POLICY DEPARTMENT. Fisheries POLICY DEPARTMENT STRUCTURAL AND COHESION POLICIES STRUCTURAL AND COHESION POLICIES

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1 Directorate-General FOR Internal Policies POLICY DEPARTMENT STRUCTURAL AND COHESION POLICIES Directorate-General FOR Internal Policies POLICY DEPARTMENT STRUCTURAL AND COHESION POLICIES B B anddevelopment Rural Development AgricultureAgriculture and Rural and Education CultureCulture and Education Role The Policy Departments are research units that provide specialised advice to committees, inter-parliamentary delegations and other parliamentary bodies. Fisheries Fisheries Regional Development Regional Development Agriculture and Rural Development Culture and Education Fisheries Regional Development Transport and Tourism Documents Visit the European Parliament website: PHOTO CREDIT: istock International Inc., Photodisk, Phovoir ISBN REGULATORY AND LEGAL CONSTRAINTS FOR EUROPEAN AQUACULTURE Policy Areas Transport Tourism Transport and and Tourism REGULATORY AND LEGAL CONSTRAINTS FOR EUROPEAN AQUACULTURE STUDY EN DE ES FR IT 2009

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3 DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT B: STRUCTURAL AND COHESION POLICIES FISHERIES REGULATORY AND LEGAL CONSTRAINTS FOR EUROPEAN AQUACULTURE STUDY

4 This document was requested by the European Parliament's Committee on Fisheries. AUTHORS Ocean Law Information and Consultancy Services (UK) Poseidon Aquatic Resources Management (UK) Lead Authors: C. Hedley, T. Huntington RESPONSIBLE ADMINISTRATOR Jesús Iborra Martín Policy Department Structural and Cohesion Policies European Parliament B-1047 Brussels LINGUISTIC VERSIONS Original: EN Translation: DE, ES, FR, IT. ABOUT THE EDITOR To contact the Policy Department or to subscribe to its monthly newsletter please write to: Manuscript completed in September Brussels, European Parliament, This document is available on the Internet at: DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorized, provided the source is acknowledged and the publisher is given prior notice and sent a copy.

5 DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT B: STRUCTURAL AND COHESION POLICIES FISHERIES REGULATORY AND LEGAL CONSTRAINTS FOR EUROPEAN AQUACULTURE STUDY Abstract This study reviews key regulatory and legal constraints in aquaculture policies in the EU and in Member States, focussing on the EU s main producers France, Greece, Italy, Spain and the United Kingdom. Identified constraints and burdens are assessed against both the needs of the EU aquaculture industry and contemporary principles of better regulation and recommendations to lessen, rationalize or remove the constraints and proposed. IP/B/PECH/NT/2008_176 Decemer 2009 PE EN

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7 Regulatory and Legal Constraints for European Aquaculture Contents LIST OF ABBREVIATIONS 5 LIST OF FIGURES 7 LIST OF TABLES 7 EXECUTIVE SUMMARY 9 1. INTRODUCTION Introduction and overview Aims and methodology AQUACULTURE REGULATION: EUROPEAN UNION Introduction Regulation of access and production Regulation of environmental impacts Trade and markets Institutional and governance arrangements AQUACULTURE REGULATION: MEMBER STATES Introduction France Greece Italy Spain United Kingdom AQUACULTURE REGULATION: THIRD COUNTRIES Norway Chile Other countries ANALYSIS AND RECOMMENDATIONS What are the problems? What can be learnt from third countries? What are the solutions? Summary of recommendations 90 REFERENCES 93 3

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9 Regulatory and Legal Constraints for European Aquaculture LIST OF ABBREVIATIONS ACFA Advisory Committee on Fisheries and Aquaculture AD Anti-dumping ADEME Executive Agency for Environmental Management (France) APL Clean Production Agreement ( Acuerdo de Producción Limpia CCFAM Canadian Council of Fisheries and Aquaculture Ministers CFP Common Fisheries Policy CMS Convention on Migratory Species CNRS National Centre for Scientific Research (Chile) CONAMA Environmental Commission (Comision Nacional de Medio Ambiente) (Chile) DFO Department for Fisheries and Oceans (Canada) ECJ European Court of Justice EFF European Fisheries Fund EIA Environmental impact assessment EIFAC European Inland Fisheries Advisory Commission EMAS Eco-Management and Audit Scheme EQS Environmental quality standard FAO Food and Agriculture Organisation of the United Nations FEAP Federation of European Aquaculture Producers FRAP Framework for Biodiversity Reconciliation Action Plans GATT General Agreement on Tariffs and Trade HACCP Hazard Analysis and Critical Control Point ICZM Integrated Coastal Zone Management IFREMER Institut Francais de Recherche pour l'exploitation de la Mer JACUMAR National Advisory Board for Marine Farming (Junta Asesora de Cultivos Marinos) (Chile) MASB Maximum allowable standing biomass MCS Marine Conservation Society MOU Memorandum of understanding MFCA Ministry of Fisheries and Coastal Affairs (Norway) MSFD Marine Strategy Framework Directive MRL Maximum residue limit NASAPI National Aquaculture Strategic Action Planning Initiative (Canada) NVE Norwegian Water Resources and Energy Directorate 5

