092

Agreement concerning Large-scale Driftnet Fishing on the High Seas, Washington, DC, 1996

Done at Washington, DC 22 and 26 July 1996
Entered into force 26 July 1996

Primary source citation: Copy of text provided by the
U.S. Department of Commerce

NOTE VERBALE

1) The Embassy of Italy presents its compliments to the Department of State of the United States of America and has the honor to refer to Note Verbale number 307 of April 27, 1996 of the American Embassy in Rome concerning high seas driftnet fishing and to the consultations between representatives of the two Governments that have taken place on this subject since then.
2) As a matter of principle, the Government of Italy would also call to the attention of the U.S. Department of State the Note Verbale presented to the Department by the Delegation of the European Commission of June 10, 1996, in which the Commission expressed its deep concern about possible trade sanctions in light of U.S. obligations relating to the World Trade Organization.
3) The Embassy would like to make clear that the Government of Italy is strictly enforcing its existing laws on driftnet fishing, which prohibit the use of driftnets longer that 2.5 kilometers. Italian enforcement authorities have been instructed to continue and enhance this effort, increasing substantially the inspection of vessels, both at sea and in port.
4) As already indicated during the consultations referred to in paragraph 1, the measures that the Government of Italy will undetake relating to driftnet fishing are outlined in the enclosed copy of the Statement made public on July 19, 1996 by the Italian Minister of Agriculture.

The Italian Government will transmit within the next days to the U.S. Embassy in Rome certain other materials that are relevant to the efforts of the Government of Italy relating to driftnet fishing.

These materials will include: 1) the proposal of the Government of Italy to the European Union for a comprehensive conversion program for Italian driftnet vessels, 2) a list of Italian driftnet vessels to be covered by the conversion program, 3) the new draft law that would provide for enhanced penalties for driftnet fishing violations that will be soon approved by the Government of Italy.

5) As described in the enclosed statement, the Government of Italy has proposed for approval of the European Union a comprehensive program to convert Italian driftnet vessels. In accordance with the proposal, beginning with the 1997 fishing season, holders ofl driftnet fishing licenses will receive benefits under the conversion plan by either choosing to abandon fishing activities entirely or by converting to another method of fishing compatible with environmental requirements. It is the Italian Government’s hope that the program will be approved in the coming months. Owners and operators of driftnet vessels that violate the terms of the program would lose all benefits they would otherwise receive under the program and would be subject to applicable penal and administrative penalties.

Concerning the draft regulation currently under examination by European institutions, it is the Italian authorities’ hope that on the occasion of the discussions within the (EU) Council, a decision could be made to begin the suspension of all driftnet fishing activities with the start of the 1997 fishing season.

6) Further to these measures, it is the intention of the Governement of Italy to provide to the Government of the United States a copy of the annual report that the Italian authorities are required to provide to the European Union pursuant to Regulation n.2847/93 CEE, specific data on driftnet fishing violations detected, and the resulting penalties that have been imposed, by the Government of Italy. The Government of Italy also intends to report to the United Nations Secretary General, on a regular basis, on measures that the Government of Italy is taking to ensure observance of the United Nations moratorium on the use of large scale driftnets, as called for in United Nations General Assembly Resolution n.50/25 of 5/12/95.

DEPARTMENT OF STATE
OFFICE OF LANGUAGE SERVICES

Translating Division

LS No. 150445
BL
Italian

THE MINISTRY OF FOREIGN AFFAIRS
OF THE REPUBLIC OF ITALY

July 25, 1996
071/12898

NOTE VERBALE

The Ministry of Foreign Affairs presents its compliments to the Embassy of the United States of America and has the honor to refer to Note Verbale No. 5554 of July 22, 1996, by the Embassy of Italy in Washington, with which the text of the Statement by the Minister of Agriculture, Food, and Forestry Resources, Sen. Michele Pinto, on the initiatives of the Italian Government concerning the discipline and control of driftnet fishing activities was transmitted to the Department of State.
As announced in that Note Verbale, the Minister of Foreign Affairs has the honor to send the following documents as enclosures:

EMBASSY OF THE
UNITED STATES OF AMERICA
Palazzo Margherita
Via Vittorio Veneto, 119’/a
00187 ROME

