Displaced Effort, License Buyouts, and the Great Barrier Reef Marine Park: Interview with Stephen Oxley

When no-take marine reserves are designated, fishing effort that formerly occurred within those areas must move elsewhere. The displaced fishing effort can lead to increased pressure on non-protected areas, and ecological degradation can result in some cases – an unsatisfactory result for managers and fishermen alike. A solution to the problem of displaced effort is to reduce fishing effort in conjunction with designating reserves. The reduction in effort – achieved through buyouts of fishing boats or licenses – can counteract the movement of fishing activity outside the new reserves.

Nonetheless, the pairing of buyout programs and reserve designations has rarely occurred. The integration of the proposed MPA network for Australia’s southeast marine region with a national license buyout program (see article above) is among the few examples.

Another example is the Great Barrier Reef Marine Park Structural Adjustment Package, which has disbursed more than AU$50 million (US$37 million) to assist fishermen and fishery-related businesses impacted by rezoning of the 344,000-km² Great Barrier Reef Marine Park (MPA News 7:6). The rezoning increased the no-take percentage of the park to 33% of the total area, in part to protect against overfishing. This month, MPA News talks about the structural adjustment program with Stephen Oxley, assistant secretary of the Marine Branch of the Department of the Environment and Heritage (Australia), the agency in charge of developing the program.

MPA News: Please explain the role of the license buyout in the Great Barrier Reef Marine Park Structural Adjustment Package (GBRMP SAP).

Oxley: There are three major components to the GBRMP SAP:

• A license buyout;
• Business restructuring assistance for both fishing businesses and fishery-related businesses; and
• Business exit assistance for fishery-related businesses, fishing-license lessees, and license-holders in fisheries not covered by the license buyout

The license buyout was the first major part of the package to be implemented, through an open tender and offer process. This involved fishing-license holders offering their entire license, all authorities to fish in different fisheries, and all effort units or quota holdings for a price of their choosing. The Department of Environment and Heritage chose, through a selection process, the set of licenses that met its effort-reduction targets across all fisheries for the lowest price.

Approximately 580 licenses were offered, of which the Australian government purchased approximately 120. The key step in this process was determining how much effort among five affected fisheries should be removed through the tender process. This was determined by the Department of Environment and Heritage in conjunction with a technical advisory committee that included officers from the management agency for the fisheries (the Department of Primary Industries and Fisheries) and the Queensland Seafood Industry Association (representing fishers). By purchasing both licenses and effort units or quota where applicable, the government has sought to ensure that effort is permanently removed from the affected fisheries. The government spent approximately AU$33 million (US$24 million) to purchase the above licenses, and the average cost of each license was close to market value.

MPA News: With the structural adjustment package consisting of other types of aid besides just buyouts, could some of the available financial assistance be spent by fishermen to increase their fishing efficiency – and fishing pressure – in areas of the park that are still open to fishing?

Oxley: Fishermen that remain in the fishery and are impacted by the rezoning are able to apply for assistance. There are two levels of assistance: a simplified assistance component, with a maximum payout of AU$50,000 (averaging $21,800), and full restructuring assistance component with a maximum payout of $500,000 (averaging $145,000). In the case of full restructuring assistance, an evaluation is made of the least-cost option to help businesses manage the impacts of the rezoning. The cheapest option for most fishermen has proven to be reducing their costs of operation by repaying part or all of their debt. The government looks favorably on this option as it does not lead to an increase in fishing effort. The second most popular option is for the government to purchase quota or effort units in the effort-limited fisheries. Again, this does not lead to an increase in effort.

There have been a few instances where new vessels or motors have been purchased, generally where there were no other options to assist a fisherman. The department looks very closely at proposals to install new motors to ensure that reducing the cost of operation is the primary outcome. This measure has been designed to help fishing businesses adjust to their changed operating environment, which for many means having to fish in areas unfamiliar to them, and which may, for example, necessitate traveling further from their home port.

MPA News: What has the government learned from implementing the GBRMP SAP that could help in implementing other structural adjustment programs, including for the proposed MPAs in Australia’s southeast region?

Oxley: The Government has learned much. The primary lessons have been how to better structure packages to deal with the major issues that generally will be unique to each fishery, and the need to find methods for costing structural adjustment packages in a realistic manner. This involves recognizing that the impacts of MPA establishment have economic costs and social costs, with the latter being difficult to quantify.

For more information

Stephen Oxley, Department of Environment and Heritage, GPO Box 787, Canberra ACT 2601, Australia. E-mail: Stephen.Oxley@deh.gov.au