10 Policy Department B: Structural and Cohesion Policies OECD Organization for Economic Cooperation and Development OFIMER National Interprofessional Office for Marine and Aquaculture Products (Office National Interprofessionnel des Produits de la Mer et de l Aquaculture) (France) OJ Official Journal of the European Communities PNA National Aquaculture Policy (Política Nacional de Acuicultura) (Chile) RAMA Environmental Regulations for Aquaculture (Reglamento Ambiental para la Acuicultura) (Chile) REDCAFE Reducing the Conflict between Cormorants and Fisheries on a Pan- European Scale RESA Sanitary Regulations for Aquaculture (Reglamento Sanitario para la Acuicultura) (Chile) RBMP River basin management plan SEA Strategic environmental assessment Sernapesca National Fisheries Service (Chile) SME Small and Medium sized Enterprise WFD Water Framework Directive WTO World Trade Organization 6

11 Regulatory and Legal Constraints for European Aquaculture LIST OF FIGURES Figure 1: Division of Responsibilities (Norway) 65 Figure 2: Organization of licence applications (Norway) 68 LIST OF TABLES Table 1: Recent Aquaculture Production (France) 48 Table 2: Recent Aquaculture Production (Greece) 51 Table 3: Recent Aquaculture Production (Italy) 53 Table 4: Recent Aquaculture Production (Spain) 55 Table 5: Recent Aquaculture Production (United Kingdom) 58 Table 6: Recent Aquaculture Production (Norway) 62 Table 7: Recent Aquaculture Production (Chile) 72 7

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13 Regulatory and Legal Constraints for European Aquaculture EXECUTIVE SUMMARY Background Modern aquaculture has overtaken capture fisheries and now produces over half the world s seafood. It has for several years been the fastest growing sector in any area of food production, with an average worldwide growth rate of 6-8% per year. The EU has not participated in this global development, however, and in recent years EU production has stagnated. The challenges for the EU aquaculture sector are numerous. For example, competition for space and limited access to water in coastal areas and river basins are important obstacles to setting up, developing or even maintaining aquaculture production sites. Competition with imported products is a major issue, particularly since stricter EU rules, notably on environmental protection, and higher labour (and other) costs generate competitive disadvantages vis-à-vis competitors. Entrepreneurs have difficulty gaining access to finance and investment, as the sector remains relatively unknown to investors and there is limited access to seed capital or loans for innovation in often a high risk environment. Other challenges include a lack of understanding, and sometimes an image problem, with respect to the general public; limited access to licensing; industry fragmentation; and insufficiency of medicines and vaccines. The principal EU policy formulation to date has been the Strategy for the Sustainable Development of European Aquaculture, adopted by the Commission in September 2002 and updated in April 2009 by a revised strategy Building a Sustainable Future for European Aquaculture A New Impetus for the Strategy for the Sustainable Development of European Aquaculture. The 2002 Strategy provided the first specific objectives for the aquaculture sector and set out policy directions to promote the growth of aquaculture, principally focussing on the key areas of assuring the availability to consumers of products that are healthy, safe and of good quality, as well as promoting high animal health and welfare standards; ensuring an environmentally sound industry; and creating long-term secure employment, in particular in fisheries-dependent areas. While the Commission recognized that significant progress had been made under the 2002 strategy, it acknowledged that the lack of growth in the EU sector meant that the industry s potential was not being fulfilled. Regulatory and legal burdens were among the factors identified as constraints to the development of the industry, and the Commission noted that one of the prime weaknesses (that the Strategy failed to address) was that the legal and administrative framework relied on actions and decisions falling primarily within the responsibility of national or regional public authorities. This led to the 2009 Revised Strategy which seeks to identify and address the causes of stagnation, with a view to ensuring that the EU remains a key player in this strategic sector. It is based on three main aims: to make EU aquaculture more competitive; to ensure that growth remains sustainable; and to improve the sector's image and governance. A wide-range of objectives and actions are identified, amongst which are several relating to better regulation, including: better implementation of EU legislation by Member States; reduction of administrative burden, including by continuing the programme of legislative simplification and reducing the administrative burden at EU level; ensuring proper stakeholder participation and consultation, as an essential component of better regulation and better governance; and ensuring the adequate monitoring of the aquaculture sector. 9