a) the plan for the reconversion and rationalization of driftnet fishing as submitted for examination and approval to the Services of the EU Commission. It was drafted on the basis of recent contacts with these same Services, which have already expressed their favorable view of it. The document has four annexes, one of which is the list of vessels using driftnets and involved in the reconversion plan, and which is to be treated as confidential at the present stage.
b) a list of vessels carrying out driftnet fishing activities (annex to the reconversion plan).
c) draft law amending Law No. 963 of July 14, 1965, on the discipline of sanctions applicable in the marine fisheries sector as submitted for approval to the Council of Ministers at the session of July 26, 1996. The Minister of Foreign Affairs avails himself of the occasion to communicate that the draft law on the accession of the Italian Republic to the International Convention for the Conservation of Atlantic Tuna (ICCAT) will also be submitted for approval to the Council of Ministers at the session of next July 26, and that the following will also be transmitted:
1) a copy of the ministerial decree of July 23, 1996, on the “ban on logistic operations in ports of Sardinia by so-called driftnet (spadare) vessels”, signed by the Minister of Agriculture, Food, and Forestry Resources on July 23, and transmitted today for registration to the State Audit Court. The decree will enter into force without delay in the next few days, as soon as it is published in the Official Gazette of the Republic;
2) The tables on controls and administrative sanctions for driftnet fishing imposed in analogous periods of reference for 1995 and 1996;

The Minister of Foreign Affairs avails himself of the occasion to renew the assurances of his highest consideration.

Rome, July 25, 1996
Initial, round stamp of the Ministry of Foreign Affairs

NOTE VERBALE

The Department of State acknowledges receipt of Note Verbale No. 5554, dated July 22, 1996, from the Embassy of Italy and Note Verbale No. 071-12898, dated July 25, 1996, from the Italian Ministry of Foreign Affairs to the U.S. Embassy in Rome, and refers to Note No. 307, dated April 27, 1996, from the Embassy of the United States of America in Rome, all of which concern the subject of large-scale driftnet fishing on the high seas.
As set forth in Note No. 307, Italy was identified pursuant to the U.S. High Seas Driftnet Fisheries Enforcement Act of 1992 on March 28, 1996 (“the Act”). As a consequence of such identification, consultations took place between the Government of Italy and the Government of the United States of America and agreement was reached between representatives of the two Governments whereby the Government of Italy has committed itself to undertake certain measures, described in Note Verbale No. 5554 and in the Statement of the Italian Minister of Agriculture enclosed with that Note, to effect the immediate termination of large-scale driftnet fishing by Italian nationals and vessels.
The Department of State is pleased to confirm to the Embassy of Italy that it is the understanding of the Department of State that the agreement of the Government of Italy to take the measures relating to driftnet fishing that are described in Note Verbale No. 5554 and in the Statement enclosed with that Note satisfies the requirements set forth in the Act necessary to avoid a prohibition on the importation of certain products of Italy into the United States.
The Department of State takes this opportunity to emphasize to the Embassy of Italy the need for effective implementation of the measures referred to above relating to driftnet fishing. In this regard, the Government of the United States of America looks forward to a continuing dialogue with the Government of Italy on this matter.

Department of State,

Washington, July 26, 1996

DEPARTMENT OF STATE
OFFICE OF LANGUAGE SERVICES

Translating Division

LS No. 150229
BL/Sim
Italian

STATEMENT

Regarding the issue of driftnets, and with reference to the recommendations by the United States Government, the Minister of Agricultural, Food, and Forestry Resources, the Honorable Michele Pinto, declares:

1. The European Commission, on the basis of its own inspections, among other things, has called the Italian Government’s attention to the need to ensure full respect for the legal provisions that have been in force since 1992, banning the use of driftnets longer than 2.5 km, and to the obligation of the EU member states to provide for adequate and effective sanctions for any violations encountered.
2. This is an issue which should first of all be squarely placed within the larger context of a global fishing policy.

Italy is fully aware of the need, also with regard to the Mediterranean, for a policy of conservation and rational management of fishing resources, while safeguarding the marine environment, as well as of the particular role of our country, based on its geographic location and the importance of its fishing activity, to ensure that international cooperation is intensified, and that compliance with the measures decided at the national, Community, and international level by all parties concerned is guaranteed. A sound fishing resource management policy is also in the interest of the fishermen themselves. The principles of responsible fishing and a sustainable fishing effort are by now the commonly accepted basis for ensuring rational resource management and for guaranteeing the long-term prospects for a profitable activity for the fishermen themselves.

3. It is in this context of renewed attention to strengthening international cooperation that one must view the intention of the Italian Government to submit by the end of this month the law ratifying the ICCAT Convention for parliamentary approval. The first conservation and resource management measures applicable in both the Atlantic and the Mediterranean that have been adopted by this new international organization have been, moreover, already made provisionally operative by a Community regulation approved on June 11, 1996, and Italy is ready to adopt at the national level the possible implementation or supplementary enforcement measures necessary to ensure full respect for the decisions adopted by that body even before the formal ratification of the Convention.
4. Regarding the specific problem of driftnet fishing, the Italian Government, as well as the European Union, is fully aware of the social implications of a change, even to the point of abolishing a fishing activity that has ancient traditions, and which provides the sole sustenance for many families. But we must be aware of the fact that the ban on the use of driftnets longer than 2.5 km established by the Community in 1992, corresponds to specific trends in the international community, which found its expression in UN General Assembly Resolution No. 46/215 of 1991, to which Italy could not and cannot but confirm its full adherence.
5. It is the intention of the Government on the occasion of the Diplomatic Conference on the Management of Fishing Activity in the Mediterranean Basin, which will take place in November 1996 in Venice, to point out the interest and obligation of all participating countries to recognize the need to arrive at the prohibition of the use of all driftnets in the Mediterranean by the end of the 1997 fishing season. At the same time, it is our intention to request and ensure that this action be conducted on both the bilateral and multilateral levels by all of the governments that have shown themselves to be particularly sensitive to this issue vis-à-vis the authorities of all those countries whose fishing vessels carry out driftnet fishing.
6. In the next few days, I shall present a rationalization and conversion plan for this specific sector to the [EU] Commission which will be facilitated by Community financing available through the Structural Funds, as well as the usual national financing.

