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DocumentphotocreditsStuartSimpson.
InvestinginSustainableFisheriesintheDominicanRepublic
EvaluationofaTrustMechanism
Preparedby:WildernessMarkets
For:ConservationInternational(CI)
InsupportofthebusinesscasedevelopmenteffortsintheCaribbean
ledbytheFoodandAgricultureOrganization(FAO).
DevelopedaspartoftheGEF-funded,WorldBank-implementedOceanPartnershipsforsustainable
fisheriesandbiodiversityconservation(OPP),asub-projectoftheCommonOceansABNJProgramledby
UN-FAO.
July25,2018RevisedAugust232018
DRAFT
DISCLAIMER
ThefindingsandconclusionsinthisreportrepresenttheinterpretationsofWildernessMarketsanddonotnecessarilyreflecttheviewofthestudyfundersorexpertstakeholders.Thisdocumenthasbeenpreparedsolelyforinformationalpurposes,andhasbeenpreparedingoodfaithonthebasisofinformationavailableatthedateofpublicationwithoutanyindependentverification.WildernessMarketsdoesnotguaranteeorwarranttheaccuracy,reliability,adequacy,completenessorcurrencyoftheinformationinthispublicationnoritsusefulnessinachievinganypurpose.Chartsandgraphsprovidedhereinareforillustrativepurposesonly.Nothingcontainedhereinconstitutesinvestment,legal,tax,orotheradvicenorisittobereliedoninmakinganinvestmentorotherdecision.Readersareresponsibleforassessingtherelevanceandaccuracyofthecontentofthispublication.Thispublicationshouldnotbeviewedasacurrentorpastrecommendationorasolicitationofanoffertobuyorsellsecuritiesortoadoptanyinvestmentstrategy.
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ExecutiveSummary
BusinessCasetoImproveBillfishConservationOutcomesintheDominicanRepublic
Area DominicanRepublicExclusiveEconomicZone(EEZ)-269,165km2
ProposedInvestmentAmount U.S.$500,000loan&$500,000GrantInvestmentTerm 10yearsFishery/SpeciesFocus Primary:Billfishrecreationalsportfishers
Secondary:Multispecies,commercialFADfishersCoreBusinessCaseInvestments • Supportthecreationofatrustmechanismtosecurea
marinemanagedareatoprotectbillfishspawninggroundsandimproveFADmanagementintheEEZoftheDominicanRepublic
PotentialGovernmentInvestmenttoSupportCase(notrequiredforimplementation)
• Implementco-managementregulations• Instituteandenforcebillfishharvestcontrolrules• Enforcefishinglicensingsystem(akeysteptoward
securetenureforfishers)• Digitallycollect,recordandanalyzekeyfisheriesdata,
i.e.landings;VMSFisheryStakeholdersBenefitted Estimated:approximately500fishermenTargetedEnvironmentalReturns:ProtectingandRestoringFishStocks
• Conserveofbillfishspawninggroundstosupportstockrecovery
• Improveuseof“catchandrelease”practicesTargetedSocialandEconomicReturns:SupportingFishingLivelihoods
• ImprovebillfishsustainabilityandincreasedfisherincomesintheDR
• ReduceFAD-relatedconflictProjectedFinancialReturns 6%
ii
ContextualAnalysis
TheDRisanopenaccessfishery,withminimalformalmanagementoffisheries,minimalcomprehensivedataoranalysisoffishstocksintheEEZ,andrelativelyweakenforcementoffishingregulations.Thelackofthesepre-requirementsforsustainablefisheriesinvestmentsuccesspresentaparticularchallengetofinancingatransitiontosustainablefisheriesutilizingmarketbasedsolutions.1Thereareestimatedtobeover8,000fishersandmorethan3,000vesselsintheDominicanRepublic(DR),ofwhich98%areconsideredtobeartisanal.Withtheexceptionoflobster,themajorityoftheDRharvestisdestinedforthedomesticmarket.2FAOfoodbalancesheetsshowthatdomesticproductionislessthan80%ofdomesticconsumption.3RecentFisheryPerformanceIndicators(FPI)completedbyConservationInternational(CI)andTheFoodandAgricultureOrganizationoftheUnitedNations(FAO)identifiedanumberofopportunitiesandthreatstopelagicpopulationsintheDR.4Withafocusonbillfish,twoprimaryusergroupswereidentifiedasbeneficiariesofhealthybillfishstocks:recreationalsportfishersandcommercialFADfishers(oftenartisanal).
Manyoftheparticipantsintherecreationalsectorareprofessionalsportfisherswhoinvestheavilyinpremiumequipmentandvesselsthatpursuesportfishingyearround,migratingtodifferentwatersandcountriesaccordingtothefishingseason.FourmarinasintheDRhostprivatesportfishingboatsandcharters.
AsidefromtheseprivateboatsthatgenerallycatertoexperiencedsportfisherswhocometotheDRspecificallytofish,therecreationalsectoralsoincludesafleetof“informal”charterboats.Theseareoftencrewedbyformercommercialfisherstransitioningintotherecreationalfisheryduetothepotentialforimprovedeconomicoutcomesandreporteddeclinesinharvestinthecommercialfishery.Thisgroupservesthevalue-conscioustouriststhatcometotheDRprimarilytovisittheall-inclusiveresortsinthePuntaCanaarea.Thesefisherstypicallydonotpossessthenecessaryinvestmentcapitaltodeployvesselswiththegear,insuranceandsafetyequipmentassociatedwithaprofessionalsportfishingfleet.Theyarealso,reportedly,responsibleforhigherlevelsofbillfishmortality,duetotheneedtosellorconsumebillfish,comparedtotheprofessionalsportfishingfleetwhopractice“catchandrelease”.
ThecommercialFADfishersandtherecreationalsportfisherfleetsbothfishtheFADssetbythecommercialfishers,whichisasourceofconflict.TournamentparticipantsandsliprentersatCapCanaandCasadeCampopayafeetothemarinasthatisestimatedtocollectapproximatelyU.S.$25,000to
1Holmes,L.,Strauss,C.K.,deVos,K.,andBonzon,K.2014.TowardsInvestmentinSustainableFisheries:AFrameworkforFinancingthe
Transition.Discussiondocument.EnvironmentalDefenseFund,ThePrinceofWales’sInternationalSustainabilityUnit.https://www.edf.org/sites/default/files/content/towards-investment-in-sustainable-fisheries.pdf.2Herrera,A.,Betancourt,L.,Silva,M.,Lamelas,P.andMelo,A.2011.CoastalfisheriesoftheDominicanRepublic.In.S.Salas,R.Chuenpagdee,A.CharlesandJ.C.Seijo(eds).CoastalfisheriesofLatinAmericaandtheCaribbean.FAOFisheriesandAquacultureTechnicalPaper.No.544.Rome,FAO.Pp.175-217.3DatafromtheFAOFoodBalanceSheetsavailableat:http://www.fao.org/faostat/en/#data/FBS.Theeffectoftheconsumptionoffishbytouristsmightnotbefullyaccountedforinthedata.4Gentner,B.,Arocha,F.,Anderson,C.,Flett,K.,Obregon,P.,vanAnrooy,R.2018.FisheryPerformanceIndicatorStudiesfortheCommercial
andRecreationalPelagicFleetsoftheDominicanRepublicandGrenada.FAOFisheriesandAquacultureCircularNo.1162.Rome,Italy.http://www.fao.org/3/I8833EN/i8833en.pdf
iii
$50,000annually.ThisispurportedlypaidtotheFADfisherstosupporttheircostsinmaking,settingandmaintainingtheFADsandtocompensatethemtonotfishtheFADsduringbillfishtournaments.Currently,thesepaymentsaretypicallyinformalandlacktransparency.Complicatingmattersfurther,FADfishershaveengagedin“pirate”-likebehavior—approachingsportfishingboats,demandingpayment,money,food,etc.,andcreatinganegativeimpressionforsportfishers.WhetherthisisacauseorsymptomoftheopaqueexecutionoftheFAD-fundingmechanismisnotclear.
ValuePropositionandBusinessModel
Whilenotraditionalbusinessmodelwasidentifiedthatwouldutilizeamarketandreturngeneratingmechanismtorewardinvestors,theconfluenceoffactorsidentifiedinthecontextualanalysis,combinedwiththeoverfishedstatusofmostbillfishspeciesandrecentpolicychangestoestablishabillfishspawningarea,providethebasisfortheestablishmentofatrustmechanism.Theproposedtrustmechanismwouldformalizeandprofessionalizethepaymentsfromtherecreationalsportfishingsector,and,incollaborationwithanappropriatelyconstitutedboard,prioritizeinterventionstosupportbillfishconservation,reduceconflictaroundFADsand,ifpossible,supporttheprofessionaldevelopmentoftheinformalcharterfleet.Thetrustmechanismconsidered,whilenotan“attractivebusinesscase”perse,isrecommendedtoaddressthelackoftransparencyintheexisting,informalpaymentsystembetweentherecreationalfisheryandthecommercialFADfishery.WhiletheresourcesraisedareconsideredmodestinthecontextofenforcinganareaclosuretoimprovebillfishspawningorimprovedFADmanagement,theydohaveprecedent.