14 Policy Department B: Structural and Cohesion Policies Aim It is against this background that the present study seeks to examine one of these potential challenges regulatory and legal constraints. To a large extent, such constraints are of a cross-cutting nature: i.e. they form part of the policy, operational and commercial challenges such as access to space and water, environmental protection, licensing, etc. that have just been described. The burdens created by regulatory and legal provisions, however, are also challenges to be examined in their own right. Thus, the role of the legal or regulatory act needs to be examined both in its social, economic and political context and in its own right (against modern principles of regulatory practice). Aquaculture Regulation: EU Regulation of access and production Licensing There is no such thing as an EU aquaculture licence, and no provision for such in EU law. In principle, having regard to the Treaty, the EU could establish a system of EU licensing. To date the Commission has declined to forward such proposals principally on the ground of subsidiarity. Licensing systems developed at the Member State level, however, are subject to a number of criticisms including that application procedures are lengthy and costly; legislation and administration is complex and outcomes uncertain; and the period of validity of licences is too short to encourage investment. Access, zones and planning Access to suitable sites for aquaculture production is a critical issue for the industry but a variety of difficulties arise in obtaining it: a frequent lack of recognition for aquaculture as an equal user of water resources as compared with other users, such as fisheries or tourism; the aquaculture sector is often poorly understood, resulting in a low status as a stakeholder in freshwater and maritime activities and/or creating uncertainty or reluctance on the part of decision-makers to grant access; environmental impacts of aquaculture are often misunderstood, leading to a disproportionate use of the precautionary principle; and there is genuine competition for space. New opportunities are presented with respect to coastal and marine aquaculture through the Maritime Policy but there is currently no clear direction for aquaculture planning in the Maritime Policy. Animal health and welfare The legislative framework for disease control in aquatic animals has recently been fully reviewed and a new Directive was adopted in October 2006 but there remain some issues of a technical nature of the aquaculture industry. There are also concerns over the EU legal framework for the welfare of farmed animals which applies to fish but is not always possible to implement. Veterinary medicines The limited availability of authorised veterinary medicinal products to address health risks is a major problem for the aquaculture industry. The issue is partly commercial (the costs of developing and marketing a specific drug for a given disease and a given fish species 10

15 Regulatory and Legal Constraints for European Aquaculture may not be profitable for a pharmaceutical company) but legal and administrative provisions also create obstacles (notably at the Member State level). A review of the veterinary pharmaceutical legislation took place in 2003/4, leading to legislative amendments, but this only partly solved the problem. Food safety and standards An issue of particular concern for the aquaculture industry currently relates to organic production. EU regulation of organic agricultural production has been in existence for some time, but was not addressed to aquaculture until 2007 (Council Regulation (EC) No 834/2007). In 2008, the Commission adopted detailed rules to implement the 2007 legislation, but at that time considered that further discussion was needed for the elaboration of detailed production rules on organic aquaculture, and so these rules should be elaborated in a subsequent procedure. Currently, there are ongoing efforts for the elaboration of detailed implementing rules on organic aquaculture, but during this current period of economic recovery there remains some uncertainty for the organic aquaculture sector. Regulation of environmental impacts Water quality and status The EU s water policy recently been subject to a major review and in future will essentially be regulated under two instruments the Water Framework Directive (WFD), covering inland and coastal waters, and the Marine Strategy Framework Directive (MSFD), covering marine waters. At the core of the WFD is a set of environmental objectives, which include achieving good ecological and chemical status of surface water within 15 years of the Directive entering into force. The Directive was adopted in 2000 and full implementation is not foreseen for several years, although Member States are currently adopting one of the main management tools under the Directive River Basin Management Plans (RBMPs). For industry, there are a number of concerns about the Directive s potential to constrain the development of aquaculture. Producers express concerns about the classification of water bodies or the definition of "fresh pristine conditions" in this context. Other refer also to national Environment Quality Standards Limits set at very strict levels (e.g. for use of bath treatment medicines) because of fear of EU action (court challenge). An area of particular concern and considerable debate is the repeal of the Shellfish Waters Directive, and the issue of whether the WFD would provide, from 2013 onwards (the date of repeal), a comparable level of protection as that provided by the Directive 2006/113/EC. The view of the Commission (DG Environment), however, is that the WFD will provide at least the same level of protection, and in practice it is likely that adequate protection will be provided through the first RBMPs developed by Member States. The Marine Strategy Framework Directive (MSFD) has broadly similar objectives and a similar approach to the WFD for marine waters, but is not discussed in detail in this report. Invasive alien species An important gap was filled recently with the adoption of a Regulation concerning use of alien and locally absent species in aquaculture (Regulation (EC) No. 708/2007). The Regulation aims to create a framework governing aquacultural practices in order to ensure adequate protection of the aquatic environment (and aquaculture activities themselves) from the risks associated with the use of non-native species in aquaculture. However, a gap remains because of the lack of comprehensive regulation for other movements of invasive alien species. The aquaculture industry should maintain an interest in the development of more comprehensive measures at the EU level. 11

