This paper set out analysis and recommendations directed at defining the notions that are key to the ongoing negotiations on fisheries subsidies. It evaluates how these definitions or elements apply within the context of subsidy disciplines.
Authors: Irina Chicu, Juan Carlos Herrera, and Ariane Vincent.
This public paper is a redacted version of a confidential research paper on fisheries subsidies negotiations. The complete version of this paper provides analysis and recommendations with respect to two areas: the first area is the identification and analysis of definitions, subsidies and subsidy disciplines related to illegal, unreported and unregulated (IUU) fishing, overfishing, overcapacity, and artisanal fishing; the second is the assessment of a specific negotiating framework. Due to confidentiality considerations, only an edited version of the first area of analysis is publicly available and presented here.
For the purpose of this public paper, we examine the definitions that are key to the ongoing negotiations on fisheries subsidies. We evaluate how these definitions or elements apply within the context of subsidy disciplines. Where appropriate, we recommend positions that states may wish to take vis-à-vis these definitions and their incorporation into an AFS. The terms covered are: “Illegal”, “Unreported and Unregulated (IUU) fishing”; “overfishing”; “overcapacity” and “artisanal fishing”.
Three key considerations inform the analysis and recommendations in the paper, namely: the need to ensure the long-term viability of fishing and fish stocks in the high seas and in Exclusive Economic Zones (EEZs), support for Sustainable Development Goal 14.6 and support for the prohibition of subsidies that support IUU fishing, overfishing and overcapacity.
1.1 Background: Disciplines on Fisheries Subsidies, Negotiations and Proposals
Negotiations on fisheries subsidies amongst WTO Members launched at the Doha Ministerial Conference in 2001, with the Doha work programme calling for Ministers to clarify and improve WTO rules that apply to fisheries subsidies. The Hong Kong Ministerial Declaration of 2005 reinforced this appeal, noting agreement to strengthen disciplines, including the prohibition of subsidies that contribute overfishing and overcapacity. The Declaration asked Participants to work on establishing the nature and extent of disciplines as well as the integration of special and differential treatment for developing and least-developed Members.
A number of texts have informed the negotiations and continue to be influential. These include texts setting out commentaries or proposed provisions for an eventual WTO agreement on fisheries subsidies (e.g. the 2007 Chair’s text), as well as provisions for subsidy disciplines in non-WTO texts (e.g. the Trans-Pacific Partnership). While also drawing on other sources, we apply three of these throughout our analysis in this paper. A short description of each is set out below.
Annex VIII - Fisheries Subsidies, Draft Consolidated Chair Texts of the AD and SCM Agreements (2007)
The subsidy disciplines proposed in the 2007 Chair’s text consist of a prohibition, general exceptions, special and differential treatment, general disciplines (mainly related to adverse effects of certain subsidies), fisheries management provisions, notification and surveillance provisions, and transitional and dispute settlement provisions. Prohibitions under Article I apply to a positive list of subsidies, which are subject to the general conditions set out in Article 1.1 and specificity criteria set out in Article 1.2 of the SCM Agreement. The text provides for general exceptions to the subsidy disciplines, as well as special and differential treatment provisions for developing and least developed countries. The text also applies a general discipline on the use of subsidies that cause depletion, harm, or the creation of overcapacity with respect to certain fish stocks.
Negotiations on Fisheries Subsidies - Report by the Chairman (2011)
The 2011 report assesses progress made in fisheries subsidies negotiations, relative to the elements included in the 2007 Chair’s text. It discusses, in particular, points of convergence and contention between the negotiating parties for each element. The report notes that the content of the 2007 text was controversial, but that it provided a structure that delegations have found to be a valuable basis for discussion.
Chapter 20 – Environment, Trans-Pacific Partnership
The TPP prohibits fisheries subsidies that support activities negatively affecting overfished stocks, as well as subsidies that support IUU fishing. Unlike the 2007 Chair’s text, it does not set out a precise list of targeted subsidies, and it links the prohibition on subsidies that support overfishing to a negative effect requirement. Subsidies that contribute to overcapacity are subject to a soft obligation, in the form of a standstill provision, to refrain from their introduction.
We apply the text of Chapter 20 in this paper in the same way as the 2007 Chair’s text – as a model that bears consideration because it may influence the nature of an eventual AFS. Members involved in drafting the TPP provisions may advocate for the inclusion of similar provisions under the AFS. Other members may, therefore, wish to develop a position relative to TPP elements, regardless of whether the TPP is ratified.
For ease of reference, the term ‘agreement on fisheries subsidies’ and acronym ‘AFS’ are applied throughout this paper in reference to an eventual, but currently hypothetical, agreement that may result from the ongoing negotiations on fisheries subsidies. Analysis and recommendations could apply equally to negotiations in a plurilateral or multilateral context.
2. Assessment of definitions that are central to fisheries subsidies negotiations
2.1 Illegal, Unreported and Unregulated Fishing
2.1.1 Jurisdiction and IUU Fishing
Concerns over IUU fishing relate to two areas, separated by jurisdiction over fishing vessels. The first is activity within areas over which states exercise jurisdiction, namely the Exclusive Economic Zone (EEZ), which extends 200 nautical miles from the coast. Fishing in these zones could be undertaken either by national or foreign vessels. The second is the high seas.
Certain countries exercise rigorous control and management of the fishing activities taking place in their EEZs. Others, particularly a number of developing countries, have poor control over fishing activities in these waters, which may effectively make their EEZs open-access fishing grounds.