In view of formulating such a plan, negotiations are under way with the social partners.

Also on the basis of the intense contacts I have had with the Commission’s services, I am confident that the plan will be approved within a very short time.
The conversion plan provides for the cancellation of all driftnet fishing licenses—which must be done in stages if it is to be effective and real —between 1997 and 1999, and will be accompanied by the surrender of the nets. Beginning with the 1997 fishing season, holders of driftnet fishing licenses will be able to choose between the complete abandonment of fishing activities and the conversion to other fishing techniques compatible with environmental requirements, without becoming dependent on public assistance. The plan thus provides for the completion of the conversion process by the 1999 fishing season.
By the beginning of the 1997 fishing season, moreover, the holders of driftnet fishing licenses who voluntarily participate in the reconversion plan will receive compensation for the suspension of driftnet fishing. However, those fishermen who do not make such a request will not have access to any benefit provided by the program and in case of violation of the law (i.e. of the current national and community statutes regarding fishing or even the mere possession of nets longer than 2.5 km) will be subject to the applicable administrative and criminal sanctions.
The EU Council is currently examining a proposed regulation, which will be appropriately modified for the purpose of carrying out the conversion plan and which will provide for the suspension of all driftnet fishing.
This is a considerable financial effort on the order of at least 200 billion lire in the first phase of implementation, which bears witness to the importance that the Government and the Community duly attach to the grave economic and social implications which have been stressed forcefully by members of this trade as well. This effort will be made with consideration being given to solutions adopted also with regard to cases which present indisputable similarities with the driftnet issue.

7. The application of the laws and regulations should be based, first of all, on voluntary compliance by those affected, and on their conviction that these laws and regulations respond to general needs. But it is up to the State to ensure respect for the law and to provide itself with appropriate instruments to guarantee this.
During the present fishing season, and in order to implement international commitments made, the enforcement actions at sea and in the ports have already been remarkably intensified compared to the past, with particular attention being paid to the maximum permitted driftnet length, and any nets not permitted by existing law are being seized and turned over to the competent authorities.
Over and above the quantifiable results of this inspection activity—which has led to a quadrupling of the total of illegal nets seized—we have reason to believe that the intensification of the enforcement actions has already brought about a considerable reduction in fishing activities with illegal nets.
8. In the immediate future, in light of the indications that emerged from the inspection activities, of the patterns that have become established in the international context, and the concerns expressed by the Spanish Government regarding illegal fishing off the Balearic Islands, we shall soon introduce a ban on the use of Sardinian ports by driftnet vessels from other ports, keeping in mind that the Region of Sardinia, within the area of its jurisdiction, has already banned this type of fishing in its territorial waters.
9. However, the need to update the general framework of sanctions for violations of conservation and fishing resource management laws and regulations was emphasised and pointed out long ago. Community law, moreover, obliges the (EU) member states to provide for proportionate and effective sanctions.

A draft law was already presented to Parliament as early as 1993. 1 shall request the Council of Ministers to approve it once more before the end of July, so that it may be examined as soon as possible by the new Houses of Parliament.
The draft law will apply to all violations in the fishing sector, but it will also contain a specific escalation of sanctions for fishing with illegal driftnets (from suspension of the license to its definitive cancellation).
We hope that the more rigorous sanctions that will be introduced will be applied as little as possible. Not by chance, the action we have undertaken hinges in fact—as previously observed—on the voluntary, responsible, and quick compliance by the fishermen with the conversion plan agreed with the European Commission.

