provide values for one year and are not based on a dynamic analysis. In this Chapter, the long term benefits are evaluated with a dynamic bio-economic model, which indicate that in the long term the greatest benefits can be obtained with a 50% proportion of the quota being allocated to longliners. This however depends on the trawl sector reducing their effort under a cooperative strategy. Non-cooperative versus cooperative management The central government is responsible for the management of South Africa's shared stocks and makes collective choice rules on behalf of license holders who act in their own interests. The objective of this Chapter was to include economic factors and consider the effects of the alternative management strategies for two competing sectors (longline versus trawl). Game theoretic modeling was used to evaluate outcomes of assumed non-cooperative versus cooperative management. The results show that the greatest benefits to the trawl sector occur i f they reduce F under a cooperative strategy, that is reduce their current quota by 10000 t. R605 million is obtained i f the trawl sector follows a cooperative strategy in the future (over the next 30 years) and this strategy is not sensitive to the discount rate. As the discount rate increases the benefits decrease. However, a cooperative management strategy still remains the best strategy as far as the trawl sector are concerned. These results confirm the findings from the NIE approach (Section 5.1-5.12), that is the extensive government-industry (the trawl sector) commitments to rebuilding, has reversed the declining trends in CPUE observed in the 1960s and 1970s, and it is beneficial as far as the trawl sector are concerned for them to engage in cooperative strategies. However, from the neo-institutional economic framework analysis, I am also able to postulate that the comprehensive partnerships that exist will struggle to remain legitimate and functional during major changes in the access rights regime. The government is re-distributing quota to new entrants and previously disadvantaged South Africans, resulting in competition between the 138 established demersal trawl fleet and a new longline sector for access rights. The greatest benefits (R368 million over 30 years) accrues to the longliners if they cheat (a non-cooperative strategy) and double F, however these benefits are only achieved if the trawl sector reduces effort (Figure 5.16). This benefit will be felt as the cost of enforcement the government would have to spend if they wish to maintain longliners at their current effort levels. What is of interest is the fact that the scenario in which longliners cheat also provides the greatest benefits to society as a whole (R227 million more than the cooperative strategy for both sectors over 30 year, Figure 5.16). The tradeoff is that the CPUE which is a reflection of stock status shows a decline of 0.74 t/std day (a CPUE of 4.06 t/std day compared to current estimate of 4.8 t/std day). The current re-structuring and institutional changes are thus impacting on the extensive interaction that existed in the past between the industry and the government. The challenge in the future is for the government to engage in co-management arrangements, which replicate the successful agreements of the past with all the stakeholders; that is, both the established industry and the new participants despite the fact that i f new participants are longlining it is beneficial for them to engage in non-cooperative strategies. 139 Chapter VI DISCUSSION In Chapter 1, I presented the central tenet of my thesis, namely that an analysis of institutions should be at the core of any multi-disciplinary analysis of alternative fisheries management systems. In Chapter 2, I reviewed international experiences with co-management and considered the relevance of co-management type arrangements to South African fisheries. I found that the key factor determining success is the presence of institutional arrangements with regard to rights and rules. In addition, as all marine resources are shared and can be considered common-pool resources, a governing body (the national government) would have to form the basis of any institutional arrangement. A special case exists in South Africa where in the past rights and rules have been unevenly distributed and thus access rights form the core of debates, especially with reference to previously disadvantaged people. Communities or fishing groups form the base of a hierarchy of interests, and they would participate only to a level defined by the willingness and ability of the government to share decision-making power with all user groups in the system. However, the most important factors for successful management are the rules governing participation (i.e., rights) and the allocation of costs and benefits. These rules need to be well defined and mutually agreed upon by all participants. In other words, as Ostrom (1990) has clearly indicated the first principle is demarcation of clearly defined boundaries to identify the members of the user pool as well as the physical boundaries of the common-pool resource. 