On the high seas, outside EEZs, control over a vessel is the responsibility of its flag state. Here again, the control exercised differs from state to state. Some countries comply fully with UN conventions, FAO voluntary codes, and RFMO conservation and management measures, while others have a weak control over their fleets. Sometimes vessels are intentionally registered under a ‘flag of convenience’ in order to escape stronger regulations in their country of origin.
2.1.2 Definition of IUU Fishing
As a term, IUU fishing first appeared in 1997 in the Convention on the Conservation of Antarctic Marine Living Resources (CAMLR Convention), describing unauthorised fishing for Patagonian toothfish in the CAMLR Convention Area by non-contracting parties as well as undeclared or misreported catches by CAMLR Convention members. It covered practices that range from large-scale illegal fishing to small-scale subsistence fishing.
The FAO's International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing (IPOA-IUU) (2001) provides an extensive and widely accepted definition for IUU fishing, as follows:
“Illegal fishing refers to activities:
Conducted by national or foreign vessels in waters under the jurisdiction of a State, without the permission of that State, or in contravention of its laws and regulations;
Conducted by vessels flying the flag of States that are parties to a relevant regional fisheries management organisation but operate in contravention of the conservation and management measures adopted by that organization and by which the States are bound, or relevant provisions of the applicable international law; or
In violation of national laws or international obligations, including those undertaken by cooperating States to a relevant regional fisheries management organisation.
Unreported fishing refers to fishing activities:
Which have not been reported, or have been misreported, to the relevant national authority, in contravention of national laws and regulations; or
Undertaken in the area of competence of a relevant regional fisheries management organisation which have not been reported or have been misreported, in contravention of the reporting procedures of that organisation.
Unregulated fishing refers to fishing activities:
In the area of application of a relevant regional fisheries management organisation that are conducted by vessels without nationality, or by those flying the flag of a State not party to that organisation, or by a fishing entity, in a manner that is not consistent with or contravenes the conservation and management measures of that organisation; or
In areas or for fish stocks in relation to which there are no applicable conservation or management measures and where such fishing activities are conducted in a manner inconsistent with State responsibilities for the conservation of living marine resources under international law.”
Following the definition provided by the IPOA-IUU, IUU can be divided into the following components:
Following the table above, IUU activities are defined on the basis of a comprehensive set of key elements:
Vessels involved in the fishing activities: national and foreign vessels, vessels without nationality, vessels flying the flag of a State not party to the relevant organization and vessels flying the flag of States that are parties to a relevant regional fisheries management organization.
Places where the activities occur: waters under the jurisdiction of a State, areas of competence of relevant regional fisheries management organizations, areas or fish stocks in relation to which there are no applicable conservation or management measures.
Measures that govern the activities: without the permission of the State, or in contravention of its laws and regulations, in contravention of the conservation and management measures adopted by organizations and by which the States are bound, or relevant provisions of the applicable international law.
In contrast, the initial draft of the IPOA-IUU was more succinct, stating that:
“The scope of the IUU fishing problem encompasses fishing and related activities, including:
Fishing in areas under national jurisdiction without the authorization of the coastal state;
Fishing which contravenes or undermines conservation and management;
Failure to effectively exercise the required jurisdiction or control over vessels and nationals;
Failure to fully and accurately meet fishery and fishing vessel data collection and reporting requirements.”
For additional comparison, the Ministerial Task Force on IUU Fishing on the High Seas (2006) defined IUU fishing as an aggregate concept, which included the following elements:
Fishing in violation of international laws and obligations
Fishing of high seas fish stocks where there are no formal management arrangements in place but which is in contravention of the broader responsibilities of States under the law of the sea to conserve and manage the marine living resources of the high seas
Fishing conducted by vessels without nationality, or by those flying the flag of a State not party to a relevant regional fishery management organization (RFMO), or by a fishing entity, in a manner inconsistent with, or which contravenes, the conservation and management measures adopted by the RFMO or broader international obligations
Fishing conducted by nationals of or vessels flying the flag of States that are parties to a relevant RFMO in contravention of the conservation and management measures adopted by that organization or relevant provisions of the applicable international law
Fishing, including fishing within the area of an RFMO, which has not been reported, or has been misreported, to the relevant national/international authorities, in contravention of international laws and regulations.
The FAO's 2001 IPOA-IUU aggregate definition is the most commonly applied. This is despite the qualifying phrase ‘In this document', in the definition's chapeau, which indicates the description was not intended to have an effect beyond the context of the document itself. The definition has been widely accepted and is applied or reflected in a number of other contexts, including the following:
EC Council Regulation No 1005/2008: The European Council Regulation (EC) No 1005/2008 of 29 September 2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing (IUU Regulation) contains a definition (Article 2) that is virtually identical to the FAO’s definition, although it is expressly limited to vessels engaged in the commercial exploitation of fishery resources.
The 2001 FAO IPOA-IUU definition appears to correlate with the goal to eradicate all IUU activities either in EEZs and high seas by setting a precise and comprehensive approach to defining IUU fishing. The components set out in the final version of the FAO’s IPOA-IUU, as opposed to the alternative examples also set out above, are inclusive and provide for a clear prohibition of IUU fishing activities.
2.1.3 Subsidies and IUU Fishing
IUU subsidies are subsidies offered to vessels engaged in IUU activities. The prohibition of this category has been subject to a widespread consensus amongst states since the harmful effects of IUU fishing are widely acknowledged.
