Allocation of Demersal Harvest Rights in Iceland

• Author: Helgi Gretarsson
• Pages: 141-160

299

[start kap]

Allocation of Demersal Harvest Rights

in Iceland

Helgi Gretarsson, University of Iceland, Reykjavik

Abstract: It is generally understood that since 1984 the Icelandic shery man-

agement system has been based on individual tr ansferable quotas (ITQs), that

licenses for commercial shing in Iceland were al located to owners of vessels

according to their shing act ivity for the period 1 November 1982 through 31

October 1983, and quota shares in the demersal sheries (usually 70 –80% of

the annual catch va lue) were allocated according to the catch history of vessels

in the period 1 November 1980 through 31 October 1983. Several judgements

have been based on these premises.

e aim of this art icle is to illustrate that the Icelandic shery management

system has by no means been a 100% ITQ system since 1984, a nd that alloca-

tion of shing licenses and quotas in the demersa l sheries in Iceland has been

far more complicated than the aforementioned understanding would indicate.

In fact since 1984 the Icelandic system has e volved more by trial-and-error than

by design, and a substantial port ion of the demersal quota shares have been

reallocated. ese rea llocations should inuence how the system is judged and

evaluated.

Keywords : sheries management, ITQs, allocation of shing rights, equa lity,

property right, f reedom of employment

1. Introduction

When annual total allowable catch (TAC) is determined for commercial shing,

the allocation of th is TAC also has to be decided. Under this management system

shing opportunit ies are normally dened as individua l quotas, but to what extent

these are transferable va ries. When shing quotas are individual ly-allocated and

Arctic Review o n Law and Politics, vol. 1, 2/2010 p. 299-318. ISSN 1891- 6252

helgi gretarsson

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transferable (ITQ), both the init ial allocation of the quota and the transferabil ity

of the quota1 become usually controversial.

is article is in pa rt a case study of this issue, which concerns the allocation

of demersal harvest rights2 in Iceland. e aim is to describe some fundamental

factors in the complicated allocat ion mechanism of the Icelandic demersal sher-

ies, focusing on facts rather than interpretation, although some ana lysis will be

presented .

e allocation mechanism employed in the Icelandic demersal sheries bears

some similarity to t he Norwegian system, and to a lesser extent that used in New

Zealand.3 ey resemble one another in four ways:

1. A TAC system was set up because other management systems had failed to

secure sustainable use of sher ies resources.

2. When the TAC was decided for the rst time, some stakeholders had used t he

resource for commercial purposes and vessel-owners i n particular undertook

nancial risk s based on the expectation to catch a certain volume of sh each

year. Vessel-owners usually received loans from nancial institutions that in

return held collateral on shi ng vessels and other properties necessary to con-

duct commercial shi ng.

3. Due to the na ncial commitment of stakeholders in category two, and for other

reasons as well, the initia l allocation of har vest rights went to vessel-owners.

eir individual quotas were usually dened either according to their catch

history, or according to criteria based on their temporary position. Eventually

the quotas were made transferable to some extent to enhance economic ef-

ciency in the sheries. is t ype of sheries management system inevitably

leads to social change that bec omes heavily debated in the political arena. L egal

questions regarding equity, freedom of employment, and property rights are

bound to arise.

4. e sensitive political situation surrounding the quota system creates a will-

ingness to deviate from the r ules for allocating shing rig hts. ese deviations

1. See Sharing the Fish – Toward a nationa l policy on individual shi ng quotas, p. 34.

2. A concept that mean s the right to hold a general commerci al shing license and t he right to

catch species t hat are managed with a TAC. e concept refers to the r ight to catch species

that are manage d with a TAC and species that are not ma naged in such a manner.

3. is statement is bas ed on Hersoug’s description of t he allocation mechanism in Nor way,

see Hersoug, Bjørn: Clos ing the Commons, pp. 137–158. e allocation mechan ism in New

Zealand is d escribed for example in Hersoug’s book, Unnish ed business, pp. 31–33, 69–71

and 83–84. Even though many features of t he sheries management sys tem in New Zealand

are simila r to the Icelandic system, the a llocation process in Norw ay resembles more to the

one in Iceland.