WORLD TRADE  
ORGANIZATION  TN/RL/GEN/36 
23 March 2005 
 (05-1237) 
Negotiating Group on Rules Original:   English 
  
 
FISHERIES SUBSIDIES TO MANAGEMENT SERVICES 
 
Paper from New Zealand
 
  
 The following communication, dated 22 March 2005, is being circulated at the request of the 
Delegation of New Zealand.   The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(05)/44), also be circulated as a formal document. 
 
_______________ 
 
 
I. INTRODUCTION 
 
1. Good progress has been made in recent m eetings of the Rules Negotiating Group on fish 
subsidies.  There would appear to be an em erging consensus that new language on prohibited 
subsidies should be added to the Agreement on Subsidies and Countervailing Measures (SCM) to 
cover at least some categories of fish subsidies.  There are now enough common elements on the table to move forward with a detailed discussion without,  at this stage, necessar ily seeking to resolve the 
issue of the ultimate structure of fish subsidy disciplines (top down or bottom up).  New Zealand 
proposes that this more detailed discussion proceed w ithout prejudice to the positions of Members on 
the structure of the new fish subsidy disciplines. 
2. The objective of this new phase of discussi ons is to develop co mmon understandings with 
respect to the definition and treatment of various categories of fish subsidies.  This will require 
consideration of the followi ng elements (among others): 
 (i) Identification and definition of subsidy category.   This may require the identification 
of sub-categories or programme-types within  a category.  Relevant work undertaken 
in other international organisations (suc h as the FAO, UNEP, the OECD and APEC) 
may assist this process, as will information on definitional approaches taken by Members in their domestic fisheries.  
 
 (ii) Discussion of subsidy category.  This would include discussion of information on 
specific policy objectives, and the form or  mechanisms used to accomplish the 
government transfers in question.  Presen tation of information regarding actual 
programmes within this category, and in particular the size and nature of such 
programmes, will be needed in order better to  assess how particular types of subsidies 
should be treated under new disciplines.  
 TN/RL/GEN/36 
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  (iii) Treatment under new rules.   For example, if categories or sub-categories are to be 
permitted under new rules, cons ideration as to what conditions might be attached or 
any particular development dimensions that need to be taken into account.   
 3. Drawing on the above approach this paper seeks to begin a dialogue on the issue of “fisheries 
subsidies to management services”.   
II. FISHERIES SUBSIDIES TO MANAGEMENT SERVICES 
4. In Rules Group discussions to date, several Me mbers, including New Zealand, have suggested 
that government expenditures for management fr ameworks should not be  prohibited under new 
fisheries subsidies rules.
1  Most Members would agree on the need for government intervention in 
fisheries resource management.  Government assistan ce in this area is often referred to as a “good” 
subsidy in that it can contribute to  achieving environmental objectives.  
5. Management services programmes also cr eate benefits. Govern ment provision of 
management services can benefit the fishing indust ry in three ways.  First, management services 
programmes aim to manage the fish stock in a way th at maximises yields over the long run.  As such, 
they create conditions under which output can be maintained over time.  Second, management 
services can reduce the competition for fish within a fi shery, leading to a reduction in the cost per unit 
of effort.  Third, management services can incr ease the fishery’s return per unit of output – for 
example, where a management control allows a fi sh to grow to a larger and potentially more 
profitable size before being harvested.2 
6. Government management services transfers ar e generally not considered to contribute, 
whether directly or indirectly, to overcapacity, overfi shing, or other trade distortions.  For example, a 
2004 UNEP commissioned study noted that, except fo r some subsidies for research, management 
services are not considered harmful to fisheries resources.3  It is on this basis that New Zealand 
believes that management services subsidies are worthwhile candidates for exemption from any 
prohibition. 
7. Members will need to engage, however, in a detailed discussion to ensure there is a common 
understanding of what ‘management services’ compri ses.  As noted above, engagement in this 
concrete and technical discussion of different ty pes of subsidies does not, in our view, prejudge 
Members’ positions on the final structure of fish eries subsidies disciplines - whether top-down or 
bottom-up.  These are issues that will need to be  addressed whatever approach we finally take.  
Identification and definition of subsidy category 
 8. To ensure new rules are predictable and enfo rceable, any permitted subsidies will need to be 
explicitly and clearly defined.  This will most likel y require identification of sub-categories of specific 
types of programmes.  Relevant questions for Members to consider are:   
- How is the type of subsidy programme defined?  
- Can this category be broken down into sub-categories or programme types?  
                                                     