6.1 Common pool resources and rights-based fisheries management: Evaluating the results of multi-disciplinary methodology Institutions can be analysed within a neo-institutional economic framework which is both descriptive and predictive (Figure 3.1). In the models predictive capability alternatives are evaluated. That is, the methodology makes predictions of the effects of non-cooperative versus cooperative alternative management strategies. These studies thus consider the socio-economic 140 dimensions of competing resource use. Therefore the methodology is used extensively as tool for studies on co-management (see Raakjaer Nielsen et al. 1996). The outcomes that result from the interactions between resource users depend on the rules, plus the economic and political reality. In South Africa, the central government is responsible for management of shared stocks and makes collective choice rules (i.e., decides who shall receive access rights). These rules are made on behalf of licensees who act in their best short term interests, and follow operational rules (see Ostrom 1990). It is possible to apply the preliminary analysis as presented in Chapter 2 to the two case studies in this thesis. After considering the information in Table 6.1, I suggest that out of the two case studies, the hake fishery is more likely to be managed 'successfully' according to the criteria identified in Chapter 2. The resource boundaries are well defined, as well as the boundary of the stocks and the membership of users is clearly defined with clear rules for distribution. The hake fishery is a quota-based fishery. However, I do not want to only rely on this methodology principally as it is based on predictions of 'success' or 'failure' (problematic concepts for many). Although, I can make predictions as to 'success', a more quantitatively, rigorous analysis is required that will capture the underlying dynamics that are driving the management systems and elucidate the critical factors influencing management policy. As previously mentioned, the objective of this thesis is to present an analysis (an integrated multi-disciplinary analysis) of two South Africa case studies using neo-institutional economic methodology, bio-economic modeling and game theory, as presented in Chapter 3 (Figure 3.2). 141 Table 6.1 A summary of the two case studies according to the criteria identified in Chapter 2 as important attributes for determining 'successful' management of 'common-pool resources'. Criteria Linefisherv - Geelbek Demersal fisherv - Hake 1. Resource boundaries defined Both users and the management are aware of the distribution of the stock. The status of the stock is however unclear to the users. Both users and the management are aware of the status and distribution of the stock. 2. Membership and participation defined Although membership is well defined the amount of fish that individual members can take is not. Membership is well defined and each user has a quota 3. Rules for allocation of costs and benefits There are limits to how many geelbek can be landed and no user fees. Quota-based fishery with user fees for each tonne landed 4. All-party management board/committee Although, S A M L M A represents all users it is not strictly all-party as far as users are concerned. Prior to the mid-1990's the S A D S R M C had been operating for 15 years as an all-party management committee 5. Management plans and reciprocal obligations Management plans are not well defined and users are not aware of obligations These are well defined within an OMP with clear obligations that users must meet in order to acquire permits 6. Enabling legislation defining control Control by a central government management agency through Living Marine Resources Act. Control by a central government management agency through Living Marine Resources Act. 7. Mutually agreed upon enforcement mechanism. Enforcement is strict. Users do not agree with all the regulations. There is little enforcement as the management agency assumes users comply with regulations 8. Process for dispute resolution A clear process does not exist. Parties rely on negotiation although more recently in times of serious dispute there have been threats of litigation 9. Information sharing between participants Information is not readily shared to all users The sharing of information is common 10. Federal structure in complex cases Federal structure exists however fishery is very complex. Federal structure exists in that there is a clear structure of control Case study 1: Geelbek and the Linefishery In Chapter 4, I undertook an extensive case study on a fishing community, Arniston (Western Cape) based on a multi-disciplinary methodology, the neo-institutional economic framework, developed by the Institute for Fisheries Management (Hirtshals, Denmark) and I C L A R M . This illustrative example is also presented in Hutton et al. (1997). Along with a complete biological, socio-economic, and political review of the fishery based in Arniston (presented in section 4.1 to 4.13), I found that: • An interest in the community with regard to marine resources was reflected by the presence of local representative groups concerned both with fisheries management (e.g., the size limit 142 of geelbek) and access rights. However, the socio-economic conditions of the participants are such that there are incentives to overfish, implying that cooperation with management authorities to introduce re-building strategies would be problematic; • National structures (the South African Marine Linefish Management Association) are in place that allow local groups' interests to be addressed in the management of national marine resources. Participation has been limited due to the extensive number of participants and representative groups and the alienation of non-whites under the previous government's policies of discrimination. In addition, although a boat licensing system was introduced, users compete for species which have been overfished as there is no output control; • A recommendation be made that these national associations initiate the participation of local representative fishing groups where possible. Although, S A M L M A was first recognised as a body able to provide recommendations within statute legislation, the Sea Fisheries Act 1988, it had