FinancialandRiskAnalysis
Fromafinancialperspective,thekeydriverofthesuccessofthetrustmechanismistherateofcomplianceachievedforcollectionoftheuserfeefromtherecreationalfisherystakeholders.Asdemonstratedinthisdocument,whilelowfeesmayencouragegreaterparticipation,theydonotgeneratesufficientrevenuetoensuretheviabilityofthetrust.AU.S.$10userfeepervisitortripata40%compliancerate,wouldgenerateU.S.$1.3millionover10years(orapprox.U.S$130,000peryear).AU.S.$50userfeeata40%complianceratewouldgenerateoverU.S.$6millionover10years(or$600,000perannumonaverage).Unfortunately,neitheroftheseparametersareassured,particularlyinthecurrentcontextofreportedcollectionamountsthatrangebetweenU.S.$25,000–50,000andgiventheearlystagenatureoftheproposedentity.Additionally,theacceptanceofthesefeesmaydeclineastheyincrease.Forcontext,however,a2018willingness-to-paysurveyoftheregionalrecreationalfisheryindicatedanglerswerewillingtopayU.S.$280upto$439peryeartoagovernment-administeredfundinordertoaccesssustainably-managedbillfish.5Otherthanthefinancialrisk,amajorrisktothisapproachwillbethedeliveryorimplementationriskoftheproposedtrustmechanismtomeetitsstrategicobjectives.Awell-managedfacility,withahighly5FAO.2018.Expenditureandwillingness-to-paysurveyofCaribbeanbillfishanglers:summaryreport.Gentner,B.andWhitehead,J.FAOFisheriesandAquacultureCircularNo.1168.Rome,Italy.
iv
focusedandtargetedimplementationplandesignednottoexceedresourcesraised,isaworthyobjective.ThiswouldbeasignificantimprovementovertheopaqueandinformalpaymentmechanismthatcurrentlyexistsbetweentherecreationalandcommercialFADfishers.Unfortunatelythereisnoguaranteethatsuchamechanismwillsucceed.Fortunately,theDRdoespossesslocalcapacityfocusedonimprovingmarineprotectedareamanagementundertheauspicesoftheMinistryoftheEnvironmentinaninitiativedevelopedbyBluefinance.ThisinitiativehasalreadysecuredthesupportoftheMinistryoftheEnvironmentandkeytourismindustrystakeholderstochargeavisitorfeefornearshoretourismactivities.Itanticipatesworkingingeographiesthatoverlapwiththeproposedareaclosureforbillfish.Assuch,thisinitiativepresentsavaluablepotentialpartnerfortheproposedtrustmechanism.Recommendation
TheproposedtrustmechanismisrecommendedifonlytoaddresstheinformalandopaquenatureofpaymentsbetweentherecreationalandcommercialFADfisherythatcurrentlyexists.Whilenotan“attractivebusinesscase”perse,ithasaroletoplayinimprovingthetransparencyofpayments,aswellassupportingtheestablishmentandenforcementofabillfishspawningareaandimprovedFADmanagement.Whileforecastedrevenuesaremodest,aprecedentdoesexistforthismodelintheDR.Undertheappropriateleadership,itmayalsoevolvetoincorporatesupportingtheprofessionalizationofthelocal“informal”recreationalcharterfleetwiththegoalofimprovingbillfishstocksustainabilityintheDR.
Giventheoperational,structuralandfinancialrisksidentifiedinthisdocument,thefinancialviabilityoftheproposedtrustmechanismisuncertain.Inordertoaddressthisriskandensurelong-termsuccess,werecommendthatCIandtheFAOexplorecollaborationwiththeaforementionedinitiativedevelopedbyBluefinance.Thismaypresentanopportunitytoachieveoperationalandgeographicsynergiesgiventhecommonmissionaroundmarineprotectedareas.
TableofContents
ExecutiveSummary.......................................................................................................................................iContextualAnalysis..................................................................................................................................iiValuePropositionandBusinessModel...................................................................................................iiiFinancialandRiskAnalysis......................................................................................................................iiiRecommendation....................................................................................................................................iv
AbbreviationsandAcronyms.......................................................................................................................1Introduction.................................................................................................................................................2ContextualAnalysis......................................................................................................................................2
Fisherystatus...........................................................................................................................................5Fleet......................................................................................................................................................7Landings...............................................................................................................................................8Infrastructure.......................................................................................................................................9
ManagementandGovernance.................................................................................................................9Organizationalcapacity..........................................................................................................................10Marketpotential....................................................................................................................................11
Seafood..............................................................................................................................................11Sportfishing........................................................................................................................................11
Stakeholderengagement.......................................................................................................................12Investableentities..................................................................................................................................12
ValuePropositionandBusinessModel......................................................................................................12ExportSubstitution.................................................................................................................................13ConservationTrust.................................................................................................................................13FinancialandRiskAnalyses....................................................................................................................15Economic,socialandenvironmentalcostsandbenefits.......................................................................16
SDGalignment....................................................................................................................................16SDG12–SustainableConsumptionandProduction......................................................................16SDG14–LifeBelowWater.............................................................................................................17
Recommendedtimescale.......................................................................................................................17Replicabilityandscalability....................................................................................................................18
Recommendedsolution.............................................................................................................................18AppendixA–BasicSuccessfulEnterpriseCriteria.....................................................................................19AppendixB-Scenario1–ExportSubstitution...........................................................................................20AppendixC–TrustRevenueAssumptions.................................................................................................21AppendixD–TrustStartupAssumptions..................................................................................................22AppendixD–Trust-SpawningAreaClosure&FADManagement(10Years)..........................................23AppendixE–AdditionalConservationInterventions................................................................................24AppendixF–Bluefinance..........................................................................................................................25
1
AbbreviationsandAcronyms
ABNJ Areasbeyondnationaljurisdiction
BET Bigeyetuna
BUM Bluemarlin
CARICOM CaribbeanCommunity
CLME CaribbeanLargeMarineEcosystem(Project)
CRFM CaribbeanRegionalFisheriesMechanism
FAD Fishaggregationdevice
FAO FoodandAgricultureOrganizationoftheUnitedNations
FIP FisheryImprovementProject
FPI FisheryPerformanceIndicators
H&G Headedandgutted
ICCAT InternationalCommissionfortheConservationofAtlanticTuna
IRR Internalrateofreturn
IUU Illegal,unreportedandunregulated
LL Longline
MT Metrictons
NGO Non-governmentalorganisation
OSPESCA CentralAmericaFisheriesandAquacultureOrganization
RFMO Regionalfisheriesmanagementorganization
SAI Sailfish
SDG UnitedNationsSustainableDevelopmentGoal
TBL Triple-bottomline(referringtoabusinessorprojectwithnotjustafinancial“bottomline”butalsoaccountingforsocialandenvironmentaloutcomes)
UN UnitedNations
WECAFC WesternCentralAtlanticFisheryCommission
WHM Whitemarlin
YFT Yellowfintuna
2
Introduction
Thisreportoutlinesthefindingsfromeffortstodevelopabusinesscaseforthesportfishingandcommercialfishaggregatingdevice(FAD)fisheriesintheDominicanRepublic(DR)thatwouldultimatelybenefitthedecliningbillfishstocksintheregion.6Whilenotraditionalbusinesscasewasidentifiedduringthecourseofthiswork,atrustmechanismwasidentifiedasapotentiallyappropriateresponsetoaddresstheconstraintsandchallengesassociatedtobillfishconservationinthecontextofthecommercialandsportfishingcommunities.Twointerventionsinparticulararehighlighted–theimplementationofaspawningareaclosureandimprovementsinFADmanagement.Athirdinterventionrelatedtoprofessionalizingthe“informal”recreationalcharterfleetisreviewedintheappendices.ThecontextualanalysissectionofthisdocumentprovidesanoverviewoftherelevantfisheriesintheDR.Thesectionsthatfollowdiscusstheproposedvalueproposition,provideafinancialandriskanalysesfortheproposedtrustmechanismandpresentarecommendationfornextstepsforconsideration.AllmonetaryfiguresareinU.S.dollars,unlessotherwisenoted.
