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A legal and economic analysis of foreign ownership of the production in the atlantic fisheries.


Foreign ownership on fisheries production (FOFIP) rights, commonly called "quota hopping", mainly occurs in Atlantic and North Sea fisheries. Fisheries management in Europe has led to numerous forms of input or output based rights designed to limit access to fisheries resources : quotas, licences, kilowatts and GRT limitations. Most of these are defined in national terms : national quotas, national objectives for total kW or GRT in the MAGPs. But free movement of capital, good and labour in Europe allows for foreign investors to gain access to these rights by investing in the harvesting sector or in the distribution/processing sector when the industry is vertically integrated. This includes the purchase of 100% of a vessel or the purchase of shares in companies. Under various and contradictory arguments, national industries and governments resist or promote such purchases.

The general objective of this programme is to assess the legal and economic aspects of foreign ownership phenomena, based on a European review of the practices and the analysis of national or local situations.

These case-studies are conducted in four Member States: the United Kingdom, Ireland, France and Spain. The legal analysis will assess the formal and informal barriers to foreign ownership of fish production that exist. The economic analysis will cover the identification of the economic incentives and the direct social and economic consequences for the catching sector and for the immediate onshore economies. The legal and economic dimensions of these practices will be discussed in regard of general objectives and principles of the European integration and of the Common Fisheries Policy. To meet these objectives, the research is structured in four tasks.

Task 1 is a review to what extent and under which legal framework, foreign investment takes place in the fisheries of the European Union states located along the Atlantic and the North Sea (i.e Portugal, Spain, France, Ireland, United Kingdom, Belgium, Netherlands, Germany and Denmark). This assessment is descriptive and limited to the information that can be obtained from public sources. It has two folds : the review of the principles founding policy/legal choices regarding foreign ownership and the identification of the fisheries concerned with this phenomena

Based on four national case-studies, in countries representing the diversity of approaches in Europe, task 2 will document in a more analytical manner the formal and informal rules for guaranteeing access to national catch quotas in the United Kingdom, Ireland, France and Spain. The core objective of this task is to explain the evolution of the strategies and policy, as perceived by stakeholders, as transcribed in the law and as implemented through legal cases. Regional differences within countries will also be discussed. The historical background will be searched as far as the foreign ownership issue has been raised in the four countries.

The objective of task 3 is to assess the economic dimensions of foreign ownership phenomena through six case-studies on main fisheries concerned in major fisheries dependent localities. This includes the evaluation of the extent of foreign ownership in local fleets, the understanding of the diversity of economic incentives for a private investor to buy or sell abroad resource access rights, the quantitative illustration of these incentives and the most likely social and economic consequences of doing so for the catching sector and the near onshore economies. A case-study may either be focused at one harbour or one fishery. This will be done according to the results of the general review that will show to what extent foreign ownership is targeted on specific fisheries and locations. A similar methodology will be applied to each case study involving three levels of analysis. First, the extent of foreign ownership will be evaluated in terms of production means and output. Second, the incentives backing the decision by private investors to buy or sell abroad resource access rights will be investigated. This will be documented by direct interviews with all the private investors. Third, reference income distribution structures and multipliers will be used to assess the likely impact of foreign ownership on income transfer to or out of the near shore economies.

At the end of the programme a fourth task will integrate the results of legal and economic works under the framework of a discussion confronting foreign ownership practices to the principles founding the European integration and those of the Common Fisheries Policy. Policy implications will be discussed

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