Individual Transferable Quotas in New Zealand

New Zealand is regarded as the leading exponent of the ITQ system. Earlier the fishing industry was mainly supplying the domestic market with prime inshore species, while deep water species were fished mainly by foreign nations, principally the USSR, Japan, Korea and Taiwan.

With the declaration of the EEZ (Exclusive Economic Zone), the government began to encourage the formation of joint ventures, leading eventually to the phasing out of most foreign ventures. The fishery became `New Zealandised’, as the largest companies bought deep water vessels which were made surplus by the collapse of overfished Atlantic stocks.

The ITQ System was introduced for deep water species in 1983 and for inshore species in 1986. ITQs are stated as a right to harvest a specified tonnage of the Total Allowable Catch (TAC)from a stock in a given area. They are widely regarded as a property right to the fish. Issued in perpetuity, ITQs are freely transferable between New Zealand residents or companies with less than 20 per cent foreign ownership.

Officials in the Ministry of Agriculture and Fisheries (MAF)point to several reasons for the introduction of ITQs, including the declaration of the EEZ, high inflation, a downturn in international markets and trade barriers. The real impetus, however, came from the Federation of Commercial Fishermen comprising mainly owner-operators. They advocated a 40 per cent reduction in fishing effort in order to save their fisheries.

At present, 32 species in some 169 management units are managed under the quota system. In addition, there are 117 species fished under a permit system. While aggregation limits restrict the quota holder from having more than 20 per cent of the TAC for any species in a given area for inshore species or 35 per cent for deep water species, under the ITQ system, quotas were aggregated to the larger companies. Operations, therefore, tended to become consolidated in the largest ports, reducing fleets in the smaller ones.

Preliminary investigations showed that in a fleet of nearly 4,000 vessels, the top 50 landed 45.2 per cent of the catch, while the bottom 2,500 landed just 4.6 per cent. Clearly, therefore, these 50 vessels were the largest trawlers operated by the big companies who were already working in the deep waters.

In the name of `professionalising’ the industry, the first step taken was to eliminate the `part-timers’. This particularly hit Maoris, the indigenous people of New Zealand who have played a major role in fisheries. Maori fishers working in small ports and communities, seasonal workers- both Maori and Pakeha (non-Maori New Zealander)-as well as the so-called `lifestyle’ or subsistence fishers, were badly affected. The already high levels of rural unemployment were aggravated and the livelihood of many coastal communities disrupted, creating major social and economic hardship.

Maoris believe that the exclusive property rights aspect of the ITQ system was contrary to their fishery rights under the Treaty of Waitangi. Consequently, they took their claims to the Waitangi Tribunal. They also resorted to other court actions during the latter 1980s.

Together these re-sulted in a successful High Court injunction on the progressive expansion to bring more species under the Quota Management System (QMS). Although subsequent agreements did allow the inclusion of four more species (squid, jack mackerel, rock lobster and southern scallops), it generally prevented others from being brought in.

Meanwhile, the real part-timers- corporates such as Fletchers and Carter Holt Harvey, who had their primary activities in domains such as construction, forestry, and pulp and paper- finished up with most of the quota. Clearly, social justice was not a major objective.

Moreover, the process of quota allocation, particularly in the case of snapper, raised the TAC to levels higher than before the ITQ system was introduced, thereby negating conservation goals. After seven years of ITQ management in the inshore fishery and three more in the deep water, six of New Zealand’s seven main export species are in danger.