ContextualAnalysis
Threefactorsareimportanttotake-awayfromthecontextualanalysis:1)thereislittleformalmanagementofthefisheriesoftheDR;2)relatedtothefirstpoint,thereislittlecomprehensivedataoranalysisofstocksintheEEZoftheDR;3)theDRishighlyreliant(upto80%)onimportsoffishtomeetdomesticdemand.Noneofthepre-requirementsforsustainablefisheriesinvestmentsuccess7arepresentintheDR.Thecontextualanalysisthatfollowsexpandsuponeachofthesepointsandothers,buttheyarementionedheretohighlighttheconstraintstodevelopmentoftriple-bottomlineenterprises.ConservationInternational(CI)andTheFoodandAgricultureOrganizationoftheUnitedNations(FAO)recentlycommissionedFisheryPerformanceIndicator(FPI)assessmentsofthecommercialFADandrecreationalbillfishfisheriesintheDRfromwhichthecontextualanalysishereinoriginates,unlessotherwisenoted.8Thereareestimatedtobeover8,000fishersandmorethan3,000vesselsintheDR,ofwhich98%areconsideredtobeartisanal.BesidestheFADfishery,themostimportantfisheriesarelobster,shrimp,conchandreeffish.Withtheexceptionoflobster,themajorityoftheharvestisdestinedforthe
6RelatedworktoidentifybusinesscasesinGrenadaandfortheformalizationoftheWesternCentralAtlanticFisheryCommission(WECAFC)intoaregionalfisheriesmanagementorganization(RFMO)wasalsocarriedoutaspartofthisconsultation.7Holmes,L.,Strauss,C.K.,deVos,K.,andBonzon,K.2014.TowardsInvestmentinSustainableFisheries:AFrameworkforFinancingthe
Transition.Discussiondocument.EnvironmentalDefenseFund,ThePrinceofWales’sInternationalSustainabilityUnit.https://www.edf.org/sites/default/files/content/towards-investment-in-sustainable-fisheries.pdf8Gentner,B.,Arocha,F.,Anderson,C.,Flett,K.,Obregon,P.,vanAnrooy,R.2018.FisheryPerformanceIndicatorStudiesfortheCommercial
andRecreationalPelagicFleetsoftheDominicanRepublicandGrenada.FAOFisheriesandAquacultureCircularNo.1162.Rome,Italy.http://www.fao.org/3/I8833EN/i8833en.pdf
3
domesticmarket.9FAOfoodbalancesheetsshowthatdomesticproductionislessthan80%ofdomesticconsumption.10InadditiontothecommercialFADfishingfleet,awell-established,professional,recreationalsportfishfleetoperatesintheDR.Theparticipantsinthisfisheryinvestheavilyinpremiumequipmentandvesselsthatpursuesportfishingyearround,migratingtodifferentwatersandcountriesaccordingtothefishingseason.Fourmarinashostprivatesportfishingboatsandcharters.AsidefromtheseprivateboatsthatgenerallycatertoexperiencedsportfisherswhocometotheDRspecificallytofish,thereisalsoafleetof“informal”charterboats,oftencrewedbyformercommercialfishersservingthevalue-conscioustouriststhatprimarilycometotheDRtovisittheall-inclusiveresortsinthePuntaCanaarea.Thesefisherstypicallydonotpossessthenecessaryinvestmentcapitaltodeployvesselswiththegear,insuranceandsafetyequipmentassociatedwithaprofessionalsportfishingfleet.Theyarealso,reportedly,responsibleforhigherlevelsofbillfishmortality,duetotheneedtosellorconsumebillfish,comparedtotheprofessionalsportfishingfleetwhopractice“catchandrelease”.
ThecommercialFADfishersandtherecreationalsportfishersfleetsbothfishtheFADssetbythecommercialfishers,areportedsourceofconflict.
Table1Findings,inbrief11
RecreationalSportfishers CommercialFADFishermenTargetspecies Multispecies-recreationalsportfisherstarget
billfish,especiallyblueandwhitemarlinCommercialFADfishermentargetdolphin,wahoo,mackerels,billfishandtunas,primarilyyellowfin
OtherimportantfisheriesintheDRnotincludedintherecentFPIassessmentinclude
spinylobster,queenconchs,coralreeffishandothers.
Stockstatus Yellowfintuna,bluemarlin,andwhitemarlinareoverfished,butsailfish,bluefintuna,anddolphinfisharenotidentifiedasoverfished,butthereisahighdegreeofuncertaintyinestimatesanddecreasingtrendsincatchofbluefin
Gear Trolling Handgear(trollinganddroplines)Vessels Estimatedat250,butvarieswiththe
season,12vesselsaretypically10-20minlengththatpayafeeforfishingtheFADssetbycommercialfishers
Atleast258vesselsof5-8minlengthwith30-40HPoutboardengineswhichsetandcommerciallyfishFADs
Trips/Landings Ofthetwomarinaswithaccuraterecordsthatreporteddata,nearly3500billfishwerecaughtandreleasedbysportfishersin2016on1483trips
Approximately1300tonsofpelagicswerelandedforlocalconsumptionin2016
Exports,2016 N/A 7500tons,forallfisheryproductsFishers 1000-1500 Over500upto1000,estimatedManagement Openaccess;fishinglicenseandvesselsafetyinspectionarerequired
9Herrera,A.,Betancourt,L.,Silva,M.,Lamelas,P.andMelo,A.2011.CoastalfisheriesoftheDominicanRepublic.In.S.Salas,R.Chuenpagdee,A.CharlesandJ.C.Seijo(eds).CoastalfisheriesofLatinAmericaandtheCaribbean.FAOFisheriesandAquacultureTechnicalPaper.No.544.Rome,FAO.Pp.175-217.10DatafromtheFAOFoodBalanceSheetsavailableat:http://www.fao.org/faostat/en/#data/FBS.Theeffectoftheconsumptionoffishbytouristsmightnotbefullyaccountedforinthedata.11Unlessotherwisenoted,allinformationwassourcedfromtherecentlycompletedFPIsfortheDRandGrenada.Gentneretal.,2018.12Herreraetal.,2011.
4
FPIscoresfortheFADfisheryindicatepoorscoresformostoutputindicators,ameasureofthewealthgenerationofthefishery.Scoresincludea2outof5forthepercentageofstocksoverfishedand3outof5fordegreeofoverfishing.BoththeFPIsandtheFAO“CoastalfisheriesoftheDominicanRepublic”13reportindicatethatfishingintheDRisseenasan“employeroflastresort”or“marginalactivity”,respectively.Whetherbycauseoreffect,commercialFADfishingispoorlydevelopedontheisland,withpoorlydevelopedregulation,handling,andcoldchainallcontributingtolowwealthgeneration.
Figure1FPIoutputscoresbyTBLIndicatorforthecommercialFADfisheryoftheDominicanRepublic
Indicatorsbycolor:Green=Ecology;Blue=Economics;Community=Orange
Incomparison,therecreationalfisheryscoredthesameforstockindicatorsmentionedabove,andlowerforlocallabor.ThestockhealthscoreisbasedontheloweroverallhealthofmostbillfishstockscomparedtotunasandotherfishthataremoreactivelytargetedbytheFADfishermen.Overallscoresfortherecreationalfisherywerefairtogood,withlowerscoresreflectingtherelativelyfewerlocalhandshired,andthatmuchofthegearusedinthefisheryisboughtoverseas(andthuslowlocalpurchasesofgear).
13Herreraetal.,2011.
012345
StockHealthHarvest
HarvestAssets
Risk
Trade
ProductForm
Post-HarvestAsset…ManagerialReturns
LaborReturns
Health&Sanitation
CommunityServices
LocalOwnership
LocalLabor
Career
5
Figure2FPIoutputscoresbyTBLIndicatorfortherecreationalfisheryoftheDominicanRepublic
Indicatorsbycolor:Green=Ecology;Blue=Economics;Community=Orange
Fisherystatus
FisherystockdatafortunasandbillfishareavailablefromInternationalCommissionfortheConservationofAtlanticTunas14(ICCAT),theregionalfisheriesmanagementorganization(RFMO)fortuna;countrylevelstockassessmentsforotherfisheriesarenotavailable.Notethatthestockstatusindicatorsarefortheentirestock,and,asthesearecosmopolitanpelagics,thisreflectsAtlantic-wideconditionsforthestock.ThelandingsintheDRareestimatedtobe1300tonsofpelagicsfordomesticconsumptions.Theseimplicationsarediscussedinmoredetailinthefollowingsectionthatdiscussesthevaluepropositionandbusinessmodel.
Table2StockstatusofspeciestargetedbycommercialFADandrecreationalsportfishers
Species Overfished? OverfishingOccurring? Rebuilding?Yellowfintuna15 Y N MayberecoveredBluemarlin16 Y Y SeeICCATsummaryWhitemarlin17 Y Notlikely Nonelisted18Sailfish19 Uncertain Uncertain Nonelisted20Dolphinfish,kingmackerel,wahooandothersintheSmallTunaSpeciesGroup21
Unknown Unknown Unknown
14http://www.iccat.int/en/assess.htm15http://www.iccat.int/Documents/SCRS/ExecSum/YFT_ENG.pdf16http://www.iccat.int/Documents/SCRS/ExecSum/BUM_ENG.pdf17http://www.iccat.int/Documents/SCRS/ExecSum/WHM_ENG.pdf18ICCATMarlinStockRebuildingPlan:https://www.iccat.int/Documents/Recs/compendiopdf-e/2015-05-e.pdf19http://www.iccat.int/Documents/SCRS/ExecSum/SAI_ENG.pdf20ICCATMarlinStockRebuildingPlan:https://www.iccat.int/Documents/Recs/compendiopdf-e/2015-05-e.pdf21https://www.iccat.int/Documents/SCRS/ExecSum/SMT_ENG.pdf
012345
StockHealth
EnvironmentalPerformance
AggregateAnglerUtility
For-HirePerformance
Risk
SupportingIndustryPerformanceFor-HireReturns
HealthandEducation
LocalLaborinFishingSector
Career
LocalLaborinSupportingIndustries
6
Table3SummaryofselectedfisheriesintheDominicanRepublic.22
PelagicFleet-type
TargetSpecies NumberofParticipants/vessels ProductMarket
Landings Revenue Management
FAD(hand-gears,trollinganddroplines)
Primary:Dolphinfish,kingmackerel,wahoo,ceromackerel,billfish,blackfintuna,yellowfintuna(YFT)
8600fisherstotalacrossallfisheries.Atleast258boatssetFADsandfishthem(estimatefromthreeregionsonlyandlikelyanunderestimation)
100%LocalConsumption
1300tonnes ?