THE MINISTER OF AGRICULTURE, FOOD, AND FORESTRY RESOURCES

In view of Law No. 963 of July 14, 1965, and subsequent amendments, concerning the discipline of marine fisheries, and in particular Art. 32;
In view of the regulations for the implementation of that Law No. 963/65, approved by Presidential Decree No. 1639 of October 2, 1968, and subsequent amendments;
In view of Law No. 41 of February 17, 1982, concerning the plan for the rationalization and development of marine fisheries;
In view of the ministerial decrees of July 20, 1989, October 25, 1989, March 30, 1990, July 18, 1990, July 30, 1990, May 22, 1991, and August 6, 1991, concerning driftnet fishing;
In view of EEC Regulation 345/92 of January 27, 1992, concerning the activity of driftnet fishing;
In view of the Sardinian Regional Law No. 10 of May 13, 1988, banning fishing with driftnets in the waters of the territorial sea of Sardinia;
In view of Decision No. 12310 of November 28, 1995 of Civil Section I of the Court of Cassation affirming in particular the principle according to which the need to safeguard the marine fauna is cause for pushing back the threshold of punishability and place both the catching of fish and the preparations for actual fishing operations on the same plane;
Considering that a plan of rationalization is about to be submitted providing for the necessary measures to provide incentives for the reconversion of driftnet fishing activities;
Convinced of the necessity of adopting measures suited to ensure respect for Community and national laws concerning the use of driftnets and to reduce, in accordance with Art. 4 of Law No. 41 of February 17, 1982, the catch of swordfish in the zone of the sea immediately adjacent to the territorial sea of the Region of Sardinia;
Having heard the Central Consultative Commission for marine Fisheries and the Committee for the Management and Conservation of Marine Biological Resources at the sessions of July 10, 1996 and July 22, 1996;

DECREES

Art. 1

1. In consequence of the ban on the use of driftnets imposed by Sardinian Regional Law No. 10 of May 13, 1988, in the area of the sea adjacent to the territory of the Region of Sardinia extending for 12 nautical miles measured from the baseline as defined in Art. 2 of the Navigation Code, for vessels authorized to use driftnets and registered in other maritime sectors than those of Sardinia, it shall be forbidden to dock in Sardinian ports for the purpose of technical and logistic operations connected with swordfish fisheries.
2. For vessels bearing an authorization, on their fishing license to engage in driftnet fishing and registered in the maritime sectors of the Region of Sardinia, docking in Sardinian ports for the purpose of the above-mentioned operations shall be controlled by the competent regional body.

Art. 2

1. Violations of the provisions of this decree shall be prosecuted in accordance with the laws in force.

This decree shall be published in the Official Gazette of the Italian Republic and shall enter into force on the day after its publication.
Rome, July 23, 1996

THE MINISTER
signature

DRAFT LAW AMENDING LAW NO. 963 OF JULY 14, 1965
ON THE DISCIPLINE OF MARITIME FISHERIES

Art. 1

1. Article 15 of Law No. 963 shall be replaced as follows:

“Art. 15

(Protection of biological resources and fisheries)

1. In order to protect the biological resources of the sea, and to ensure disciplined fishing activity, it shall be unlawful to:
a) fish in zones and at times that are forbidden by the rules, decrees, and regulations legitimately issued by the competent administrative authorities, and to hold, transport, and trade in the product of such fisheries, as well as to catch quantities in excess of those authorized for any species or living organism, by rules, decrees, and regulations legitimately issued by the above-mentioned administrative authority, or to navigate at times of day forbidden by the rules and decrees without appropriate authorization by the maritime authority;
b) fish with ships or barges, gear, or instruments that are forbidden by the regulations or not expressly permitted, or used in a manner different from that permitted by the regulations, or keep forbidden gear on board, or gear not expressly permitted or not corresponding to regulatory norms, or place stationary or mobile equipment for purposes of fishing without authorization or in a manner diverging from the necessary authorization, as well as hold, transport, and trade in the product of such fishing activities;

Art. 7

1. Article 27 of Law No. 963 of July 14, 1965, as amended by Article 9 of Law No. 381 of August 25, 1988, shall be replaced as follows:

“Art. 27

(Accessory administrative sanctions)

1. For violations of Article 15, letters a) and b), the following accessory administrative sanctions shall be applied:
a) confiscation of the catch;
b) confiscation of the instruments, gear, and fishing equipment used in contravention of the provisions of this law, excepting the vessels;
c) obligation to put the zones in which unauthorized works or facilities were constructed back into their original condition within a pre-established period;
d) suspension of the fishing license for a period not to exceed one month, which can be increased up to six months in case of repeated violations. The suspension of the license prevents the use for fishing purposes of the vessel or barge and its gear and equipment used in the violation. If a subsequent violation is committed by use of a vessel or barge which is not the same as the one used in the first violation, the suspension shall be applied in equal measure to both;
e) in case of repeated violations, closing of the commercial establishment by the competent commercial authority from

five to fifteen days;
f) in case of a first proven violation of Article 15, letter b) by vessels authorized to use driftnets, suspension of the fishing license for a period of up to one month; in case of a second violation of Article 15, letter b), suspension of the fishing license for a period of up to three months; in case of a third violation of Article 15, letter b), complete cancellation of the driftnet authorization on the license”.

