Negotiations on Fisheries Subsidies: Overfished stocks
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2 NICOLÁS GUTIÉRREZ 12 June 2018 Geneva, Switzerland Negotiations on Fisheries Subsidies: Overfished stocks Nicolás GUTIÉRREZ, Fishery Resources Officer, FAO
3 Outline What is the status of global fish stocks? Overfishing vs. overfished stocks How does a government know if a stock is overfished? What do we already know about unassessed stocks? Take home messages
4 Population size What is the status of global fish stocks? Overfished: A fish stock that has a population size that is too low and jeopardizes the stock's ability to produce its maximum long-term yield MSY Limit Years
5 What is the status of global fish stocks? - monitoring Proportion of catches from stocks assessed in SOFIA report: ca. 70% of global capture production (2015) 31% stocks included in SOFIA are overfished (2015) Underexploited Fully-exploited Overexploited
6 What is the status of global fish stocks? - management Proportion of catches from stocks assessments in RAM: ca. 50% of global capture production (2015) Trend in total biomass of stocks in each region. Size of the circles is proportional to how many stocks are contained in the database. Color represents the proportion of the stocks in the region that are overfished. Green few overfished, red many overfished. Source: RAM legacy
7 Relative Biomass What is the status of global fish stocks? - management Proportion of catches from stocks assessments in RAM: ca. 50% of global capture production (2015) Stock status is improving, but only stock with formal stock assessment, mostly in developed world, are included What about the rest of the stocks and regions? Year Source: RAM legacy. Ray Hilborn pers. comm (2018)
8 What is the status of global fish stocks? - management Proportion of catches from stocks assessments in RAM: ca. 50% of global capture production (2015) Source: RAM legacy. Ray Hilborn pers. comm (2018)
9 Overfishing vs. overfished stocks Biomass is slightly below target stock is overfished Fishing rate is below target no overfishing occurring BUT Fishing is low enough to allow stock to recover to target and/or uncertainty in assessment may not justify further reductions in fishing quotas Atlantic Ocean Yellowfin Tuna Assessment (2016) Overfished Overfishing Fishing can be controlled, abundance often fluctuates based on external factors Overfished Rebuilding Not overfished Not overfishing
10 Overfishing vs. overfished stocks Biomass is slightly below target stock is overfished Fishing rate is above target overfishing occurring Indian Ocean Yellowfin Tuna Assessment (2016) Ovefished Overfishing Fishing is too high to allow stock to recover management has not been responsive / effective What can be done? Overfished Rebuilding Not overfished Not overfishing
11 Effective management Effective Management = Harvest Control Rule HCR = pre-agreed guidelines that determine how much fishing can take place based on indicators of the fish stock s status Stock not overfished = no additional regulations are needed
12 Effective management Effective Management = Harvest Control Rule HCR = pre-agreed guidelines that determine how much fishing can take place based on indicators of the fish stock s status Indian Ocean Yellowfin Tuna Assessment (2016) Stock not overfished (on target) = no additional regulations are needed
13 Effective management Effective Management = Harvest Control Rule HCR = pre-agreed guidelines that determine how much fishing can take place based on indicators of the fish stock s status Indian Ocean Yellowfin Tuna Assessment (2016) Stock is overfished = management regulations for rebuilding triggered - Number of boats - Number of fishing days - c Total Allowable Catch, - Spatial / temporal closures, etc
14 Effective management Effective Management = Harvest Control Rule HCR = pre-agreed guidelines that determine how much fishing can take place based on indicators of the fish stock s status Indian Ocean Yellowfin Tuna Assessment (2016) Stock is depleted= management regulations for rebuilding have not worked - Close the fishery
15 How does a government know if a stock is overfished? Quantitative stock assessment Data-limited modeling approaches Empirical indicators approaches
16 How does a government know if a stock is overfished? Quantitative stock assessment Local knowledg e Math models Long-term data Overfished / not-overfished: B/BMSY Pros: quantifies catch/effort, defines stock status, transparent and reproducible Cons: Data intensive, technically complex, expensive
17 How does a government know if a stock is overfished? Data-limited stock assessment (catch-only, size-based, others) Biology Math models Local knowledg e Catch data Overfished / not-overfished: Pros: may quantify catch/effort, may define stock status, less data intensive Cons: reliance on catches (uncertainty!), variable degree of complexity, controversial
18 How does a government know if a stock is overfished? Empirical indicators approaches Local knowledge Indicators Some data Pros: Less data intensive, simple indicators, incorporates local knowledge Cons: Does not quantify stock status nor catches/effort, less reproducible
19 What do we already know about unassessed stocks? 1. Globally, unassessed stock are less healthy and declining This is not a stock assessment but a modelling approach to understand the global or regional situation Should not be used for management Costello et al Science
20 What do we already know about unassessed stocks? 2. Globally, unassessed small stocks have worst status and declining However, we can t assume all unassessed stocks are overfished If effective management is in place and properly enforced, unassessed stocks are likely to be sustainable Costello et al Science
21 Take home messages Distinction between stock assessment (management) and stock classification (monitoring) FAO SOFIA, Costello et al. 2012, others Substantial regional / country differences in the state of the stocks and in availability of stock assessments Smaller stocks and developing countries require additional support (human and financial resources for monitoring, assessment and management) Different approaches to assess stock status exist suitable to wide range of data and technical requirements Unassessed (and small) stocks are more likely be unmanaged and overfished Independently of whether a stock is assessed or unassessed, if effective management is in place, good chance of being not overfished
22 Thank you Nicolas L. Gutierrez, Food and Agriculture Organization of the UN, Rome, Italy Source: FAO
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24 BRENDAN MCGIVERN 12 June 2018 Geneva, Switzerland Negotiations on Fisheries Subsidies: Overfished stocks Brendan MCGIVERN, Partner of Counsel, White & Case LLP
25 Outline of presentation A. Context: Existing WTO rules and proposed new provisions on overfished stocks B. Limiting the discipline to subsidies that have a negative effect on overfished stocks: legal implications C. Who decides if the subsidy has a negative effect on the overfished stock, on what basis?