16 Policy Department B: Structural and Cohesion Policies Nature conservation A major problem for aquaculture is that certain wild species notably cormorants, herons and seals protected by EU nature conservation Directives (the Wild Birds Directive, 97/409/EEC, and the Habitats Directive, 92/43/EC) can pose a significant problem for aquaculture production in many areas because of their predation on aquaculture stocks (a problem exacerbated by successful environmental protection measures, which have allowed populations of the protected species to increase). The losses to European fisheries from cormorant predation alone, for example, are substantial estimated to be more than tonnes per year (European Parliament 2008), of which more than tonnes is from aquaculture installations and inland fisheries. In principle, Community legislation provides the necessary mechanisms to manage such conflicts but there is considerable uncertainty over the interpretation and application of these provisions, and a highly-variable situation in the Member States. Despite the Commission s recognition of the problem in the 2002 Strategy, and notwithstanding the substantial impact of predation, no practical progress has been made following the launch of the Strategy, and the problem is not addressed in the 2009 Revised Strategy. Nevertheless, at least in relation to cormorant predation, there have been long-standing calls for action. At international level, the issue of cormorants has been discussed by the Convention on Migratory Species (CMS) Scientific Council and the European Inland Fisheries Advisory Commission (EIFAC), and at the EU level, the issue has been on the agenda of the European Parliament since More recently, the issue has again been taken up by the European Parliament which adopted a Resolution in December 2008, recommending the development of a Pan-European Management Plan. Environmental impact assessment (EIA) One of the major areas of environmental legislation affecting aquaculture concerns environmental impact assessment (EIA). In practice there is wide variance in EIA procedures not only as between Member States but often within Member States, as countries with administratively and/or legislatively autonomous regions, or operating devolved government, may have separate provisions. Consequently, there is no uniform approach or practice to conducting EIAs for aquaculture projects in some Member States, an aquaculture project will rarely be subject to EIA, whereas in other Member States certain types of aquaculture project are subject to mandatory EIAs (e.g. certain aquaculture developments in France and Scotland). Furthermore, there appear to be considerable differences in the scope, methodology and determination of EIAs, with some Member States (or some localities within Member States) applying a much more precautionary approach in effect blocking or constraining aquaculture developments or applying more onerous conditions. There are also complaints in the industry about the length of time it takes to complete assessments, the cost of conducting assessments and the lack of guidance and predictability to the process. Strategic environmental assessment (SEA) Council Directive 2001/42/EC on the assessment of the effects of certain plans and programmes on the environment ( the SEA Directive ) requires a formal environmental assessment of certain plans and programmes (e.g. marine spatial plans), including those relating to fisheries and aquaculture, which are likely to have significant effects on the environment. Although there can be uncertainty as to whether a particular plan is subject to the requirement for SEA under the Directive, the SEA Directive is not generally reported as a constraint in European aquaculture. Conversely, the presence of an SEA (which will ordinarily be a factor in setting the framework for development consent within a particular field) can potentially provide assistance to the industry. Thus, whilst not preventing the 12

17 Regulatory and Legal Constraints for European Aquaculture need for a project-specific EIA, the surveys and data made available through the government-led SEAs will facilitate and reduce the costs of the EIA process. Moreover, they can increase the level of certainty for industry concerning approval of projects, as there will already have been some assessment of environmental impacts which have not impeded the inclusion of aquaculture development within the plan (depending, of course, on the precise contents and nature of the plan). This should mean that aquaculture developments have good prospects of obtaining consent unless significant environmental impacts are revealed through the EIA. Trade and markets International trade is governed by a complex series of agreements concluded under the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT). In a general sense this system is not controversial in the context of EU aquaculture although some particular features of the WTO system do create more complex impacts. The main one concerns so-called anti-dumping (AD) measures, a protective trade barrier which is imposed on dumped imports, i.e. products sold at less than the cost price in the exporting country market, which can cause significant injury to the receiving market. As regards aquaculture products, the EU has sought to invoke anti-dumping measures against Norway, Chile and the Faroe Islands concerning the import of farmed salmon. These measures have been controversial and have led to litigation both before the European courts and before the WTO Dispute Settlement Body. It should also be noted that EU rules for ecolabelling of fisheries products, including aquaculture products, are currently being considered. Institutional and governance arrangements A consequence of multiple legal regimes is multiple governance institutions. This applies both at EU level and at the Member State level. At the EU level, for example, several DGs within the Commission have competence over some matter relating to aquaculture policy (e.g. not only DG Mare, but also Environment, Sanco and others). At the Member State level, policy, law-making and administration may be split not only across different sectoral bodies but also across different administrative levels (e.g. central government, regional government and local government). This is not only a question of administration i.e. aquaculture stakeholders having to work with, report to and be subject to control by different bodies but also a matter of different policy and cultural governance i.e. different bodies will have different policy aims, perspectives and operating cultures. The obvious risk from the involvement of many bodies however, is that policies, regulation, administration and enforcement can come into conflict or overlap, or at least appear to do so. It appears to be a fairly common perception amongst aquaculture stakeholders that conflict and overlap occurs in aquaculture, although the extent to which this occurs is likely to be less than is perceived. The Commission has recognized that there is generally a need for better coordination of policies and for some challenges to be dealt with at EU, national and local/stakeholder levels. Aquaculture Regulation: Member States France France is one of the leading nations in Europe in terms of volume of aquaculture production, the quality of its system of education and research and the support of the producers organisations. However, despite good conditions for aquaculture extensive rivers, thousands of hectares of ponds and km of coastline the industry is 13