PLAN FOR THE RATIONALIZATION
AND CONVERSION OF DRIFTNET FISHERIES

July 25, 1996

1. Introduction and Context

The necessity of restructuring the driftnet fishing fleet, also referred to as the “swordfish fleet”, i.e. the vessels which practice swordfish fishing with the use of driftnets, is essentially based on the need to protect the marine mammals and to adequately conserve swordfish stocks.
The opposition of the environmentalists, fishermen who use other fishing techniques, and strong pressure from the U.N., persuaded the European Union in 1992 to adopt regulatory measures to limit the use of driftnets above a certain length, and thereby to reduce the danger to the marine ecosystem.
Since the existing laws allow the use of driftnets of a maximum length of 2.5 km, and since according to the representatives of that sector the compliance with that limit causes economic difficulties for those involved in this activity, all measures that could ensure the conversion of that sector with the help of the European Union have been examined.
Following the agreements between Commissioner Bonino and the Minister of Agricultural Resources, a mixed technical group has been established, composed of the Services of the Commission and representatives of the National Administration, whose mandate is to propose conversion measures for the fleet in question, in order to eliminate driftnet fishing gear in accordance with a three-year plan.
The Technical Group submitted its final report on June 20.

2. Description and Social and Economic Importance of the Driftnet Fleet.

Annex 1 lists the complete data on the driftnet fleet, with numbers of vessels, their internal numbers, and an analytical subdivision by segments concerning the type of license issued to the owners in addition to those for driftnets.
These data are complemented and integrated through social and economic indicators relative to the entire driftnet fleet, giving the location of the vessels (Annex 2).
The Services of the Commission have provided for verification of the data furnished by the National Administration in the Community Fleet Register, drafting a final list and identifying each vessel by type of license, length, tonnage, and engine power (Annexes 3 and 4).
These data show that the conversioin to other fishing systems is an operational (lack in some cases of gear for other fishing methods) and socio-economic problem, and not a juridical one, since practically all the vessels of the driftnet fleet have licenses for at least one other method of fishing.

Concise Data on the Driftnet (“Swordfish”) Fleet as of June 18, 1996:

— Number of vessels (total):

• 677 (the majority of which are deployed in the Regions of Objective 1, more particularly 252 in Sicily and 82 in Calabria)

— Vessels with different licenses besides driftnet licenses (principal segments):

• 328 Driftnets + encircling nets + other systems
• 171 Driftnets + longlines + other systems
• 89 Driftnets + bottom trawl + encircling nets + other systems

— Distribution of the fleet by tonnage class:

• 0 < 20 GT 478 vessels
• 20 < 40 GT 147 vessels
• > 40 GT 52 vessels.

— Workforce on vessels:

• 2,658 (of whom 1,760 are inscribed in the Sicilian registers)

— Workforce indirectly dependent on the activity of the “swordfish” fleet:

• 850

— Total workforce involved:

• 3,500

— Crew per vessel:

• this datum is variable up to a maximum of 5.

Estimated Economic Data (1994)

— Median income per crew member per fishing season (60/80 days (not all on active duty)):

• 7.6 million lire

— Median income per shipowner working on board per fishing season (60/80 days (not all on active duty)):

• 27.7 million lire

— Total annual production:

• 33.3 tons

— Value of annual saleable gross production:

• 72 billion lire.

3. Legal Framework

The regulatory structure of the Community includes:

a) EEC structural regulations No. 2080/93 and EC No. 3699/93, and the SFOP Operative Programs derived from them;

b) EC Regulation No. 2719/95, amending EC Regulation No. 3699.93 by inserting the provision for Community intervention for social and economic measures;
c) the Multi-Year Conversion Program for the Italian fleet.

Regarding the structural SFOP regulations, it has been proposed:

a) to implement an early retirement regime in accordance with Regulation 2719/95, even though a diminished impact of such an action is expected due to the implementation conditions and the amount available;
b) the recourse to the financial means already available in the SFOP Operative Programs through reprogramming to be realized within the framework of the respective oversight committees.

There are proposals for the creation of an ad hoc driftnet segment in the future Fisheries Plan IV, with the subsequent elimination of these vessels from the “multivalent” segment.
A “specific measure” for the utitlization of the resources relative to payment of interim compensation (“for waiting”) appears necessary, as well as finding possible additional funds and possibly exceeding the ceilings of intervention provided by the existing Community legislation.