invited interest groups and fishing community representatives to previous meetings. Representatives from Arniston attended a S A M L M A meeting in late 1998 and this organization continues to play an important role in management of linefish stocks. However, the possibility of users participating in the management of stocks that need re-building, is becoming less likely as high value species are being replaced by low value species, with resulting in low incomes to the participants. Thus it is necessary to quantify the economic constraints of including fishing communities (users) in the management of shared linefish species such as geelbek. A key aspect of this thesis is the development of a multi-disciplinary methodology for the evaluation of cooperative versus non-cooperative management of marine resources. This required that the neo-institutional framework presented in the first part of Chapter 4 be integrated with a bio-economic approach specific to a fish resource, geelbek, within the case study. Thus, in second half of Chapter 4 (Section 4.14 - 4.16), I presented a bio-economic analysis of the geelbek stock which simulated the effects of increased size limits and effort restrictions on two separate jurisdictions (the Cape, including Arniston, and Kwazulu-Natal), and I found that: • The current status of the geelbek stock requires more conservative management. Size limits need to be increased and an effort limit introduced; 143 • The sustainable management of geelbek stocks to achieve maximum benefits would require that participants (e.g. the fishing community at Arniston) obey the regulations and cooperate with the responsible management authority; • The large number of participants (licensees) within the linefishery creates a costly situation in terms of facilitating cooperative management in spite of the potential long term benefits of such management arrangements, in terms of yield (i.e., catches). This is analogous to Scenario 2 presented in Chapter 3 (Section 3.4), that is N » l . In this case, there are -3000 commercial and semi-commercial fishing units; • Concurrently, the potential discounted long term revenue from the resource decreases because of high interest rates in South Africa (Scenario 1, Chapter 3, Section 3.4). The short term economic benefits of non-cooperation exceed the long term benefits of cooperative management. In excess of R1.5 million can be gained in the short term (five years) under modeled non-cooperative scenarios. This estimate is over and above the revenue from exploitation at present levels and would be obtained from intentionally overfishing geelbek, severely threatening the stock; • Further, the extensive distribution of the different life history stages of geelbek among competing interests on the East coast of South Africa exacerbates the problem of facilitating cooperative management and this implies that a governing body has to regulate the stock. The reality is that short-term economic factors impose major constraints on the co-management of linefish resources in South Africa. Along with issues of representation, the latter is identified as a major constraint to the inclusion of users in the management of marine resources. Thus, in summary, any inclusion of users in co-management is not only dependent on the political reality in South Africa, that is the willingness and ability of the government to share decision-making power, but also on the economic circumstances within which the participants operate. The short term economic benefits of non-cooperation and overexploitation exceed the long term benefits of cooperative management (co-management) for fully exploited stocks such as geelbek. Although this is an illustrative example, it is postulated that all shared stocks (most of the linefish species) suffer from the same constraints and fishing communities are subject to the same economic disincentives thus threatening the long term sustainability of these marine resources. These are important findings in terms of the long term sustainable utilization of marine resources in South Africa and their management because it shows that management 144 policies which ignore economic realities will fail unless policies are 'incentive adjusting' (see FAO 1998). It is assumed that incentives can be adjusted to result in positive outcomes when the rules governing participation (i.e., rights) and the allocation of benefits for shared stocks are well defined and constrained. Otherwise the consequences of unfettered competition for access to scarce marine resources will result in their depletion. Case study 2. The hake fishery (trawling versus longlining) I also applied the neo-institutional economic framework analysis to the South African Deep-Sea hake Fishery in Chapter 5 to evaluate past and present co-management arrangements (Section 5.1 - 5.12) and found that: • The comprehensive partnerships that exist are struggling to remain legitimate, functional and operational during the major change in the access rights regime; • The government is re-distributing quota to new entrants and previously disadvantaged South Africans, resulting in competition between the established demersal trawl fleet and a new longline sector for access rights. Longlining has created opportunities for potential new entrants as it was promoted as means of fishing without large investments in trawlers. Since new entrants have been given amounts of quota less than 400 t, most of the new entrants are seeking access to longline permits. In the second half of Chapter 5 (Section 5.13-5.16) I present the results of a bio-economic model which quantifies the tradeoffs between trawling and longlining. The objective was to include economic factors and consider the effects of the alternative management strategies for two competing sectors (longline versus trawl). Game theoretic modeling was used to evaluate outcomes of assumed non-cooperative versus cooperative management, I found that: • Under the assumptions of the model, it is beneficial for the dominant trawl sector to cooperate with the management authority; • The greatest benefits to the trawl sector occur if they reduce fishing mortality under a cooperative strategy (that is reduce their current quota by 10 000 t). R605 million will accrue to the trawl sector if they follow a cooperative strategy in the future (over the next 30 years) and this strategy is not sensitive to the discount rate; • As the discount rate increases benefits decrease, yet a cooperative management strategy still remains the best strategy as far as the trawl sector are concerned. 