18 Policy Department B: Structural and Cohesion Policies considered to be far from reaching its potential, and has had virtually no growth for a number of years, with a gradual decline in the production of shellfish and freshwater species. The major issues currently in French aquaculture concern competition for and access to sites and related to that authorization for new facilities. In particular, anecdotal evidence indicates that it is effectively impossible to obtain authorization for new aquaculture facilities in France, because of the manner in which planning decisions in relation to access (e.g. competition in the coastal zone for space and water use, especially with tourism) and environmental assessment are made, and because of burdensome requirements for impact studies, waste control and monitoring. Other constraints include issues with EIA, the introduction of environmental controls that are more stringent than apply in some other Member States, the proliferation of protected predatory birds, such as cormorants, regional or departmental variations in the interpretation of the animal health rules, which can often depend simply on the administrator dealing with the question and can also often change frequently, and difficulties in relation to succession and/or handover of enterprises law. Greece Greece has had a long-standing tradition of aquaculture activity, although did not develop a substantial commercial industry until the 1980s. Production has grown from less than tons per year during the 1980s to over tons per year in recent years. According to industry estimates, production increased again in 2008 (to more than 130,000 tons) but it is believed to have peaked and industry participants anticipate a drop in production by Although there have been no detailed studies of potential legal and regulatory constraints in Greek aquaculture, it appears to be widely accepted amongst stakeholders that a comprehensive review of the legislative system is required. The volume of applicable legislation obviously varies over time, and is in fact difficult to calculate precisely, but at the time of this study was estimated that just in relation to the evaluation of aquaculture producer applications, the various Ministries need to consider: 39 laws in force (Acts, Presidential decrees and Ministerial decisions), 3 legal advices (Jurisprudences) and 35 legal interpretations (Encyclical letters) concerning establishment, and 46 laws in force, 20 legal advices and 35 legal interpretations concerning the environment. Furthermore, a variety of Ministries and other agencies have administrative responsibilities and stakeholders report a number of administrative difficulties in the process, including lack of coordination among the different bodies involved, overlapping competences, different approach-concept concerning common issues and the lack of demarcation zones for the various activities. The other key issue for Greek aquaculture concerns the difficulty of establishing aquaculture development in coastal and marine areas, where tourism in particular is a major competing use. Italy In terms of volume of production, Italy is in a broadly similar position to France although the aquaculture industries are quite different. The main components of Italian aquaculture consist of fresh water species (e.g. trout, catfish and sturgeon) and of euryhaline species, such as seabass and seabream. The review conducted for this study suggested that the Italian aquaculture sector is presented with various legislative constraints. Many of these are relatively common to other countries. For example, lack of harmonization, inconsistencies, uncertainty and delay created in administrative and regulatory processes 14

19 Regulatory and Legal Constraints for European Aquaculture as a result of large numbers of laws and multiple administrative agencies. Often the agencies have overlapping responsibilities, or unclearly defined functions in relation to aquaculture. Differences in administration, regulation and enforcement between regional autonomies can also create difficulties. Key issues relate to licensing (the obtaining of authorizations and permits, particularly for new plants, occurs only after long and detailed bureaucratic investigations); coastal/marine zone planning (most regional administrations have basic marine management plans); and support for organic standards. Spain Spain, which has almost km of coast, with varied topography and climate providing good opportunities for aquaculture, has an important aquaculture industry and is Europe s largest aquaculture producer, with an output of around tonnes in Spain has more than aquaculture installations and aquaculture is an important driver of development in coastal areas highly dependent on fisheries. Estimates suggest that aquaculture as an economic activity generated about 450 million euros in 2007 and created employment for more than To an extent, the legal and regulatory constraints perceived in Spain are similar to those reported elsewhere complexities in transposing and applying EU legislation; corresponding difficulties in domestic legislation, resulting in multiple legal and regulatory procedures and institutions; etc. Arguably, however, a key difficulty in Spain, which translates into a range of regulatory issues for the aquaculture industry, is the substantial decentralization of policy and regulatory authority to the Autonomous Communities. This leads to a lack of a favourable administrative framework for aquaculture, particularly directed towards the fiscal system, the (inconsistent) effectiveness of the public institutions and the (inconsistent) regulation of aquaculture operations. Specific issues that are reported include: the lack of any legislative coherence amongst the Autonomous Community legislatures, the lack of any administrative or regulatory coordination at the institutional level, differing autonomous legislative and executive systems leading to a proliferation of legislation, and thus to an inherent increase in the regulatory burden, the complexity of administrative procedures for obtaining authorizations, disparities between Autonomous Communities in the application of port fees and other taxes and the lack of definition of uses of coastal areas. There are also significant constraints caused by the presence of Natura 2000 sites. United Kingdom Aquaculture is a relatively new industry in the United Kingdom, with rapid development of the finfish industry since the 1980s and the shellfish industry since the 1990s. Commercial growth of the sector has been consistently strong, the value of aquaculture production increasing from 200 million per year in the early 1990s to over 650 million in 2007 (FAO 2009a). However, as with other Member States in recent years growth has stagnated and to an extent declined, although growth is likely to resume with the strengthening of salmon prices resulting from a significant decline in Chilean salmon production (see below). A wide number of issues are reported in the United Kingdom (Scotland), although many of these replicate the issues above. There is a perception, however, that the Scottish salmon industry is the most heavily regulated in the world. Specific issues of particular concern include: delay in licensing process; uncertainty of applications; disproportionate use of precautionary principle; and high threshold for EIAs. 15

