BREXIT

Brexit and the UK’s Under Ten metre fleet:

Opportunities and Challenges Introduction:
Whilst the only certainty with regard to the post Brexit landscape [seascape] for fisheries is that there is no certainty, it does however provide the opportunity to start from a clean sheet on which to design our future. The previous Fisheries Minister, Richard Benyon MP rightly made clear on his accession to the position and on inheriting the shambles caused by previous CFP’s and other factors that “if I was starting then it wouldn’t be from here’. His successor, George Eustice MP does have the very real benefit of his ‘here’ being potentially unencumbered with the historic wrongs endured by Richard and in a recent meeting, George, together with Andrea Leadsom MP made it clear that they and their staff were open to comment and suggestions as to the way forward for the industry and the country. So, notwithstanding the aforementioned certainty of a plethora of uncertainties, we can only proceed on the basis that ‘Brexit means Brexit’ and therefore consider what the future should hold for the inshore fleet, irrespective of what might be the end result following the exit negotiations.

Legislation: In terms of current regulations, we will of course be free of the Common Fisheries Policy once we leave the EU. This leaves the London Convention 1964, the United Nations Convention on the Law of the Sea (UNCLOS) and domestic legislation: The London Convention created arrangements for fisheries jurisdiction to 12 miles.
Its provisions included:
 coastal states should have the exclusive right to fish and exclusive jurisdiction in fishery matters within the 0 – 6 mile zone, albeit that this is only a derogation from the overarching approach of the CFP of equal access to a common resource and therefore always liable for reform;
 fishing within the 6 to 12 mile zone would only be permitted by the coastal state to the fishing vessels of any other contracting state which had habitually fished there between 1953 and 1962 (and then only for stocks and on grounds habitually exploited there);
 fishing within the 6 to 12 mile zone would be regulated by the coastal state in a non-discriminatory manner towards foreign vessels;
 Article 15 of the Convention stated that the convention would be of unlimited duration, but that any Contracting party could “denounce the Convention by giving two years’ notice in writing”.
It is the final bullet point that is of particular relevance and it is clear that our government must give the two years notice in writing at the same time as they invoke the Article 50 process. United Nations Convention on the Law of the Sea [UNCLOS]: UNCLOS is an international convention that defines the rights and responsibilities of countries with regards the use of oceans. The Convention established Exclusive Economic Zones (EEZ). EEZ give coastal states jurisdiction over sea resources, including fisheries, up to 200 nautical miles from their shores.

In 1983 EU Member States agreed that fisheries and quotas in their EEZs would be shared on the basis of who was already fishing in those areas (the principle of relative stability). This meant that when the new UNCLOS EEZ regime was introduced in the 1980s, there would not be any dramatic consequences for any Member State fishers. UNCLOS is therefore a key area where our negotiators will have to take a strong line if we are to reap major benefits from the exit process. And finally: The Fishery Limits Act 1976 permits the Secretary of State to allow foreign fishing vessels to fish in certain areas of the UK’s EEZ. The purpose for doing this is not given in the Act, but the legislation essentially appears to implement the fisheries access agreements that the UK has with other countries (including under the Common Fisheries Policy). The areas are actually set out in the Fishing Boats Designation (England) Order 2015, which is secondary legislation made under the Act.
This Order currently provides that:
 France, Germany, Belgium, the Republic of Ireland and the Netherlands have some access to fisheries within designated areas within the 6 to 12 nautical mile zone around the English coast;
 Austria, Denmark, Finland, Greece, Italy, Luxembourg, Portugal, Spain and Sweden enjoy access to fisheries within British fishery limits but outside 12 miles from the baseline;
 Norway and the Faroe Islands enjoy access to fisheries within certain sea areas. It is the view of the author that as this is effectively domestic UK legislation, it can be repealed and or amended as we wish.