145 These results confirm the findings from the NIE approach (Section 5.1 - 5.12), that is the extensive government-industry (the trawl sector) commitments to rebuilding has reversed the declining trends in CPUE observed in the 1960s and 1970s. It is beneficial as far as the trawl sector are concerned to engage in cooperative strategies. From the neo-institutional economic framework analysis (Section 5.1 - 5.12), I am also able to postulate that the comprehensive partnerships that exist will struggle to remain legitimate and functional during major changes in the access rights regime. The government is re-distributing quota to new entrants and previously disadvantaged South Africans, resulting in competition between the established demersal trawl fleet and a new longline sector for access rights. The greatest benefits (R368 million over 30 years) accrue to the longliners i f they cheat (a non-cooperative strategy) and double F. However, these benefits are only achieved if the trawl sector reduces its effort (Figure 5.17). This benefit will be felt as the cost of enforcement that the government would have to spend if it wishes to maintain longliners at their current effort levels. What is of interest is the scenario where longliners cheat also provides the greatest benefits to society in all (R227 million more than the cooperative strategy for both sectors over 30 year, Figure 5.17). The tradeoff is that the CPUE, which is a reflection of stock status, shows a slight decline (a CPUE 4.06 t/ std day compared to current estimate of 4.8 t/ std day). The current re-structuring and institutional changes are thus impacting on the extensive interaction that existed in the past between the industry and the government. The challenge in the future is for the government to engage in co-management arrangements, which replicate the successful agreements of the past with all the stakeholders; that is, both the established industry and the new participants. The government will have to engage in such initiatives despite the fact that, i f new participants are longlining it is beneficial for them to engage in non-cooperative strategies. 146 Table 6.2 The results from the two case studies indicating the reliability of the overall methodology to make the same predictions. Method Characteristic Prediction from case study Linefishery: Geelbek Deep-Sea Hake NIE Framework Qualitative Non-cooperative Cooperative Bio-economic model with game theoretic outcomes Quantitative Non-cooperative Cooperative The integration of the two approaches (NIE framework and bio-economic model) in the thesis relies on them being congruent in their predictions. Table 6.2 shows that they are indeed congruent in their predictions, providing a truly multidisciplinary methodology for the evaluation of alternative management strategies since it is possible to be prescriptive in terms of current and future fisheries management policy. 6.2 The impact of current government initiatives to re-structure the fishing industry The government is currently extensively involved in modifying the fisheries management policy in South Africa. The political uncertainty and the will to re-distribute access rights can result in an increase in the discount rate (8). The lack of security of tenure is creating a situation where in effect participants are acting in their short term interests (that is, the net effect is an increase in 8). In real terms the discount rate (8) is already high (>10%), such that Scenario 1 (Chapter 3, Section 3.4) already potentially exists unless the participants can be provided with incentives to consider the long term. For example, in the past, the two companies that controlled >80% of the hake T A C , had security of tenure and acted such that their long term interests were met. Thus over the last two decades, extensive government-industry commitments to rebuilding has reversed the declining trends in CPUE observed in the 1960s 147 and 1970s. That is, in the past a Scenario 1 (Chapter 3, Section 3.4) did not occur as security of tenure meant that the participants acted in their long term interest. There are other ways that the recent re-structuring and institutional changes are impacting on the extensive interaction that existed in the past between the industry and the government. The government's restructuring program is creating a Scenario 2 (Chapter 3, Figure 3.2) where the number of participants has increased from 5 to 130+ (see Figure 5.6). Two time periods can be considered for the hake fishery: 1) Pre-1990 N « 1, in fact N was in the range of 5 to 15, however in effect N approximated one since two dominant companies existed (and agreements existed between the two). 