Graph terms:
C Social marginal benefit (SMB) curve
O Equilibrium under regulation of externality (SMB = SMC)
X Equilibrium with no regulation of externality (SMB = PMC)
G Socially efficient quantity of fish harvested
B Private marginal cost (PMC) curve
H Unregulated quantity of fish harvested
F Welfare gain from regulation
A Social marginal cost (SMC = PMC + external cost) curve.

The graph tells you that as the quantity of fish caught decreases from H to G, total social cost decreases by OYHG and the total benefit decreases by OXHG. Since the decrease in benefit is less than the decrease in cost, there is a welfare gain. The welfare gain is OYX (the area F).

The needs of conservationists have to be balanced against the inevitability of some by-catch, though by-catch is in nobody's interest. The Government has passed legislation to protect marine mammals and sea birds, and over the last few years the fishing industry has taken steps to minimise by-catch. For example, nets are better designed, hooters are blown to scare seals and lines are made more visible so birds can avoid them.