The inclusion of IUU subsidy prohibitions in existing proposals is evidence of this consensus. For example, the 2007 Chair’s text states in Article 1, paragraph 1.1 (h) that ‘subsidies the benefits of which are conferred on any vessel engaged in illegal, unreported or unregulated fishing’ shall be prohibited. Similarly, Article 20.16 of the TPP, para. 5(b) expressly states that no Party to the Agreement shall grant or maintain ‘subsidies provided to any fishing vessel while listed by the flag State or a relevant Regional Fisheries Management Organization or Arrangement for IUU fishing in accordance with the rules and procedures of that organization or arrangement and in conformity with international law.
There is also consensus among WTO Members on a related type of subsidy, for the transfer of vessels. Members agree that fishing or service vessels transferred to third countries often engage in IUU practices and that subsidies for such transfers should, therefore, be prohibited. The 2007 Chair's text specifies that these transfers could better occur through the creation of joint ventures with third country partners.
The 2011 Chair’s text also highlights shared concern amongst Members over the difficulties associated with the fact that IUU fishing, where it occurs, is not always knowingly supported by governments. For example, a ship that is otherwise engaged in legal fishing activities could also fish in restricted areas, fish more than the allocated quota permitted or fish prohibited species. Accordingly, some Members have proposed domestic procedures to address IUU fishing, as well as the repayment of subsidies or the establishment of legal presumptions concerning subsidies to IUU fishing.
2.1.4 Subsidy disciplines and IUU fishing
As established above, IUU is a relatively uncontroversial term that correlates with the goal of ensuring the sustainability of fish stocks and securing the long-term interests of its domestic industry. Because IUU fishing should not occur regardless of the application of subsidies, however, it is unclear whether disciplines under an AFS would have a significant influence on curbing IUU practices. Nonetheless, a prohibition on IUU subsidies would create an added tool against support for this harmful activity.
IUU subsidy disciplines could be especially useful in addressing fishing activities within the EEZs of developing countries. The OECD has stated that developing countries are primarily affected by IUU fishing in their exclusive economic zones (EEZs) and that IUU fishing in EEZs is estimated to account for the largest share of total IUU. IUU activities that are most harmful to developing countries derive from three key issues: i) a lack of management and enforcement capacity in many developing countries, ii) a lack of control of activities of developed and emerging countries’ fleets in third countries’ waters and on the high seas by their flag states, and iii) overcapacity and redundant assets which create incentives for IUU activities.
As the disciplines that apply equally to commercial and artisanal fishing in order to ensure that the latter does not contribute to resource exhaustion, states might seek to limit any carve-outs or exceptions to these disciplines. This would be unlike the European Union approach, for example, which limits IUU activities to commercial fishing. This limitation is problematic; while on an individual basis artisanal fishing operates on a small scale, in aggregate non-commercial fishing activities account for a considerable part of IUU fishing. Incorporating the detailed 2001 IPOA-IUU definition into a discipline would be helpful in this respect, as it does not limit IUU activities to commercial fishing.
2.2.1 Definition of overcapacity
As defined by the UN FAO, fishing capacity refers to the amount of fish (or fishing effort) that can be produced within a period of time (e.g. a year or a fishing season) by a vessel or a fleet if fully utilized and for a given resource condition.
Overcapacity is a long run phenomenon that exists when the potential output that could exist under normal operating conditions is different from a target level of production in fisheries such as maximum economic yield or maximum sustainable yield.
With respect to this definition of capacity, overcapacity applies in two ways:
In practice, measuring capacity and identifying overcapacity is a challenge. Although they provide a useful estimate of capacity and capacity utilization, output-based measures are of limited use for the purposes of fisheries management. Most fisheries are managed using some form of input control, as inputs must be withdrawn in order to reduce capacity. The most straightforward way to assess capacity is to count the number of vessels in a fishing fleet. However, this approach is not particularly accurate. More precise measurements may take into account vessel size and characteristics such as the horsepower of the engines, the gear used, and how long the vessel can operate.
The concept of “capacity utilization” is also helpful in defining overcapacity, although it is not necessarily equivalent to overcapacity as it does not incorporate certain factors such as market forces and management control. It refers to excess capacity in a fishing fleet, meaning that there are more vessels than needed in order to harvest the available resources. The measure of underutilization can have a value of between zero and one, with a value less than 1 indicating the underutilization of the existing capacity (i.e. the current output is less than the potential output given the characteristics of the vessel and the state of the stocks).
Capacity utilization is primarily an output-based measure, based on the ratio of current to potential output under normal working conditions, and incorporating factors such as the potential output from the current fleet given the desired stock level to the target level. However, the relationship between input and output-based measures is an important component of management information systems. Using input-based factors, a measure would be based on the ratio of current fishing effort to potential fishing effort, assuming normal working practices given the state of the resource. Factors might include, for example, the current level of investment in a fishery (for example, in terms of vessel numbers) relative to the desired level of investment.
Another factor in identifying overcapacity is “capacity creep", which occurs when vessels are able to catch more fish due to technological improvements, thereby potentially allowing overcapacity to persist despite a reduction in the number of vessels. Technological advances might impact, for example, fish-finding equipment, gears, and fishing methods. This type of consideration may be key, for example, when applying capacity-curbing measures that target the quantity of vessels.
Context may also be important to identifying overcapacity. For example, overcapacity in developing countries is generally linked to large numbers of fishers, rather than vessel characteristics or technological capacity. In some regions, overcapacity is linked to situations in which poverty leads individuals to depend on fishing for food, but the management of these fishing activities is inadequate.
