Camanchaca, Landes, Blumar fear 'unconstitutional' changes to quota system
A new fisheries law under consideration would be a 'complete expropriation of rights,' execs claim.
Chilean fishing companies are facing a critical scenario as they wait for a decision on a proposal to abolish their right to renew fishing licenses. Lawmakers are currently considering the proposal of the Ley Corta (Short Law), which seeks to eliminate companies' rights to renew their licenses every 20 years under the Fishing Law of 2013, or the Longuiuera law. This would mean 100 percent of the existing fishing rights in Chile would be put up for auction in 2033, a move the industry considers to be detrimental for businesses, workers and the sector in general. “This would be an expropriation of rights,” Pesquera Camanchaca CEO Ricardo Garcia told IntraFish.
The move would revoke a right granted to companies in 2013, when the implementation of individual total allowable catch (TAC) limits was allocated to fishing companies. The distribution of quotas was based on historic catches and other parameters. The new law granted companies a right to renew their quotas every 20 years.
"This is what was agreed on when this law came into force, now they are proposing to revoke the right to renew the licenses, and to put up 100 percent of the quota for tender," Blumar CEO Gerardo Balbontin told IntraFish.
"This completely changes the conditions on which we operate."
The industry claims the measure would not only damage the sector and thwart any long-term investments, but would also be detrimental to the environment and the sustainability of the resource.
In Chile, the world’s second-largest producer of fishmeal and fish oil after Peru, there was an unregulated "Olympic" fishing system up until 2002, under which vessels could land fish according to their capacity and without quota limitations.
Due to an increase in the number of vessels through the 1990s and improvements in fishing efficiencies, falling fish stocks led to the government to implement a catch limit in 2002.
This law allocated fishing quotas to fishing vessels for the first time in Chile.
In 2012, the Chilean government drew up a new law -- which was implemented in 2013 -- granting companies a total allowable catch (TAC) limit, and the right to renew fishing licenses every 20 years.
This law fell in line with fishing systems already in place in other fishing nations such as Norway, Spain and all countries in the Organization for Economic Cooperation and Development (OECD).
The Fishing Law of 2013 included a clause by which 15 percent of the fishing quotas of certain species, mainly horse mackerel and anchovy, would be put up for auction every 20 years as well, giving opportunities to new players to opt for fishing rights.
Lack of support
However, the proposal of the Short Law – which is gaining traction and the industry fears will become law – seeks to redistribute the allocation of quotas entirely every 20 years.
According to the industry, the fishing sector is unsupported, with few politicians willing to back it or fight for its interests.
The political background behind this is that the Fishing Law of 2013 is associated with the Corpesca case, a criminal investigation still underway that saw a senator who participated in the approval of the Fishing Law receive irregular financing from fishing giant Corpesca, one of the companies benefiting from it.
According to the industry, this case has led politicians to strongly distance themselves from the fishing industry.
“What is being discussed now is damaging to the fishing sector, to all other sectors related, and also to all other unrelated sectors operating with natural resources,” Garcia said.
Furthermore, the industry notes the new proposal is being brought forward by the second administration of Chilean President Sebastian Piñera, even though it was Piñera’s first administration that implemented the Fishing Law of 2013.
The Fishing Law of 2013 is backed by the United Nations Food and Agriculture Organization (FAO), which supports the idea that renewable licenses are an incentive for responsible management of the resource by operators.
Another consequence of the changes would be economic, according to the industry: implementing auctions for the allocation of quotas lead to higher levels of concentration and anti-competence practices.
In addition, it does not encourage firms to invest in better efficiencies, new technologies, and any progressive installations in the fishing industry, leaving behind the sector in terms of competitiveness with other fishing nations.
“Auctions are a good method to allocate licenses of new resources, or resources which have not been previously exploited in a country, but not to redistribute rights in an already established industry once companies have already invested millions in vessels, plants, and have built their entire businesses around these rights,” Pesquera Landes CEO Andres Fosk told IntraFish.
The proposal of the Short Law is now in the hands of Chile's Fisheries Commission. The next steps will be for the Commission to present the agreement it has reached to the Senate, which will review it and could send an amended version to the Commission or to the Low Chamber.
The industrial fishing industry in Chile also claims the Short Law is unconstitutional, since the renewability of the fishing licenses was a fundamental clause in the Fishing Law of 2013.
“After 20 years, the quota holder will not have the power to ask for a renewal and obtain it, they won’t be able to continue developing their economic activity -- a right that is stated in our Constitution,” Garcia said.
Despite the opposition by the fishing industry, the new law is expected to come into force, as other “more damaging” alternatives are also proposed.
“There is another alternative that is now being pushed forward, which seeks to eliminate the fishing law altogether, which would leave the sector lawless,” Garcia said.
“This one is not likely to pass, but could put pressure on the government to abolish the renewability clause of the Fishing Law of 2013.
The controversial measure is being discussed as another regulation, this one affecting the jumbo squid trawler fleet, has passed, banning all jumbo squid mid-water trawling in Chile from August this year.