Miljø- og Fødevareudvalget 2019-20
MOF Alm.del Bilag 472
Offentligt
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S
ETTING
T
HE
R
IGHT
S
AFETY
N
ET
: A F
RAMEWORK
F
OR
F
ISHERIES
S
UPPORT
P
OLICIES
I
N
R
ESPONSE
T
O
C
OVID
-19
Author: Griffin Carpenter, New Economics Foundation, [email protected]
April 2020
S
UMMARY
While disruption in seafood supply chains has brought temporary relief to wild fish populations, this should not
be celebrated. This environmental improvement has not come about due to any deliberate transition plan for
workers, nor will any environmental relief prove lasting once the public health crisis passes. Environmental
improvement is essential, but it should be achieved in a socially just manner.
This is where a principle-based approach is useful. The ten principles in this briefing establish a framework that
can be used to assess whether fisheries support policies in response to Covid-19 are appropriate to set a path
towards a healthier fishing sector, public, and marine environment. While some policies that have been
publicly advocated for violate one or more of the principles, other policies offer promise and should be pursued
with urgency.
Based on the ten principles, successful policies should:
●
support the acquisition of personal protective equipment such as masks and gloves;
●
enhance remote surveillance and non-observer monitoring programmes to ensure that essential data
is collected and that IUU fishing does not undercut law-abiding fishers and the marine environment
(e.g. cameras, electronic reporting systems);
●
improve traceability to ensure that efforts to develop new, localised supply chains can support EU
fishers and prevent IUU seafood from entering the supply chain, through digitisation;
●
ensure that lost fishing income due to the Covid-19 public health crisis is compensated for through
income support schemes (i.e. including the self-employed and fishers whose income is received
through a revenue share);
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●
●
condition any support for fixed business costs on improved environmental performance (e.g. the
adoption of low or lower-impact fishing gear, remote electronic monitoring, and/or stunning
equipment to improve fish welfare conditions);
pursue in-year quota flexibilities to allow fishers the opportunity to utilise their quota allocations (e.g.
rollover of monthly allocations, promoting the use of quota swapping/leasing, other means of
increasing in-year uptake particular to each Member State).
Based on the ten principles, good policy development and implementation should:
●
run for the duration of the crisis and expire at its end;
●
respect institutional integrity including the purview of funding bodies;
●
be developed, implemented, and have its intended effects within a short period of time;
●
be developed in consultation with a range of industry and civil society actors;
●
be clear in its goals,
●
be transparent about how support will be administered and who recipients are.
Based on the ten principles, a path to build back better should include:
●
investment in the marine environment (e.g. policies from the Blue Manifesto);
●
more resilient labour models in marine fisheries (e.g. labour representation for non-contracted fishers,
wage guarantees, co-ops schemes, sick pay);
●
a shift in financial support away from damaging subsidies and towards a system where the industry
pays for the costs of fisheries management (i.e. cost recovery), for access to a limited public resource
(i.e. resource rent), and for environmental damages (i.e. negative externalities).
While not a Covid-19 response measure in a direct sense, reviewing the typology of support measures against
the principles makes it clear that environmental improvements are needed. Fundamentally the Covid-19
economic crisis is about incomes, costs, and livelihoods. Improvements to incomes will be larger and longer
lasting if fish populations and the subsequent fishing opportunities are larger. Fishing costs also decrease as
more abundant fish populations can be harvested with less effort. Better prices can be secured by ending the
oo a d ust
of TAC cycles, so that fish can grow to larger size classes, and eco-certification can be
achieved.
Critically, while Covid-19 response measures may offer support for one year, a sustainable marine
environment supports livelihoods for years to come. With the climate and biodiversity crises as the setting,
any policy proposal needs to answer the fundamental question: how does this policy allow us to build back
better?
C
OVID
-19
HAS DISRUPTED SEAFOOD SUPPLY CHAINS
The Covid-19 public health crisis has now transformed into a wider economic crisis. Attempts to contain the
spread of the virus have kept workers at home and customers out of shops with serious ramifications for many
industries. The fisheries sector has not been immune from this wider economic crisis, and some parts of the
sector, particularly fresh seafood sales, have proven especially vulnerable.
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Global seafood trade has slowed, restaurant sales have evaporated, and even fresh fish counters in many
supermarkets have closed. While people are not consuming fewer calories, the response to Covid means sales
of fresh fish are down while frozen and canned fish have seen an increase (EUMOFA,
2020).
It remains unclear
for how long public health measures - and their economic effects - will continue and if there will be a longtail of
recovery. Some fishing businesses will struggle to stay operational if there is a lengthy recovery.
S
UPPORT POLICY IS NEEDED
In this context, emergency measures are being designed to support the production of seafood. The European
Pa lia e t has app o ed the Eu opea Co
issio s te po a elief s he e that allo s EU Me e States
to use structural funds to pay for compensation packages, including fleet tie-ups. This has enabled Member
States to offer fisheries-specific support packages over the existing social safety net and Covid-19 economic
programmes to cover lost wages (including the self-employed and fishers whose income is received through a
revenue share). The response has been rapid and expansive, and further programmes are being considered at
both the European and Member State level.