20 Policy Department B: Structural and Cohesion Policies Aquaculture Regulation: Third Countries Norway Norway is one of the world s major aquaculture producers, accounting for more than tonnes in 2006, placing it 9th on FAO s list of top producers (FAO 2009), with steady industry growth and anticipated production of more than tonnes in Salmon is by far the major species, with production of salmon expected to reach about tonnes in Large trout makes up the majority of the remaining industry. Regulatory and administrative environment In the broadest analysis, aquaculture regulation in Norway is comparable to regulation in the EU there are rules governing aquaculture production and access to aquaculture sites, and a range of related rules governing environmental protection, food safety, animal welfare, etc. To an extent those rules are similar in nature or in standards to EU rules, and are in some cases aligned to the Community acquis. On the other hand, there are a number of fundamental differences between the EU and Norwegian regimes, in particular since the introduction of a new comprehensive and specific framework law for aquaculture in The express purposes of the Aquaculture Act (s. 1) are to promote the profitability and competitiveness of the aquaculture industry within the framework of a sustainable development and contribute to the creation of value on the coast. In policy terms, a major objective of the Act was to better meet the needs of the aquaculture industry while ensuring continued protection for the environment and social needs. Selected best practices in Norwegian aquaculture regulation - Legislative framework Norway is one of a small, but growing, number of countries which has developed a comprehensive and specific legal framework for aquaculture. The 2005 Aquaculture Act provides the basic legislative and administrative framework for aquaculture regulation, and to a large extent defines the relationship between aquaculture and other regulatory processes (e.g. environmental protection). Although it is not possible to analyse whether this legislative approach is more effective than other approaches, it is to be noted that the Act is credited with establishing an effective regulatory framework within Norway. - Administrative organization Although, as in many other countries, there are a number of agencies involved in the administration and regulation of aquaculture, the concentration of administrative functions in the Fisheries Directorate, combined with a clear definition of the roles, functions and relationships of and between the various agencies (in part provided in the Aquaculture Act itself) not only creates greater coherence but also provides a more efficient and accessible administrative structure for the industry. - Single window administration of licensing A single-window system exists for the processing of aquaculture licence applications, whereby the industry applicant deals with just one body the Fisheries Directorate. The Directorate then coordinates with other relevant authorities as part of their own processing of the application. The Fisheries Directorate ensures that statements and decisions are obtained from the local municipality, as well as various sector authorities, such as the County Governor (environmental authorities), Norwegian Food Safety Authority and the Norwegian National Coastal Administration. 16

21 Regulatory and Legal Constraints for European Aquaculture - Regulation of environmental impacts Norway has long-been, and continues to be, a leader in environmental regulation of aquaculture (see the Strategy for an Environmentally Sustainable Norwegian Aquaculture Industry, launched in June 2009 MFCA 2009). One of the notable features of the Norwegian approach is that much of the regulation is addressed specifically to aquaculture, or has specific conditions addressing the aquaculture sector. A second notable feature is the use made of self-regulation instruments (e.g. the NYTEK standard for fish escapes). The Government recognizes the balancing act between imposing government measures through law and allowing the industry to undertake measures (particularly of a more technical nature) on a more quasi-voluntary basis. - Environmental impact assessment Norway applies the Community acquis in relation to SEA, EIA and public participation, but there are two significant differences between aquaculture EIA in Norway and in the EU. First, in Norway the Directorate of Fisheries is defined as the competent authority, with responsibility for screening and conducting the EIA process in relation to aquaculture installations. Second, the Regulations include a specific threshold for the assessment of aquaculture. - Coastal zone planning Coastal zone planning at regional (county) level has been introduced to deal with the problems of integration that coastal zone planning at municipal level has not been able to solve, in particular coordination between the relevant sectors at regional level. - Transfer and mortgaging of aquaculture licences One of the key developments in the 2005 Aquaculture Act was the establishment of a legal right to transfer and mortgage aquaculture licences which permits a licence to be transferred between private parties without any public approval or additional licence. The new mortgage right means that the licence can be used as collateral for a creditor s security interest, contributing to greater predictability and improved access to capital for the industry. Chile Aquaculture is an important industry in Chile, particularly in some regions where the industry provides significant revenues and employment in areas otherwise lacking economic opportunities. For several years the industry has been enjoying substantial growth from less than tonnes in 1990 to more than tonnes in However, the current position in Chilean aquaculture is rather different a series of disease outbreaks causing production to decline in 2008 and In response to this crisis the Government has drafted new aquaculture legislation, but a highly critical review of the Bill by the Senate Fisheries Committee in July 2009, casts doubt on the future viability of the text. The amendments to the 1991 Law, if introduced in the form currently in the Bill, will introduce a number of significant changes to Chilean aquaculture regulation. To a substantial degree, however, the new measures are a direct reaction to the current disease problems and largely reflect good practices already existing in EU legislation. The proposal to introduce a mortgage mechanism for long-term concessions reflects the Norwegian system, and the need for commercial (and in particular investment) certainty for aquaculture operators. However, the question of whether the certainty and security needs of the aquaculture industry are best achieved through this method or by existing means is a question of political debate in Chile. 17

