Kahawai FAP Statutory Obligations

Kahawai Final Advice Paper - Statutory Obligations

Ministry of Fisheries

29 June 2004

Statutory Obligations and Policy Guidelines

Purpose of the Fisheries Act 1996

1. The purpose statement of the Fisheries Act 1996 describes the overriding objective of the Act as being to provide for the utilisation of fisheries resources while ensuring sustainability. The Act defines ‘ensuring sustainability’ as to ‘maintain the potential of fisheries resources to meet the reasonably foreseeable needs of future generations; and avoiding, remedying, or mitigating any adverse effects of fishing on the aquatic environment’. Management of a specific stock must be consistent with these dual requirements in order that sustainability of the stock can be ensured.
2. ‘Utilisation’ of fisheries resources is defined as conserving, using, enhancing, and developing fisheries resources to enable people to provide for their social, economic, and cultural well-being. Within the parameters of these sustainability standards, there is a positive obligation to provide for the use of fisheries resources.
3. The extent of management measures required to achieve the purpose of the Act will produce a continuum of potential outcomes. Utilisation may be provided for at different levels and the extent of such use should be considered on a case by case basis. Where there is a significant threat to the sustainability of a fishstock, the measures adopted to achieve sustainability are likely to be more stringent than where there is a lesser threat.
4. Consideration of social, economic, and cultural wellbeing (in conjunction with other considerations consistent with the purpose and principles of the Act) may influence how measures to ensure sustainability are implemented. Hence, providing for utilisation while ensuring sustainability may be achieved in different ways, and the objective may be reached over time. Consideration of the purpose of utilisation may be relevant in determining which is the most appropriate approach.

Setting a Total Allowable Catch

5. Below the level of the purpose statement, the Act contains a number of specific provisions relating to ensuring a stock is managed sustainably. A key measure is the setting of a TAC for a QMS stock. The Minister is required to set a TAC for each QMS stock. The Act contains a number of different options in terms of the intended target level able to be implemented for a QMS stock. All of the options are consistent with the purpose of ‘ensuring sustainability’, but each option provides for a fundamentally different management outcome.

Maximum Sustainable Yield (s 13)

6. Section 13 represents the default management option that is to be applied when setting a TAC for a stock within the QMS, unless that stock qualifies under criteria for management under ss 14 or 14A.
7. Under s 13 there is a requirement to maintain the biomass of a fishstock at a target stock level, being at, or above, a level that can produce the MSY, having regard to the interdependence of stocks. MSY is defined, in relation to any fishstock, as being the greatest yield that can be achieved over time while maintaining the stock’s productive capacity, having regard to the population dynamics of the stock and any environmental factors that influence the stock. A requirement to maintain stocks at a level that is capable of producing the MSY is generally recognised internationally as being an appropriate fishstock target, although there is some international support for MSY representing a minimum fishstock threshold level.
8. If a stock is currently below the target stock level, there is a requirement pursuant to s 13(2)(b) to set a TAC that will result in the stock being restored to the target stock level (ie, at or above a biomass that will support MSY) and in a way and rate which has regard to the interdependence of stocks and within a period appropriate to the stock, and having regard to the stock’s biological characteristics and any environmental conditions affecting the stock. If the stock is above a target stock level, there is a requirement to set a TAC that will result in the stock moving towards the target stock level, or alternatively remain above the target stock level, having regard to the interdependence of stocks (s 13(2)(c)). In determining the way in which, and rate at which, a stock is altered to achieve the target stock level, the Minister is to have regard to such social, cultural, and economic factors as he or she considers relevant (s 13(3)). Section 13(3) makes it explicit that such factors are relevant in the determination of the way and rate of progress to the target level, rather than in the determination of the target stock level itself.
9. There is no set rate, or time frame, within which a rebuild or a ‘fishing down’ of a stock must be achieved. However, the progress of moving towards the target stock level must be suitable to the fishery in question, having also considered those matters specified in s 13 of the Act. Hence, a TAC should be viewed as a tool for moving a stock towards the target stock level. Other measures may be adopted in conjunction with a change in the TAC. However any additional measures should not be relied on in place of the TAC.
10. Additional flexibility is encompassed within s 13 by the capacity to provide for an in-season adjustment to the TAC for certain stocks. Any TAC that is set or varied has effect on and from the first day of the next fishing year for the stock concerned. An exception applies to those stocks listed on the Second Schedule to the Act. This Schedule can apply to any stock with a highly variable abundance. For such stocks in years of high abundance, the TAC may be increased in-season and the Minister may allocate all or part of that increase as Annual Catch Entitlements (ACE) to commercial fishers. At the commencement of the next fishing year the TAC reverts to the level set at the commencement of the previous fishing year. This means that commercial catch levels, not property rights in the form of individual transferable quota (ITQ) are increased during the fishing year.
11. An in-season TAC increase may be distributed between commercial, customary and recreational fishers, and an allowance made for other sources of mortality to the stock. The increase allocated to commercial fishers does not result in an increase to the TACC during the fishing year.
12. The fundamental objective of an in-season adjustment is to manage a stock at or above the level that can produce the MSY. Information about what is the desirable level of the TAC that can produce the MSY is available at such a time that a decision is made after the start of the fishing year. However, at the end of the fishing year, the TAC reverts to the level that was applicable at the start of the fishing year.