Managementoffisheriesislimitedtoenforcementoffishinglicenses.Theproductqualityisverylowasfewboatsuseice.Thefishlandinginfrastructureispoor.Manycaptainsandcrewsareperpetuallyindebttothefishbuyers/boatowners.Captainshavelowincomes.Verticallyintegratedbusinessesdobetter.Veryshortsupplychainsoftencompletelyverticallyintegrated.
Recreational(biggametrolling)
TheDominicanRepublicisoneofthepremierbillfishfisheriesdestinationsgloballyPrimary:Bluemarlin,whitemarlin,sailfishSecondary:Dorado(DOL),Kingfish(KNG)&others.
350slipsonthesouthcoastarecapableofhostinglargesportfishingvessels.Thelocalfleetfollowsfishfromwesttoeastseasonally.Peakseason,therearemanyrecreationalfishingvesselsfromothercountries.Estimatesofthenumberofboats,effortorcatcharenotavailable.
100%Catch&ReleaseforBillfishDOL,KNG,andYFTconsumedorsoldtoclient/localconsumption
Twolargestmarinaskeepaccurateeffortandcatchstatistics.Thesetwomarinasaccountfor1483tripsin2016catchingandreleasingnearly3500billfish
Ifall1483tripsfromthetwomarinaswerechartertrips,revenuescanbeestimatedatbeingbetweenU.S.$2.2andU.S.$4.5million
Licensesrequiredforprivateandfor-hirecaptains;thelicensesarethesameasthoseforcommercialfishermenandallowforfishsales.Thereisnodelineationinthelicensestoidentifyrecreationalfishers.Thelicenseistiedtothevessel,nottotheangler.Nootherregulationsexistforrecreationalfisheries.
22Gentneretal.,2018.
7
Fleet
BoththerecreationalandFADfisheriesexperienceseasonalfluctuationsanditisunlikelythatallvesselsorfishersareactivethroughouttheyear.TheoverallDRcommercialorsubsistencefleetisestimatedtohave8,600fishersandalthoughfishinglicensesareostensiblyrequired,thefisheryislargelyunregulated.ThecommercialFADfisheryiscomprisedofprimarilyartisanalfishermen,whotypicallyspendalargeportionoftheyearindebttotheiremployingboatownerand/orfishbuyer.TheFPIsreportthatCODOPESCAestimatedin2011to2012thatatleast258vesselssetFADsandfishthem,andnotethatthisislikelyanunderestimate.Theytypicallyuseawood,fiberglassoverwood,orallfiberglassboat(panga)thatcostsapproximately$2,300to2,700whennew;is5to8metersinlength;crewedby2men;andwithasingle30to40horsepoweroutboardengine.Theyincreasinglyusedroplinesbaitedwithlivebaitthathasbeencaughtbytrollingorbait-fishing,tobettertargetlargepelagicsforharvest.EachvesselownertypicallysetsfivetotenFADswhicharereplacednearlycontinuouslygiventheirrudimentaryconstruction.OftheFADfishers,asmanyassixtypercentareowner-operatorvesselsandtheremainderareownedbyvertically-integratedbuyers,typicallyotherfishersorformerfishers.23
Thenumberofrecreationalsportfishersisuncertainandvariable,withmanytransientvesselstravellingtoDRinpeakseasontotargetbillfish;lowerboundtriplimitswereestimatedtobe1,500in2016.LiketheartisanalFADfishery,thefisheryislargelyunregulated.Thereare350boatslipsforthesevesselstooccupy,locatedatfourprivatemarinas.Mostvesselsareabouttwelvemetersinlength,with984horsepowerintotalpervessel.Bothcharterandprivatevesselsusuallyhaveahiredcaptainandmate.Charterpricesatthesportfishingmarinasaverage$3,000ormoreperdayandclientstypicallybookmultipledays.Incontrast,morevalue-conscioustouristorientedchartersinPuntaCanaareincreasinglyoffering“splitcharters”(multiple,unaffiliatedindividualsandgroupsbookedononevessel)foraround$1,500totalor$200perperson.Thesetwentytothirtyvessels,partofthe“informal”fleetarereportedtobeinpoorconditionand,unliketheothersportvessels,theydonotpractice“catchandrelease”ofanyfish,includingbillfish.Thesefisharesoldtocovercostsandimproveprofitmarginsinthislessprofessionalizedsectoroftherecreationalfishingfleet,forwhichmostcaptainsandcrewsareoftenformercommercialFADfishers.
Aspreviouslymentioned,thecommercialFADfishersandtherecreationalsportfishersfleetsbothfishtheFADssetbythecommercialfishers.TournamentparticipantsandsliprentersatCapCanaandCasadeCampopayafeetothemarinasthatcollectivelytotalsanestimatedU.S.$25,000to$50,000peryear
23Gentneretal.,2018.
Figure3CommercialfishermenlandingsailfishinBarahona,DominicanRepublic.PhotocreditRoyBealey.
8
thatissupposedtobepaidtotheFADfisherstosupporttheircostsinmaking,settingandmaintainingtheFADs;thesepaymentslacktransparency.Itisunclearwhoreceivesthepayment,onwhattermsandconditionsandforwhatpurpose.TheFADfishers,whoarenotformallyorganized,havealsoengagedin“pirate”-likebehavior—approachingsportfishingboats,demandingpayment,money,food,etc.WhetherthisisacauseorsymptomoftheexecutionoftheFAD-fundingmechanismisnotclear.
Landings
TheDRhasnumerousimportantfisheries;however,giventhesignificantbacklogindataentryandimpreciserecordforpre-2011landings,productivityisdifficulttoassess.(Figures3and4areincludedasexamplesoftheerraticreportedlandings.)Therearenoregulatorylimitstolandingsinthepelagicfisheries(withtheexceptionofasharkharvestban).Morethantwentydifferentgearsareusedtolandfishatmorethan200coastalsites.24
Fisheriesimportantforbothcommercialandsubsistencepurposesinclude:spinylobster,whiteshrimp;queenconch;reeffish(snapper,grouper,crabs,molluscs,etc.);pelagics;billfish;squid;crab;andornamentalfish.25Ofthese,pelagicsandbillfisharethemostlikelytobelandedwhilefishingFADs.Theamountofoverlapbetweenthefisheriesisnotwelldocumented.
Figure4LandingsoftheDominicanRepublic,2005-2015,withhighpointsindicated.26
Fiveoutoftenhighpointsforlandings(redbars)inthesegraphsoccurredin2010,themostrecentyearwithreporteddataduetothebackloginentries.Notethattheseareonindividualscales.Thegraphbelow(figure5)hastherelativelandings.
24Herreraetal.,2011.25Herreraetal.,2011.26FAO.2017.FisheryandAquacultureStatistics.Globalproductionbyproductionsource1950-2015(FishstatJ).In:FAOFisheriesandAquacultureDepartment[online].Rome.Updated2017.www.fao.org/fishery/statistics/software/fishstatj/en
Species(ASFISspecies) Landings,2005-2015(tonnes)
Albacore
Atlanticsailfish
Atlanticthreadherring
Caribbeanspinylobster
Kingmackerel
Mulletsnei
Nurseshark
Stromboidconchsnei
Wrasses,hogfishes,etc.nei
Yellowfintuna
9
FADfisheriesinthesouthofthecountry,wherethemajorityofFADsaredeployed,aresubjecttobiologicalseasonality.Sailfisharegenerallycapturedduringthefirstquarterandthefirsthalfofthesecondquarter;followedbydolphinfishseasonduringthesecondquartertothefirstpartofthethirdquarter;andtheremainderoftheyearisdominatedbyyellowfintuna.ThemainbluemarlinseasonisapproximatelyFebruarythroughMay,whilethewhitemarlinrunMarchthroughJune,conditionscanbeprohibitivelyroughearlyinthewhitemarlinseasonontheeastcoast.Kingmackerelsarefoundmoreofteninthesecondhalfoftheyear.
Figure5LandingsoftheDominicanRepublic,2005-201527
Infrastructure
Ingeneral,theFADfisherylandingsitesareinpoorcondition,whereasthesportfishinginfrastructureisverygoodasittargetshighendtourismclients.TheFPIsnotedthatlocalfisherstypicallydonotcarryiceonboardtheirvessels;veryfewfreezersandfreezingtechnologyexist;thosethatdoarerudimentaryandtherearenoHACCPcertifiedfacilities.DuetotheinternationalnatureoftourismintheDRandtherecreationalbillfishsector,mostsportfisherscometotheDRbyair.Theimportantinfrastructurefeaturesthatareingoodconditionincludeboatslips,airconnectionsandroads.
Thewell-developedairandroadinfrastructureandlackoftransparencyinthemarketscouldbepotentialleveragepointsforvaluerecoveryinthecommercialFADfishery.Mostlandinglocationshaveonlyonebuyerandifthereismorethanone,fishersareoftenindebtedtooneofthem,hencetyingthemtothatbuyer.Moretransparencyinthemarket,coupledwithhigherpricesforimprovedqualitymaybeusedasincentivesforchangesinpracticesandpotentiallyimprovefisheriesmanagement,abeneficialcircleofwealthcreationinthefishery.Thisoptionisconsideredintheappendices.