22 Policy Department B: Structural and Cohesion Policies Regarding existing practices, three aspects can be highlighted: (1) Single window administration: like Norway, Chile employs a single window approach to aquaculture administration. (2) A National Aquaculture Commission constituted by representatives of the public (12) and private (7) sectors has been established, which plays a central role in national aquaculture planning. (3) Designation of aquaculture areas: aquaculture areas and boundaries in marine waters have been defined by decree in eight regions. Other countries It is clear that, in general, the regulatory picture in most other advanced economies is similar to that in the EU, with similar problems being experienced. Examples of good practice from other countries includes the introduction of a longer licensing periods (20 years) and a Single permit system (United States) and establishment of a comprehensive best practice framework (Australia). Recommendations Best Practice Framework A range of legislative and regulatory measures should be employed and these could be coordinated through, and supplemented by, policy and implementation guidance in the form of a Best Practice Framework for European aquaculture. Such a framework could set out the principles and provide the basis for developing specific guidance on aquaculture regulation both at the EU and Member State levels. Licensing Consideration should be given to exploring the possibility of developing an EU aquaculture licence, in full consultation with stakeholders. Included within that consideration should be utilization of best practice models, noting the Norwegian Aquaculture Act as a particularly useful model, such as a single-window system, time-limits for decision-making, standard periods of validity, etc. Access and spatial planning Promote the position of aquaculture in integrated coastal zone management and marine spatial planning, and consider ways to define a specific approach for aquaculture siting. Ensure that inland spatial planning fully integrates the needs and values of freshwater aquaculture. Water Framework Directive Ensure close coordination and proper involvement of aquaculture stakeholders in WFD processes and consultations. Ensure that the aquaculture sector remain fully informed to ensure proper implementation of the Water Framework Directive (WFD) and Marine Strategy Framework Directive (MSFD) as regards aquaculture activities. Keep under review the potential need to amend some parts of the legal framework for the purposes of aquaculture (e.g. shellfish waters). Give consideration to the development of specific implementation guidance. 18

23 Regulatory and Legal Constraints for European Aquaculture Predation by protected species The Commission, in consultation with Member States and stakeholders, should develop guidance on the legal interpretation and application of the conflict resolution provisions of the Wild Birds and Habitats Directives (in particular as regards the operative words no satisfactory alternative, not detrimental and serious damage ). Member States should, as appropriate, adopt the Commission guidance into their domestic administrative procedures. Further work should be undertaken to develop a scientific consensus on conflicts, in particular as regards cormorants, so as to provide a reliable basis for decisionmaking. As regards cormorants specifically, the recommendations of the European Parliament in particular as regards development of a coordinated population management plan and development of guidelines on good practice for prevention and mitigation of conflicts should be adopted. Environmental impact assessment Consideration should be given to developing aquaculture specific criteria and guidelines, and/or incorporating aquaculture EIA within the best practice framework, with a view both to developing common minimum standards and guidelines for the conduct of EIA for aquaculture and to promoting the recognition of aquaculture as a user of space.. For sites considered to be in sensitive coastal areas (e.g. Natura 2000 SACs / SPAs), the better incorporation of appropriate assessment and other mechanisms to mainstream aquaculture into user planning. Other issues Aquatic animal health: keep under review the list of important diseases for aquatic animals; assess additional guarantees for some diseases taken at Member State level. Animal welfare: assess fish welfare issues in order to evaluate the value of nonlegislative or possible legislative measures; propose revision of some provisions of the Transport Regulation (Council Regulation (EC) No. 1/2005). Veterinary medicines: adopt the proposal for a new Regulation on Maximum Residue Limits (while seeking to ensure provisions of particular interest to aquaculture). Detailed rules for organic aquaculture: complete the work on developing detailed rules for organic aquaculture and complete the legal framework for organic production established under Council Regulation (EC) No. 834/2007. The EU should continue to act as key player in the international trade agenda, and the EU institutions concerned should coordinate actions as far as possible to ensure that the interests of the EU aquaculture industry are effectively represented. 19