2) Post-1990 N » l , the number of participants has increased significantly, over the last f decade (see Figure 5.6, N=139 in 1998). In theory, each one receives a payoff of H/5*N (see Figure 3.2). A cheater then receives a much larger share of B, than if he/she cooperates. There are huge incentives to cheat as the number of players becomes large. The number of participants (N) influences the ability of the institution arrangement to approximate a cooperative management regime. Clark (1990) was able to predict the outcomes from his model, which was presented in Chapter 3. The relationships in Clark's (1990) model of whether to cheat or not, and the costs of facilitating cooperative management can be computed as 'transaction costs' (TC). The transaction costs can be assumed to be proportional to N . Further, it is postulated that when the transactions costs are high, cooperative management regimes will not prevail. Under these non-cooperative regimes where less rules prevail and the costs (TC) of enforcing property rights are prohibitory the participants will see it such that their rational options are to act in the extreme short term. This is the case for the 148 linefishery as the socio-economic conditions the participants operate within are such that they can only consider the very short term. The discount rate under which participants operate is: S ( t o t a l ) = 5 ( r e a l ) + f where f is equal to 0 - when property rights exist (PR) and f approaches GO when property rights are non existent (NPR) In summary, the relationships are such that it is postulated that the number of participants (N) impacts on the transactions costs (TC) which in turn influences whether property rights exist (PR) or not (NPR) and these two extremes influence the discount rate (8) that the participants operate under (see Figure 6.1). In South Africa the discount rate (8) is high (>10%), such that Scenario 1 (Figure 3.3, see Clark 1990) exists for slow-growing species. That is the short-term benefits of overexploitation can exceed the long-term benefits of stock renewal. In addition, the number of participants in many of the fisheries is large ( N » l , Scenario 2, Figure 3.3, see Clark 1990), especially in the linefishery for geelbek. 149 N P R • '(total) _ "(real) If N » 1 t henTC are high N P R 8(total) _ 8 ( r e a | ) + / Figure 6.1 The relationships between number of participants (N), transaction costs (TC), the existence or non-existence of property rights (PR and NPR, respectively) and the discount rate (8) which participants will operate under. The factor (/) is assumed to approach infinity under certain conditions (for example when N » l and/or extreme poverty exists in a fishing community and the users are only interested in the very short term). Therefore the critical factor between the case studies relates to number of participants and how this factor impacts on the ability to assign and enforce property rights (which provide incentives for the participants to act in the long term, that is at lower discount rates). The number of participants and the discount rate are also related in the sense that each participants 'shadow price' of investment is influenced by how may other participants there are. The shadow price of investment is the cost to each participant of investing in the future growth of the resource assuming these benefits will accrue to them (Munro 1981). Each participants shadow price decreases in proportion to the decrease in their share. In reality, each participant plays a smaller role in the future of the resource and may see it in their best interests to cheat, acting as 'free riders' in a system where they assume the other participants will invest. Similarly as rights are questioned (the allocation period) participants will be less willing to pay the shadow price of investment, that is they will be less willing to invest in the future as their potential role in the future diminishes due to lack of security of tenure. In the past there were de 150 facto property rights in the hake fishery due to few elite quota holders having assured access and a good relationship with the government. In terms of policy reforms the government requires incentive adjusting mechanisms to modify incentives of participants, otherwise the result will be over-fishing and over-capitalization. In addition, the political competition for rights will create instability and the management authority questioned as to legitimacy. I could argue that in fact attempts to create greater access is coming at an expense as the government is creating open-access like conditions. The government will to bring in new entrants rather than replace previous rights-holders is increasing N and there is the opportunity for politicians to use rights as a bargaining tool, that is "quotas for voters". The government may need to accept that the industry's attempts to re-distribute were legitimate and the government should rather promote these programs of increasing equity in the distribution of resources. 6.3 The cost of co-managing South African marine resources South Africa has put in place a new functional dispensation for fisheries management with sustainable fisheries management as the objective. The economic and social costs and benefits of the development of this policy still have to be assessed. Pomeroy and Berkes (1997) argue that decentralization and co-management go hand-in-hand especially since they both empower regional or local communities. In South Africa, the government is opposed to decentralization, yet wishes to promote co-management. The government's model of co-management is that organized groups of users (e.g. Industry Associations) enter into management partnerships in which the government still has the right to over rule group decisions. However, as Pomeroy and Berkes (1997) point out this is the first step in the process of decentralization. The cost to the government of the establishment and maintaining of such institutions has never been quantified. In the previous section I argued that the government's policies of increasing the number of participants is increasing the transaction costs. In addition, by including new participants and questioning the long term rights of access by the established industry, the government is creating a situation where participants can only consider their short term interests. 