ManagementandGovernance
AllfisheriesintheDRareopenaccess.Fishermenmustacquireafishinglicense,andvesselregistration.ElConsejoDominicanodePescayAcuicultura(CODOPESCA),thefisheriesauthorityofDR,collects
27FAO.2017.FisheryandAquacultureStatistics.Globalproductionbyproductionsource1950-2015(FishstatJ).In:FAOFisheriesandAquacultureDepartment[online].Rome.Updated2017.www.fao.org/fishery/statistics/software/fishstatj/en
- 1,000,000
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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(lbs)
Albacore Atlanticsailfish Atlanticthreadherring
Blackfintuna Caribbeanspinylobster Kingmackerel
Mulletsnei Nurseshark Stromboidconchsnei
Yellowfintuna
10
fisherieslandingsdataateachlandinglocationthroughgovernment-employedenumerators.Thedataiscapturedusingpaperlogs,andthereisadigitaldataentrybacklogto2011.Additionally,before2011datawasrecordedbyspeciesgroups,notbyindividualspecies.Giventhesedatadifficulties,theerraticreportedlandings(seefigures3and4,above)areunsurprisingandshouldbeviewedasagenerality,notadefinitiveaccount.
Wealthcreationinthefishery(partoftheFPIInputs)scoredlowduetoalackofrestrictionstofisheryaccess(norights-basedmanagement),lackofmanagementorenforcement,poormarkettransparencyaswellaslackoffisherorganizationandparticipationalong-withpoortonoparticipationbywomeninthesector.BrightspotsincludethelessdistortionaryfisherysubsidiescomparedtoGrenadaandgoodroadandairinfrastructure.Dataconfidenceismixed;whiletheenumeratorsystemiscomprehensive,thepaperlogs,dataentrybacklog,andlackofprofessionalizationoftheenumeratorspulledthescoredownward.
Figure6FPIinputscoresfortheFADfisheryoftheDominicanRepublic
Organizationalcapacity
Theleveloforganizationintheartisanalfisheryislow,andthisistruenationwide.TheFPIdocumentnotesthatthefishershavemixedscoresduetonothavingrecognizedleadersandopenconflictsexistatsomeportsbetweenowner-operatorsandhiredcaptainsandcrew.Therehasbeenlimitedsuccessoffisheryco-managementinitiatedbyNGOs.28Nosuitableinvestableentitieswereidentifiedinthissector.
Incontrast,bythenatureofsportfishing,therearehigherlevelsoforganizationalcapacitybutthisisnotuniformanditdoesnotnecessarilyexistatthefisherlevel.Therearefourmarinasthathostprivateboatsandcharters,whichmeansthatthesefishersareatleastgeographicallyconcentratedwithanoverarchinggroupmanagingthemarina.Thecharterboatsservingthevalue-conscioustouriststhatvisit
28Herreraetal.,2011.
0.0
1.0
2.0
3.0
4.0
5.0
NationalEnvironmentalPerformance
EnvironmentalRisk
NationalGovernance
NationalEconomics
FishingAccessRights
HarvestRights
CollectiveAction
Participation&SupportLeadership&Cohesion
Gender
ManagementCapacity
Data
ManagementMethods
Markets&MarketInstitutions
Infrastructure
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theall-inclusiveresortsinthePuntaCanaareaoperatefairlyindependentlyofeachotherwithnooverarchingorganizationalaffiliation.
Marketpotential
Seafood
ThefigurebelowgraphicallyshowsthattheDRimportedovereightypercentoftheirfishsupplyforhumanconsumptionfrom2009through2013.29ThismaypresentanopportunityfordomesticallylandedstockstoreplaceimportedproductconsumedintheDR.Thisscenarioisconsideredinthisdocument.
Figure7DominicanRepublic,Domesticproductionoffisheryproductscomparedtototalavailablefoodproductsfromfisheries(domesticproductionplusimports)
Sportfishing
RecentworkbyGentnerConsultingGrouptoassessopportunitiesintherecreationalsportfishingsectortocreatevaluethroughmanagementreformsincludeddatafromtwomarinasintheDR.Recordskeptin2016identifiedacombined173vesselsfromCasadeCampoandMarinaCapCanathattook1,483tripsthroughwhich3,466billfishwerereleased.Consideringthereisanothermajormarina–ClubNautico–andtheinformalchartersinPuntaCanatoconsider,thenumberofrecreationalsportfishingtripsisestimatedatminimum1,500,butlikelyatleastover2,000.Partofthesameworkidentifiedself-reportedfishingtripexpendituresbynon-residentsthataveraged$7,436and$10,409forcharters(n=19)andprivateboats(n=24),respectively.Thesesamefishersreportedanaverageof9tripsperyear,whichlastedanaverageof16dayseach,with13daysspentonprivateboatsand3oncharterboats.30
29http://www.fao.org/faostat/en/#data/FBS30Gentner,B.Draft.FinalReport:EconomicImpactAnalysisofCommercialandRecreationalFisheriesintheWesternCentralAtlantic.FinalgrantendingreportpreparedforConservationInternational.ServiceAgreement#60030333.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
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tofFoo
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eries
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12
Stakeholderengagement
Figures2and5reflecttheOutputandInputscoresummariesfortheFPIs,respectively.TheFPIdocumentnotesthatthecommercialFADfishershavemixedscoresduetonothavingrecognizedleadersandconflictsoccuratsomeportsbetweenowner-operatorsandhiredcaptainsandcrew.Thereisverylittleformalizedengagementofstakeholderswithregardstothemanagementofthefishery.
Therecreationalfishersscoredhigherforsocialcohesionandleadershipduetohavingseveralkeyfisheryleaders.Itscoredsimilarlylowtothecommercialsectoroncollectiveaction,participation,andsupportdue to the low number of fishermen’s organizations, although there is at least one that does lobbygovernmentandpro-activelytriestomanageFADconflict.
Asreferencedearlier,therearereportedconflictsbetweenthecommercialandrecreationalfishers.Purportedly,twoofthemarinasarecollectingfeesfromrecreationalfishersandpayingtheFADfisherssotheycancontinuetosetFADs,whichattractgamefish.BoththerecreationalsportfishersandcommercialFADfisherstargetthepelagicgamefishesthataggregatearoundtheseFADs,whicharetypicallydeployedbythecommercialsectorstakeholders.Thesepaymentsappeartobebasedoninformalagreements,lacktransparency.andmaynotbegoingbacktothefishersresponsibleforsettingtheFADs.Thismayrepresentanopportunitytoestablishatrustmechanisminordertotransparentlymanagepaymentsbetweenthetwofisheries,inawaythatachievesthecurrentlylackingsustainably-managedfisheryoutcomes.
Investableentities
Tomakeaninvestmenttopromotetheeconomic,environmental,andsocialsustainabilityoffisheriesintheDR,aninvestibleentitymustexistandshouldmeetbasiccriteriaforsuccessfulenterprisemanagement,includingtherequirementsidentifiedinAppendixA.NoneofthesecriteriaweremetbyanyfisherorfishingorganizationinthecommercialFADfishery.Several,ifnotmost,weremetbyvariousentitiesintherecreationalfishery.Onepotentialentity,withanalignedmissionrelatedtomarineconservation,wasidentified.BluefinanceisanNGOoperatingundertheinstitutionalandtechnicalumbrellaoftheUnitedNationsEnvironmentProgramme(UNEP)withtheobjectiveofensuringsustainablemanagementofmarinehabitatsbydevelopingnewinvestmentmodelsandfundingstreamstoaddressthegapinmarinefundingconservation;BluefinanceisactiveintheDR.Theyreportcurrentlyhavingfourotherpublic-privatepartnershipsinlast-stagedevelopmentintheCaribbean.PartnersincludeAlthelia-Mirova,ConservationCapital,Deloitte,RopesandGray(lawyers)andGRID-Arendal.31AppendixFincludesabriefpressreleasefortheBluefinanceinitiativeintheDR.
ValuePropositionandBusinessModelIngeneral,therearethreepotentialvaluepropositionforsustainablefisheries:
- Improvingstockhealthleadstoamoreabundantresourcethatsupportshigherlong-termyieldsandmakesfishlesscostlytofindandtocatch
- Increasingoperationalefficiencyreducesthecostoffishinganddeliveringfishthroughthesupplychain,improvingprofitmarginsandthusimprovingthereturnsfromfishingasawhole
31http://blue-finance.org/
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- Increasingmarketvaluethroughimprovedmarketaccess,certification,brandingandlong-termpartnershipsreturnsmorevaluetofishers32
GiventheopenaccessnatureoftheDRfisheries,thestatusofthestocks,andthehighlyfragmentednatureoftheFADfishery,anyfisheryinvestmentsmustbeconsideredcautiously.Underthesecircumstances,effortstoimprovemarketvalueoroperationalefficiencyareconsideredhighlylikelytoincreaseeffort,andresultinfurtherstockdepletions.Therefore,priorityshouldbegiventoinvestmentsthatdirectlyimprovestockhealthalongwithcreatingareturnoninvestment.
Twoscenarioswereconsideredforthepurposesofthisdocument:
Scenario1–ExportSubstitution
Scenario2–ConservationTrust
ExportSubstitution
Whileitmayseemintuitivetoimproveandutilizedomesticseafoodlandingsinlieuofseafoodimports,therealityismorenuanced.Theopenaccessnatureofthefisheryandtherelativelyweakenforcementoffishingregulationsmeanthattherewasahighassessedriskofexacerbatingoverfishingshoulddomesticmarketsproveviable.Thepoorqualityofdomesticfisheriesinfrastructure,alongwiththecompetitionfromseafoodimportspresentsignificantbusinesschallengestoasuccessfulbusinesscase.Thisisnottosaythataspecializeddomesticvendorofseafoodwouldnotsucceed.However,giventhattheriskofimprovingthedomesticmarketwouldlikelyresultinoverfishinginanopenaccessandunregulatedsystem,itisnotarecommendedapproach.PleaserefertoAppendixBforfurtherdiscussiononthisscenario.