International Commitments on Overcapcity
A number of international commitments address the issue of overcapacity. Not all of these commitments are enforceable or legally binding, but at a basic level, they demonstrate a will of States to address the problem of overcapacity. UNCLOS is the key legal instrument requiring that its parties take action to avoid the over-exploitation of marine resources. UNCLOS specifically states that: “the coastal State, taking into account the best scientific evidence available to it, shall ensure through proper co-operation and management, measures that the maintenance of living resources in the Exclusive Economic Zone (EEZ) is not endangered by exploitation”. 
The FAO Code of Conduct for Responsible Fisheries was adopted in 1995. This voluntary instrument provides that States should take measures to prevent or eliminate excess fishing capacity and ensure that levels of fishing effort are commensurate with the sustainable use of fishery resources. Towards this aim, the FAO Committee on Fisheries (COFI) also adopted, in 1999, the International Plan of Action for the Management of Fishing Capacity (IPOA-Capacity) which was later endorsed by the FAO Council in 2000.
The immediate objective of the IPOA-Capacity is for “states and regional fishery organizations, in the framework of their respective competencies and consistent with international law, to achieve worldwide, preferably by 2003 but no later than 2005, an efficient, equitable and transparent management of fishing capacity”. In particular, it called for the limitation of and progressive reduction of fishing capacity for certain fisheries. Adopted a few months after the FAO Code of Conduct, the legally binding UN Straddling and Highly Migratory Fish Stocks Agreement (UNFSA), reiterates the Code’s concerns related to over-capacity, primarily as regards the high seas, but recognizing implications for all maritime waters.
Trans Pacific Partnership Agreement (TPP)
Concerns related to overcapacity are prevalent in existing approaches to subsidy disciplines. However, not all impose strong measures. As discussed in the previous section, the TPP restricts prohibitions to subsidies that hinge on overfishing and IUU activities, while for overcapacity it only imposes a soft obligation:
“Parties recognize that the implementation of a fisheries management system that is designed to prevent overfishing and overcapacity and to promote the recovery of overfished stocks must include the control, reduction and eventual elimination of all subsidies that contribute to overfishing and overcapacity.” 
2.2.2 Subsidies and overcapacity
Certain capacity-enhancing subsidies are considered “bad” subsidies as a result of their impact on fisheries resources. One example is subsidies in the form of capital inputs and infrastructure investments from public sources that reduce cost or enhance revenue.
While the 2007 Chair’s text (Article I) prohibits a positive list of subsidies that includes a number of categories, Members have not yet come to a consensus on which of these categories contribute to overcapacity and should be prohibited.
The WTO’s Agreement on Subsidies and Countervailing Measures (ASCM) is the basis for the global trading system’s disciplines on subsidies, and therefore a logical starting point to assess the need for additional disciplines on subsidies to the fishing industry. The table below provides an example of an ASCM-based categorization of fisheries subsidies disciplines, as set out by the United Nations Environment Programme (UNEP) in 2011:
UNEP’s assessment concludes that subsidies to capital costs and subsidies to variable costs appear to have the most direct impact on fishing capacity and effort, along with three other kinds of subsidies—for infrastructure, access to foreign waters, and price support. This conclusion is reinforced by its similarities to subsidy categories identified by other organizations. The World Bank and FAO, for example, identify subsidies for vessel construction, renewal and modernization, fuel, surplus fish purchases, tax exemption programs, and fishing access agreements  as having the most direct impact on capacity.
Most of the subsidies identified in the table above are included, subject to variations in terminology, in the list of subsidies proposed for prohibition in Article I of the 2007 Chair text in the WTO negotiations. The 2007 text also includes a prohibition on the subsidized transfer of access rights purchased by a government to its distant water fishing fleet, except in cases where the access purchased was to developing country waters and sustainability and transparency criteria are met.
With respect to other texts, the TPP Parties, for example, recognized the need to control, reduce and eventually eliminate subsidies that contribute to overfishing and overcapacity in article 20.16, para. 5. However, the actual prohibition in this Article only addresses subsidies for fishing that negatively affect overfished fish stocks and that are provided to any vessel listed for IUU fishing. It includes no prohibition on subsidies explicitly related to overcapacity. The TPP also subjects Parties to a standstill provision to refrain from introducing, extending or enhancing subsidies that contribute to overcapacity and agreed to review the disciplines in paragraph 5 during their regular meetings (Article 20.16, paragraphs 7, 8).
On a more general level, the FAO International Plan of Action for the Management of Fishing Capacity also calls on states to reduce and gradually eliminate subsidies and economic incentives that contribute to the build-up of excessive fishing capacity, restating the damaging effect they have on the sustainability of marine resources.
2.2.3 Subsidy disciplines and overcapacity
Trade measures designed to address overcapacity will continue to generate concerns in relation to artisanal, subsistence, indigenous, and small-scale fishers. This issue has already arisen in subsidies negotiations as well as in the development of laws relating to another resource issue, namely illegal timber and the UN’s programme for Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD+). In the timber context, the World Bank excluded logging that was illegal but done “in relation to securing basic subsistence and involving individuals living in poverty without access to adequate timber supplies from legal sources” from the definition of illegal logging. The FAO has also addressed the need to assess prohibitions on certain kinds of forest use against the socioeconomic benefits that these uses bring to local and small-scale forest producers.
In this vein, states may wish to consider whether overcapacity concerns in the context of fisheries subsidies negotiations warrant balancing against considerations such as socioeconomic conditions or indigenous rights. However, the aggregate impact of any flexibilities that permits certain countries leeway to apply subsidies that support overcapacity could undermine sustainability objectives.