4. Content of the Conversion Plan

The present plan is aimed at voluntary conversion, rationalization of driftnet fishing, occupational stability, and income continuity, for the purpose of preserving as a precautionary principle the halieutic resources from overexploitation by fishing as hypothesized for this segment of the fleet and to avoid by-catches.
The plan is based on the existing regulations and within these limits includes a direction in which, without prejudice to Community laws which may modify such a direction, the exercise of fishing activities with nets not exceeding a length of 2,500 meters is guaranteed to those (fishermen) who have not applied for participation in the plan.
In this framework, the plan provides strong incentives for fishermen and shipowners to convert to other types of fishing or to other activities, both within and outside the sector, or to retire completely. The plan provides for the adoption of a ceiling on specific extraordinary allocations, both on the national and Community level, to be supplemented through limited use of SFOP 94/99 funds. These funds will ensure the financing of the incentives and compensations provided by the plan to make the opportunities for conversion attractive to enterprises and employees alike.
To facilitate voluntary compliance on the part of the recipients, the voluntary, and therefore not compulsory, character of the plan, which during the three years of its implementation from 1997 - 99, will not be combined with measures aimed at suspending or interdicting fishing activities with nets of these dimensions, guaranteeing, on the contrary, their legitimacy with the modalities and within the limits imposed by the Community and national laws in force, which will be observed very strictly.
The plan therefore:

a) is a voluntary plan;
b) is a comprehensive plan which provides for and examines all possibilities for reorientation and conversion applicable to all persons involved (shipowners as well as crews);
c) outlines the entirety of available means, both on the national and Community level, for its implementation;
d) has a progressive character, since it is to be implemented over a period of three years (1997 - 1999);
e) considers the importance which must be attached to the compensation for renouncing driftnet gear in relation to the income levels which that activity guarantees and to the differences in income level guaranteed by other types of fishing activities;
f) will be a powerful incentive;
g) is innovative inasmuch as in order to reach the objectives that have been set, it takes the opportuneness of taking recourse to legal ad hoc measures, and if necessary to modifications of the present Community regulations into consideration;

h) is a flexible plan, taking the different real situations into consideration and providing for a spectrum of hypothetical actions that can be applied to the different subjects, giving them the option to choose the solution that best fits their own needs;
i) will take shape along pre-established lines for each kind of compensation, with an obligation for those who have participated in the first stage of one of these actions to stay on board for the subsequent stages;

j) due to the fact that the greater part of the driftnet fleet is concentrated in Regions within Objective 1, the plan provides the possibility for making use of all the EU structural funds in order to create alternative activities, and in particular the FSE and FESR. In view of the realities of the Regions involved, tourism would be the most easily realizable alternative activity.

5. Measures

The Plan considers the applicable conversion measures and related forms of financial intervention according to three hypotheses relative to the shipowners and three hypotheses relative to the crews.

General Considerations

— Within the framework of what is set out in the preceding paragraph, the sector will be declared to be in a state of crisis.
— As regards the measures for conversion to another sector to be facilitated by the regional FSE and FESR, preliminary coordinated working groups will be established in order to identify initiatives to propose to the individual regional administrations for the purpose of programming or rather reprogramming the pertinent sectoral programs. A meeting is to be held before September 20 on the initiatives in question with the regional administrations involved in order to set up these groups. Before November 30, the technical working group will formulate the operative proposals to the relative region.
— Similarly, working groups shall be set up to propose initiatives to the Administration of Agricultural Resources for the SFOP aquaculture projects, facilities on land, and modernization.
— For all procedures provided in the Plan, the Ministry shall establish an ad hoc structure in order to guarantee the procedural timeframes set by the Plan.
— Also provided is an interim compensation (“for waiting”) for 1996 for up to four months, to the extent provided for in the subsequent forms. The compensation shall correspond to the period of time for which the effective interruption of the activity has been proven.
— Regarding the composition of the crew, reference is made to the personnel on board on July 22, 1996, or, in case there was no activity in 1996, to the personnel on board during the 1995 fishing season. The compensation for cessation of fishing operations shall amount to 100% for workers who have been on the job for three years (in reference to the fishing season); 80% for those with two years; 50% for those who have worked for one year. Reference is made to the relative discharge papers.
— The application for the compensation for the cessatioin of fishing operations and interim compensation for each of the years 1997, 1998, 1999 must be filed respectively before January 31, 1997, January 31, 1998, and January 31, 1999.
— The beneficiaries who have been approved for the benefits of the plan and who are continuing fishing activities with the driftnet fleet even within the allowed limits must return any compensation received plus legal interest.

Shipowners

First Hypothesis: Definite Withdrawal from Fishing Activity

a) Interim Compensation (the equivalent of six months) on the basis of Article 14 - Annex IV - table 2 of EU Regulation No. 3599/93; the compensation shall be paid to each applicant starting in 1997 and shall end in the year the measures described in letter b) below are implemented:
b) the compensation for the surrender of the license and of the driftnets will be decreasing relative to the year in which such operations shall be carried out, in accordance with the following table:

Class of vessel Compensation for Withdrawal in Ecu
by tonnage 1997 1998 1999

0 < 5 26.000 23.000 20.000
5 < 20 104.000 92.000 80.000
20 < 40 120.000 105.000 93.000
> 40 156.000 138.000 120.000

c) the premium for the demolition of the vessel will be in accordance with EU Regulation 3699/93. Forty percent of the financial ceiling for each of the years 1997, 1998, and 1999 shall be reserved for these initiatives. The documentation must be completed within 30 days after notification by the Ministry.

