EU STRUCTURAL FUNDS—THE FINANCIAL INSTRUMENT FOR FISHERIES GUIDANCE

44. Since 1993 the EU Structural Funds for Fisheries have been combined in a single Financial Instrument for Fisheries Guidance (FIFG). Measures which qualify for co-financing are set out in Regulation 2792/99. These cover: adjustment of fishing effort; renewal and modernisation of the fishing fleet; aquaculture; protected marine areas; fishing port facilities; processing and marketing; promotion of fishery products; and technical assistance.

45. Member States which have not met their capacity reduction targets under the MAGPs cannot receive assistance for renewal and modernisation of their fleets. Consistently throughout successive MAGPs the capacity reduction objectives have failed to reflect either the scale of fish stock reductions or the increased efficiency of vessels achieved by new technology. The current MAGP IV requires Member States to achieve 30 per cent reductions in effort for stocks at risk of depletion and 20 per cent for stocks which are overfished.

46. Approximately one quarter of FIFG funds, almost ECU 700 million, were allocated for the period 1994-1999 to reduction in capacity and adjustment of fishing effort, while funds for modernisation and renewal amounted to ECU 640 million. The combined effect of these two measures has been to reduce the number of vessels, but not the overall ability to catch fish.

47. In England and Wales the uptake of FIFG funds has been poor at around 55 per cent, amounting to a significant underspend of the funds available. This has been due in part to the inability of British vessel owners to gain access to Renewal and Modernisation Grants, because of the absence of matching funding. Many witnesses commented on this failure on the UK's part to take up full structural fund entitlements, citing the Fontainebleau Agreement as a principal reason for this.[16] There was also criticism that FIFG funds were not being used for short-term transitional assistance to alleviate the temporary short-term losses of income resulting from new conservation measures (as distinct from long-term structural assistance needed to promote capacity reductions).

EFFORT CONTROLS AND MEDIUM-TERM MANAGEMENT STRATEGIES

48. Witnesses were asked about the value of controls on fishing effort, such as "days at sea". Although these are not popular with fishermen, it was suggested that they could be the key to curbing over-fishing until capacity can be reduced. They are likely to become easier to enforce with the advent of satellite monitoring, and would have numerous benefits, including enforceability, reduced incentives to misreport landings, reduced need to discard over-quota fish, and less need to set precautionary TACs on the basis of inadequate scientific information. The scope for making use of effort controls as a partial replacement for TACs may be greater in the context of zonal management of the resources.

49. Views were also invited on the scope for adopting medium-term management strategies to help to achieve sustainable levels of fishing over a transitional period until capacity could be reduced. An example is the use of "control rules" in Iceland, under which TACs are pre-determined formulaically in relation to stock levels. Similar strategies are used in, for instance, Australia, New Zealand and South Africa. Transparent and agreed management strategies are extremely helpful in keeping longer-term objectives clearly in view, and avoiding the ratchet effect in which of any short-term improvements in stock status are exploited, but with no balancing reductions when the stock situation is adverse.

50. It has been suggested that, in addition to introduction of individual transferable quotas (see footnote to paragraph 30), it has been suggested that the introduction of tradeable licences to fish, on which "resource rentals" would be paid, should be considered. Mrs Sheryll Murray (Fishermen's Association Ltd) told the inquiry that the present financial state of the industry made this impracticable (Q 232). However, as fishing becomes more profitable, the licence revenue could in principle be used to finance both modernisation and decommissioning. Resource rentals need not necessarily take the form of licence fees: they could also be levies on landings, payments for quota entitlements or effort charges (a fee per day at sea).

51. It is clear that there are some lessons to be learned from overseas experience and practice. Evidence and information was received on fisheries management in Norway, Greenland, Iceland, Faroes, Australia, New Zealand, the USA and various other countries from, among others, Mr Jonathan Peacey (Marine Stewardship Council), Dr Geoffrey Kirkwood, Professor Ola Flaaten, the JNCC and the Whale and Dolphin Conservation Society. As much of the ground was covered by the Science and Technology Committee's 1996 Report, we have not attempted a detailed summary here.