151 An analysis of transaction costs is suggested as a means to evaluate the benefits and costs of decentralization, of both fisheries management and coastal resource management. The default assumption is that transaction costs are equal or lower in institutions characterized by co-management than costs associated with centralized management institutions (Abdullah et al. 1998a, 1998b). Transaction cost analyses have been applied to other case studies such as the management of lakes in Bangladesh (see Murshad-e-Jahan et al. 1999). The fact that South African decision-makers are acutely aware of the costs of increasing user participation is evident from changes made to policy documents during the Fisheries Policy Development Process. Within the draft fisheries policy of June 1995 were specific clauses implying that management authority could, be delegated to lower levels. In addition, there was a clause that dealt with 'user participation' which addressed 'guidelines' for participation at all levels. There was also a clause addressing user participation in management plans. Further, in the section that discussed levels of management and institutional structures, reference was made to the delegation of management responsibility. In May 1997 the White Paper, A Marine Fisheries Policy for South Africa, was released26. Efficient consultation was presented as an option, because of concerns with legitimacy, but clauses were included which emphasized the need to minimize potential cost and bureaucracy arising from user group participation in management. In this way the White Paper re-affirmed the government's will to control fisheries at a national level. The practicality of multi-party co-management arrangements for shared resources however, remains outside the realm of government policy in the White Paper. This exclusion results from the need to minimize bureaucracy which was not highlighted in the draft fisheries policy document. The South African government's policy wish is to cut the administrative costs of governance and move towards policies that are based on the 'user-pay' principle and an 'agency versus client' relationship. Meanwhile, the government also wishes to include users in management of Department of Environmental Affairs and Tourism (1997). A Marine Fisheries Policy for South Africa. 23pp. CTP Book Printers. 152 marine resources. This is evident from the structural changes being made in the Department of Environmental Affairs and Tourism (DEA&T) under the new Living Marine Resources Act. The D E A & T is undergoing extensive change to accommodate new structures, whereby research, enforcement and monitoring are integrated depending on resources (e.g. Coastal and Inshore VS. Offshore). The new structure is shown in Figure 6.2. Two clauses, one under Functions in the new Directorate: Economics and Resource Development, and the other under Functions in the new Directorate: Coastal and Inshore Resource Management, are relevant to this discussion. "To facilitate community interactions, partnerships and cooperative governance". Function (number 5) Directorate: Economics and Resource Development 'Tacilitate the establishment of partnerships for coastal and inshore resource management". Function (number 4) Directorate: Coastal and Inshore Resource Management However, these aims to restructure and accommodate the above Functions must involve adjustments to the institutional arrangements and the objectives of the South Africa government's policy initiatives need to be clarified. 153 CHIEF D I R E C T O R A T E M A R I N E A N D C O A S T A L M A N A G E M E N T R O L E : To guide the development and conservation of the marine and coastal environment and ensure the sustainable utilization of marine and coastal resources. D I R E C T O R A T E SUPPORT SERVICES R O L E : To provide strategic and support services to the Chief Directorate: Marine and Coastal Management FUNCTIONS • Provide communication and information services • Provide human resource, management, finance and logistical services • Develop working relationships Chief Directorate and relevant governance structures • Provide secretarial support service to various structures in accordance with Marine Living Resources Act • Provide information technology to Chief Directorate D I R E C T O R A T E C O A S T A L A N D INSHORE R E S O U R C E S M A N A G E M E N T R O L E : To facilitate and regulate sustainable and equitable development of coastal and inshore resources FUNCTIONS • To conduct inshore research in support of resource utilization • Monitor and control inshore resource utilisation and report on state of coastal environment • To ensure sustainable and equitable inshore resource utilization • Facilitate the establishment of partnerships for coastal and inshore resource management L E G A L A N D A D M I N I S T R A T I V E SUPPORT R O L E : To provide legal and administrative support to the Chief Directorate: Marine and Coastal Management D I R E C T O R A T E E C O N O M I C S A N D R E S O U R C E D E V E L O P M E N T R O L E : To facilitate sustainable development of marine and coastal resources by integrating human needs and natural resources. FUNCTIONS To conduct economic and socioeconomic research in support of resource utilization