N
OT EVERY POLICY IS APPROPRIATE
Yet the desire to do
something
should not mean an uncritical acceptance of
everything
or
anything.
With the
benefit of hindsight, it is often the case that action in response to one crisis situation can create a new crisis or
compound another. Already there are concerns that some political leaders are using Covid-19 to pass
otherwise unacceptable legislation. Some businesses have been lobbying to cut regulations and the
o o a i us p ofitee s
Hurowitz, 2020)
get bailouts while harming the planet. The Commission has
announced a delay to biodiversity and food strategies, and is under pressure to delay everything from a single-
use plastics ban to emission targets for vehicles (Lazarus,
2020).
Similar pressure is underway to pursue the deregulation of fishing activity and its impact on the marine
environment (EAPO
& Europeche, 2020; Defra, 2020).
These efforts must be resisted. A vast amount of
research has been produced on fisheries support measures, their impacts on the health of the marine
environment, and the actual effect on livelihoods of fishers (reviewed in
Sakai et al, 2019).
Support for the
fisheries sector can work to protect the marine environment or it can undermine it.
P
OLICIES SHOULD PROTECT WORKERS AND THE MARINE ENVIRONMENT
A healthy marine environment leads to improved economic opportunities for the fisheries sector. Studies have
shown that if European fish stocks were allowed to recover they could produce more, as we are currently
harvesting from a small population. If recovered, there would
e a e t a € . illio i a ual e e ue e e
year and over 20,000 new jobs across the fisheries sector (Esteban
& Carpenter, 2015).
Conversely, measures
that are sometimes framed as helping fishers, such as setting total allowable catches (TACs) above scientific
advice, have ended up hurting fishers by failing to recover fish populations, necessitating even lower scientific
advice in the future, losing MSC certification, and delay reaching a state of higher economic potential (Guillen
et al, 2016).
It is critical that response measures to Covid-19 should bring us closer to this sustainable potential,
not further away.
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2020 is a critical year in European fisheries as it marks the deadline for the EU to end overfishing according to
the Common Fisheries Policy and achieve Good Environmental Status of European Seas according to the
Marine Strategy Framework Directive. Progress up until this point has proven insufficient and 68 out of 136
TACs were set above scientific advice for this year (Carpenter,
2020).
The CFP will fail in its objective to end
overfishing if all of the TACs that were set above scientific advice are caught (i.e. full quota uptake). For some
species an end to overfishing may be achieved in 2020 due to the disruption in seafood supply chains.
However, such reductions in fishing pressure will not last if TACs continue to be set above scientific advice, nor
will the marine environment see lasting improvements if the fishing industry continues to use the same fishing
techniques in the future (potentially compounded by interannual quota flexibilities).
It must also be recognised that we are in the midst of a biodiversity crisis and a climate emergency that
includes the marine environment (Luypaert
et al, 2019).
Wild fisheries is the key driver of biodiversity loss at
sea to date, according to the 2019 UN IPBES global assessment report on biodiversity
(IPBES 2019
).
Action on
one crisis should not worsen another, for example, by adopting measures that incentivise overcapacity or
o e fishi g. The Eu opea Pa lia e t s Co
ittee o E i o e t, Pu li Health and
Food Safety has been
clear that Covid-19 response should further, not hinder, the European Green Deal - a call echoed by
environment ministers from seventeen Member States (European
Parliament, 2020; Doyle, 2020).
Incentivising
fishing pressure would also work against the public health crisis and protective policies to keep people isolated
at home.
There is no need to pursue fisheries support policies that risk public health and the marine environment when
win-win policies are available. If designed correctly, policy support can lead to a healthier fishing sector and
marine environment. This briefing sets out how to solve these crises concurrently.
T
EN PRINCIPLES
C
OVID
-19
FOR ASSESSING FISHERIES SUPPORT POLICIES IN RESPONSE TO
The sheer volume of potential support policies means that rather than assess each policy individually, what is
needed is a broader framework that can be applied. Policy appraisal at the level of individual policies is also
context-specific and depends on the interaction with other policy measures (e.g. fisheries management
measures, social support policy), the fishery itself, and the political realities of the institutions.
The following ten principles provide a framework that should be applied when developing and appraising
response policy options, in order to deliver a healthier fishing sector and marine environment.
1)
Concurrent crisis response: Policies to address one crisis should have a positive impact on other
existing and anticipated crises.
Neither the causes nor the effects of crises can be viewed in isolation.
While there can be co-benefits to policies that deliver economic, human, and environmental health,
the e is also a alte ati e he e a tio o o e isis a o se a othe . But these do ai s a e o
substituta
le : i p o e e ts i o e do ai do ot o pe sate fo losses i a othe . B pu sui g
o u e t isis espo se e futu e p oof poli , e su i g that it fu the s ou olle ti e lo ge
-term
environmental and ethical goals (Lonergan
& Blyth, 2020).
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2)
Efficiency: Obtain the best results with limited resources.
The direct health emergency will require
substantial financial resources, making it even more important to provide targeted support. For
example, analysis by the OECD on fisheries support measures has shown that just using existing funds
and shifting them from fuel (i.e. fuel tax exemptions) to income support would raise incomes, fish
populations, and catches concurrently (Martini,
2019).
