1. MANAGEMENT OF SHARED BALTIC FISHERY RESOURCES by Robert Aps Estonian Marine Institute University of Tartu

2. RESOURCE CONFLICT The most fundamental form of conflict Contracting Parties IBSFC are dealing with is that over fishery resources. The direct way of resolving resource conflicts is by each Contracting Party individually exploring alternative resource allocations until a mutually acceptable allocation (i.e. deal) is found.

3. INTERACTION A particularly challenging problem is the understanding of various forms of interaction between Contracting Parties in resolving the resource conflicts that is enabling them to coordinate their activities, cooperate to reach common objectives, or exchange fishery resources to better achieve their individual objectives.

4. NEGOTIATIONS Contracting Party negotiates with other Contracting Parties in order to get better access to internationally regulated Baltic fishery resources. Through negotiation, Contracting Parties are also attempting to reach agreement on the division of the shared fishery resources or on a mutually useful exchange of their own resources.

5. NEGOTIATION AIMS Negotiation aims at reaching some allocation of resources that is acceptable to all Contracting Parties.

6. NEGOTIATION POSITION AND INTERESTS Negotiation position of an Contracting Party may be formulated in terms of the resources that Contracting Party wants to acquire from its negotiation counterpart. Negotiation interests of the Contracting Party reflect the underlying goals it wants to achieve using these resources.

7. NEGOTIATION ISSUES There are two main negotiation objects: 1) Setting TAC (how much TAC may differ from the scientific advice provided by ICES) 2) Re-allocation of the fishery resources when and as necessary (establishing of new allocation key)

8. TAC NEGOTIATIONS Baltic cod, herring, sprat and salmon

9. NEGOTIATION PROTOCOL Negotiation protocol is a repeated process of making a offer and a counter offer until Contracting Parties accept. The utility functions that express preferences of Contracting Parties over outcomes are essential in their decision making.

10. NEGOTIATION PROTOCOL The most basic form of negotiation is based on a simple request protocol: 1) Contracting Party proposes deal 2) negotiation partner either accepts of rejects A bargaining dialogue is a series of request dialogues that terminate once an Contracting Parties accepts a proposal. An interest-based negotiation (I. Rahwan et al., 2004) dialogue is a mix of bargaining, information seeking and persuasion dialogues.

11. INTEREST BASED NEGOTIATION The processes of interest-based negotiation: acquiring information, resolving uncertainties and revising preferences normally take place as part of the negotiation process itself. In adjusting and adapting their strategies during negotiations, learning Contracting Parties are more likely to achieve better outcome.

12. ARGUMENT Argument is a piece of information that may allow a negotiation partner to justify its negotiation stance; or influence another partners negotiation stance ( Jennings et al., 1998 ).

13. ARGUMENTATION BASED APPROACH Argumentation-based approach ( I.Rahwan et al., 2004 ) allow Contracting Parties to exchange additional information, or to argue about their beliefs and other attitudes during the negotiation process.

14. COMMITMENTS During a negotiation dialogue, a Contracting Party may assert information about its intentions and beliefs. Therefore there is a need to capture and store the commitments Contracting Parties make during the negotiation and to specify how these commitments influence the subsequent unfolding of the negotiations.

15. COMMITMENT STORE Commitment store is a public-read information store that contains the information that a Contracting Party has publicly committed to.

16. COMMITMENT RULES Commitment rules specify when and how commitments are inserted to and removed from commitment stores.

17. CONFIDENCE BASED STRATEGY Confidence-based strategy ( Leen-Kiat Soh & Xin Li, 2004 ) : 1) a pipelined, one-at-a-time approach, 2) a confidence-based, packaged approach.

18. IBSFC TAC RECOMMENDATIONS 30 years of TAC negotiations under the IBSFC framework has shown that as a rule the TAC recommendations by fish stocks have always been higher than scientific advice provided by ICES

19. RE-ALLOCATION OF FISHERY RESOURCES CASE: Baltic Herring

20. TIME FOR CHANGE IBSFC is facing the difficult challenge to adjust its Baltic herring and cod stock management units to the structure of fish populations. In practical terms this means re-allocation of the Baltic herring fishery resources amongst IBSFC Contracting Parties. Estonia, Latvia, Lithuania and Poland became members of the European Community on 1st May 2004. Therefore, the problem of the Baltic herring and cod fishing quota re-allocation may move to a different political forum but its substance remains.

21. STOCK MANAGEMENT UNITS Up to 2004 IBSFC managed the Baltic herring in three management units: 1)Gulf of Bothnia (Subdivision 31), 2)Bothnian Sea (Subdivisions 30 + 29N) and 3)Herring in the Western and Central Baltic (Subdivisions 22-29S + 32).

23. MANAGEMENT DIFFICULTIES Mismatch between stock structure and management units created real difficulties for the rational use and conservation of the Baltic herring resources. For example, two components of the combined Baltic herring stock (Central Baltic herring in Subdivisions 22-29S + 32 and the Gulf of Riga herring) show distinct divergent biomass trends; currently stock biomass of the Central Baltic herring is historically low, whereas the herring stock in the Gulf of Riga is at a historical high.

24. NEW MANAGEMENT UNITS IBSFC Long Term Strategy WG proposed in 2003 a the new scheme for management of the Western and Central Baltic herring with five management units: 1) Western Baltic (Subdivisions 22-24), 2) Central Baltic (Subdivisions 25-29S + 32 excl. Gulf of Riga) 3) Herring in the Gulf of Riga. 4) Gulf of Bothnia (Subdivision 31), 5) Bothnian Sea (Subdivisions 30 + 29N)

25. RELATIVE STATBILITY For any revised allocation scheme to be acceptable to all IBSFC Contracting Parties fishing for the Baltic herring, the scheme must secure that each Contracting Party maintains the TAC share it would be entitled to under the existing allocation scheme irrespectively of the area split and independently of how the TACs might be composed.