52. Many of these countries have put in place more effective policies on effort management, conservation and enforcement of regulations. There are obvious advantages of being relatively isolated and able to control activity right up to the full 200 nautical miles EEZ boundary. These make possible a more hands-on approach, and a shortening of lines of accountability. The management of the EU fisheries is perceived to be cumbersome, time consuming and therefore ineffective. Mr John Ashworth (Save Britain's Fish) contrasted this with examples of rapid response in Namibia and Canada (Q 218). It is indeed the case that non-EU North Atlantic countries are able to respond within hours to advice to close down a specific fishing area for conservation of juveniles or other such reasons, whereas the EU is incapable of responding for several months, except in an emergency.

ZONAL OR REGIONAL MANAGEMENT

53. Witnesses were asked whether traditional conflicts between fishermen and fisheries managers, and their scientific advisers, could be reduced by deciding on management strategies through appropriate regional or zonal forums, and whether the specific proposals by the national federations offered a way forward.

54. One of the principal exhibits to the inquiry were the recent proposals by the SFF and the NFFO, produced as a contribution to the review of the CFP, for a system of zonal management.[17] They are based on the joint belief of the Federations that the deficiencies of the CFP can be repaired by:

• Decentralising the management of the common European fishery
• Ensuring participation of all the legitimate interests operating in a decentralised area
• Re-designing the political structure governing European fisheries.

55. The NFFO and the SFF argue that zonal management is "the key", helping to change the "mind-set" through peer group pressure and by bringing fishermen into the heart of the management system. This is borne out by Australian, New Zealand and US experience.

56. The Fisheries Minister, Mr Elliot Morley, was positive in his support for the proposals:

"I think the fishing associations have been very thoughtful and put forward an extremely well thought-out proposal. Obviously some of it is more achievable than others, like most things, but it is a strategy and they are quite right to think through a strategy and aim for objectives … I certainly share many of their views and it is an approach I would be willing to argue for in relation to the CFP."

He did not hold out hope for reforms which involved a Treaty change, but expressed the belief that "you can have a great deal of decentralisation, and much more of a regional approach, within the current [CFP] framework" (Q 242).

57. Zonal management would provide a basis for allowing more flexibility between fishery areas. It would be important to enlist all stakeholders, including environmental interests. Mr David Symes saw as one of the advantages of zonal management the opportunity to reflect a clear set of common interests at regional level and to create long-term strategies, within broad policy objectives defined by the Commission (QQ 177, 192, 194). The JNCC, WWF and Professor McGlade saw a clear potential for synergy between zonal management and the ecosystem approach which they advocated; this would be crucial to effective implementation of the Habitats Directive and the EU Biodiversity Strategy within the EEZ (QQ 339, 347, 377-9).

58. There are a number of practical considerations to be addressed. How should the zones be defined? Should the zonal committees have executive functions or should their role be essentially consultative and advisory? There is a view (expressed, for instance, by Mr Symes) that in the long run they should have decision-making powers but that they should be left to evolve over time—perhaps over 15 years or more.

DISCARDS

59. The CFP has been widely criticised for perpetuating and even increasing the practice of discarding unwanted fish. Fish may be discarded because they are below the minimum landing size, because the value is too low (which would include unmarketable species) and because there is no quota left to land the fish. In a mixed species fishery by-catches are inevitable, though measures such as regulation of mesh size, the shape of the cod end and the insertion of escape panels in nets can alleviate the problem. Greater use of closed areas (see paragraph 38) where juveniles are identified can reduce the catch of fish below the minimum landing size.

60. Mr Chris Venmore (South Devon & Channel Shellfishermen) provided a vivid illustration of the unpleasant effects of discards when he described how crab pots were contaminated by dead mackerel in an area closed to mackerel fishing (Q 223). The Sub­Committee was also shown photographs of mature fish being thrown overboard (Q 228). As Director-General Smidt conceded, "the discard problem is one of the really difficult ones with which we are confronted" (Q 152). Solutions do not just turn on technical measures; they will vary according to geography and other circumstances. Norway forbids the practice of discards though there is little confidence that this regulation can be universally enforced.

FISHERIES MANAGEMENT WITHIN 6, 12 AND 200-MILE LIMITS

61. The existing derogations which allow Member States to exercise national control within 12 nautical miles of the coast (and with limited access in the 6-12-mile zone for foreign fishermen, based on historic rights) are embodied in the basic regulation (3760/92) and are due to expire on 31 December 2002. There appears to be wide support for renewal.