ConservationTrust
Thisscenarioconsidersthedevelopmentandestablishmentofatransparenttrustmechanismtoaggregatefundsfromthetourismandrecreationalsportfishingsectorandtousetheseresourcestodevelopthecapacityandimplementsolutionstoaddressthedriversofstockhealth.33Itwouldserveasaforumtoidentify,prioritize,andaddressmarineconservationchallenges.
Akeydriverofthesuccessofthismodelistherateofcomplianceachievedforcollectionoftheuserfeefromtherecreationalfisherystakeholders.Researchindicatesthereisprecedentforthismodel,albeitatmodestlevelsofincome.Asdemonstratedintheanalysisbelow,whilelowfeesmayencouragegreaterparticipation,theydonotgeneratesufficientrevenuetoensuretheviabilityofthetrust.AU.S.$10userfeepervisitortripata40%compliancerate,wouldgenerateU.S.$1.3millionover10yearswhileaU.S.$50userfeeata40%complianceratewouldgenerateoverU.S.$6million.Unfortunately,neitheroftheseparametersareassured,particularlyinthecurrentcontextofreportedcollectionamountsthatrangebetweenU.S.$25,000–50,000andgiventheearlystagenatureoftheproposedentity.Additionally,theacceptanceofthesefeesmaydeclineastheyincrease.Forcontext,however,a2018willingness-to-paysurveyoftheregionalrecreationalfisheryindicatedanglerswere
32Holmes,L.,Strauss,C.K.,deVos,K.,andBonzon,K.2014.TowardsInvestmentinSustainableFisheries:AFrameworkforFinancingtheTransition.Discussiondocument.EnvironmentalDefenseFund,ThePrinceofWales’sInternationalSustainabilityUnit.https://www.edf.org/sites/default/files/content/towards-investment-in-sustainable-fisheries.pdf.33WildernessMarkets.2016.ConnectingtheDots:LinkingSustainableWildCaptureFisheriesInitiativesandImpactInvestors.WildernessMarkets.http://www.wildernessmarkets.com/our-work/connecting-the-dots/
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willingtopayU.S.$280upto$439peryeartoagovernment-administeredfundinordertoaccesssustainably-managedbillfish.34PleaserefertoAppendixCforadditionalbackgroundontherevenueassumptions.Table4Projectedtenyearrevenueatvariousassumptions
Thefinancialviabilityofthisoptionwillbedeterminedbythecostsofoverheadandadministrationontheonehand,andthecostsofspecificconservationinterventionsadoptedontheotherhand.
Itmaybeentirelyreasonabletoassumethatcostswillbeminimalduringtheearlyyears.However,thiswillneedtobebalancedagainsttheneedtoensuretransparency,accountabilityandvaluetotherecreationalsportfishersandcommercialFADfishers.
Forthepurposesofthisdocument,wehaveevaluatedthehypotheticalcostofaspawningareaclosureandamodestbudgettoimproveFADmanagementduetotheconflictassociatedwiththisresource.
SpawningAreaClosureandFADManagement
Thefocusofthisinterventionistheestablishment,management,andenforcementofthealreadyproposedbillfishspawningareainthefirstyearofthefund’soperation.PleaserefertoappendixCfortherevenueassumptionsandappendixDfortheassumptionsdataand10yearcashflowofthisapproach.A2009resolutionfromtheofficeoftheSecretaryofStatefortheEnvironmentandNaturalResourcesoftheDominicanRepublicrecognizedanareaontheeasterncoastasimportantforthebiologicalhealthofblueandwhitemarlinsandsailfish.Onlytrollinggearispermittedformarlinsandsailfishinthisarea,andanymarlinsorsailfishraisedmustbereleasedinthesamearea,withoutdelayorharm.TheareawasdelineatedasaperpendicularlinefromthemouthoftheNisibónRiver(coordinatesUTM523596E,2097983N)tothelimitsofthewatersterritorial(12nauticalmiles)oftheDR,andfollowingthecoastlineuntilconnectingwithanotherlineperpendiculartothecoast,inPuntaEspada(coordinatesUTM562540E,2040903N).35ThisincorporatesthewatersofftheeasternpartoftheislandpopularfortourisminPuntaCana.Thefinancialmodelprovidesestimatedbudgetamountsrelatedtothestart-upcostsforthetrustaswellasestimatedongoingmanagementandenforcementcostsoftheproposedspawningarea.Consistingofresourcesonlynecessarytosupportaspawningareaclosure(seeAppendixD),itdoesnotincludeanypaymentstofishers,vesselmanagementsystems(VMS)orfisherprofessionalization
34FAO.2018.Expenditureandwillingness-to-paysurveyofCaribbeanbillfishanglers:summaryreport.Gentner,B.andWhitehead,J.FAOFisheriesandAquacultureCircularNo.1168.Rome,Italy.35ResolucionMedioAmbiente,No24-2009.SecretariadeEstadodeMedioAmbienteyRecursosNaturales.2009.
15
(althoughboththoseinterventionswouldsupportimplementationofthiscase).Itincludesaninvestmentinpatrolvessels,trainingandadministrationatstartupofU.S.$500,000,andongoingadministrativeandoperatingcostsofU.S.$480,000.Thisisfocusedalmostentirelyonenforcement.Witha$30userfee,thetrustisabletoachieveapositivecashflowinyear4,andmaynotrequireadditionalfundraisingovertenyears.However,itwillfullyutilizetheinitialU.S.$1millionraisedatthestartup,consistingofaU.S.$500,000grantandU.S.$500,000loan.Theloanisrepaidover10yearsata6%rateofinterest.
AlsoincludedinthisoptionarelimitedresourcestoimprovethemanagementofFADs,consideredasignificantsourceofconflictinthisfishery.ThiswouldconsistoftheproactiveregistrationandmanagementofFADs.
Inthiscomponent,atotalof800FADsareregisteredbyrequiringanumberedstickeridentifyingtheownerorasystemsimilartotheU.S.usesforlobsterorcrabfloatsthatisuniquetoeachowner.Itwouldrecordinformationsuchasconstructiontype,dateplaced,coordinates.AbudgetofU.S.$40,000isproposedinthefirstyear,followedby$20,000inthesecondyear.Enforcementactivitiesaresharedwiththeareaclosureenforcementbudgets(seeAppendixD).
Theentity’scoremaintenanceandenforcementresourcesperformthenecessarytasksofmaintainingthisFADmonitoringsystemandusinggatheredinformationtopromotethesustainableandefficientuseofFADsamongbothartisanalandrecreationalsportfishingsectors.AsFADsareoneofthesignificantsourcesofconflictinthisfishery,establishingandimplementingaFADmanagementsystemshouldbeconsideredanearlyfirststeptoimprovingmanagementofthefishery.
FinancialandRiskAnalyses
Itischallengingtomeaningfullyconductafinancialorriskanalysisassociatedwithoutaspecificbusinesscase.Thatacknowledged,aswithanywildcapturefishery,theinherentriskstoresourceswhollywithinanaturalsystemarepotentiallythelargestchallengetonotonlyfinancialbutenvironmentalandsocialreturns.Governance,social,andfinancialrisksalsoexist.Foranypotentialinvestmentintheregion,somecommonriskswillremainconsistent,including:
- Overharvesting- Weakmanagement- Waterpollution- Habitatdegradation- Conditionsassociatedwithclimatechangesuchasincreasedtemperatures,acidification,etc.
Theimpactofnotimplementingmeasureswithinabroaderframeworkoffisheriesreformmaybesignificant,asimprovementsinoperationalefficiencyandimprovedmarketvaluewilllikelyresultinincreasedmortality,asdetailedbyHoydal.36Decliningcatchlevelsforbillfishandotherspeciesarelikelytonegativelyimpactfoodsecurityandemployment,recreationalfisherytourismvalue,aswellasoverallincomes,livelihoodsandexportearningsacrossallfisherystakeholders.
36FAO.2016.“Findingsoftheindependentcost-benefitassessmentoftheoptionsforstrategicre-orientationofWECAFC”byKjartanHoydal.FAOFisheriesandAquacultureCircular.No.1117.Bridgetown,Barbados.
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Inadditiontotheabove,thiscasehassignificantrisksassociatedwith:
- Structure–developingtheappropriateandlegalstructurecapableofeffectivelyengagingtherecreationalsectorandensuringthetransparentremittanceoffundsbetweenthetwosectorswillbechallenging.Thiswillrequiresignificantlocalsupportandcommitmentfromarangeofstakeholderstobeeffectivelyimplemented.Thelikelihoodofitssuccessisdirectlyrelatedtotheavailabilityofoperationalcapacity.
- CreditRisk–consideringthelackofestablishedcashflowsandequityintheproposedmechanism,creditriskissignificant.Thismaybemitigatedthroughtheuseofgrantfundingand/orguaranteemechanisms.
