The effects of unilateral cost recovery in an international fishery

Management cost recovery has been introduced in a range of countries, including Australia (Department of Primary Industries and Energy, 1994; Kaufmann and Geen, 1997), Canada (Department of Fisheries and Oceans, 1995), Iceland (Arnason, 1993), New Zealand (New Zealand Department of Fisheries, 1997), South Africa (Sea Fisheries, 1997), and the USA (Office of Sustainable Fisheries, 1997). The system of cost recovery varies in these countries, but generally is based on either a percentage of the landed value or a charge per management unit. In all these cases, the fisheries are specific to a single country. While foreign fleets may operate in the exclusive economic zones of these countries, their activity is heavily regulated. Further, they are generally charged an access fee to cover not only the cost of management, but also to extract an element of resource rent. The situation facing fisheries in the European Union is quite different. While the fleets of Member states have exclusive access to their territorial waters (i.e., the first 12 miles from the low tide mark), most economic activity takes place in the waters subject to shared access (i.e., beyond the 12-mile zone but within the 200-mile EEZ). Fisheries management regulations in this area are globally imposed at the European level, but the management and enforcement of these regulations are the responsibility of the individual Member States. For example, the UK is responsible for licensing its own fleet, monitoring its activity and enforcing the catch limits imposed by the quota system. At present, management cost recovery in Europe is largely limited to nominal administration charges for processing licenses, etc. Even these costs are not being recovered in all Member States. However, the high cost of managing fisheries relative to their economic contribution (generally less than 1% of GDP) has called into question the advisability of continuing these subsidies.