62. In England and Wales, but not in Scotland and Northern Ireland, Sea Fisheries Committees (SFCs) manage inshore fisheries within the six mile limit. We received evidence from a number of organisations proposing the extension of the inshore zone to twelve miles, for instance from Save Britain's Fish and the Fishermen's Association Ltd (QQ 221, 236). The Association of Sea Fisheries Committees provided copies of its recent report on the role of the Committees, in which it similarly advocated renewal of the derogations and recommended extension of national controls to the 6-12-mile zone.[18] Mr Venmore drew attention to the problem of under-size crabs being caught within the zone by French vessels and landed in France. At present the SFCs were powerless to act (Q 236). Both WWF and the Wildlife Trusts supported the proposal that SFCs should be given more responsibility (Q 406).

63. It is important to recognise the distinct characteristics of the local fleets which are principally active within coastal waters. The House of Commons Agriculture Committee, in its 1999 Report (see Box 1), made the point that the UK fishing industry was composed of many individual industries and that the economic circumstances of one segment could vary dramatically from that of another. It cited, by way of example, the fact that the pelagic fleet consisted of a comparatively small number of vessels and less than 20 per cent of total tonnage, but accounted for almost 40 per cent of total fish landings by weight. In the fleet as a whole there were some 2,400 vessels over 10 metres in length which together caught 95 per cent of the UK fish. At the other end of the scale there were some 6000 small vessels (under 10 metres), representing 70 per cent of the fleet by number, which caught the remaining 5 per cent.

64. Mr Symes drew a clear distinction between inshore and offshore fisheries, arguing that there was a need for separate quota allocations and for different systems of management and regulation, in order to ensure the viability of coastal communities and to avoid the marginalisation of the small boat sector (QQ 197, 199).

65. The JNCC, IEEP, RSPB and WWF-UK emphasised the environmental characteristics and particular sensitivity of inshore waters. Inshore fisheries are regarded as environmentally especially sensitive, but fisheries there are socio-economically special and often vulnerable, and tend to seek preferential treatment, such as exemption or derogation from normal conservation rules (eg use of smaller mesh sizes). From the conservation point of view, that is the opposite of what is needed. The JNCC suggested the solution was to reserve the inshore zone for small boats, but they should still be subject to appropriate environmental conservation measures (QQ 362-3).

SOCIAL IMPLICATIONS OF MOVES TOWARDS MORE SUSTAINABLE FISHING

66. Many decisions taken under the CFP affect inshore fishing activity, with profound social consequences. The inquiry examined the scope for helping the fishing industry accept necessary short-term losses of income by providing some form of transitional aid—but not long-term subsidies—within EU rules.

67. The former PESCA Community Initiative deployed Structural Funds to help the fisheries sector in ways which were designed to be complementary to measures under the FIFG. It set out to assist areas dependent on fisheries to cope with the social and economic consequences of structural changes in the fishing sector. For the period 1994-1999 the Community contribution to PESCA was ECU 255 million (compared with ECU 2.7 billion for FIFG). The share available to the UK of ECU 37.4 million was heavily oversubscribed. Despite that, the PESCA programme was not renewed when the Structural Funds were reviewed for the 2000-06 period. On the one hand it offered a useful learning process for local stakeholders in developing and implementing projects; on the other hand its small size and cumbersome administrative procedures limited its effectiveness on the ground.[19] There is also a chronic problem of antipathy on the part of fishing communities to the idea of getting out of fishing (cf paragraphs 4 and 20).

68. A number of witnesses argued that decommissioning programmes should expressly encourage diversification. The JNCC, however, was critical of Structural Funds which were being used in "perverse ways" to promote diversification without adequate environmental impact assessments (QQ 341-2). Attention was drawn to studies by OECD and WWF on "perverse subsidies" by Member States to their national fishing industries, some of which were highly discriminatory and probably in breach of the EC Treaty.[20]

FISH FARMING

69. We referred in paragraph 20 to the cultural and dietary importance of fish. In many parts of the world fish is a staple food, a more significant part of a day-to-day diet than meat of land-reared animals. In regions where traditionally there has been a strong culture of meat eating, there has been a tendency in recent decades to move away from meat and towards fish, inspired by both health and ethical considerations. As wild stocks have declined and prices have risen, fish farming (aquaculture) has grown in importance and the range of fish on the market has greatly expanded—it is not just a matter of salmon and trout. The Marine Stewardship Council's eco-labelling scheme (still in its infancy) has potential attraction to the consumer in providing assurance that the fish have been sustainably reared (QQ 1, 4). The large supermarket chains have responded to consumer demand for fish which is of consistent quality and size and this has tended to boost fish farming. There is every reason to suppose that fish farming will continue to grow.