 
1 TN/RL/W/166, TN/RL/W/169 and TN/RL/W/172. 
2 We recognize that there may be  some differences in views regarding whether some types of 
government expenditures relating to management services actually constitute a “subsidy” under Article 1 of the 
SCM Agreement.  In our view, the key point is to ensure that we develop clarity and a common understanding 
in this regard.  Such clarity will only emerge through a discussion of specific types of fish subsidy programmes. 
3 Porter, G (2004), “ Analysing the Resource Impacts of Fisheries Subsidies: A Matrix Approach ”, 
commissioned by Economics and Trade Branch, United Nations Environment Programme, p. 45.  TN/RL/GEN/36 
 Page 3 
 
 
 - What are actual examples of current s ubsidy programmes in this category?  
 9. In seeking to answer these questions for mana gement services, we have referred to work that 
has been conducted on this topic by various inte rnational bodies.  The APEC study of 2000, for 
instance, took a broad approach to this categor y and examined programmes for management and 
conservation jointly, which included all govern ment-funded programmes designed to enhance the 
fisheries resource base.
4  
 10. With the objective of creating well-defined cat egories for any list of permitted subsidies, 
New Zealand proposes that capacity reduction pr ogrammes (such as vessel decommissioning) and 
effort reduction programmes (such as permit buybacks and licence retirement) should be treated as 
separate categories to, and discussed separately from, management services.  Similarly, we would propose that subsidies for conservation, such as stock enhancement programmes, be treated as a 
distinct category as well.  We therefore have not cons idered these types of subsidies in this paper, but 
would welcome contributions from other Members on these topics. 
11. The OECD has developed a comprehensive a pproach to classifying management services 
subsidies, which usefully breaks down the category into the following three sub-categories.
5  T h i s  
categorisation has been referenced in FAO work, a nd a similar definitional approach has been adopted 
in UNEP commissioned work on fisheries subsidies.6  New Zealand proposes that these three sub-
categories be incorporated in any list of permitted subsidies. 
(i) Research to inform fisheries management decision makers  
 
This sub-category includes data collection, survey s, data analysis and stock assessment.  The 
objective of these activities is usually to meet the information needs of the decision makers 
implementing the management rules.  
New Zealand believes that the following research programmes fall outside the category of 
‘research to inform fisheries management decision makers’, given the clear commercial 
nature of the activities and their ability to increase fishing effort: 
 - R&D for exploratory fishing;  
- R&D for the identification and development of new fisheries; and  
- R&D for the development of new fisheries technologies 
 
(ii) Creating and implementing fisheries management systems
 
 
This sub-category comprises programmes orient ed towards policy development, process and 
procedure.  It can be disaggregated further into the following three functions: 
                                                      
4 This joint classification comprised: vessel buybacks; permit buybacks or license retirement; stock 
enhancement programmes; fisheries management progr ammes; fisheries enfor cement programmes; stock 
assessment programmes; programmes to identify and develop new fisheries; R&D programmes for developing 
new fisheries technologies; and other fisheries management and conservation programmes.  
PriceWaterhouseCoopers LLP (2000), “ Study into the Nature and Extent of Subsidies in the Fisheries Sector of 
APEC Members’ Economies ”. 
5 Flaaten, O. and P. Wallis (2000), “ Fisheries Management Costs: Concepts and Studies ”, OECD.  See 
also Cox, A. (2003) “ The Costs of Managing Fisheries ”, OECD. Milazzo also refers to three major elements to 
governments’ costs of managing the resource: fisheries management, the supporting science, and enforcement. 
Milazzo, M. (1998) “Subsidies in Wo rld Fisheries: A Re-Examination”, World Bank Technical Paper 406 , p. 
56. 
6 Westlund, L. (2004), “Guide for Identifying, Assessing and Reporting on Subsidies in the Fisheries 
Sector”, FAO Technical Paper 438 , p. 38.  Porter, G (2004), op. cit . TN/RL/GEN/36 
Page 4  
 
  
(a) Establishing and administering manageme nt systems.  For example, monitoring 
fishing licences, permits, vessel numbers and catch returns 
 
(b) Adjusting management settings within  an existing management system.  For 
example, the annual process of setting the ‘total allowable catch’ for a fishery 
 
(c) Recommending amendments or additions to the existing management system.  
For example, introducing new effort or output controls. 
 
(iii) Enforcing fisheries management rules
 
 
This sub-category includes government expenditu res for the surveillan ce of compliance with 
fisheries laws and the prosecution of non-compliers.  
 
