Review of approaches for determining commercial fisheries compensation

Project number: 2022-021

Project Status:

Current

Budget expenditure: $136,420.00

Principal Investigator: Martin van Bueren

Organisation: Synergies Economic Consulting

Project start/end date: 9 Oct 2022 - 29 Jun 2023

Contact:

FRDC

Need

WAFIC and DPIRD are seeking an improved understanding of the methods available for valuing fishery access rights, their relative advantages and disadvantages, and more specifically which methods would be most relevant and appropriate for Western Australia’s small-scale fisheries. This is to better ensure that future compensation schemes better meet their objectives while also building increased certainty and confidence for industry and the holders of access rights, which ultimately supports improved resource security.

Our proposed approach draws on relevant literature and consultation with both government and fishery stakeholders (including fishers, investors, and brokers) to understand the range of approaches applied to valuing commercial fishing rights and their relative advantages and disadvantages. We will then define some key evaluation criteria that define what an appropriate compensation method is and then assess identified methods against these criteria. This evaluation will also consider how the applicability of methods may vary for different fishery types and circumstances.

The end outcome will be identification of the most appropriate valuation methods for the development of future compensation schemes for different fishery types, with a particular focus on small-scale fisheries. This advice will be developed to be readily adopted and applied by in relevant legislation and/or policy instruments.

Objectives

1. To review and summarise methods that can be used to value fishery access rights for compensation purposes, including each method’s advantages, disadvantages and appropriateness for given circumstances.

2. To understand the views and perspectives of those that hold or trade fishery access rights regarding how they value fishery rights.

3. To identify and recommend compensation calculation approaches that are most suitable for Western Australian small-scale fisheries and that could readily be adopted in Western Australian government legislation, policy or processes.

Final report

Authors: Simon Vieira Paul McLeod Peter Rogers Martin van Bueren

Final Report • 2024-03-18 • 2.64 MB

2022-021-DLD.pdf

Summary

The report discusses challenges in compensating fishers for giving up their fishing rights, particularly in small-scale commercial fisheries. These challenges include lack of transparency, data issues, timing problems, and mistrust. Based on past experiences, the report recommends several improvements, including favoring compulsory schemes, providing clear criteria and guidance, and allowing for appeals. The goal is to develop best practices for fair and transparent compensation processes in fisheries management.

Project products

Brochure • 2024-03-19 • 146.82 KB

2022-021-Summary-of-approaches-for-commercial-fisheries-compensation.pdf

Summary

Approaches for determining commercial fisheries compensation

Increasingly, commercial fishers are being called on to surrender their fishing rights (in part or in full). Historically, compensation schemes have been used to improve the sustainability and economic viability of a fishery through reducing the number of licenced fishers. More recently, compensation schemes have arisen out of a need to meet other objectives, such as making way for offshore wind farms, port infrastructure, marine parks or reallocation of fish stocks to recreational fishers.

Designing a compensation scheme and setting a proper level of compensation, be it for compulsory buy-out of licences or a voluntary scheme, is inherently difficult. Participants have divergent goals. Fishers seek the best price possible for surrendering their rights, while the government seeks the best overall value for all parties. Importantly, compensation schemes need to be transparent, defensible and equitable if they are to gain broad acceptance.

This report reviews the range of approaches currently being used in Australia and internationally, with particular emphasis on small scale fisheries in Western Australia (WA). Small scale fisheries have a unique set of characteristics that tend to make compensation challenging – these being the limited or no trade in fishing rights (resulting in a paucity of traded market values for licences on which to base compensation), limited public information about fishing activities and financial performance, and fishers being motivated by lifestyle factors over profit.

In this study, both process aspects of compensation and methods for determining payments are examined. The objective is to develop an understanding of how various approaches have worked in the past, lessons learned and what improvements may be warranted.