Discussion:
The net result of the above sections is that there appears to be no genuine impediment to the UK being able to take responsibility for our territorial waters out to 200 miles or the relevant median lines. On that basis, and considering the ‘simple’ issues first, from an inshore perspective, taking back genuine access to the 6 – 12 mile zone is paramount and should be considered a ‘red line’ requirement. For far too long, many powerful European vessels have had almost unfettered access to the 6-12 mile zone around the UK coast. This very significant fishing effort has contributed to the demise of many ‘inshore’ stocks as well as degradation of the marine environment more generally. In the introduction to the CFP (19), it states that; “existing rules restricting access to resources within the 12 nautical mile zones of Member states have operated satisfactorily, benefitting conservation by restricting fishing effort in the most sensitive part of Union waters. Those rules have also preserved the traditional fishing activities on which the social and economic development of certain coastal communities is highly dependent. Those rules should continue to apply. Member states should endeavour to give preferential access for small scale, artisanal or coastal fishermen”. These apparent protections would be fine if they were in fact effective. In reality, the only genuinely sovereign area of UK coastal waters is the 0 – 6 mile zone. The 6 – 12 mile zone is dominated by the attentions of those European fleets with apparent ‘historic rights’, as well as significant quota for the species common to these areas.

The net result of this is that smaller UK passive gear vessels are effectively pinned into the 6 mile limit as any pots or nets set outside of this are often towed away by foreign vessels. In addition, many of the vessels with historic rights are powerful trawlers and beam trawlers that have had significant by catch and discard rates. This, together with their catching efficiency has had a serious impact on fish stocks and the wider marine environment in general and an overall and seriously deleterious effect on the fishing opportunities for the inshore fleet over many years. A “red line” for the UK’s inshore fleet is therefore a genuine 0 – 12 mile zone exclusively for UK inshore vessels. Perhaps the thorniest issue of all in terms of the forthcoming negotiations is the way that the UK’s ‘domestic’ quota has been allowed to be used and abused by the flagship phenomenon.

It would take a whole paper to firstly explain the background and then consider the range of arguments with respect to the situation where so much of the UK’s access to fish stocks in our own waters is now held by other than UK interests and importantly, where very little if any genuine economic, social or environmental benefits accrue to the UK. Decades of both wilful and ignorant mismanagement of the quota issue has resulted in the entirely unacceptable situation where many of the UK’s smaller scale fishermen are now forced to stand on the quay, without any quota to allow them to go to sea, and watch much larger, foreign owned vessels, with sometimes 100 times the power of our vessels, sweeping up fish in our territorial coastal waters. A previous Conservative Administration attempted to redress the iniquity of this by repatriating UK quota from flag ships but lost the argument in the European Court of Justice, on the basis of that bedrock of the CFP, ‘equal access to a common resource’ [the Factortame Case] that resulted in the payment of over £80m compensation to mainly Spanish interests who had been prevented from accessing UK quota during the period of the case. Whilst we understand that repatriation of this quota would not be straightforward, the High Court action of 2012 where the United Kingdom Association of Fish Producer Organisations sought a Judicial Review of the Government’s decision to reallocate a small part of constantly unused quota from the PO’s to the under ten metre fleet did provide some relevant considerations in this respect. Whilst there was a presumption by the PO’s that they had an annual and ongoing entitlement to an allocation based on their Fixed Quota Allocations [FQA’s], Justice Cranston found that they had no legitimate expectation to any future allocation as it is purely at the discretion of the Administration as to whether any quota is allocated, or otherwise in any given year.
On that basis, a stepwise repatriation of UK quota is entirely feasible and would provide a massive windfall that could form the foundation for the rejuvenation of coastal communities devastated by the lack of quota, and underpin the social and economic regeneration of the inshore fleet. It should be noted that arguments have been put forward previously, often by those with a financial stake in maintaining the flag ship ethos, that much of the relevant quota relates to offshore stocks that the inshore fleet could not catch for obvious reasons. This is, to coin a phrase, a red herring as these same people have overseen and benefitted from the commodification of quota, from a publicly owned resource to effectively private property. On that basis, the quota is as beneficial as a commodity to be traded for access to other stocks that would be of benefit to the inshore fleet as it is a stock of fish in its own right. It is also relevant that indeed some of this quota does pertain to species that frequent inshore waters and is therefore just as attractive to inshore as offshore vessels. The potential substantial benefits of a successful negotiation should however be put clearly and honestly against possibly less favourable post Brexit scenarios.