No Specified Target Stock Level (s 14)

13. Section 14 of the Act prescribes an exception to the target stock level based on an assessment of the MSY for those stocks where:

1. It is not possible to estimate MSY because of the biological characteristics of the species; or
2. A catch limit for New Zealand has been determined as part of an international agreement; or
3. The stock is managed on a rotational or enhanced basis.

14. For stocks that meet the above criteria, and as a result are listed on the Third Schedule of the Act, a TAC may be set other than in accordance with the requirements in respect of target stock levels stated in s 13, provided the TAC better achieves the purpose of the Act.
15. While any TAC must be set in a way that ensures use of the stock is sustainable, there is no requirement to take into account or be guided by the need to manage in accordance with MSY. In contrast to s 13, s 14 provides significant flexibility as to the target stock level set for a stock. The rationale for that flexibility is different for each of the categories of stocks eligible for listing on the Third Schedule.
16. The biological characteristics of some stocks mean that it is not possible or necessary to estimate the MSY to ensure the sustainability of the stock. For example, squid is a short-lived species. There is currently no ability to estimate the available abundance either before or within the fishing season. The extent of catch taken from the available biomass will not affect future recruitment or abundance of the species. For this reason, the TACs set for squid stocks have not been significantly changed during the last decade, but the actual catch levels have fluctuated markedly within that time.
17. Under an international agreement, a catch limit for a species may be set and allocated between individual fishing nations, eg, southern bluefin tuna. Typically such international agreements relate to highly migratory species or species that straddle national boundaries. The overall catch limit set for the species must be consistent with international fisheries management law; hence, the catch limit would need to ensure the sustainability of the species. There is no requirement that New Zealand separately manages that portion of the species it is allocated at MSY.
18. The third category relates to those stocks managed on a rotational or enhanced basis. The effect of rotational fishing or fisheries enhancement is that MSY may no longer be the appropriate target level (eg, scallops in area 7 (SCA 7)). Enhancement is designed to increase the level of abundance. While enhancement of the stock may not need to be consistently maintained, the ability to intervene to increase abundance means that the sustainability of the stock can be ensured. The available yield will change over time.
19. Rotational harvesting involves selective harvesting of a portion of the stock. Rotational fishing is best suited to sedentary species or stocks with established fishing grounds. The yield taken in any one year may not be the MSY available for the stock overall. The ability to successfully manage a stock on a rotational basis may be dependent upon the biological characteristics of the stock.
20. A combination of rotational harvesting and enhancement may result in greater flexibility in setting a TAC that will ensure the sustainability of the stock. Enhancement may enable rotationally harvested areas to be restocked at a level above that which could be naturally produced. Enhancement may also provide an ability to maximise catch from each area as it is rotationally fished. Areas closed to fishing allow both enhanced and wild stocks to contribute to the spawning biomass and reach harvestable size before being subjected to commercial fishing. Area closures may protect sufficient adult stocks to ensure adequate recruitment to the fishery.
21. As with s 13, s 14 provides for an in-season increase to the TAC for stocks listed on the Third Schedule. The purpose of an in-season increase under s 14 is to take advantage of the available yield beyond any pre-determined target stock level. However, the level of the in-season increase must be consistent with the objective of ensuring sustainability of the stock.
22. An in-season TAC increase may be distributed between commercial, customary and recreational fishers, and an allowance made for other sources of mortality to the stock. Additional ACE is generated during the fishing year in respect of the increase in the TAC allocated to commercial fishers. At the close of the fishing year the TAC reverts to the level set at the beginning of that fishing year.