Second Hypothesis Conversion to Another Activity Outside the Fishing Sector

a) The interim compensation (equivalent to six months) on the basis of Article 14 - table 2 - of EU Regulation No. 3699/93; the compensation shall be granted to any applicant starting in 1997, and ending in the year the measure described in letter b) below is implemented;
b) the compensation for surrender of the license and the driftnets shall be decreasing in relation to the year in which these operations are carried out in accordance with the table mentioned in item b), first hypothesis;
c) the premium for the demolition of the vessel in accordance with EU Regulation 3699/93. The documentation must be completed within 30 days after notification by the Ministry.
d) Financial participation in the measures provided for by the FSE and FESR regional funds is at present not quantifiable; or else 60 initiatives shall be admitted on a priority basis, each for a maximum amount of 2,000 million at the expense of the SFOP funds for aquaculture projects and facilities on land. If the initiatives are presented jointly by several subjects which all qualify for the benefits of the plan, the maximum amount for each initiative shall consist of 2,000 million established for each initiative increased by 25% multiplied by the number of these subjects. The maximum ceiling of 4,500 million for aquaculture and 10,000 million for facilities on land established by the national laws shall remain in place.

In order to facilitate the conversion of the workforce, a public contribution of 85% of the permissible costs is being provided to the beneficiary who hires the workers, taking them completely off the list of those who need to be provided with work following the conversion; 70% of the permissible costs shall be paid to the beneficiary who hires workers at the level of 50%; and the usual percentage to the beneficiary who hires workers below the 50% level. In order to guarantee the occupation of those hired, the beneficiary must provide security in the amount of the differential between the usual limit and that obtained for a period of three years after the granting of the subsidy. The applications can be filed before January 31, 1997, June 30, 1997, and January 31, 1998; the applications themselves shall be approved in chronological order of filing until the limit of 60 initiatives to be financed will be reached. Cases with complete documentation shall receive preferential treatment vis-à-vis cases with incomplete documentation.

Third Hypothesis: Change to Other Fishing Activities.

a) Interim compensation (equivalent of six months) on the basis of Article 14 - Annex IV - table 2 of EU Regulation No. 3699/93; the compensation shall be granted starting in 1997 until the year the measure described in the letter b) below is implemented;
b) Compensation for surrender of the license and driftnets shall be decreasing in relation to the year in which such operations are carried out in accordance with the table in item b) of the first hypothesis;
c) priority treatment regarding the SFOP funds is to be given to the “fleet modernizations” project for the purpose of allowing the adaptation of the units to the new fishing activity. Forty percent of the SFOP ceiling for each of the years 1997, 1998, and 1999 shall be reserved for modernization initiatives, up to a limit of three hundred units. A public subsidy of up to 85% of the permissible costs shall be granted; the initiatives must not represent an increase in capacity in terms of tonnage and (engine) power. The applications for all three years must be filed by January 31, 1997; before February 28, 1997, the parties shall meet in order to evaluate the number of applications and for the purpose of identifying suitable initiatives if the applications that were filed should be in excess of the hypothetical number of 300 units. The applications shall be reviewed in chronological order as determined by the time of completion of the documentation that must be enclosed; the applicants can complete the documentation within 30 days from the date of filing;

d) regarding the regime of the licenses, the units shall be granted the addition of a permit for encircling nets and a type of gear for select small-scale fisheries. The provisions of the Ministerial Decree of July 26, 1995 shall apply to vessels under 10 tons. The updating of the license shall be arranged by the Ministry within a month from the application.
e) concession of a license for gear for selective small-scale fisheries to an interested party who demolishes (also for a premium) vessels in excess of 20 tons in order to build a boat of up to 10 tons with his own funds.

Crews

First Hypothesis: Definite Cessation of Fishing Activities by the fisherman.

a) Interim compensation - specific measure by the Council equivalent to six months, applying the minimum contractual social security, in respect to which the Commission intervenes in accordance with the measure established by Council Decision No. 95/451/EC of October 26, 1995; the compensation shall be paid starting in 1997 until the year the measures described in letters b) and c) below are implemented;
b) Compensation for cessation of activities in the amount of 50,000 Ecu;
c) application of Art. 14 bis of Regulation 2719/95 for admission of 200 workers to the “early retirement” program (according to the terminology of the Regulation), applying the modalities of the plan of so-called long-term mobility. In particular, this is an intervention on behalf of the workers who become eligible for that program due to years in service or age, and who apply by March 31, 1997. The worker shall be paid the difference between the contractual minimum social security payment and the compensation amount. In case the number of persons entitled to this measure exceeds 200, the parties shall meet in order to determine the instruments by which the additional financial burden can be covered. Meetings are planned with the competent Administrations and the representatives of employers and employees in order to define the technical contents of the measure.