It is not just the size of support but also its
efficient use that matters.
3)
Rationality: Effective policy requires a linkage between the crisis being addressed and the policy
proposal.
This includes the time duration of policies -- policy design should include options for review
and removal post-crisis. If the problem is little or no income for fishers stuck on land during the crisis
then there should be income support policies for that time period, not a catalogue of long-standing
requests that will fail to provide income to fishers during the crisis.
4)
Speed: A crisis situation requires a rapid response.
Policies need to be developed, implemented, and
have their intended effects within a short period of time. The end of the financial year is the absolute
deadline, but as many business costs need to be paid much sooner, the earlier a policy can be
implemented the better. This implies a small number of policies that can quickly be designed,
implemented, and take effect.
5)
Institutional integrity: Support measures should respect existing institutions.
Existing policy processes
exist in a carefully constructed policy environment. Changing the division of powers, the remit of
institutions or the original intent of the source of funding in an ad hoc manner threatens the ability to
respond now and in the future (see case study on the European Maritime and Fisheries Fund).
6)
Anti-abuse: Ensure that policies are directed towards their intended recipients.
If spent correctly,
public funds can be of great help, but not if they are abused. This could include prevention mechanisms
such as a requirement that financial support for the same loss is not already covered through other
s he es i.e. o dou le dippi g a d/o la a k e ha is s that ould e ui e fishi g o pa ies
to pay back any tax relief, plus interest and penalties, if they are found to have abused the system.
Overall, there needs to be a sense of proportionality: the support available must be designed to cover
the loss incurred.
7)
Consultation: Engage industry and civil society in policy generation.
Civil society is the watchdog of
policy impact. It is not the case that the direct beneficiary is the only or even the most important
stakeholder. A limited consultation - or no consultation at all - is much more open to abuse. Within the
seafood sector it is also important to ensure wide consultation as the effects of Covid-19 vary greatly
between sub-sectors and some sub-sectors have more power and representation than others (e.g.
Carpenter et al, 2019).
8)
Clarity and transparency: To protect against abuse, policy intent should be stated and outcomes
monitored.
It is only with transparent information that past policies used in previous crises have been
shown to be subject to abuse (see Pedrógão Grande case study).
9)
Conditionality: There should be clear eligibility criteria and transparent procedures for application.
Conditionality is one of the main mechanisms by which concurrent crisis response can be achieved.
Public funding should always be conditional on good performance, and crisis response funding is no
exception (see case study on how other sectors are using conditionality to build back better).
10)
Integration: Fisheries support policies do not exist in a vacuum and should strengthen policies in
other areas.
Without integration, policy support in one domain (such as fisheries) could undermine
policies elsewhere. Policy integration also requires an international perspective. As a heavily traded
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product, seafood in one country often depends on fisheries in another. Mutually dependent seafood
market means that economic, human, and environmental health matters across Europe and beyond.
Taken together, these principles establish a framework that can be used to assess fisheries support policies in
response to Covid-19. It is not a prioritised list and, like the people, economy, and environment domains, each
principle matters in its own right. To some degree, trade-offs are inevitable, The use of conditionality can slow
the speed of implementation. However good policy design should aim to achieve these principles while
minimising the conflicts between them.
Case study on the Pedrógão Grande forest fires: Lack of clarity and transparency leads to abuse
In the summer of 2017, wildfires swept across the Portuguese municipality of Pedrógão Grande. In total
45,000 hectares of land were destroyed and 64 lives were lost. In response to the crisis the Revita Fund was
established to help residents who had lost thei
ho es i the fi e. Most of the € .3 illio a e f o p i ate
donations but the fund was overseen by the government.
Unfortunately the crisis response to the Pedrógão Grande fires serves as a lesson in mismanagement. A lack
of clarity on the governance of the funds and a lack of transparency regarding the recipients resulted in an
inefficient programme that was open to abuse. A 2019 Court of Auditors report summarised their assessment
as follows:
The o
u ity as ot suffi ie tly
involved, the criteria for granting support were not clear,
decisions with external effectiveness were not disclosed; the list of beneficiaries and support
gra ted as ot pu li ized a d the a ou ts pro ided are also ot pu lished (Sofia
Luz, 2019).
In response, the Revita Fund's Management Board noted that the decisions made need to be seen in the
context
of the i u sta es of so ial e e ge
i
hi h the suppo t took pla e
Diário de Notícias,
2019).
Regardless, the effect was that 58% of the total funds ended up with farmers rather than home repair,
a sha e hi h the Cou t of Audito s alled e essi e
Sofia Luz, 2019).
The Pedrógão Grande case highlights the need for
clarity
(i.e who should receive funds) and
transparency
(ie.
who did receive funds) in crisis response measures.
D
EFINING A TYPOLOGY OF FISHERIES SUPPORT POLICIES
While there are numerous potential fisheries support policies that could be pursued in response to Covid-19,
these policies can be broadly grouped into categories based on their approach. Defining a typology helps to
determine how the ten principles guide policymaking for each category of policy rather than a detailed
appraisal of each specific policy and the different contexts it might be applied in.