2.2.4 Implications of overcapacity for overfishing
The most harmful effect of overcapacity is undoubtedly the fact that it leads to overfishing. This process can develop in two ways. First, underutilized or unutilized fleet wastes resources because the investment into these vessels brings no returns. If this underutilization is the result of management constraints such as restrictions on the total allowable catch, it may create an incentive for fishers to exceed settled quotas or other parameters, in order to compensate for lost returns resulting from underutilization.
Another example of overcapacity leading to overfishing occurs when the presence of excess capacity creates a competition for resources. This can lead to the introduction of even greater capacity within a fishery, as fishers seek to sustain or increase levels of catch in order to maintain profitability. This creates pressure to either increase investments in the capacity of the fleet in order to compensate for reduced rates of catch or to quit the business. This may lead to the procurement of larger boats or gear that is more effective so the individual catch is maximized.
2.3.1 Definition of overfishing
Overfishing is closely linked with the notion of Maximum Sustainable Yield (MSY), which refers to the highest possible catch of a certain type of fish stock over a period of time. When stocks are fished without regard to MSY, their reproduction is severely affected, which in turn decreases future catch. In this context, overfishing encompasses two subcategories, namely: (i) growth overfishing, where fish are harvested at a size smaller than would produce maximum yield per fish; and, (ii) recruitment overfishing, where the reproductive capacity of a stock is diminished to a point where the spawning stock biomass is not sufficient to maintain the sustainability of a stock’.
When a fish stock acquires the status of ‘overfished’, this means that the stock does not have the capacity to produce at its MSY, or in other words, that exploitation of the stock has exceeded the threshold beyond which it is not sustainable.Consequences of overfishing include decreased catch rates, the presence of immature and small-sized fishes, and the destruction of fish stock. Overfished status may continue to apply to a stock in moments when overfishing is not actively occurring.
The structure and effectiveness of fisheries management regimes are crucial to controlling overexploitation. Management regimes that include an inefficient regulatory or legal framework governing the EEZ, or that fail to provide for adequate surveillance of vessels fishing within the EEZ or on the high seas, may contribute to unsustainable fishing and the impairment of fish stocks. The success of a fisheries management regime in preventing overfishing also depends on its administration of key elements such as individual fishing quotas, rights to harvest in particular quantities, and setting appropriate total catch allowances (e.g. for a certain period of time).
Certain jurisdictions have defined the concept of overfishing, or ‘overfished’, within domestic law. For instance, the United States Sustainable Fisheries Act deems overfishing ‘a rate or level of fishing mortality that jeopardizes the capacity of a fishery to produce the maximum sustainable yield on a continuing basis’. This legislation devotes a complete appendix to defining overfishing: ‘Appendix 3 – Overfishing and Overfished Definitions’. It provides for several fisheries subcategories with accompanying formulas or methods of calculation to establish if these types of fisheries fall within the scope of overfishing activities.
The elements and implications generally associated with overfishing are summarized below:
Crucially, the elements set out in this table must be assessed on a case-by-case basis in order to set applicable parameters for each possible situation of overfishing for a given fishery. Accordingly, it may be appropriate to link a clear methodology – such as standard mathematical formulas or data-based processes for assessing MSY, or the condition of individual types of fish stock in need of protection – to the definition of overfishing under the AFS. This may, however, raise concerns related to agency and capacity – i.e. who would be responsible for carrying out determinations based on this methodology, and under what conditions.
2.3.2 The Role of RFMOs
A 2009 paper issued by the OECD highlights the diversity of factors employed by different RFMOs when making quota allocations, as reflected in the following examples:
Data: stock assessment, historical catch, registered tonnage, vessel carrying capacity, applications to fish.
Balancing coastal and distance state interests: negotiated allocation criteria or settlements, capacity restrictions to protect stock, priority or veto right to coastal states.
Accounting for new entrants and aspirations of developing countries: quotas set aside for developing countries or for cooperating non-contracting parties, allowances for smaller fleet expansion, exemption from capacity limits for developing fleets, limitations on new entrants, discouragement of new entrants.
Compliance as a basis for allocation: sanctions for violation incl. quota reductions, removal of vessels from registries, allocations for cooperating non-contracting parties, IUU vessel lists.
Traceability or transferability of allocations between parties: prohibition on or permission for sale/transfer.
The complexity involved in developing criteria to identify or set a threshold that defines overfishing makes leveraging existing capacity – in the form of RFMOs or other entities already carrying out this work – an attractive option. Developing a standard for MSY or a uniform set of practices unique to an AFS could be a complex and contentious process, as a perception of what constitutes "best practice" would differ in accordance with the interests of different negotiating parties.
2.3.3 Subsidies to overfishing
This section approaches subsidies to overfishing from two perspectives. One is the perspective of a direct beneficiary of the implementation of such disciplines, through the prevention of overfishing by vessels whose activities affect fish stocks accessed by another country’s vessels. The second perspective takes into account the potential restrictions disciplines could place on the ability of countries to enhance and increase their own fishing activities.
In order to understand the scope of the applicable subsidies that could, directly or indirectly, promote overfishing, it is important to analyse and compare available categorizations. The table below compares elements applied by the FAO, in the 2007 Chair’s text, and by the OECD, to characterize subsidies that impact overfishing.
As indicated in the table, the principle subsidy areas linked to overfishing are direct and indirect financial transfers, which may permit the development and improvement of a country’s fishing fleet. While a number of these elements are directed at overcapacity, they are included here as they have a direct influence on overfishing.