It is true that fishing is one area where we have something that our European neighbours want and many of whom have indeed built significant businesses upon. It is reported that the French fleet take 80% of their catches from UK waters and that altogether, over 50% of landings by EU [non UK] vessels come from our waters. If one includes the very substantial landings from flag ships, registered on the UK Register but with a beneficial ownership elsewhere then this figure would increase dramatically. On the other hand there are some fisheries in EU waters, mainly French and Irish, where UK vessels benefit from access [Scallops in the French part of the English Channel and a part of the Irish part of the Irish Sea].
On balance, the financial benefits of these areas pale into insignificance in relation to the access to UK waters held at present by non UK vessels. The other potentially negative element is with regard to the export of mainly shellfish species from the UK to mainland Europe. Something of the order of 90% of catches of lobster and crab are exported to mainly France and Spain. At the same time, many of the UK vessels fishing quota species in waters adjacent to continental Europe also land and benefit from the auctions there. These will of course be subjects for detailed negotiations between the UK and our EU neighbours. Finally, and against the fervent hope and expectations of the UK fishing industry of a post Brexit bonanza, there are two massive elephants standing in the middle of the bridge that will need to be dealt with sooner rather than later. Whilst not directly linked to Brexit, the current minister has made clear his intention to retain the discard ban. In its currently understood form, the full introduction of the requirements of the Landings Obligation under Article 15 of the CFP continues to represent a serious threat to the future ability of many under ten metre operators to maintain sufficient economic activity to remain viable in light of the choke species issue. Although this is not a subject for this discourse in detail, it is nevertheless worth noting as a relevant consideration in terms of the future of the UK fleet during the negotiation and subsequent post Brexit situation. Significantly more relevant however is the danger of a gap in the Brexit timeline, between the end of the two year Article 50 period and the finalisation of agreements between all relevant parties. Once the Article 50 process has been concluded, the UK is out of Europe but no or at best very few trade deals and tariffs will have likely been agreed between the UK and other global parties, not least the EU trading bloc. Current wisdom suggests that the overall negotiations related to the vast array of issues and elements of Brexit will last for many years after the initial two year period, some say decades. It is worth noting that even when Greenland left the EU, and had precious few political or practical ties with the EU, it still took three years of intense negotiations to complete the divorce. Brexit will therefore take far, far longer.

So in the event that the EU takes a robust negotiation stance, and there is absolutely no reason to think otherwise, and the Great Repeal Bill merely shifts all related EU legislation into domestic UK law, convenient but not overly helpful in the bigger scheme of things, then what happens to the UK fleet, and the UK’s fish processing sector in the interim? If the UK goes ahead and kicks out all EU fishing interests from the 6 – 12 mile zone from 2019, as one would assume would be the case, as they would have to have announced that at the outset of the Article 50 process by giving notice under the London Agreement as mentioned previously, then it is highly unlikely that other fishery related agreements would have been satisfactorily concluded by that date, never mind the vast range of interconnected trade aspects outwith fisheries. This scenario represents a real danger that the UK fishing industry could get caught up in a no man’s land, facing trade sanctions in the form of import tariffs yet without alternative options having been agreed. This note is being written from the small scale sector perspective. It may well be that the larger scale fleet, reliant as it is on being able to trade their large catch volumes on an export rather than a domestic basis, may well be the bigger losers without some form of interim trade deal. In a similar vein, the UK’s significant fish processing sector, if it is mainly reliant on export markets may well suffer in the same way. The author is not sufficiently informed in these regards to comment authoritatively but it would appear that unless the two sectors mentioned are at least substantially able to find sufficient domestic outlets for their products should the need arise then they may have a serious problem in this interim period. On the other hand, in the event that the Article 50 period of two years concludes with the reclamation of the 6 – 12 mile zone AND there is at least some movement on the repatriation of quota, it may be that the small scale fleet in the UK is a net beneficiary of the process.
Whilst there will in all probability be economic losses to those sub sectors, primarily shellfish fishers, reliant on the export market, these may be more than offset by benefits accrued in other Brexit related ways. If one considers that a 10% tariff may perhaps be introduced for fish and shellfish exports into the EU, whilst painful, it would not be economically terminal for those reliant on the trade. At the same time, their ability to increase fish and shellfish catches would be possible due to unfettered access to the previously risky 6 – 12 mile zone. There would also be a gradual net gain in both fish and shellfish stocks, as long as the aforementioned use of heavy mobile gears by EU vessels was not simply replaced by similar UK effort, on the basis that finfish and shellfish species, as well as the wider marine environment would not suffer the current impact of said gears. Many smaller scale fishing businesses currently rely on shellfish due to the lack of access to finfish quota. In fact the largest single cause of discarding by this sector is regulatory, rather than biological or economic, the fish are there to be caught but the operators have no quota to be able to retain it. With a very significant reduction in effort and therefore landings of quota species by EU vessels fishing in UK waters, there will clearly be a great deal more fish available to our sector. If this was not the case then the French would not be taking 80% of their overall catches from our waters. They are here because the fish are here, not in their waters. At the same time, a gradual repatriation of quota from flag ships and acquiring the quota from other EU vessels that may hold the quota but will not subsequently have access to the related quantities of fish traditionally fished by them in the UK zone will also provide far greater access to the UK resource for the inshore fleet than was previously the case. The combination of these benefits should more than outweigh any tariffs imposed by Europe. It is also the case that whilst difficult, we are slowly but surely building up a fertile trade in shellfish with far eastern interests. Additionally, as the world’s population increases, so will the demand for fish and shellfish and this requirement will certainly outweigh any longer term import restrictions by countries needing that which our fishers can supply. And finally within this area of consideration, a significant proportion of the inshore fleet land day caught fish to domestic rather than export markets so the impact of any tariffs will be minimal. These impacts could be further reduced by dint of a proactive marketing campaign, allied to improved value added processing initiatives and the creation of a small scale specific recognised Producer Organisation, to persuade domestic consumers to purchase domestically produced fish and fish products. There is a relatively small downstream risk whereby larger scale operators, denied economic access to the EU’s market may well increase efforts to market products domestically, putting price pressure on existing smaller scale supplies.