- ExecutionRisk–ensuringthetrustmechanismhasthecapacitytoachieveitsmissionandobjectiveswillbehighlydependentontheoperationalcapacityofthetrust.Intheabsenceofaneffectiveandtrustedexecutiveandmanagement,itwillbechallengingtoensurestakeholderbuyin.Thismaybemitigatedbyengagingordevelopinglocalcapacitywithexperienceinthissector.
- RegulatoryRisk–levyingafeewithoutexpresspermissionfromtherelevantauthoritieswillpresentachallenge.Thismaybemitigatedbyworkingwithentitiesthathavealreadyreceivedlegalpermissiontolevythesefees.
Economic,socialandenvironmentalcostsandbenefits
Likefinancialandriskanalyses,assessingtheeconomic,social,andenvironmentalcostsandbenefitsisdifficultatthistime;but,creatingatruststructureortacklinganyoftheproposedinterventionsshouldhavesomehighlevelbenefits.ThesemaybedefinedthroughthelensoftheUnitedNationsSustainableDevelopmentGoals(SDGs).
SDGalignment
TheprimaryrelevantgoalsareSDG12–SustainableConsumptionandProductionandSDG14–LifeBelowWater.
SDG12–SustainableConsumptionandProductionSustainableconsumptionandproductionisaboutpromotingresourceandenergyefficiency,sustainableinfrastructure,andprovidingaccesstobasicservices,greenanddecentjobsandabetterqualityoflifeforall.Itsimplementationhelpstoachieveoveralldevelopmentplans,reducefutureeconomic,environmentalandsocialcosts,strengtheneconomiccompetitivenessandreducepoverty.37
Keytargetsincludethesustainablemanagementandefficientuseofnaturalresources;thereductionoffoodwaste;encouragingcompaniestoadoptsustainablepracticesandtointegratesustainabilityinformationintotheirreportingcyclesaswellassupportdevelopingcountriestostrengthentheirscientificandtechnologicalcapacitytomovetowardsmoresustainablepatternsofconsumptionandproduction.38
37https://www.un.org/sustainabledevelopment/sustainable-consumption-production/38https://www.un.org/development/desa/disabilities/envision2030-goal12.html
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SDG14–LifeBelowWaterAstheFAOstates,“Fisheries….offerampleopportunitiestoreducehungerandimprovenutrition,alleviatepoverty,generateeconomicgrowthandensurebetteruseofnaturalresources.”39
SDG14specificallycallsforimprovingaccessforsmallscaleartisanalfisheriestomarineresourcesandmarkets.UnderthisSDG,theFAOisaddressingthefollowingrelevantindicators:40
- Proportionoffishstockswithinbiologicallysustainablelevels
o Takingproperaccountoffishingeffortandmortalitythroughimproveddatacollectionandtraceabilityandthenusingthattoadvocateforappropriatefishingeffortandmethodsinallfisheries,wouldreducelandingsofbillfish,thusreducingmortalityofthisdepletedstock.Intheshort-term,thiswouldbeanindirecteffect.Inthelong-term,assumingappropriatemanagementandgovernance,thiswouldbedirectlyaffected.
- Progressbycountriesinthedegreeofimplementationofinternationalinstrumentsaimingto
combatillegal,unreportedandunregulatedfishing
o Implementingadatacollectionandtraceabilitysystem,wouldprovideabasistoreduceillegal,unreportedandunregulated(IUU)fishing,improvecompliancewithICCATrequirementsandU.S.andEUseafoodimportmonitoringrequirements.
- SustainablefisheriesasapercentageofGDPinsmallislanddevelopingstates(SIDS),least
developedcountriesandallcountries
o Improvingsupportservices(bestpracticesforhandling,processing,etc.),leadingtooverallincreasedqualityofproductfordomesticconsumptionandexportintheregionisexpectedimproveoveralleconomicvalueoffisheryproducts.InlocationslikeGrenadaandtheDR,fisheriesareasmallpartofnationalGDPwithmuchroomforincreaseinvaluewithoutanincreaseinvolume.
- Progressbycountriesinadoptingandimplementingalegal,regulatory,policy,orinstitutional
frameworkwhichrecognizesandprotectsaccessrightsforsmall-scalefisheries
o Byimprovingdataaggregationandstrengtheningthecapacityofdomesticfisherorganizations,theproposedinitiativesbuildslocalcapacitytorecognizeandprotectaccessrightsforfishersandfortherelevantnationstocomplywithICCATrequirements
Recommendedtimescale
GiventheapparentprogressmadebytheBluefinanceinitiativeundertheMinistryoftheEnvironment,itwouldappearthatinitiativehasamorerobusttimescaleincomparisontoestablishinganew,independenttrust.Ineithercase,astructuredapproachtotestingpilotprojectssuchasthisshouldbeundertakentocontinueforwardmomentumintheregion.
39http://www.fao.org/sustainable-development-goals/goals/goal-14/en/40http://www.fao.org/sustainable-development-goals/goals/goal-14/en/
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Replicabilityandscalability
Onceamodelthatcaneffectivelyengagetherecreationalfisheryinsupportofconservationandfisherymanagementhasbeendeveloped,structured,andtestedintheDR,ideallywithmissionalignedpartnerssuchasBluefinance,moreinformeddecisionscanbemaderegardingreplicationandscale.Theoverallprocessproposedhereprovidesameansforassessingpotentialmodels.Ifimplemented,theapproachproposedintheDRwouldprovidevaluablelessonsforreplicabilityandscalabilityacrosstheregioninsomeofthemostdatapoorandweaklygovernedfisheries.LessonslearnedfromthisandrelatedprojectssuchastheonebeingconsideredinGrenadashouldbeusedtoimplementsimilarprojectsinothergeographiesandfisheriesintheWECAFCregion,whilepartiesaresimultaneouslybringingtogetherthecaseforanRFMO.
RecommendedsolutionTheproposedtrustmechanismisrecommendedifonlytoaddresstheinformalandopaquenatureofcurrentpaymentsbetweentherecreationalandcommercialFADfishery.Whilenotan“attractivebusinesscase”perse,ithasaroletoplayinimprovingthetransparencyofpaymentscurrentlybeingmade,aswellassupportingtheestablishmentandenforcementofabillfishspawningareaandimprovedFADmanagement.Induecourse,andundertheappropriateleadership,itmayalsoengageinsupportingtheprofessionalizationofthelocalrecreationalcharterfleetwiththegoalofimprovingbillfishsustainabilityintheregion.
Giventheoperational,structural,andfinancialrisksidentifiedinthisdocument,thefinancialviabilityoftheproposedtrustmechanismisuncertainandislikelymodest.Inordertoaddressthisriskandensurelong-termsuccess,werecommendthatCIandtheFAOexplorecollaborationwiththeaforementionedinitiativedevelopedbyBluefinance.Thismaypresentanopportunitytoachieveoperationalandgeographicsynergiesgiventhecommonmissionaroundmarineprotectedareas.
19
AppendixA–BasicSuccessfulEnterpriseCriteria
Tomakeaninvestmenttopromotetheeconomic,environmental,andsocialsustainabilityoffisheriesintheDR,aninvestibleentitymustexistandshouldmeetbasiccriteriaforsuccessfulenterprisemanagement,includingtherequirementsbelow:
- LegallyrecognizedbythecountryoftheDR- Experiencedmanagement(atleasttwoyearsofoperations)- Atleasttwoyearsofprofitableoperations- Currentandviablefinancialplan,includingannualizedinvestmentreturns,financinghistory,
financialprojections(profitandloss/balancesheet),andcollateral- Currentandviableoperationalplan,includingstrongcustomerbase,clearvalueproposition,
geographicandbusinessriskmitigationstrategies,scalability,awell-developedandtestedbusinesscase,firm-levelandmarket-levelupgradingstrategiesandpremiums(includingcertificationoptions),andmarketanalysis
- Activitieswillhavemeasurableandmeaningfulenvironmentalandsocioeconomicoutcomesforthelocalcommunity
- Clearopportunitiestocreatevaluebyimprovingthesupplychain- Meaningfulengagementoflocalfishersininfluencingmanagementandfisheryaccess- Strongrecognizedleaderorleadersinthefishingcommunitywhoinfluencemanagementand
stakeholders- Financialmodelbasedonthebiologyandfishingeffortsforthefisherythatshowsreturns
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AppendixB-Scenario1–ExportSubstitution
Asnotedinthecontextualanalysis,thedomesticcommercialfisheryinDRappearsagoodopportunitytomeetsomeoftheseafooddemandcurrentlybeingservedbyimportedseafood.TheDR’slargeandwellestablishedtourismindustryrepresentsagoodpotentialmarketforlocallysourcedseafood,inkeepingwithseveralconsumermarkettrends.
Therealityissignificantlymorecomplex.Asreferencedinthecontextualanalysissectiononinfrastructure,thecommercialFADfishermenrarelycarryiceonboardtheirvesselsandcoldchainfacilitiesarerudimentary41Becauseofthis,domesticlandingsareofpoorqualitysinceonceoutsidesafehandlingtemperatures,seafooddeterioratesrapidly,quicklylosingqualityandsanitation.Intheabsenceofanorganizedcoldchaintodeliverlandedproductstoprocessorsortomarket,productcontinuestodeclineinqualityuntilitiseventuallynolongersuitableforconsumption,leadingtowastagethatultimatelyrequiredgreaterharvestratestoachieveprofitsequaltoamoreeffectivevaluechain.Furthermore,theFPIsandprojectresearchrevealedthatwhilelandingsarelowvalue,theycompetewithstillrelativelycheapimports,andthereisinsufficientmargintojustifytheadditionalinvestmentthatwouldbenecessarytoorganizefishers,improveonboardstorageandhandling,andsecuremarketaccess.Untilthesepricescanbeimproved,itwillbedifficulttojustifyeithermarketorvaluechainbasedinvestments.