In broad terms, there are three phases to the disbursement of public funds through an economic crisis:
1. Damage limitation: immediate short-term funding and regulation to fill the hole in household and
business cash flow (e.g. rent, mortgage suspension);
2. Targeted bailouts: Targeted intervention to protect larger businesses in key sectors significantly
impacted by the Covid-19 fall-out (e.g. aviation, restaurants);
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3. Fiscal stimulus: Non-business-specific government revenue and capital spending designed to stimulate
economic activity (e.g. infrastructure investment).
Many policies for damage limitation have taken place and we are now mostly operating in the second phase of
targeted bailouts (i.e. financial assistance to business to save it from collapse). Fisheries support policies fall
into this second phase although there may be policies that step backward into the first phase if there are issues
with incomplete coverage or step forward into the third phase if bailout policies have long-term implications
for the future structure of the economy, society and natural environment.
The following typology of policy support measures is split into seven categories:
●
Policies to ensure safe and controlled fisheries;
●
Policies to increase the resilience of seafood supply chains and create new ones;
●
Policies to provide financial support for lost income;
●
Policies to provide financial support for fishing business costs;
●
Policies to provide price support;
●
Policies to change regulations and regulatory processes;
●
Policies to provide recovery stimulus.
Case study: Institutional integrity and the future EMFF
In order to ensure
institutional integrity,
structural funds, such as the EMFF, should not be used to deal with
acute crises. The EMFF is the financial instrument to ensure the sustainability of human activities as sea, in
particular in the fisheries and aquaculture sector, and to protect the aquatic environment. The fact that the
future EMFF (2021-2027) is currently under review and inter-institutional negotiations are taking place,
presents a risk of taking decisions that puts us in the wrong path of misusing the future EU fund to respond to
the crisis. There are several policy support measures described above that are already possible to implement
with the help of EMFF funds, as they are measures that fulfil the original intent of the fund which is
supporting the sector in the long-term task of becoming sustainable and protecting the marine environment.
Some of these policies are:
●
Policies to ensure safe and controlled fisheries;
●
Policies to increase the resilience of seafood supply chains and create new ones;
●
Policies to provide recovery stimulus.
On the contrary, allowing the future EMFF to support policies that provide financial support for lost income
or for fishing business costs and policies to provide price support would consist of a violation of the
institutional integrity
principle, as the EMFF is not the financial tool to cover these types of costs. Financial
support for lost income should be covered by national programmes designed to support workers across the
economy and fixed fishing business costs should be equally covered by national government programmes.
Using future EMFF funds along these lines would also fail the principle of
concurrent crisis response,
as funds
intended to respond to the biodiversity crisis would be compromised and potentially become a source of
harmful fisheries subsidies.
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P
OLICIES TO ENSURE SAFE AND CONTROLLED FISHERIES
For fishing vessels that continue to go to sea, there is an urgent need to support the acquisition of
personal protective equipment such as masks and gloves. Fishing vessels and fishing ports can be densely
packed and without protective measures there are concerns that fishing activity could spread the virus. This
concern has led to calls for fisheries closure - sometimes instigated by fishers themselves (Page
& Fequet,
2020)
- and has even resulted in fishers from one Member State blocking fishers from another Member State
landing in domestic ports (Mac
an tSíthigh, 2020).
Some Member States have acted on this and are providing
funds for safety equipment through the existing European Maritime and Fisheries Fund (República
Portuguesa,
2020).
Just as some fishing vessels are not going to sea due to safety concerns, the same applies to control vessels and
the operation of fisheries observer programmes. This presents a serious risk of illegal, unreported, and
unregulated (IUU) fishing from vessels that continue to fish. The Eu
opea Co
issio has e p essed deep
o e
a out the a ilit fo so e Me e States to o ito o
e ial fishi g a ti it at sea du i g the
Covid-19 pandemic (Siggins,
2020).
E pe ie e gai ed f o p e ious ises adds fu the eight to the Eu opea Co
issio s o e . The Food
and Agriculture Organisation of the United Nations (FAO) has warned of an increase in IUU fishing based on the
outbreak of Ebola in West Africa from 2013-2016 where Fisheries Monitoring Centres (FMC) were left unable
to function properly (FAO,
2020).
The FAO commented on the control and enforcement shortcoming, noting
that Fishe s ho a e safel out at sea i thei i o os k o this a d a keep ope ati g o adapt thei
ope atio s to e efit f o the Mo ito i g, Co t ol a d Su eilla e s sho t o i gs to e gage i illi it
a ti ities
FAO, 2020).
To prevent a similar occurrence during the Covid-
isis, the FAO e o
e d
ai tai i g le els of
monitoring, control and surveillance of fishing
a ti ities a d e ha i g, he e possi le, e ote su eilla e
and non-observer monitoring programmes (cameras, vessel tracking, log-
ooks, ele t o i epo ti g s ste s
(FAO,
2020).
Similar measures have been advocated by NGOs to fishery managers and Regional Fisheries
Management Organisations (RFMOs) in response to Covid-19 (Nickson
et al., 2020).
These measures would
allow continued control and monitoring without endangering the health of control officials. Such an investment
would represent a good use of public funds in the EU given the current proposal for a new EU Fisheries Control
System.