26 Context Current proposals on fisheries subsidy provisions: no consensus on legal form Range of options include SCM Agreement Article 3, or Annex to the SCM Agreement, or stand-alone Agreement Substance will determine scope of the rule
27 Context Current proposals on fisheries subsidy provisions: include as part of the prohibited subsidies disciplines of Article 3 of the SCM Agreement Prohibited subsidies are per se illegal WTO Members are under a treaty obligation not to grant or maintain such subsidies If considered a prohibited subsidy will be deemed to be specific
28 The negative effects test Multiple options for the new rules on subsidies related to overfished stocks. Prohibited subsidies could relate to: stocks in an overfished condition fishing that targets such stocks fishing that negatively affects such stocks
29 The negative effects test Application of negative effects test would involve three main questions: 1. Does the subsidy fit within the definition in Article 1? 2. Is the stock in an overfished condition? 3. Does the subsidy negatively affect the stock? These questions would need to be addressed: By the subsidizing Member (assessing its compliance) By the WTO panel (in a dispute)
30 The negative effects test who decides? Decision on negative effects could be taken on the basis of: Objective definition Expert evidence Or both But element of subjectivity cannot always be avoided Definitions need to be interpreted Experts can disagree
31 The negative effects test objective definition? Option: Illustrative List of negative effects Or: Illustrative List of subsidies that are not considered negative With actions outside this list considered to have such a negative effect Illustrative List of measures deemed to provide subsidies, or measures that are deemed to have a negative effect Appellate Body in EC Bananas III: The ordinary meaning of the word "affecting" implies a measure that has "an effect on", which indicates a broad scope of application.
32 Negative effects: Who decides? Options could include: The WTO Member (as subsidizing state or coastal state) Regional Fisheries Management Organizations Permanent Group of Experts SCM Committee WTO dispute settlement panel would rule on compliance
33 The negative effects test Best scientific evidence available Not a panacea Members can differ both on what constitutes the best scientific evidence, and how it should be interpreted Subjective assessments can come into play Raises the issue of degree of deference to be shown to scientific experts
34 The negative effects test What happens when WTO panels must review technical evidence, such as on the state of a fish stock? Analogy: food safety regulations SPS measures In SPS cases, WTO Appellate Body has established that WTO panels should not substitute their scientific judgement for those of the technical experts
35 Appellate Body in US Continued Suspension Panel decision overturned because it reviewed the scientific experts' opinions and somewhat peremptorily decided what it considered to be the best science. AB: Panel should not decide if risk assessment was correct, but should only determine whether that risk assessment is supported by coherent reasoning and respectable scientific evidence and is, in this sense, objectively justifiable.
36 Appellate Body in US Continued Suspension AB: scientific basis for the measure need not reflect the majority view within the scientific community may reflect divergent or minority views provided that it comes from a respected and qualified source. Panel draw cannot substitute its own scientific judgement for that of the government that adopted the measure.
37 Appellate Body in US Continued Suspension Relevance for fisheries: Jurisprudence could determine that WTO Panels should not second-guess national governments on fisheries measures that have a respectable scientific basis. Deference more likely to be accorded on issues related to state of the fish stock Little or no deference on issues related to economic effect of subsidy
38 The negative effects test who decides? Option - WTO Member WTO Member decides (subsidizing state, coastal state) As a subsidizing state: will allow Member to decide for itself whether it has complied. Very weak discipline. Coastal state could make a determination but this would likely need to be subject to challenge through dispute settlement
39 The negative effects test who decides? Option - RFMO Regional Fisheries Management Organizations would have the expertise to address issues related to the state of the stock Legal issue: effectively delegating to another international organization the ability to make determinations on the interpretation of WTO provisions
40 The negative effects test who decides? Option - RFMO Delegating the decision outside the WTO? Very unusual but there is some treaty precedent GATT Article XV: Parties are required to consult with the IMF on issues concerning monetary reserves: GATT Parties shall accept all statistical findings of the IMF and shall accept the IMF s determination on whether action by a GATT Party is in accordance with the IMF Articles Upheld by WTO panel in Dominican Republic Cigarettes Model would likely apply only on technical issues (state of the stock)
41 The negative effects test who decides? Option - Permanent Group of Experts Panel can ask whether the measure in question is a prohibited subsidy. Never used. Panel will perform its own legal assessment PGE: no fisheries expertise
42 The negative effects test who decides? Option - SCM Committee Unwieldy and operates on the basis of consensus Not a decision-making body No fisheries expertise
43 Conclusions Context of pre-existing WTO obligations will shape the interpretation and application of any new fisheries subsidies disciplines. Key issues: who decides and on what basis? WTO panels would need to assess scientific and economic/legal issues WTO dispute settlement process is binding but can be time-consuming
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