Finally,giventherelativelylowpricesofimports,itwasnotpossibletodemonstrateafinancialincentivethatwouldjustifychangesinpracticesormanagementtoachieveanymeasureofsustainabilityinfisheries.Rather,giventheopenaccessnatureofthefisheryandtherelativelyweakenforcementoffishingregulations,therewasahighassessedriskofexacerbatingoverfishingshoulddomesticmarketsproveviable.Thatis,improvingthedomesticmarketwouldlikelyresultinoverfishing.
41Gentneretal.,2018.
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AppendixC–TrustRevenueAssumptions
Forthepurposeofthisdocument,avisitorfeeperanglertripisproposed.Thisischargedtonon-residentanglersfishingintheDR.Thisfeeisconsistentwithsimilarrecreationalfishingfeesinothertourismdestinations.CaboSanLucascharges$46perannum,whileCostaRicacharges$50fortheyear.42Itisalsowellwithinwiththewillingness-to-paysurveyofthefishery,whichindicatedanglerswerewillingtopayU.S.$280upto$439peryeartoagovernment-administeredfund.43
Thenumberofvisitorswhowouldbesubjecttothisfeearemoredifficulttodiscernduetoarangeofvariables.Whilenumbersfromthemainmarinasarerelativelywelldocumented,thetotalnumberofvisitorsisexpectedtobehigherduetothetwentyorsounregulated,unofficial“pirate”charteroperatorsthatrunsplitcharters,workingthebeachesorusedbytheall-inclusiveresorts.44Akeycomponentoftheenforcementandtransitionactivitieswillbetoprofessionalizetheseoperatorsandtoensuretheirclientsarepayingtheanglerfee,aswellaspricesthatdon’trequirebillfishharvestsalestoprovideadequateprofitmargins.
Forthepurposesofthemodel,weassumeatotalof7,000boattripsperyear,atthelowerendoftheestimatespreparedbytheGentnerConsultingGroup.
Forthepurposesofthemodel,weassumeonly50%ofvisitorseligibletopaythefeeactuallypaythisfeeinyear1,aproportionthatgraduallyincreasesto75%byyear5.
42Gentner,B.PersonalCommunication.July2018.43FAO.2018.Expenditureandwillingness-to-paysurveyofCaribbeanbillfishanglers:summaryreport.Gentner,B.andWhitehead,J.FAOFisheriesandAquacultureCircularNo.1168.Rome,Italy.44Genteretal.,2018.
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AppendixD–TrustStartupAssumptions
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AppendixD–Trust-SpawningAreaClosure&FADManagement(10Years)
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AppendixE–AdditionalConservationInterventions
InadditiontotheproposedspawningareaclosureandtheproactiveregistrationandmanagementofFADs,additionalconservationinterventionsrecommendedincludetheregistrationoffishersandtheuseoffisherconservationagreements.
FisherConservationAgreements
Inthisintervention,fishersareengageddirectlyandencouragedtosignformalco-managementconservationagreementsthatengageaformofcompensationforfollowingpracticesthataremutuallyagreedwithstakeholderrepresentativesandthetrustmechanismboard.TheseagreementsshouldpromotebillfishsustainabilityandsustainorimprovethevalueofbothsportandartisanalFADfishing.Billfishharvestreductionagreements,potentiallyseasonal,withlinkedagreedmodesofco-operatingaroundFADsamongsportandartisanalfishersmayformbaseagreements.
Benefits
Fisherswhoaretransitioningintotherecreationalcharterindustryareprovidedsupporttoprofessionalizetheirvessels.Thisincludessecuringthenecessaryinsurancealongwithlifejackets,safetyequipmentandcommunications.
Discussion
Dependingonthetotalnumberofvesselsandfisherstargeted,andthetypesofinterventionsproposed,thecostsofthisoptioncanrapidlyescalate.Thereisariskthattheadditionalcostswillnotresultincommensurateincreasesinrevenueinthetrustmechanism,resultinginanincreasednegativecashflow.
Basedonthemodestrevenuesandtheneedtoestablishaneffectiveentity,weproposethisinterventionisprioritizedoncethetrustmechanismhasbeenstabilized.
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AppendixF–Bluefinance
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27
DR Business case: Investing in Investing in Sustainable Fisheries in the Dominican Republic
Risks identified and addressed in the business case development process for the creation of a trust mechanism to secure a marine managed area to protect billfish spawning grounds and improve FAD management in the EEZ of the Dominican Republic, included Overharvesting, Weak management, Water pollution, Habitat degradation, Conditions associated with climate change such as increased temperatures, acidification, etc.
Potential impacts Mitigation Recommendations Monitoring of indicators
Environmental The catch of fish may increase due to better FAD fisheries management and reduced conflicts. Fishing per definition may have environmental impacts, particularly in case overfishing occurs, but also in terms of impact on aquatic biodiversity, bycatch of endangered, threatened and Protected species, as well as on habitats. Impact identified at the start of the business case development process included: Increased billfish harvests, Water pollution, Habitat degradation, Conditions associated with climate change such as increased temperatures, acidification, etc.
The business case aims to support the creation of a trust mechanism to secure a marine managed area (MMA) to protect billfish spawning grounds and improve FAD management in the EEZ of the Dominican Republic. The MMA would contribute to the reduction of billfish catches and the conservation of this species in the EEZ in the DR, but will also have a positive impact on the stock status in wider ABNJ, as the species is highly migratory. Recreational/sport fisheries promoted by the business case will be catch and release fisheries, which will reduce harvesting and mortality of billfishes. The FAD fisheries regulations supported by the project will ensure better management of the FADs, reduce bycatch, promote catch and release of billfish, reduce catch of juveniles, as well as reduce conflicts (see governance impacts) Climate change adaptation is not specifically addressed in the business case. The size of the MMA is sufficiently large to expect that the area will remain a spawning area for billfish for some more time. Further investigations in the mid-term will be required.
A fishery Performance Indicator study (FPI) was conducted for the fishery, which enables monitoring against the indicators applied in the FPI. The FADs regulation enforcement and the reports on monitoring and enforcement of the MMA will demonstrate the usefulness and impact of the regulation and the MMA on fish landings.
Governance - Weak Fishery Management - Inadequate Legal Framework in
the Dominican Republic and particularly regulation of pelagic fisheries
- Inadequate Monitoring and Enforcement of the fishery
- Limited organization of fishers
Key interventions included: ▪ The project has supported in the
business case development process the review of the national fisheries legislation and the Government has taken this up. Currently (2019) the government has a draft fisheries (and aquaculture) act that is undergoing a stakeholder review process, supported by FAO legal assistance.
▪ Linkages have been established with ICCAT to share data and information on pelagic stocks covered by ICCAT (e.g. tunas and billfishes), which will contribute to implementation and (as necessary) update of regulations for FAD fisheries management.
▪ The institutional capacity at the CODOPESCA (Fisheries authority) is limited and it is not expected that this will change soon. Capacity building interventions are provided by various donors.
▪ The CODOPESCA is however supportive of instituting and enforcing billfish harvest control rules, improving its fishing licensing system, and improving data collection and analysis in fisheries. These actions will contribute to the success of the business case.
▪ The project has also worked on strengthening fisherfolk organizations in the DR, which has resulted in some better managed organizations of small-
Enacted FAD fisheries management regulations and fisheries and aquaculture act. Stakeholder meeting reports between recreational fisheries, small-scale commercial fisheries and government agencies. The draft fisheries act incorporates mechanisms for mediation and to resolve conflicts between sectoral stakeholders and with other sectors.
scale fishers. However, the business case will need to build linkages during implementation with the organizations for continuous capacity building, given the (likely) transition of staff and for succession planning of the leadership of these organizations.
Social. The business case noted some conflicts between the recreational and commercial fishers, which require to be resolved for successful implementation, as well as some fishers may not be interested in compliance with the business case arrangements
Key interventions identified include: ▪ Incorporation of a mechanisms for
mediation and to resolve conflicts between fisheries sector stakeholders and with other sectors in the new fisheries and aquaculture act.
▪ Stakeholder support will be increased through transparent payments from a formalized trust mechanism to compensate commercial fishers for improved FAD management.
▪ Stakeholder meetings to report on and discuss progress with the business case implementation and the trust will guarantee transparency.
Meeting minutes of stakeholder meetings. Annual (audited) reports of the trust.
Enterprise. Impacts identified at the start of the business case development process included: lack of transparency in payments in an informal system of transfers from recreational fishers to commercial fishers that is currently being tested.
The business case formalization through an notarized MoU or legalized contract and the establishment of the Trust will support the formalization (system) of the transactions. The transfers of funds from the trust to fisherfolk organizations will likely have a positive effect on membership and strengthen the organization of fishermen. Capacity building of the leadership of the fisherfolk cooperatives in the management and operations of a cooperative will help ensure the sustainability of the system, as well as transparency.
MoU or contract. Annual (audited) reports of the trust. Minutes of fisherfolk organization meetings and lists of participants.