In general, recognising also the important role that transparency within the global fishing sector can have in
tackling IUU fishing efforts, coastal, flag and port States, civil society, RFMOs, industry and international
institutions should enact and enforce transparency and good governance measures such as those advocated by
the EU IUU Coalition (Environmental
Justice Foundation et al, 2019).
Similarly, increasing
transparency
in the
implementation of the EU fisheries control system would contribute to creating a culture of trust, collaboration
and compliance (Environmental
Justice Foundation et al, 2019).
Unfortunately examples are already being recorded of IUU fishing due to the reduced enforcement capacity
during the Covid-19 crisis, for example large-scale vessels fishing in areas designed for small-scale vessels
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(Cabico,
2020).
Like many forms of IUU fishing, this activity harms both fish populations and the fishing
activities of legal operators. Investing in policies to ensure safe and controlled fisheries therefore represents a
good use of public funds that promotes
concurrent crisis response.
P
OLICIES
TO INCREASE THE RESILIENCE OF SEAFOOD SUPPLY CHAINS AND CREATE
NEW ONES
As global seafood supply chains have become disrupted, many export-oriented seafood supply chains have had
to search for alternative markets for seafood products. This includes not just export markets, but also seafood
supply chains such as brown shrimp which is harvested in Europe, peeled in Morocco, and then sold back again
in Europe (ICES,
2020).
Dozens of success stories are now emerging of fishing businesses offering direct (i.e. door-to-door) sales to
consumers (FARNET,
2020).
All else equal, a more localised supply chain could lead to environmental
improvement by reducing transport emissions (in particular fresh seafood sent by air freight) and better
connecting consumers and their diets to the environment around them. Direct sale also tends to diversify diets
rather than focusing on a small number of supermarket species which concentrates fishing pressure.
Unfortunately, given that many fish populations in Europe are overexploited, it is sometimes the case that
seafood imports are more sustainable than local catches (e.g. imported cod from the Barents or Icelandic Sea is
more sustainable than cod from nearly all EU waters).
Supporting business innovation as an emergency response and larger government industrial strategy
can
meet
some of the ten principles. There is however the potential for
abuse
if sales are made without proper
registration. Innovative governance solutions are needed to match business innovations. It is also important to
recognise the problems with promoting local sales where it could lead to more pressure on overfished stocks,
especially once international markets return. These cases would violate the first principle of
concurrent crisis
response.
As with many market interventions in fisheries, ultimately it comes back to the government to
ensure that the system is sustainable (Carpenter,
2019).
Given the recent enthusiasm for local sales, there is an opportunity to not just promote local supply chains, but
also to improve traceability. Currently, most EU-caught seafood products are traced through a paper-based
system. Ensuring that adequate information is passed along the supply chain to ascertain the legality of EU-
caught products, and transforming to an improved and digitised traceability system would help combat illegal,
unreported and unregulated (IUU) fishing, deliver healthy fish stocks, and safeguard the livelihoods of fisheries-
dependent communities (ClientEarth
et al, 2019).
By improving traceability (for example through the revision of the EU Fisheries Control System) - and
importantly by improving the status of European fish populations - efforts to develop new, localised supply
chains can support EU fishers while also improving the marine environment and deliver on the first principle of
concurrent crisis response.
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P
OLICIES TO PROVIDE FINANCIAL SUPPORT FOR LOST INCOME
Many EU Member States have introduced programmes to support the incomes of workers across the economy.
As marine fisheries have unique forms of labour compensation it is important to ensure that lost fishing income
due to the Covid-19 public health crisis is covered by these income support programmes (i.e. that they include
the self-employed and fishers whose income is received through a revenue share).
As a loss of income is the main economic harm caused by Covid-19 in the fisheries sector (e.g. in the supply
chains for fresh seafood), a policy that offers financial support for lost income has a strong
rational
linkage and
is therefore an
efficient
policy approach. Compared to other policies, income support is also better (i.e. less
harmful) for the marine environment. As OECD analysis on the relative effects of fisheries support summarised:
Suppo t ased o fishe s i o e appea s to p o ide the g eatest e efit to fishe s a d is elati el less likel
to i ease apa it o fishi g effo t
Martini & Innes, 2018).
To the extent that financial support for lost income incentivises fishing vessels to remain in port (i.e. is
conditional on a decrease in fishing activity) there are potential public health and environmental co-benefits.
By fishing less in 2020, fish populations can reproduce to greater numbers in future years. In this respect a tie-
up s he e ould p o ide a o at h i est e t fo EU ate s
Crilly & Esteban, 2012).
Any environmental
gain would be quickly lost however if fishing capacity remains at the same level (see Deepwater Horizon case
study).
More problematic is a scheme where income support is provided to the fisheries sector specifically while
fishi g a ti it o ti ues e.g. S otla d s seafood se to suppo t:
Marine Scotland, 2020).
The
rationality
principle requires that financial support for lost income is for
lost
i o e, a d is the efo e tie-up aid athe
tha top-up aid. I additio , a p og a
e fo fi a ial suppo t fo lost i o e eeds to e o sistent
in its
treatment of circumstances across sectors (including other sectors within seafood supply chains) as described
by the
integration
principle.