To facilitate policy and strategy development To facilitate appropriate national and international engagements To enhance benefits from resource To facilitate community interactions, partnerships and cooperative governance To promote conservation, ecosystem health and biodiversity To manage coastal infrastructure D I R E C T O R A T E O F F S H O R E R E S O U R C E S M A N A G E M E N T R O L E : To facilitate and regulate sustainable and equitable development of offshore resources FUNCTIONS • Conduct offshore research in support of resource utilization • Ensure sustainable and equitable offshore resource utilization • Monitor and control offshore resource utilization • Provide resource assessment and remodeling service. Figure 6.2 The new structure for the Chief Directorate M C M as proposed on the 31 May 1999 (the Directorate: Antarctica and Islands is not shown). 154 The South African Government's Objective It is assumed that the Department will act as an agent and it's objective will be to minimize the three types of transaction costs as proposed by Williamson (1995): (/) information; (D) collective decision-making; and collective operational costs (enforcement, E) - subject to a constant level of service (So) being provided. In addition the system is constrained by revenue (R') which is obtained from three sources, i.e., (1) minimize C = rl + vD + wE subject to (2) So = F(I,D,E) - and (3) Cmust be < R' r,v and w are the respective per unit costs of the factors I,D and E (as is presented in Azhar et al. (1999)). Where (4) R' = tr + up + cs (general tax revenue (tr), user-pay schemes (up), and cross-subsidies (cs) from other sectors) Transaction Costs In South Africa, searching and acquisition costs (information costs) are generally covered by the fishing industry, whereas most of the collective fisheries decision-making costs (the costs of participating in meetings, policy formulation, communicating decisions and coordinating with local and central authorities) are covered by the D E A & T . For example, the Fisheries Policy Development process was financed by a grant of R503 000 from the D E A & T . This funding proved insufficient however, and the Department of Trade and Industry provided an additional R1.3 Million for the completion of the policy development process. The government paid for representatives to attend the working meetings of the Fisheries Policy Development Committee. The collective operational costs of monitoring, enforcement and compliance, that is the monitoring of fishing rules, catch records, fishing effort and sanctions for various violations are shared in South Africa by government, industry and institutions such as the Police force and 155 Navy (enforcement). The Department has Marine Patrol vessels which needed R2 million to be upgraded in 1996. The collective operational costs of resource evaluation are covered by users as they are required by legislation (Marine Living Resource Act, 1998) to submit catch returns and other sources of information, depending on the permit condition. In addition, the research arm of the directorate has technicians, researchers and other staff who are responsible for conducting surveys and analyses onboard government vessels. The government does on occasion contract out research on stock assessment. A part of the costs of independent research is funded by the National Research Council (NRC). Outside agencies may also fund research in South Africa, for example, the Danish International Development Agency, funded a course on stock assessment with a grant of R190 000 in 1996. The collective operational costs of resource distribution, is covered by the government. The distribution of licenses and permits in monitored by the Boat Licensing System which is a database run by the D E A & T and includes information on each license-holder as well as permit conditions on quota-holders. The administration of rights is undertaken by the department, but access is allocated by two separate bodies, the Minister or the Fisheries Transformation Council. Revenue The costs of the centralized management system in South Africa are covered by three sources: 1) general tax revenue (the D E A & T is funded from the central coffer and the annual budget for agriculture, forestry, nature conservation and sea fisheries totaled R4 218 million in the 1996/7 financial year). 2) user-pay schemes , e.g., the South African Sea Fishery Research Fund. Revenue is generated from the South Africa Research Levies which are charged as Rand per tonne landed by each fishing unit for different species and species group. 3) cross-subsidies from other sectors , e.g., enforcement by the water-wing of the South Africa Police Force (the annual budget for the police was R13 750 million in the 1996/7 financial year, 3 times larger than the funding received for agriculture, forestry, nature conservation and sea fisheries combined). A Hypothesis on Transaction Costs Instead of future studies applying a comparative statics framework as in Azhar et al. (1999), their aim should be to empirically evaluate the transaction costs and revenues which were 156 discussed above. This will complement other empirical studies (Kuperan et al. 1999, Murshed-e-Jahan et al. 1999). Thus, future analyses will rely on the generation of a hypothesis which will be based on the assumptions that: a) Enforcement and compliance costs will be lower if users are involved in management. b) Collective Fisheries Decision-making Costs (CFDCs) will be higher for the government agencies i f they cooperate with various user groups, although some of the costs of meetings will be covered by the user groups themselves. A co-management approach is associated with high design costs, as effective participation is time consuming and inherently costly (Abdullah et al. (1998b). The benefits the industry receives will be fishery specific, however in the current political situation of South Africa most fishing interests find it beneficial to maintain a healthy relationship with the government as then they are assured of access to the resource. The hypothesis will be that overall, the benefits received under a regime of lower enforcement costs will exceed the higher CFDCs costs from government-industry cooperation. Thus any co-management arrangements which the government of South Africa enters into will eventually alter the production frontier. This can only be determined by future empirical studies. 