The final consideration in this discourse relates to jobs in the catching and processing sectors. We will however only comment specifically with regard to the catching sector. For some time, in fact from the fuel crisis of some years ago, larger scale vessels have turned to cheaper eastern European labour to fill the gaps left by indigenous workers voting with their feet and leaving boats for land based employment. This was primarily because the additional fuel costs cut into the earnings of the vessel and therefore crew income. In addition, the ever increasing cost of leasing quota also reduced the crew share. There is currently little clarity with regard to the position of European workers within the fishing, or indeed other industries post Brexit but it is a further consideration. In the same way as the potential need for interim trade arrangements was mentioned previously, so there may well be a gap between losing european crews and an improvement in vessel incomes sufficient to attract indigenous workers back to sea. The consequent need for training and certification should also not be ignored in this respect.

Conclusions:
It is important that the catching sector is not seen as one simple homogenous group in relation to Brexit impacts and outcomes. Politically there are significant differences between smaller and larger sectors. Vested interests will make every effort to retain the financial benefits linked to flag ships et al and of course fault lines are already appearing between larger scale Scottish and English representative groups.

The under ten sector represents 77% of the UK fleet by number and provides over half of catching related employment. It has become a shadow of its former self, along with some of the coastal communities around the coast that had significant inshore fishing interests. Through gross overfishing by larger scale interests together with the mismanagement and allocation of quota in past decades, overseen by the aforesaid interests, this has led to this vital sector only having access to 1.4% of the overall UK quota. This is a fundamental nonsense and if Brexit can do anything for the sector then addressing the imbalance in allocation must be a priority. This requirement is bought into sharp relief by the fact that the UK’s over ten fleet has the highest, and fastest growing profit margins of all the European fleets. Margins in the under ten fleet however continue to bump along the bottom. Add to this the dramatic loss of so many under ten metre boats, forced out by lack of quota, poor markets and unfair competition for fishing grounds with other sectors, fishing and otherwise, and it hardly surprising that we find ourselves in the current situation.

The Brexit process to date has been characterised by a lack of honesty on all sides. Promises have been made that will be hard to keep. The purpose of this note is to highlight current thinking within the small scale sector in the UK, draw some lines in the sand, related primarily to access to the 12 mile zone as a starting point, the repatriation of quota with an emphasis on delivering equity for the under tens and recognising and repairing past injustices. We rely on the undertakings given by the current Fisheries Minister in these respects and not least as unlike his predecessor, he can start from here to build a fair and equitable future for the under ten fleet and the coastal communities they support and who in turn support them.

New Under Ten Fishermen’s Association (NUTFA)

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