26. WINNERS AND LOOSERS If the new allocation scheme on the Baltic herring would be agreed with individual allocations for each of the new management units then there will be winner and loser Contracting Parties. However, which Contracting Parties will be among the winners and which among the losers depend on the ratio between the TACs agreed for the individual new management units.

27. PAY BACK The percentage allocation of the herring in the Central Baltic would imply that Latvia would need to pay back 17.88 % of the herring TAC for Subdivisions 25-29S and 32 (excluding Gulf of Riga). This is obvious not possible and is suggesting that Latvia would need to pay its partners in some other currency, e.g. cod.

28. Allocation (%) of the Baltic herring TAC by IBSFC Contracting Party and by the Management Area TAC in tons143 000460006200035000 IBSFC Allocation key (%)22-2425-29S+32Gulf of Riga Estonia10,140,000,6440,30 Denmark, Finland, Germany, Sweden54,9588,5161,070,00 Latvia6,860,00-17,8859,70 Lithuania2,140,004,940,00 Poland20,1411,4937,930,00 Russia5,770,0013,310,00

29. ALLOCATION IN TONS Next table shows the same allocation in tons. Here those Contracting Parties with negative allocation get a TAC of zero tons (area by area). As the sum of positive allocations is more than 100, the allocations are adjusted to a sum 100 by down grading all with the same proportion. The difference is the new allocation minus the old allocation.

30. Allocation (t) of the Baltic herring TAC by IBSFC Contracting Party and by the Management Areas IBSFC Allocation Differen ce (t)22-24 25- 29S+32 Gulf of Riga TAC (t)143 000 460006200035000 Estonia14 500-60033514 105 Denmark, Finland, Germany, Sweden78 579-5 74340 71532 1210 Latvia9 81011 0850020 895 Lithuania3 060-46402 5960 Poland28 800-3 5675 28519 9480 Russia8 251-1 25107 0000

31. ALLOCATION IN € Table shows the allocations in €. The prices are weighted by the area TACs and prices per ton are different in each area. The difference is the new allocation minus the old allocation. Note that the TAC difference can be 0 while the value in € is different from 0. In this example made for illustrative purposes only, Latvia would gain about 2 059 260 €, while all other Contracting Parties will be among the losers.

32. Allocation (value in €) of the Baltic herring TAC by IBSFC Contracting Party and by the management units IBSFC Allocation (€) Difference (€)22-2425-29S+32 Gulf of Riga TAC value 30 900 000 11 500 000 12 400 0007 000 000 Estonia3 133 260-245 208067 0522 821 000 Denmark, Finland, Germany, Sweden 16 979 550-376 722 10 178 6506 424 1780 Latvia2 119 7402 059 260004 179 000 Lithuania661 260-142 0510519 2090 Poland6 223 260-912 2721 321 3503 989 6380 Russia1 782 930-383 00701 399 9230

33. TRADING SCHEME If a scheme with strong equity is introduced then this must be associated with a trading scheme allowing those countries that have fishing rights but no access to the area to trade these rights with countries that have free fishing capacity and access to the areas. The interesting problem is: what is the value of a quota without access rights.

34. Negotiating positions for seller-buyer of fishing rights assuming that the seller if he has access right also have fishing capacity available Value to seller Value to buyer With Access rights With Surplus fishing capacity With access rights Without Surplus fishing capacity Without access right Full market value Nil With access rights Full Market value Full market prices No deal Without access rights NilReduced market price No deal

35. POSSIBLE SOLUTIONS In practise there could only be two solutions possible: 1)strong equity without regard for access and combined with trading or swapping of quota rights or 2)an allocation scheme based on upper bound equity either defined as an absolute upper bound or a relative upper bound.

36. CONCLUSIONS If a scheme with strong equity is introduced then the revised management system should include the following elements: 1)existing allocation key is applied to all herring stocks/management units, i.e. herring allocation for the subdivisions 22-29S and 32 would apply to all herring management units into which this area might be split; 2)access right to fishing area be made explicit in the system; present system for quota swaps will be used to ensure efficient use of the fishing capacity; 3) system with prices for each herring stock/management unit will be agreed for use in quota swaps. 4) Implementation of upper bound equity imply the political solution.

37. RFERENCES R. Aps, H. Lassen, J.C. Rice, K. Andrejeva4 and J. Aps. Re-allocation of the Baltic herring fishing possibilities.Proc.Estonian Acad.Sci.Biol.Ecol. 2004, 53, 4, 306-316 N. R. Jennings, K. Sycara, and M. J.Wooldridge. A roadmap of agent research and development. Journal of Autonomous Agents and Multi-Agent Systems, 1(1):7.38, 1998b. URL citeseer.ist.psu.edu/jennings98roadmap.html. Leen-Kiat Soh and Xin Li. Adaptive, Confidence-Based Multiagent Negotiation Strategy. AAMAS'04, July 19-23, New York NY, USA, 2004. I. Rahwan, P. McBurney, and L. Sonenberg. Bargaining and argument- based negotiation: Some preliminary comparisons. In P. M. I. Rahwan and C. Reed, editors, Proceedings of the AAMAS First International Workshop on Argumentation in Multi-Agent Systems (ArgMAS), New York NY, USA, 2004. I. Rahwan, L. Sonenberg, and F. Dignum. Towards interest-based negotiation. In J. Rosenschein, T. Sandholm, M. J. Wooldridge, and M. Yokoo, editors, Proceedings of the 2nd International Joint Conference on Autonomous Agents and Multiagent Systems (AAMAS-2003), pages 773.780. ACM Press, 2003.