Kristen M. Fletcher, J.D., LL.M.
 

In 1995, Congress handed a blow to fishery management in the Gulf of Mexico when it amended the Magnuson Act to include a moratorium to the proposed Individual Transferable Quota (ITQ) system for the red snapper fishery in the gulf.1 The Gulf of Mexico Fishery Management Council scrambled to adopt an emergency endorsement system in order to keep open the commercial red snapper fishery. Recognizing that the endorsement system was a temporary solution and the ITQ option denied, the Council considered a license limitation system. Under Amendment 15 to the Reef Fish Fishery Management Plan, the council adopted this system last January. As the system completes its first year in action, it offers a unique perspective of the continuing transition from open access fishing to limited access.

Restricted Access to the Red Snapper Fishery
Since the inception of limited entry methods under the Reef Fish Fishery Management Plan, the Gulf Council has been reducing participation to the commercial red snapper fishery.2 Originally, it included restrictive harvest levels and a vessel permitting system designed to limit access to commercial fishers historically dependent on the resource. By 1992, however, a race to catch fish -- called a "derby" -- resulted from quotas and closed seasons as red snapper fishers raced to harvest fish as quickly as possible to maximize their share of the quota before it was filled and the season closed. Since then, the Council has sought to combat the negative effects of the derby on the fishery.

In 1992, the Council established a moratorium on the issuance of additional vessel permits for three years. The permits were transferrable only by transfer of the vessel, prohibiting access by additional commercial participants during the moratorium while the Council evaluated a more comprehensive controlled access system. Also during this time, the Council adopted the red snapper endorsement system limiting permitted vessels, whose owners could demonstrate landings of at least 5,000 pounds in two of the years 1990-1992, to vessel trip limits of 2,000 pounds and all other permitted reef fish vessels to trip limits of 200 pounds. Again, the Council's intent was to restrict access to those persons with a demonstrated dependence on the fishery.

With the vessel permit and endorsement system in place, the Council began development of a limited access system for the commercial red snapper fishery. The new system needed to provide for the rebuilding of the red snapper stock but also put an end to derby fishing and provide for transferable fishing permits. Relying on information gathered from workshops with commercial fishers and public testimony, the Council selected the ITQ system in May, 1995, as the preferred system for the red snapper fishery. The ITQ system provided for the commercial red snapper quota to be divided into individual shares and distributed to fishers based upon their historical participation in the fishery. Once holding shares, ITQ participants could have entered and left the fishery, or adjusted their individual harvest, by buying and selling individual shares. Advocates of the ITQ system claimed that this system would end derby fishing because fishers could harvest their shares at any time of the year without fear that someone else would catch their fish and the season would close.

When Congress included language in the Sustainable Fisheries Act of 1996 to preclude operation of the ITQ system, the Gulf Council extended the red snapper endorsement system while the Council developed an alternative limited access system for the fishery.

From Endorsement to Licensing

The Council described the red snapper endorsement system as a "closed access system" because it precludes transfer of the endorsements.3 Transfer was allowed only on death or disability of the endorsement holder or to another vessel owned by the endorsement holder. Understanding that such a closed system can exist for only a limited period without providing for transfer, the Council moved to adopt a license limitation system to allow for less restrictive transfer of endorsements or licenses and the opportunity for new participants to enter the fishery. The alternative to the limited licensing system was to return to open access fishing, an option many considered unreasonable in light of the overfished status of the red snapper stock.

License limitation is a form of limited entry that, ideally, determines the number of fishers that a fishery can sustain and the number of licenses that should be allowed. In establishing such a system, fisheries managers must decide which fishers get licenses, whether new fishers can enter the fishery or whether licenses should be transferable. The red snapper license limitation system provides for two classes of licenses. Class 1 licenses with an initial 2,000 pound trip limit are issued to red snapper endorsement holders as of March 1, 1997. Class 2 licenses with an initial 200 pound trip limit are issued to other holders of reef fish permits as of March 1, 1997, who had any landings of red snapper between January 1, 1990 and March 1, 1997. Vessels that do not have a Class 1 or Class 2 red snapper license are prohibited from commercial harvest of red snapper.

This two-tiered system is markedly similar to the endorsement system in place previously. It does, however, offer easier transferability. Prior to the adoption of the licensing system, in order to transfer a permit under the endorsement system, a fisher had to transfer or lease the vessel. By allowing transferability of licenses, it reduces confusion and additional operation costs, and yields a market benefit.

Since implementing the licensing system in January, it has received mixed reviews. Advocates explain that it provides greater security to fishers rather than having a temporary endorsement system extended indefinitely and provides transferability allowing new fishers into the system. Critics see the licensing system as a continuation of the status quo. They claim it does not differ from the endorsement system and, therefore, leaving things the same with adverse conditions in the red snapper fishery such as excess fishing capacity, fishery closures, and ecological harm.

In reality, the Gulf Council has not received many complaints from fishers because the two-tier system is similar to the endorsement system. But, market changes and stormy fall weather have made it difficult to judge the effectiveness of the system in terms of red snapper prices.

The Future of Red Snapper Management

Called for by Congress, the Ocean Studies Board of the National Research Council is completing a peer reviewed study of ITQ systems on a national level. The study, conducted by the Committee to Review Individual Fishing Quotas, is the result of public hearings and information gathering on a national level and is due to Congress in October for its consideration. The Gulf Council cannot consider the ITQ system as a viable alternative until Congress authorizes the Fishery Management Councils to develop new systems.

By adopting the license limitation system in Amendment 15, the Gulf Council hopes that it has found a viable alternative to the ITQ and endorsement systems by increasing the stability of the red snapper fishery, avoiding the derby type fishing season and promoting flexibility for fishers. The council also seeks to provide for cost-effective and enforceable management and reduce the harvesting capacity of the red snapper fleet using historical dependence on the red snapper. The Council recognized that the licensing system would not be as effective or efficient in reaching these stated goals as the planned ITQ system of 1995 but found the licensing scheme to be a management measure able to improve net benefits within the fishery.
 

NOTES

1. See 16 U.S.C. § 1883 (1998).

2. Limited entry is a general term used for a fishery management program that restricts a fisher's access to open fisheries such as licensing schemes, fishery quotas, season closures, individual transferable quotas, and gear restrictions.

3. See Amendment 15 to the Fishery Management Plan for the Reef Fish Fishery of the Gulf of Mexico, p. 8 (1997) (available from Gulf of Mexico Fishery Management Council at (813) 228-2815 or visit the Council homepage at www.gulfcouncil.org ).
 

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