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Case study on the Deepwater Horizon oil spill: Support measures support fish populations
The explosion and subsequent oil spill from the Deepwater Horizon drilling rig in April 2010 closed significant
fisheries areas for part of the year. While the oil spill had ecologically damaging effects on the surrounding
marine environment in the Gulf of Mexico, subsequent analysis has revealed that the decrease in fishing
p essu e led to i p o e e ts to io ass due to the losu e ese e effe t a d highe at h ates
Fodrie and
Heck, 2011; Schaefer et al., 2016).
Payments to fishers for lost income included the Vessels of Opportunity Program ($283 million), Seafood
Compensation Program ($2.2 billion) alongside emergency claims for general
business economic losses ($6.7 billion). This total of $9.2 billion greatly exceeded the commercial revenue for
all GoM key species or groups over the same time period ($3.8 billion from 2010 to 2014) (Cockrell
et al.,
2019).
The counterintuitive result is that while there was exit from the fishery in 2010, this occurred at a significantly
lower rate than the historical average (5% vs 20%) implying that because of the crisis fishers remained in the
fleet that otherwise would have left the industry (Cockrell
et al., 2019).
The economic effects of fisheries support policies developed in response to the Deepwater Horizon oil spill
illustrate the problems of
inefficiency
associated with overlapping support programmes and the
abuse
that
these programmes can generate. The ecological effects illustrate the failure to consider fishing capacity and the
need to deliver
concurrent crisis response.
P
OLICIES TO PROVIDE FINANCIAL SUPPORT FOR FIXED BUSINESS COSTS
While fishers undoubtedly benefit from the income support programmes described previously, there has also
been pressure for bespoke fisheries support measures to cover ongoing business costs, for example port dues
and insurance (NFFO,
2020a; NFFO, 2020b).
Some Member States have responded by implementing
programmes of financial support for ongoing costs while other Member States have stated that they do not
intend to pursue such programmes as there are signs that prices have not declined as expected and key
seafood supply chains are beginning to return to normal (Siggins,
2020).
Financial support for fixed business costs is
less efficient
than income support at targeting the stated problem,
it is more problematic from an environmental perspective and it fails the principle of
concurrent crisis
response.
In their modelling of fisheries support policies the OECD concluded that payments based on vessel
osts a e the ost likel of all poli ies to esult i o e apa it of the fishi g fleet
Martini & Innes, 2018).
If financial support for fixed business costs is provided, environmental conditions should be applied (see case
stud o othe se to s usi g o ditio alit to uild a k ette . This e su es that pu li
o e ge e ates a
return for the environment and wider society as well as fishing businesses for
concurrent crisis response.
Conditions that could be applied to fishing businesses to simultaneously improve the marine environment
include, where applicable, the adoption of low or lower-impact fishing gear, remote electronic monitoring,
and/or stunning equipment to improve fish welfare conditions.
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To prevent
abuse,
the design of support schemes should be targeted at fixed costs, for example using fleet
e o o i data o osts
fleet seg e t e.g. S otla d
s shellfish sector support scheme) which could be
assessed with relative
speed.
Eligibility requirements should be
clear
and
rational,
such as which vessel groups
and levels of fishing activity (i.e. part-time fishers) are included.
Other non-income financial support proposals include VAT reduction and tax exemptions or deferrals (EAPO
&
Europeche, 2020).
VAT reduction is problematic for different reasons as it is very likely to lead to
abuse
with
the scheme being used for goods and services not specific to the business. As such, VAT relief has been
analysed and dismissed as an option in other sectors such as mining (IGF
& ATAF, 2020).
VAT payments are also related to operating costs, not vessel costs, that are even more problematic for their
environmental impacts. In general, support for variable costs incentivises fishing pressure whereas support for
fixed costs incentivises capacity. In their modelling of fisheries support policies the OECD conclude that:
Support that is ased o the osts of fishi g, su h as help to pur hase fuel, gear or ait, a
increase fishing effort more than other policy options. These types of support are the most likely
to increase IUU fishing effort and to lead to stock depletion. They also tend to favour larger
fishers, to the poi t here others i the fishery ay e ade orse off y support
(Martini
&
Innes, 2018).
Tax deferral could be considered and is a common tool used in government bailouts. Indeed some Member
States are already offering this option for all businesses, suggesting the option to pursue
integration.
Storage aid for fisheries products could be considered as a business cost or as an investment in supply chains
(see earlier section). While this may offer some promise in particular fisheries, in others it could be extremely
inefficient
and is unlikely to deliver
concurrent crisis response.
As Shane McIntyre, director of the National
I sho e Fishe e s Asso iatio , e plai ed: A tie-up
which would allow fish to recover in the sea would be far
ette tha pa i g fo f eezi g apa it fo fish hi h ight o l fet h
a kilo
Siggins, 2020).
Going
further, the Low-impact Fishers of Europe (LIFE) believe that in some instances storage aid could make their
members worse-off
as sto age aid ould ost likel ha e a dep essi g effe t o fish p i es o e the isis
eases. What acti
e fishe s eed ost is i o e suppo t, a d suppo t to sell thei fish di e t to o su e s.