Second Hypothesis: Continuation of (Fishing) Activity on Other Vessels

a) Interim compensation - a specific Council measure equivalent to six months, applying the minimum contractual social security, in respect to which the Commission shall intervene in accordance with the measure established by Council Decision No. 95/451/EC of October 25, 1995; the compensation shall be paid starting in 1997 until the year the measure described in letter b) below will be implemented until the activity is resumed on other vessels;
b) the compensation for cessation of activities shall be 20,000 ECU.

Third Hypothesis: Conversion of the Fisherman to Another Sector

a) The compensation for waiting is a specific Council measure equivalent to six months with the application of the minimal contractual social security payment, with respect to which the Commission shall intervene in accordance with the measure established in Council Decision No. 95/451/EC of October 26, 1995; the compensation shall be paid starting in 1997 until the year in which the measures described in letter b) below is implemented and until the activity is resumed in another sector;
b) the compensation for cessation of activities shall be 20,000 ECU;
c) the compensation for changing to a new job (cost sharing by FSE and FESR) on a regional basis is at present not quantifyable.

6. Financial Evaluation of the Measures

As already mentioned, it is clear that there is a need for all the Community structural funds (FSE, FESR, and SFOP) to provide support. However, the available resources under the SFOP program shall be used exclusively for measures of “complete cessation”, “fleet modernization”, “aquaculture”, and “facilities on land”.
In addition to the resources necessary for implementing the classical SFOP structural measures (premiums for complete cessation, fleet modernization, and early retirement), the overall ceiling of the costs can be estimated at about 200 million Ecu (440 billion lire). These are the additional financial resources needed to stimulate the surrender of the nets and licenses and for the interim compensation motivated by social considerations.

These estimates are based on the following hypotheses:

a) application of the numbers mentioned in paragraph 5 “Planned Measures”;
b) complete withdrawal from fishing by 30% of the driftnet fleet.

Annex 1 B
The principal social and economic indicators regarding driftnet fishing.

The following estimates were worked out on the basis of the available data collected through a specific investigation of the production sector in question carried out by Acquastudio and Irepa in 1994 at the request of the General Fisheries Directorate. It is not assumed that substantial changes have taken place in the meantime, except for a modest increase in the prices paid to producers.

1. General Characteristics

The total production can be estimated at about 33,000 tons for a gross saleable production of little more than 72 billion lire.
The fleet is concentrated in only seven Regions, but 66% are registered in the Sicilian Sectors, and another 20% in the Sectors of Calabria. This means that of the 2,658 workers estimated to be directly involved in production activities, at least 1,760 are inscribed in the Sicilian Registers, and 512 in the Calabrian Registers. It is estimated that 5% of the workers are located in Campania, while even smaller percentages are reported for Liguria, Apulia, Latium, and Sardinia. The workers indirectly dependent on the fishing industry are estimated at about 850, making up a total of 3,500 workers whose livelihood depends on driftnet fisheries.
The income produced by this fishing activity is not relevant in absolute terms. However, its dimension becomes significant when one considers that the fishing season limited to no more than 60/80 days, and not even all of these are active working days. The investment costs are therefore high vis-à-vis the limited period of activity. Consequently, the quota of income that the shipowners derive from capital takes precedence over that derived from the labor performed on board. This also means that the income of the employees of the fishing fleet can be transferred to other segments of the national fishing fleet. In that sense, in view of the short fishing season, the median income realized by a fisherman on a fishing boat equals about 7,5 million (lire), although there is some difference between the more than eight million of a Sicilian fisherman and the roughly six million of a fisherman from Campania.
Adding the income from capital to that from work on board, we arrive at a national median total of about 28 million, although with a significant difference between the 31.6 million achieved in Sicily and the 25.3 million in Calabria. This difference can, moreover, be attributed to the greater number of partners on board which characterizes ship ownership in Calabria compared to the situation in Sicily.
More significant differences can obviously be found when taking the diverse classes of tonnage into account and not only regional differences. In that case, while the income from work on board does not express significant differences between the almost 7 million per employee on a vessel of up to 10 GT and the almost 9 million earned by an employee on a vessel of over 40 GT, the same is not true for the median income of a shipowner who works his own boat. In that case, in fact, the difference is between less than 20 million for the smallest class of vessel and up to 56.3 million for a larger vessel, with the national median being 27.7 million.

2. Impact of the Elimination of Driftnets

In addition to the occupational effects, which obviously are of primary concern, one must also observe that the elimination of the driftnets will have the following consequences:

— The pressure will be transferred to other stocks already being exploited, which will make their management more difficult;
— the total profitability of the system is reduced because of the consequent concentration of vessels operating in the