6.4 Back to the beginning: rights, rules and responsibility The descriptive power of the model presented by Oakerson (1992) which forms the basis of the neo-institutional economic (NIE) analysis is high in that it captures the South African reality. The issue of access rights formed the basis of debates during the policy formulation of the new Marine Living Resources Act. This is complemented by the preliminary analysis in Chapter 2, which revealed that the successful management of common property resources depends on the rules governing participation (i.e., rights) being well defined and mutually agreed upon by all participants. In both case studies, the NIE analysis was used to qualify the predicted tradeoffs and reveal the competing participants. In addition it predicted whether there was, and still is, the potential for cooperative or non-cooperative strategies. In Case Study 1 (the linefishery for geelbek) the competing interests are two regions. The extensive distribution of the different life history stages of geelbek among competing interests on the East coast of South Africa 157 exacerbates the problem of facilitating cooperative management. This implies that a governing body has to regulate the stock. Short-term economic factors impose major constraints on the co-management of depleted linefish species such as geelbek. Along with issues of representation, the latter is identified as a major constraint to the inclusion of users in the management of these marine resources. Thus, in summary, any inclusion of users in co-management, is not only dependent on the political reality in South Africa, that is the willingness and ability of the government to share decision-making power, but also on the economic circumstances the participants operate within. In the hake fishery, the competing interests are two sectors. The increasing number of participants within the fishery (from 25 in 1994 to 139 in 1998) is creating a costly situation in terms of facilitating multi-party co-management between the government and the competing interests. It is assumed that the participants will practice long term resource management i f the benefits of such actions will accrue to them under security of tenure. The relationship between 'rights to resource' and 'participation in management', is one where during the current period of uncertainty, where access rights are being re-distributed, the participants are investing in negotiating security of tenure. In the last 5 years the established industry have had a 14% decrease in their share of the T A C . Therefore, processes such as co-management are irrelevant to the real concerns of the industry which is to maintain access to the resource. The current re-structuring and institutional changes are thus destabilizing the extensive interaction that existed in the past between the industry and the government. The predictions from Scenario 2 (chapter 3, Section 3.4) imply that the increase in the number of participants in the hake fishery is detrimental to the management of the resource. It is not implied in this thesis that the government should not be re-structuring, rather the government should be aware of the consequences of re-structuring (the increase of participants from 5 to 130+) and make allowances for the sense of insecurity with regard to access rights. In addition, the government will need to increase monitoring and control such that all the participants have less chance of cheating. Increasing the number of participants in any fishery (e.g. hake) will increase costs for enforcement, and the risk of overfishing. As a suggestion, future studies should focus specifically on the transaction costs of management on order to empirically 158 evaluate policy initiatives in each of the fisheries. The details of these costs and the revenues, along with an analysis, which included a consideration of the objectives, was presented. The central tenet of the thesis is that management policies, which ignore institutions, will fail unless policies are incentive adjusting. It is assumed that incentives can be adjusted to result in positive outcomes when the rules governing participation (i.e., rights) and the allocation of benefits for shared stocks are well defined and constrained. Otherwise the consequences of unfettered competition for access to scarce marine resources will result in their depletion. Non cooperative behaviour will prevail when political uncertainty exists. Thus, political uncertainty-and patronage for the distribution of short-term rights, exacerbates the problem of facilitating cooperative management among competing interests. In essence what this means is that the government should provide all the participants will greater security of tenure. Greater security of tenure could be provided by moving towards a system of property rights. Alternatively, good governance can result in situations where the participants have a greater sense of security of tenure. 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