Discussion of Subsidy Category - Management Services  
 
International Estimates  
 12. The most recently available figures for costs of managing fisheries in OECD countries are for 
1999 and are set out below.
7  
Sub-category US$ million (OECD countries only) 
 
Research services 832.9 
Management services 647.9 
Enforcement services 972.0 
Total 2,452.8 
 The APEC 2000 study estimated APEC Members’  fisheries programmes for 1997 for the following 
sub-categories as follows:
 8 
 
Sub-category 
 US$ million 
Fisheries Management Programmes 151.8 
Fisheries Enforcement Programmes 52.5 
Fish Stocks Assessment Programmes  2.9 
 
New Zealand’s Management Services Programmes  
 13. Information is provided in Annex I to th is submission on New Zealand’s own management 
services programmes, using the framework identified a bove.  Reciprocally, we would be interested to 
hear from other Members on their views and practi ces in this area.  Such  an exchange will be 
important to ensure Members’ develop common unders tandings of what types of programmes actually 
fall within the different sub-categories identified a bove.  This information may also inform Members’ 
views on how different subsidies should be treated under the new rules.   
                                                     
 
7 Cox, A. (2003), op. cit . 
8 The APEC 2000 study estimated the total value of APEC fisheries programmes and subsidies at 
US$12.6 billion. PriceWaterhouseCoopers LLP (2000), op. cit . p. 11.  TN/RL/GEN/36 
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 Treatment under new rules 
 
14. As noted above, subject to further discussion of definitions and types of programmes that fall 
within these definitions, New Zealand believes that subsidies to management services should not be 
prohibited under new disciplines on fish subsidies.   We are open, however, to discussions on the 
desirability of maintaining some form of actionabilit y, or requirements with respect to notification. TN/RL/GEN/36 
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 ANNEX I: NEW ZEALAND’S MANAGEMENT SERVICES PROGRAMMES 
  (i) Research to inform fisheries management decision makers
 
Government expenditure in  this category relates to  gathering and analysing data on 
New Zealand’s fisheries to support decisions a bout sustainable utilisation and the provision of 
information on the biodiversity of New Zealand’s marine environment.  
Policy Objective : To provide the information required to ma ke decisions on the sustainable utilisation 
of New Zealand’s fisheries resources.  
 
Programme Name Description Government 
Expenditure, 2003/04, NZ$   
Fisheries research Research includes: 
- Stock assessment research determining estimates 
of biomass, sustainable yields for fish stocks and 
non-commercial harvest levels 
- Investigations into the effects of fishing on the 
aquatic environment, including biodiversity and bycatch species 
- Analysis of the social, cultural and economic 
factors that may be included in the management 
decision process  $15,841,000 
Biodiversity research Marine biodiversity research includes: 
- Surveys and descriptions of marine communities  
- Analysis of species composition, abundance and 
richness  
- Investigations of tools u sed for the collection of 
marine biodiversity data  $4,108,000 
Observer collected 
research data Fisheries observers are used to collect research data 
to inform fisheries management decisions. Data 
collected includes: 
- Biological specimen collection 
- Observations of seabird and marine mammal 
interactions with fishing activities 
- Catch composition data $2,187,000 
Biosecurity research  Marine biosecurity research includes: 
- Baseline biodiversity surveys to support border 
control 
- Risk profiling for invasive marine species; 
- Monitoring of ballast water exchange 
- Analysis of incursion response systems $2,119,000 
Total  $24,255,000 
  TN/RL/GEN/36 
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(ii) Creating and implementing fisheries management systems  
Policy Objective : To provide a framework within which th e sustainable and efficient utilisation of 
fisheries can occur.  
Function Programme 
Name  Description  Government 
Expenditure, 
2003/04, NZ$ 
 
Ministerial 
services  Providing services to the Minister 
responsible for Fisheries  $1,391,000 
International 
agreements Implementing domestically decisions 
made by Regional Fisheries Management Organisations  $578,000 
Customary 
applications Processing and evaluating applications 
from stakeholders to manage 
customary access  $974,000 
Cost recovery Determining fisheries management 
costs recovered from the commercial fishing industry  $1,536,000 
Statutory 
decisions Processing, evaluating and deciding on 
applications from stakeholders to farm aquatic life and to harvest aquatic life outside normal rules $1,884,000 Administering 
the existing management 
system 
Registry services Monitoring and delivery of contracted 
registry services  $6,241,000 
Adjusting 
management 
settings within an 
existing management system Domestic 
utilisation and 
sustainability 
advice  Evaluating stock assessment advice 
and stakeholder views, and providing 
recommendations on decisions 
regarding the utilisation and sustainability of fisheries resources  $5,779,000 
Recommending 
amendments or additions to the 
existing 
management system Policy advice  Reviewing, developing and providing 
policy advice to enable the sustainable and efficient utilisation of fisheries 
resources $3,329,000 
Total   $22,712,000 
 TN/RL/GEN/36 
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(iii) Enforcing fisheries management rules
 
