Individual transferable quotas

Individual transferable quotas


A trawl full of redfish

Photo: Þorgeir Baldursson

In 1990, a comprehensive and uniform Fisheries Management Act was passed by the Icelandic Althing. By this Act, the individual transferable quota (ITQ) system was established for the fisheries and they were subject to vessel catch quotas. The quotas represent shares in the national total allowable catch (TAC). They are permanent, perfectly divisible and fairly freely transferable.

The Ministry of Fisheries is responsible for management of the Icelandic fisheries and implementation of the legislation. The Ministry issues regulations for commercial fishing for each fishing year, including an allocation of the TAC from each of the stocks subject to such limitations.

The allocation of quota shares for each vessel is based on its share in the catch of each stock in the three years leading up to the establishment of individual vessel quotas for fishing from that stock. For the major groundfish stocks, this was the period 1981-83.

Since 1991, a number of amendments have been made to the fisheries management system. In August 2006 the legislation was re-issued as Law nr 116/2006, thus including all the changes made to the original 1990 legislation.

A vessel can transfer some of its quota between fishing years but its quota is lost if it catches less than 50% of its total quota, measured in "cod equivalents", in two subsequent years. There is also a requirement that within the year, the net transfer of quota from any vessel must not exceed 50%.

In order to prevent undue consolidation of fishing rights by a few fishing companies certain upper limits have been set for the holding of quota shares in major fishable stocks by a fishing company or a group of companies closely linked by ownership. The upper limit is 12% of the quota share for cod, 20% for haddock, saithe and Greenland halibut, 35% for redfish, 20% for herring and capelin and 20% for offshore shrimp. A further measure stipulates that each fishing company or a group of companies is not permitted to hold more than 12% of the value of the combined quota shares for the stocks utilized by TAC allocations.

A seperate small boat quota system (krókaaflamarkskerfi) is available for boats less than 15 GT. These are only allowed to fish with handlines or longlines. These boats get quotas for all the major demersal species and can freely transfer the quota within this system. However to prevent consolidation of fishing rights these quotas can not be transferred to the common quota system. Currently about 700 boats are fishing wihtin the small boat system.

Fishing year

By the 1990 Act the fishing year was set from Sept 1 to Aug 31 in the following year but previously it had been based on the calendar year. This was an effort to channel fishing of the groundfish stocks away from the summer months, when quality suffers more quickly and many regular factory workers are on vacation.

There are a few exceptions to the fishing year spanning 12 months. The fishing year for Icelandic herring is set from Sept 1 to May 1 and for inshore shrimp it is Oct 1 - May 1. In the capelin fishery, the TAC applies from June 20 to April 30 the following year. Fishing of herring from the Atlanto-Scandian stock, oceanic redfish in the Irminger Sea and northern shrimp on the Flemish Cap is also subject to special regulations by international agreements.

Fishing fee

A new chapter in the Fisheries Management Act was passed by the Icelandic Parliament in its 2002 spring session. This includes a levy on fishing rights allocation and is payable by fishing companies. Fishing rights for the Icelandic fleet within and outside the EEZ have been levied from Sept 1 2004.

The fishing fee each year is based on the total value of landed catch in the period May 1 (previous year) to April 30 (current year) from which major running costs and fishermen's salaries are deducted. Salaries are calculated as being 39.8% of the landed catch value in the period. The cost of oil for the fleet as a whole is calculated on the basis of average cost in 2000 and linked to later changes on the world market. Other running costs are also index linked to the average cost in 2000. From this figure of net landed value, 9.5% will be the total resource fee when fully applied. The total fee is further divided by the corresponding landed volume (landings in cod-equivalents) and this ratio then becomes the resource fee per allocated cod equivalent in the ensuing fishing year. As a preliminary measure, the fee was 6% from September 1 2004, but will gradually increase to 9.5% by Sept.1 2009.

The Directorate of Fisheries will be responsible for levying and due payment of the fishing fee.

Supporting measures

The Icelandic fisheries management system has many supporting measures designed for specific fisheries.

There are extensive nursery areas permanently closed for fishing. Spawning areas of cod are closed for a few weeks in late winter during the spawning period and the Marine Research Institute has the right of immediate, temporary closure of areas with excess juveniles. There is a 12 mile limit for large trawlers in most areas and there are several selectivity measures, such as a mesh size of 135 mm or equivalent. A sorting grid is mandatory to avoid by-catch of juvenile fish in the shrimp fisheries and devices for excluding juveniles in the groundfish fisheries are also mandatory in certain areas.

The catch rule for cod is also a very important landmark in the precautionary approach to cod stock management. This rule, based on scientific recommendations, was adopted by a government decision and became effective in 1995. It states that the annual TAC for cod is to be set at 25% of the fishable biomass. This implies that the TAC is automatically set after the annual stock assessment. Following the recommendations of the Marine Research Institute, the government decided in July 2007 that the TAC for cod in the fishing year 2007/08 should be set at 20% of the fishable biomass.

There are requirements that small fish, i.e. cod and saithe less than 50 cm and redfish shorter than 33 cm must be kept separate in the catch and must not exceed 10% of the cod, saithe, haddock and redfish catch, the equivalent numbers for haddock are 41 cm and 25%. In compensation, and since this fish has rather low value, it does not count fully in calculations of the vessels' used quota.

There are also strict requirements for the keeping of logbooks on-board all fishing vessels and they must be made available for fishery inspectors. Furthermore, the logbooks are important for scientific assessment purposes.

Management by International Agreements

Fishing from the Atlanto-Scandian herring stock in the northeast Atlantic is controlled by an international agreement. Iceland, Faroe Islands, Norway, the Russian Federation and the European Union all fish from this stock. The annual TAC is decided by the Northeast Atlantic Fisheries Commission (NEAFC) and Iceland's share is allocated to individual vessels.

Fishing of the oceanic redfish stock in the international area of the Irminger Sea is also controlled internationally by NEAFC. This stock is fished by Iceland, Russia, Faroe Islands, Greenland and some EU countries. The Icelandic share is allocated to individual vessels.

The capelin stock is also trans-boundary by nature but most of it is found within the Icelandic EEZ. It is fished mainly by Iceland but a proportion of the TAC is fished by other nations in accordance with an agreement between Iceland, Norway and Greenland.

A recent agreement (May 1999) between Iceland, Norway and Russia has settled a dispute involving Icelandic fishing in the international area of the Barents Sea. According to this, some rights for fishing within the respective EEZs were agreed on, but subject to stock conditions.

The northern shrimp fisheries in the international area of the northwest Atlantic, usually called the Flemish Cap, are subject to management by the Northwest Atlantic Fisheries Organization (NAFO). The fisheries are subject to management by effort restriction but Iceland has objected to this system of management and allocated individual vessel quotas on the basis of this being more effective. Icelandic observers are placed on-board all Icelandic fishing vessels for various assessment including shrimp size, maturity and by-catch.