24 Policy Department B: Structural and Cohesion Policies 20

25 Regulatory and Legal Constraints for European Aquaculture 1. INTRODUCTION KEY FINDINGS Modern aquaculture represents a major development and a major opportunity in the production of aquatic food, and has for several years been the fastest growing sector in any area of food production, with an average worldwide growth rate of 6-8% per year. Recently, the EU aquaculture industry has not participated in this growth and since 2000 EU production has stagnated. As a result, total EU aquaculture production accounts for around just 2% of worldwide aquaculture production, which is well below its 4% share in 1996 and far less than the EU s worldwide share of capture fish production (around 6%). The challenges for the EU aquaculture sector are numerous and include competition for space and limited access to water; competition with imported products; difficulty gaining access to finance and investment; public perceptions; limited access to licensing; industry fragmentation; and insufficiency of medicines and vaccines. The 2002 Strategy has only been partially successful, hence the requirement for the 2009 review. The 2009 Revised Strategy is broadly based on three main aims to make EU aquaculture more competitive; to ensure that growth remains sustainable; and to improve the sector's image and governance and a wide-range of objectives and actions are identified, among which several are relating to better regulation Introduction and overview EU aquaculture Modern aquaculture represents a major development and a major opportunity in the production of fish and other aquatic food. It has for several years been the fastest growing sector in any area of food production, with an average worldwide growth rate of 6-8% per year. Largely driven by major growth in Asia and South America, aquaculture now provides about half of the world fish supply for human consumption, with a global production of nearly 52 million tonnes in 2006 (FAO 2009). Furthermore, it has a vast potential for further growth even more conservative estimates predict an annual average rate of 4.5% growth over the period (FAO 2009) growth which is considered necessary future demand for fish, although more recent forecasts suggest a lower rate of growth (Bostock et al, 2008; Huntington et al, in preparation). Although aquaculture has been expanding globally, the EU industry after the initial period of growth (from nearly tonnes in 1981 to almost 1.3 million tonnes in 2001) has grown much more modestly and in recent years has stagnated. Between 1995 and 2004, total aquaculture production in the EU-27 rose by only 3 to 4 % until 1999, or less than half the global growth rate, and since 2000 EU production stagnated (European Commission 2009). As a result of this overall stagnation, total EU aquaculture production in recent years accounts for around just 2% of worldwide aquaculture production (based on 2005 figures), which is well below its 4% share in 1996 and far less than the EU s worldwide share of capture fish production (around 6%). 21

26 Policy Department B: Structural and Cohesion Policies Nevertheless, European aquaculture is significant. The EU-27 aquaculture industries produced approximately 1.3 million tonnes of fish, shellfish and crustaceans in 2006, representing a turnover of more than 3 billion euro and providing direct employment for almost people (Framian 2009). From artisanal and small-scale beginnings, European aquaculture has developed into a Box 1 Some Key EU Aquaculture Species Oysters: production largely dominated by France; some production in other Member States, e.g. Ireland. Mussels: top producers are Spain, Italy, the Netherlands and France. Clams: production is dominated by Italy; also production in Spain and Portugal and a few other Member States. Trout: almost every Member State has trout farms; main producers are Italy and France, followed by Denmark, Germany and Spain. Atlantic salmon: main EU producers are the UK (Scotland) and Ireland. Sea bass and sea bream: main p od ce is G eece also technologically-advanced and cutting-edge industry, with fully integrated businesses (most small and medium-sized enterprises - SME), where many producers are at the forefront of technological development. Some Member States are among the world s leading producers for some products. The EU industry is also one of the most diverse. Although most production is made up of around ten major species, there are around 100 different aquatic species farmed in Europe (European Commission 2009a), including freshwater and marine finfish as well as shellfish bred in various types of farming systems: closed or open, extensive or intensive, on land, in lakes, in ponds fed by rivers or even groundwater near the shore or offshore (see Box 1 for an indicative list of some of the main species). Furthermore, within the EU, although a relatively small industry in overall terms, aquaculture is an important economic activity in certain coastal and continental areas. By volume, the main producers are France ( tonnes), Spain ( tonnes), Italy ( tonnes), UK ( tonnes) and Greece ( tonnes). By value, the main producers are France (555 million euro), UK (498 million euro), Italy (476 million euro), Greece (345 million euro) and Spain (280 million euro) (European Commission, 2009). In the face of a changing legislative, technical and economic environment, the EU s aquaculture industry has changed through: the introduction of new species (mainly highly priced, and often non-native species introduced from sub-tropical regions), the introduction of new technologies, such as the use of recirculation systems to reduce water usage and effluent discharges, as well as offshore cages and shellfish longline systems that can be used in exposed open water sites away from the immediate coast; and New business strategies, including the use of government-defined aquaculture areas that have sometimes been subject to an SEA and thus have simplified licensing and planning processes. However, whilst aquaculture production has stagnated, import of seafood products have risen almost threefold in the past six year (Ernst and Young 2008). Current EU consumption demand accounts for about 12 millions tonnes, 60% of which is met by imports, a substantial proportion being aquaculture imports. The main imported products are: salmon from Norway, shrimps from South East Asia and South America, and fresh water fish such as Pangasius and tilapia primarily from South East Asia. These figures 22