2.3.4 Disciplines on subsidies to overfishing
Because the concept of overfishing is linked to particular activities and context-specific yields, it might be useful to consider the specific factors affecting overfishing in a certain region in order to ensure that these are accounted for in a possible definition for overfishing. It may also be relevant to identify methodologies and/or entities that it views as best suited to determining the status of ‘overfished’ stock. These considerations would help to ensure that the discipline on overfishing is both effective and practical.
Provisions aimed at strengthening domestic fisheries management systems might support or complement provisions that impose disciplines on subsidies to overfishing. In the context of weak disciplines on subsidies, management-related obligations could help to compensate by strengthening administrative practices and monitoring activities. If, for example, a country has concerns over subsidies applied by third countries that dominate global fisheries, encouraging strong management obligations could provide a secondary means of curtailing the risk of overfishing. On the other hand, management obligations may impose overly general or onerous requirements on developing countries.
It is also important to examine proposed disciplines on subsidies that support overcapacity in light of their implications for overfishing, as well as their relationship with disciplines on subsidies that specifically support overfishing. Overcapacity provides a platform for overfishing. Subsidies that support activities such as vessel and fleet construction or modernization, could have a direct impact on rates of catch. This suggests, for example, that the soft obligation covering subsidies that support overcapacity under the TPP could frustrate efforts to curtail overfishing under that agreement. Given these interconnections, we propose that support for prohibitions on both activities is essential.
2.4 Artisanal fishing
2.4.1 Definition of artisanal fishing
Although the concept of artisanal or small-scale fisheries varies, it is generally defined as a type of fishery oriented to subsistence or small-market ends, using traditional techniques and small boats. The UN FAO has specified that artisanal fisheries use a ‘small amount of capital and energy’, employ small vessels, and cover short distances for fishing trips. Artisanal catch typically supplies local consumption and/or fish exports, depending on the region.
Artisanal fisheries are common in developing countries, in particular, and play an important role for ‘livelihoods and food security’. The aggregate scale of artisanal fishing may be significant; in some regions, artisanal fisheries catch the same quantity of fish as commercial or industrial fisheries and provide more employment and lower production costs (e.g. with regard to fuel consumption). Artisanal fisheries also constitute a benefit for low-income communities as a source of seasonal employment.
Variation between artisanal fisheries definitions reflects the complexity of factors that inform these definitions. Types of fishing equipment, the species targeted, the distance of fishing activity from shore, seasonal or prolonged migration considerations, and the nature of the communities involved in fishing, are all elements that, among others, may produce diverging definitions in different communities. The scope of an artisanal fishing definition might also depend on how a country divides fishing activities overall. Senegalese law, for example, only makes one distinction: artisanal fisheries, on one hand, and industrial fisheries on the other.
Factors specific to a country or region may be determinative to the long-term viability of its artisanal fisheries. A number of factors typically make this type of fishery difficult to sustain. Disadvantages can include remoteness, a lack of infrastructure, and marginal political influence, as well as difficulties in competing for fisheries resources and market access as compared to (sometimes heavily subsidized) industrial fleets. Sustainability-linked criteria such as eco-labeling might create additional hurdles.
2.4.2 Analysis: artisanal fishing in the context of subsidy disciplines
In view of the context-specific factors impacting the viability of artisanal fisheries, countries might consider factors specific to the situation of their own artisanal fishers when assessing the appropriateness of a given definition. Even if a country is seeking to expand its capacity into high seas areas, which would require a more commercial/industrial fleet, a practical definition, and treatment of artisanal fisheries would help to ensure fair treatment under subsidy disciplines for its existing fishers. This would also benefit other developing countries with artisanal fishing activity, and in turn, certain socioeconomically disadvantaged fishers.
This paper set out analysis and recommendations directed at defining the notions that are key to the ongoing negotiations on fisheries subsidies. It evaluates how these definitions or elements apply within the context of subsidy disciplines.
Throughout the paper, we take into account three key considerations: the need to ensure the long-term viability of fishing and fish stocks in high seas and Exclusive Economic Zones (EEZs), the support for Sustainable Development Goal 14.6 and the support for prohibition of subsidies that aid IUU fishing, overfishing, and overcapacity.
The analysis of definitions and subsidy disciplines related to IUU fishing, overfishing, overcapacity and artisanal fishing, in section 2 of this paper, yields the following conclusions.
IUU Fishing: the FAO’s International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing sets out a comprehensive definition of IUU fishing that could be usefully applied in the context of a prohibition on IUU subsidies.
Overcapacity: assessing overcapacity is challenging as it may involve numerous variables; subsidy disciplines can target a range of activities. Negotiating parties may wish to see prohibitions apply to a precise set of activities that reflect the need for sustainability, without overly restricting measures aimed at economic development.
Overfishing: definitions for overfishing apply the concept of maximum sustainable yield (MSY) to identify the threshold at which a fish stock becomes overfished. Because MSY is highly context-specific, we recommend that subsidy disciplines within an eventual agreement clearly define the methodology with which to identify specific situations of overfishing. Negotiating parties might also consider whether they would accept that overfished status is defined based on domestic governments or RFMO determinations, as in the TPP, a process that is more straightforward but potentially less consistent in application.
Alice Tipping, ‘A ‘Clean Sheet’ Approach to Fisheries Subsidies Disciplines’, E15Initiative. Geneva: International Centre for Trade and Sustainable Development (ICTSD) and World Economic Forum, 2015. <www.e15initiative.org/>.