70. Fish farming, even in the open sea, has environmental implications. Farmed salt-water fish need a diet derived mainly from small fish, especially Norway Pout and sandeels, caught by so-called "industrial" fisheries operating with small-mesh nets. Both the fishing activity and the loss of important components of the food chain affecting higher species may themselves be environmentally damaging.

71. The European Communities Committee touched on fish farming in its 1992 Report. With hindsight, it can now be seen to have underestimated the industry's potential. A more up to date assessment of prospects for fish farming is to be found in the Science and Technology Committee's 1996 report.[21]

ENFORCEMENT

72. The CFP provides a framework of rules which ultimately impacts on almost every aspect of the Community fishing fleet. There are regulations which concern the size of vessel, engine size, type of fishing gear, area of operation, days at sea, amount that can be caught and the size of fish that can be landed.

73. These regulations, once agreed by the Council of Ministers, are in the main left to each Member State to enforce. Under Council Regulation (EEC) No 2847/93 each Member State must operate control systems for monitoring and enforcing quota management, conservation, structural and market measures. Member States must also ensure that appropriate measures are taken to deal with infringements, including administrative action and criminal proceedings. The Commission employs some 25 fisheries inspectors, whose role is to undertake missions to Member States in order to monitor and verify their control activities (p 82).

74. Throughout the Community there is a universal view that the level of enforcement is at best inconsistent and often prejudiced in favour of Member States' own nationals (see, for example, the evidence from WWF at QQ 404-5). The perception from outside the Community is that fines, when imposed for infringements, are set by courts in the Member States at levels which have little deterrent effect. The consequences of inequitable enforcement are a credibility problem which strikes at the heart of the Common Fisheries Policy and does much to bring the CFP into disrepute. Dr Christian Lequesne referred to Member States who found it expedient to do a deal with the industry in which "social peace" was traded for "flexibility in the controls" (Q 325).[22]

75. Director-General Smidt recognised the difficulties facing the Community in seeking to achieve consistent enforcement in an area of responsibility which is close to the heart of a sovereign state. He suggested that:

"There must be commitment on both sides, both national and Community, for enforcement to be effective. That is why we hope that we can break the classic dichotomy between national responsibility and Community responsibility, which is tricky to handle, by pooling responsibilities in an institution which will not be "the Commission" but something outside it where Member States will also collectively have their role." (Q 162)

76. As already mentioned (paragraph 48), satellite monitoring is a relatively recent addition to the array of fisheries management measures and is likely to be crucial to effective policing of "days at sea" controls, and to enforcement generally.

77. Previous enlargements of the Community have had a profound effect in shaping the development of the CFP.[23] With the prospect of further enlargement, it is essential that new accessions do not add to the current problems of the CFP. It is mainly the Baltic that is affected in the first instance. The accession negotiations will provide an opportunity to ensure that new Member States conform to common standards of enforcement from the outset.

GLOBAL FISHERIES

78. The Community has currently seventeen fisheries agreements with third countries; others are under negotiation.[24] There are three different types of agreement:

• those with the EU's northern neighbours providing reciprocal access to fish quotas in each others' waters;
• those with mainly developing countries under which the EU pays for fishing rights in third country waters;
• "second generation" agreements which promote partnership arrangements between EU vessel owners and third country vessel owners.[25]

79. Several witnesses, including Mr Ashworth of Save Britain's Fish, gave evidence of agreements which were working at the expense of sustainable development and management of the marine environment and employment opportunities of third countries.

17   Zonal Management: A new vision for Europe's fisheries, Scottish Fishermen's Federation and National Federation of Fishermen's Organisations, May 2000. Back

18   Association of Sea Fisheries Committees of England and Wales: A report on the role of Sea Fisheries Committees in the management and regulation of the coastal waters of England and Wales, June 2000. Back

19   Coffey (1999) op cit. Back

20   Flaaten, O, and Wallis, P, Government Financial Transfers to Fishing Industries in OECD Countries, OECD, Paris, 2000; Fishing in the Dark, WWF European Office, Brussels, November 2000. Back

21   Op cit, paragraphs 2.112-2.133. Back

22   See also Lequesne, op cit, pp 359, 361. Back

23   Lequesne, op cit. Back

24   See House of Lords European Communities Committee, 3rd Report, 1996-97, Third Country Fisheries Agreements , HL 28. Back

25   See the Government's written evidence, pp 85-86. Back