Policy Objective:  To promote compliance with fisher ies laws and lead to detection of those involved 
in illegal fisheries activities.   
Programme Name Description Government 
Expenditure, 
2003/04, NZ$ 
 
Enforcement of commercial, customary and 
recreational fishing 
rules A compliance capability is provided to take action in 
commercial, customary and recreational fisheries to encourage compliance and deter offending. 
Enforcement activities conducted include: 
- Monitoring of commercial, customary and 
recreational fishing activity, including commercial fishing activity through a satellite Vessel Monitoring System  
- Analysis of fishing returns to detect offending  
- Inspection of commercial fishing vessels and 
Licensed Fish Receivers 
- Education of commercial, customary and 
recreational fishers 
- Co-ordinating and managing special approval and 
statutory vessel notification requirements 
- Provision of recommendations to prosecute  
 $14,903,000 
Deterrence of black 
market and poaching activities Actions taken to apprehend poaching and black market 
offenders through monitoring and detection of poaching and black market activity  $3,558,000 
Prosecution Fisheries-related prosecutions $3,608,000 
Total  $22,069,000 
  TN/RL/GEN/36 
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 ANNEX II: NEW ZEALAND’S FISHERIES MANAGEMENT REGIME 
  Characteristics of the New Zealand Fishing Industry 
  About 130 species are fished commercially with in New Zealand waters.  Seafood production 
is dominated by deepwater species (including hoki, li ng, orange roughy, oreo dories, squid and silver 
warehou) as well as spiny rock lobster, paua, gr een-lipped mussels and snapper.  Approximately 
750,000 tonnes greenweight of seafood is harvested annually.  70% of this seafood is taken from 
deepwater and midwater stocks, 11% from pelagic stocks (such as mackerel and tuna) and 10% from 
farmed species.  The inshore fisheries provide a base for the majority of owner-operated fishing 
businesses.  
Fisheries Management in New Zealand 
  Management of New Zealand’s fisheries res ources is governed by the Fisheries Act 1996.  
The purpose of the Fisheries Act is to provide for the utilisation of fisheries resources while ensuring 
sustainability.  In the Fisheries Act, ‘ensuring su stainability’ means to maintain the potential of 
fisheries resources to meet the reasonably foreseeable  needs of future generations whilst avoiding, 
remedying or mitigating any adverse effects of fi shing on the aquatic environment.  ‘Utilisation’ 
means conserving, using, enhanci ng, and developing fisheries resources to enable people to provide 
for their social, economic and cultural well-being. 
  The purpose of the Fisheries Act provides for two outcomes sought when the legislation was enacted.  The first outcome, “providing for utilisation”  sets out the expectation that access to fisheries 
resources will be provided and the second outcome, “ensuring sustainability”, sets the parameters for 
utilisation.  The Fisheries Act is intended to facilitate  the activity of fishing while having regard to the 
sustainability of harvests and mitigating the effects of  fishing on the environment.  Therefore, it deals 
with fisheries resources that can be harvested and used sustainably either now or in the future. 
  The objectives of utilisation and sustainab ility are achieved for commercially valuable 
fisheries through the Quota Management System (Q MS), designed in the 1980s to address increasing 
domestic concerns around the over-fishing of some  inshore species and to provide for the 
rationalisation of fishing capacity.  The QMS is a property rights based management framework that 
applies output controls to promote sustainable utilisation.   The Act includes an environmental focus by  introducing environmental and information 
principles which require decisions to be based on the best available information and to take account of 
the wider ecosystem in which fisheries exist.  While  the setting of sustainable catch limits, based on 
scientific research, continues to  underpin sustainable stock management, efforts have increasingly 
focused on delivering ecosystem-based manageme nt.  As of October 2004, 95 commercially 
harvested species are managed within the QMS.  Cost Recovery 
 
 Approximately NZ$70 million is expended annually on managing New Zealand’s fisheries 
resources.  This expenditure is shared between  the Government and fisheries rights holders.  
New Zealand recovers from fishers certain costs associated with managing the resource.  A set of 
rules enacted under the Fisheries Act determine whethe r, and to what extent, costs associated with 
managing fisheries can be recovered from the industry.  The cost recovery rules limit cost recovery to 
the costs associated with fisheries and conservati on services, such as research and registry services.  
Under this model, public good services in fisheri es management, such as policy advice, are not cost TN/RL/GEN/36 
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 recovered from the fishing industry. In 2003, 43 per cen t of the Government’s total direct expenditure 
on managing fisheries was directly cost recovered from the New Zealand fishing industry.   
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