Artisanal Fisheries <http://thefishproject.weebly.com/artisanal-fisheries.html> accessed 10 October 2016
Boon, Kristen, ‘Overfishing of Bluefin Tuna: Incentivizing Inclusive Solutions’, University of Louisville Law Review, Vol. 52, No. 1 (2013) 13-18 <https://ssrn.com/abstract=2356566> accessed 17 October 2010
Cox, A. (2009), “Quota Allocation in International Fisheries”, OECD Food, Agriculture and Fisheries Papers, No. 22, OECD Publishing, Paris. <http://dx.doi.org/10.1787/218520326143>
Gregory Shaffer, Robert Wolfe, and Vincent Le. ‘Informal Law’s Discipline of Subsidies: Variation in Definitions, Obligations, Transparency, and Organizations’. (E15 Task Force on Rethinking International Subsidies Disciplines, 2015) http://e15initiative.org/publications/informal-laws-discipline-of-subsidies-variation-in-definitions-obligations-transparency-and-organizations/.
Jennifer Jacquet, Daniel Paully, ‘Funding Priorities: Big Barriers to Small-Scale Fisheries’, Fisheries Centre, University of British Columbia V6T 1Z4.
OECD, Trade and Agriculture Directorate Fisheries Committee, ‘Fishing for Development – Background Paper for Session 4. The Challenge of Combatting Illegal, Unreported and Unregulated (IUU) Fishing’ (April 2014).
Overfishing, Overfished <http://fishionary.fisheries.org/overfishing-overfished/> accessed 19 October 2016.
Sarr, Mare, ‘The Political Economy of Fisheries Reforms in Sénégal’ (2012) <http://dx.doi.org/10.2139/ssrn.2825111> accessed 18 October 2016.
UN FAO, ‘The State of World Fisheries and Aquaculture’ (2014).
UN FAO, ‘The State of World Fisheries and Aquaculture’ (2016).
UN FAO <http://www.fao.org/docrep/005/y4281e/y4281e04.htm#bm04> accessed 15 October 2016.
UN FAO, ‘What is fishing capacity?’ <http://www.fao.org/newsroom/en/focus/2004/47127/article_47132en.html> accessed October 2016.
Anja von Moltke (ed.), ‘Fisheries Subsidies, Sustainable Development and the WTO’, United Nations Environment Programme (UNEP) Economics and Trade Branch (ETB), Geneva, Earthscan, London.
Chen-Ju Chen, ‘Fisheries Subsidies under International Law’, Springer (2010).
Indrani Lutchman, Sophie des Clers, Koen Van den Bossche, ‘Overcapacity – What Overcapacity? An Evaluation of Members States Reporting on Efforts to Achieve a
sustainable Balance Between Capacity and Fishing Opportunities in 2007’ (2009).
Margaret A. Young, ‘Fisheries and the Trade System. Trade-Related Measures to Address Illegal, Unreported and Unregulated Fishing’, E15 Expert Group on Oceans (2015).
U.R. Sumaila, A.S. Khan, A.J. Dyck, R.A. Watson, G.R. Munro, P.H. Tyedmers, D. Pauly, ‘A bottom-up re-estimation of global fisheries subsidies’ (2010) J. Bioecon.
Legal and other sources
Agreement on Subsidies and Countervailing Measures.
Chair – Rules Negotiating Group, ‘Draft Consolidated Chair Texts of the AD and SCM Agreements’ (WTO, 30 November 2007) TN/RL/W/213 <https://www.wto.org/english/tratop_e/rulesneg_e/rules_chair_text_nov07_e.htm>
Chair – Rules Negotiating Group, ‘Draft Consolidated Chair Texts of the AD and SCM Agreements’ (WTO, 30 November 2007) TN/RL/W/213 <https://www.wto.org/english/tratop_e/rulesneg_e/rules_chair_text_nov07_e.htm>accessed September 2016.
Chair of the Negotiating Group on Rules, ‘Communication from the Chairman’ (2011)
Chair’s text 2007.
Confred G. Musuka1, Lloyd Haambiya, ‘The Contribution of Artisanal Fisheries towards Livelihoods and Food Security among Communities of Chanyanya Fishing Camp in Kafue District of Lusaka Province Akufuna Sonjiwe1’ in International Journal of Forestry and Horticulture (IJFH) Volume 1, Issue 2, (2015).
Daniel R. Goethel Steven X. Cadrin Brian J. Rothschild, ‘Reconsidering Historical Definitions of Overfishing and the Balance between Sustainable Use and Overexploitation’, <http://www.vliz.be/imisdocs/publications/247565.pdf> accessed 15 October 2016
FAO International Plan of Action for the Management of Fishing Capacity Rome 1999.
FAO, Fisheries <www.fao.org/fi/glossary/default.asp> accessed 14 November 2016.
Trans-Pacific Partnership, signed 4 February 2016.
UN FAO, ‘Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing’ (2010).
UN FAO, ‘Fisheries Circular No.994’ (2004).
UN FAO, ‘Fisheries Report No. 691’ (2002).
UN FAO, ‘International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing (IPOA-IUU)’ (2001).
UN, ‘Goal 14: Conserve and Sustainable use the oceans, seas and marine resources ‘(UN Sustainable Development Goals) <http://www.un.org/sustainabledevelopment/oceans/> accessed September 2016.
United Nations Convention on the Law of the Sea, signed 10 December 1982, entered into force 16 November 1994.