(LIFE,
2020)
Financial support to the fisheries sector in response to Covid-19 should also be set in the context of the longer
te
di e tio of fishe ies a age e t. Fo e a ple, the OECD s a al sis suggests that e isti g fishe ies
support for costs such as the fuel tax exemption should be shifted to income support which would not only
have the intended effect of raising incomes, it would also increase fish populations and catches and,
presumably, lower greenhouse gas emissions (Martini,
2019).
Like other fisheries support policies in response
to Covid-19, a longer-term perspective is needed so that actions taken today set us on the right path toward
thriving fisheries operating in a healthy marine environment.
In addition, the future of fisheries management in EU Member States should see a mature industry paying for
the cost of management (i.e. cost recovery), for access to a limited public resource (i.e. resource rent), and for
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environmental damages (i.e. negative externalities). This model of industry payments is common across
resource industries including forestry, mining, and even radio and cellular services (Carpenter,
2018).
Industry
payments are just as relevant to the fishing industry and over the past two decades countries around the world
from Iceland to the United States to Namibia have implemented programmes to recover costs for fisheries
management -- but not in EU Member States (Carpenter,
2017).
This is especially unreasonable as profits in the
EU fisheries sector are actually higher than in other sectors (STECF, 2019). Any action on fisheries support
taken now should be part of a clear path in the direction of longer-term cost recovery (e.g. any cost support is
given as a business loan and policy announcements are made about longer-term cost recovery).
Case stud : Othe se to s usi g o ditio alit to uild a k ette
Other economic sectors, like the fisheries sector, are envisioning what their future looks like after Covid-19. In
so e ases, e poli ies a e ei g de eloped that atte pt to uild a k ette
i teg ati g
environmental and social goals with policies to spur economic activity and resilient public health systems.
These follow a similar model to the 2009 bailout of General Motors and Chrysler in the US where businesses
restructuring plans were required that included fuel efficiency and emissions requirements.
As a condition for the aviation sector to receive bailout support, the Austrian government is requiring a
linkage to climate targets. This may include a reduction in short-haul flights, increased cooperation with rail
companies, use of lower emission fuels and larger tax contributions (Morgan,
2020).
As a condition for any business to receive bailout support, the governments of Denmark and Poland are
forbidding the use of tax havens. The Danish government explained that: "Companies based on tax havens in
accordance with EU guidelines cannot receive compensation, insofar as it is possible to cut them off under EU
law and any other internatio
al o ligatio s
Bostock, 2020).
A alte ati e optio is fo these o ditio s to e applied et ospe ti el if the go ernment
takes equity in
companies and steers the direction of the business (Lonergan
& Blyth, 2020).
The partial (or complete, in
some cases) nationalisation is unlikely in fisheries given the scale of businesses.
P
OLICIES TO PROVIDE PRICE SUPPORT
A alte ati e to suppo ti g lost i o e o tie-up aid is to p o ide p i e suppo t. A p i e floo ould esta lish
a minimum price, although this approach is more often used to combat market power and may lead to fewer
sales and is thus unlikely to serve as a Covid-19 response.
I thei p oposal, EAPO a d Eu ope he p opose the esta lish e t of
i i u p i e e ha is s th ough
POs, i hi h the State helps fi a e these a ti ities
(EAPO
& Europeche, 2020).
The implication seems to be
that governments would pay the difference between the offer price and the minimum price, in which case the
system is ripe for
abuse
with buyers simply making one cent offer prices (and the additional problem that all
offers in the market become identical). Price support offers little promise then, and is certainly
inefficient
compared to income support when supermarkets have been clear that they will not run out of food and
income support offers ecological co-benefits (see Deepwater Horizon case study). Price support could also have
the unintended effect of endangering workers practicing social distancing by incentivising an increase in fishing
activity.
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Bette p i es a e se u ed
e di g the oo a d ust of TAC
les, so that fish a g o to la ge size
classes, and eco-certification can be achieved. Increasing market resilience through local supply chains could
also improve prices (see previous section on resilient supply chains).
P
OLICIES TO CHANGE REGULATIONS AND REGULATORY PROCESSES
Like other sectors (Lazarus,
2020),
the fisheries sector in Europe has been lobbying for deregulation from a
catalogue of measures. Some of the suggested deregulation is not linked to Covid-19 and thus fails the
principle of
rationality.
One of the major deregulation policies EAPO & Europeche propose is increasing the interannual TAC flexibility
from the 10% specified in the CFP basic regulation to 25% for the 2021 fishing year for all commercial species
as some fisheries may fail to use the entire TAC in 2020 (EAPO
& Europeche, 2020).
Proposals in this vein fail
the principles of
concurrent crisis response
and
rationality.
If it were ecologically manageable to have
interannual flexibility at 25% then it would have already been at that level in the CFP. Covid-19 does not change
the underlying biology of fish populations, nor does it resolve the problem of compounding TACs and removing
an entire year-class of fish.
Increasing interannual flexibility also fails the principle of
anti-abuse
because any underuse of TAC in one year
is already incorporated into stock assessments as abundance improves. For this reason, calls for more
interannual flexibility have already been rejected in other fisheries administrations such as South Africa
(TimesLive,
2020).
Offering both interannual flexibility and income support would also fail the principle of
anti-
abuse
as interannual flexibility would mean income is not being lost but rather deferred for a future year.
Increasing interannual flexibility could also have the unintended consequence of crashing prices in 2021 due to
large increases in landings (see discussion of storage aid). In this case there would be both short-term financial
losses and environmental losses.
Importantly there are alternatives to meet the same policy intent, for example Member States can change in-
year quota flexibilities from adjusting monthly allocations to annual allocations or promoting quota swapping,
leasing, and other means of increasing in-year uptake. In principle, greater in-year flexibility also allows fishers
to target fish populations when they are more abundant and avoid them during spawning season.
Rather than deregulatio
, hat is eeded is e poli ies that uild a k ette
pu sui g
concurrent crisis
response
and meeting the other principles outlined. Other sectors can provide an inspiration model for EU
fisheries (see transport policy case study).
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Case study:
Co
i i g health a d e i o
e tal
easu es i t a spo t poli
to uild a k ette
Covid-19 and the need for social distancing presents a transport challenge in cities and dense areas serviced by
public transport in particular. Several cities have responded with plans to promote cycling and walking by
changing the way passenger vehicles are used in the city. In Milan, policies include a maximum speed limit of
30 km/h, new cycle lanes and new and widened pavements. Marco Granelli, a deputy mayor of Milan,
explained:
We orked for years to redu e ar use. If e ery ody dri es a ar, there is o spa e for people,
there is no space to move, there is no space for commercial activities outside the shops. Of
course, we want to reopen the economy, but we think we should do it on a different basis from
efore
(Laker,
2020).
In Brussels, policies include a maximum speed limit of 20 km/h and pedestrians and cyclists will have priority
on the roadways and no longer only sidewalks and cycle paths. These measures come into force at the
beginning of May and apply across the whole inner city zone (Le
Soir, 2020).
Action at the level of national governments has been slower, with suggestions including pro-EV scrappage
schemes, charging infrastructure and grid upgrades, and public money in exchange for higher emissions targets
(Poliscanova,
2020).
It is hoped that these measures will not only promote public health through physical distancing but also
through increased activity. A shift in transport use towards walking and cycling would also prevent air pollution
from rising - itself linked to mortality from Covid-19 (The
Guardian, 2020).
P
OLICIES TO PROVIDE RECOVERY STIMULUS
While much of the policy attention in response to the Covid-19 public health crisis has focused on policies to
deal ith the i
ediate i pa ts, the e is also a eed to look e o d the isis to e su e that e uild a k
ette as a so iet . Fo the fishe ies se to the e is a lea eed fo
the marine environment to build back
better through ecosystem restoration. Earlier this year the
Blue Manifesto - The Roadmap to a Healthy Ocean
in 2030
was launched to provide this longer-term vision. The 10 year policy guide was signed by over 100
environmental organisations and calls for: at least 30% of the ocean to be highly or fully protected by 2030,
shifting to low-impact fishing, securing a pollution-free ocean, and planning of human activities that support
the restoration of thriving marine ecosystems (Seas
at Risk et al., 2020).
The World Bank has set out a framework of short-term stimulus and job creation, medium-term growth, and
long-te
sustai a ilit . Usi g this f a e o k, the autho s ote that Ma p oje ts a s o e high o all
three dimensions. Energy efficiency, nature conservation, clean energy options, and the sustainability of
transport are clear win-win areas fo
sti ulus i est e ts
Hallegatte & Hammer, 2020).
Given the combined
environmental and economic potential of marine fisheries in the EU (detailed earlier), the marine environment
is ideally placed for a stimulus investment and green stimulus should be made blue. It is not only the case that
stimulus should be sustainable, sustainability is the stimulus.
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The Covid-19 crisis has also revealed the vulnerability of the labour model used in fisheries. While self-
e plo ed fishe s ope ati g o a e sha e is fai l o
o , it is ot ithout p o le s a d a lo g-term
plan
for fisheries means ensuring that fishers have more secure protections when a crisis (of any kind) hits.
Developing new labour models should of course be done in close consultation and is unlikely to be mandatory,
but policy developments could include the formal representation of fisheries workers through unions or other
means, minimum payments for crew (currently the law in Belgium), and/or a co-op scheme with members
from multiple fisheries to ensure a greater regularity of income, sick pay, payment of bills, and access to
savings and credit accounts as required.
A
NEW VISION
Our relationship with nature is our link to life; and that link is strained. The Covid-19 global pandemic requires
emergency action to address immediate health concerns and to cushion economic impacts. Yet, such
emergency action must be taken in the conte
t of a ide pla fo Eu ope s futu e a d guided a a itious
European Green Deal to avoid exacerbating the pre-existing climate and nature crises while dealing with the
pandemic. We need to remedy the broken relationships that endanger our planet and deepen inequalities
within our society. The ocean is the source of all life, yet we are putting it under unrelenting pressure. Easing
that pressure and restoring ocean health will deliver enhanced resilience to the impacts of climate change and
safeguard key natural elements that may equip us with countless more solutions to future and unexpected
challenges.
The Covid-19 crisis has prompted a range of support measures to be proposed, with more likely to come in the
weeks ahead. The ten key principles outlined in this document should be used to develop and appraise
fisheries support policies in response to Covid-19 and the typology can help to determine how the ten
principles can guide policymaking for each category of policy.
16