 Chair of the Negotiating Group on Rules, ‘Communication from the Chairman’ (2011)
 OECD, Trade and Agriculture Directorate Fisheries Committee, ‘Fishing for Development – Background Paper for Session 4. The Challenge of Combatting Illegal, Unreported and Unregulated (IUU) Fishing’ (April 2014) 3
 Ibid (n 16) 4
 Task Force on IUU Fishing on the High Seas, ‘Closing the net: Stopping illegal fishing on the high seas’ (2006) 93
 UN FAO, ‘International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing (IPOA-IUU)’ (2001) para 3
 Task Force (n 5) 93
 Ibid 95
 Chair’s text 2011 (n 1) [3 (b), (i)]
 Chair – Rules Negotiating Group, ‘Draft Consolidated Chair Texts of the AD and SCM Agreements’ (WTO, 30 November 2007) TN/RL/W/213
<https://www.wto.org/english/tratop_e/rulesneg_e/rules_chair_text_nov07_e.htm> accessed September 2016
 Chair of the Negotiating Group on Rules, ‘Communication from the Chairman’ (2011) 54
 OECD (n 3) 3
 OECD (n 3) 6
 UN FAO, ‘Fisheries Circular No.994’ (2004)
 UN FAO, ‘Fisheries Report No. 691’ (2002)
 UN FAO (n 15) 2
 Ibid 6
 UN FAO (n 15) 3
 FAO, ‘What is fishing capacity?’ <http://www.fao.org/newsroom/en/focus/2004/47127/article_47132en.html> accessed October 2016
 United Nations Convention on the Law of the Sea (signed 10 December 1982, entered into force 16 November 1994) art 61. 2
 Indrani Lutchman, Sophie des Clers, Koen Van den Bossche, ‘Overcapacity – What Overcapacity? An Evaluation of Members States Reporting on Efforts to Achieve a sustainable Balance Between Capacity and Fishing Opportunities in 2007’ (2009) 10
 Trans-Pacific Partnership (signed 4 February 2016) Article 20.16(5)
 U.R. Sumaila, A.S. Khan, A.J. Dyck, R.A. Watson, G.R. Munro, P.H. Tyedmers, D. Pauly, A bottom-up re-estimation of global fisheries subsidies, J. Bioecon. 12 (2010) page 203-206
 Alice Tipping, A ‘Clean Sheet’ Approach to Fisheries Subsidies Disciplines. E15Initiative. Geneva: International Centre for Trade and Sustainable Development (ICTSD) and World Economic Forum, 2015. <www.e15initiative.org/> 2
 Anja von Moltke (ed), ‘Fisheries Subsidies, Sustainable Development and the WTO, United Nations Environment Programme (UNEP) Economics and Trade Branch (ETB), Geneva; Earthscan, London 48
 Tipping (n 25) 10
 FAO International Plan of Action for the Management of Fishing Capacity Rome 1999, 
 Margaret A. Young, ‘Fisheries and the Trade System. Trade-Related Measures to Address Illegal, Unreported and Unregulated Fishing’, E15 Expert Group on Oceans (2015) 14
 UN FAO, ‘Fisheries Circular No.994’ (2004)
 FAO, Fisheries <www.fao.org/fi/glossary/default.asp> accessed 14 November 2016
 Daniel R. Goethel Steven X. Cadrin Brian J. Rothschild, ‘Reconsidering Historical Definitions of Overfishing and the Balance between Sustainable Use and Overexploitation’,10 <http://www.vliz.be/imisdocs/publications/247565.pdf> accessed 15 October 2016
 Boon, Kristen, ‘Overfishing of Bluefin Tuna: Incentivizing Inclusive Solutions’, University of Louisville Law Review, Vol. 52, No. 1 (2013) 13-18 <https://ssrn.com/abstract=2356566> accessed 17 October 2010
 Overfishing, Overfished <http://fishionary.fisheries.org/overfishing-overfished/> accessed 19 October 2016
 Chen-Ju Chen, ‘Fisheries Subsidies under International Law’, Springer (2010) 12-13
 Sustainable Fisheries Act, Public Law 104–297 104th Congress USA, SEC. 102 Definitions <http://www.nmfs.noaa.gov/sfa/laws_policies/msa/documents/sustainable_fishereries_act.pd> accessed 19 October 2016
 Cox, A. (2009), “Quota Allocation in International Fisheries”, OECD Food, Agriculture and Fisheries Papers, No. 22, OECD Publishing, Paris. <http://dx.doi.org/10.1787/218520326143>
 Chen-Ju Chen (n 37)
 Artisanal Fisheries <http://thefishproject.weebly.com/artisanal-fisheries.html> accessed 10 October 2016
 Confred G. Musuka, Lloyd Haambiya, ‘The Contribution of Artisanal Fisheries towards Livelihoods and Food Security among Communities of Chanyanya Fishing Camp in Kafue District of Lusaka Province Akufuna Sonjiwe1’ in International Journal of Forestry and Horticulture (IJFH) Volume 1, Issue 2, (2015) 22
 FAO <http://www.fao.org/docrep/005/y4281e/y4281e04.htm#bm04> accessed 15 October 2016
Sarr, Mare, ‘The Political Economy of Fisheries Reforms in Sénégal’ (2012) <https://ssrn.com/abstract=2825111 or http://dx.doi.org/10.2139/ssrn.2825111> accessed 18 October 2016
 Jennifer Jacquet, Daniel Paully, ‘Funding Priorities: Big Barriers to Small-Scale Fisheries’, Fisheries Centre, University of British Columbia V6T 1Z4, 832