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Above Level of Long Term Viability (s 14B)

23. A further exception to setting a TAC in accordance with the MSY is the management of a stock under s 14B of the Act. A TAC is to be set at a level that ensures the stock is maintained above the level that ensures its long-term viability. However, the Minister must be satisfied that the purpose of the Act would be better achieved by setting a TAC other than in accordance with s 13 of the Act (ie, at or above MSY). Maintaining a stock above the level that ensures its long-term viability is consistent with the purpose of the Act in relation to meeting the reasonably foreseeable needs of future generations.
24. The purpose of s 14B is to enable other related stocks to be fully harvested. The stock in question must be taken primarily as an incidental catch during the taking of one or more other stocks and must constitute only a small proportion of the combined catch taken. The Act does not prescribe a level that is deemed to be above that which ensures the long-term viability of a stock. That determination is required on a case-by-case basis, subject to the requirement that the TAC must be set at a level no greater than what is required to allow for the taking of another stock in accordance with its own TAC and TACC. Quota owners are required to take all reasonable steps to minimise the catch of the stock managed below BMSY.
25. Section 14B addresses the difficulty of managing stocks within a mixed fishery to BMSY without forgoing some economic return. In some mixed species fisheries the TACs of minor bycatch species limit the ability of fishers to catch their entitlement of the target species and could result in closure of the target fisheries.
26. Section 14A specifies a number of significant tests apply in order to mitigate the risk of managing a stock below BMSY. First, the stock must be able to be maintained above a level that ensures its long-term viability. Secondly, the Minister is required to consider the need to: (1) commission appropriate research to assess the impact of reducing the stock below BMSY; (2) implement measures to improve the quality of information about the stock; (3) close areas to commercial fishing to reduce any sustainability risk to the stock; and (4) avoid any significant adverse effects on the aquatic environment of which the stock is a component. Hence, the setting of a TAC under s 14B to allow for the taking of another stock may need to be balanced by the closure of areas to fishing to ensure the stock is maintained above a level that ensures its long-term viability. Consideration of significant adverse effects of fishing could have potential implications for the aquatic ecosystem as a result of reducing the biomass of the stock.
27. Consideration also needs to be given to the social, cultural and economic implications of managing a stock below BMSY. The setting of a TAC above the level that ensures the stock’s long-term variability must have the support of quota owners who hold 95% of the shares in the stock. Arrangements need to be in place to address the concerns of those quota owners who do not support the setting of a TAC under s 14B. The total benefits of managing the stock at a level other than that permitted under s 13 must outweigh the total costs. Managing the stock in a manner other than s 13 must have no detrimental effects on non-commercial fishing interests in the stock.
28. A final important check and balance when setting a TAC under s 14B is that the Minister for the Environment is required to concur with a proposal to enable a TAC to be set for a stock above the level that ensures it long-term variability.
29. The ability to set a TAC under s 14B is triggered by the submission of a proposal from quota owners to the Minister of Fisheries to manage the stock in this way. An Order in Council (ie, a regulation) must be made specifying the application of s 14B for the named stock. No proposal relating to s 14B has been received in respect of the stocks to be introduced to the QMS on 1 October 2003.

Other Statutory Obligations Applicable When Setting a TAC

30. When setting a TAC, a number of generic provisions of the Act need to be taken into account – in particular, the purpose of the Act (s 8), the environmental and information principles (outlined in ss 9 and 10 respectively), factors to be taken into account when setting sustainability measures (s 11), and the application of international obligations and the provisions of the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992 (s 5).

Information Principles

31. The nature of the data and assumptions used to generate fisheries assessments and the results produced contain inherent variation and uncertainty. The Act specifies, in s 10, the information principles to use when information is uncertain. Decisions should be based on the best available information that, in the particular circumstances, is available without incurring unreasonable cost, effort, or time. Decision makers should consider any uncertainty in the information available and be cautious when information is uncertain, unreliable, or inadequate. However, the absence of, or any uncertainty in, any information should not be used as a reason for postponing or failing to take any measure to achieve the purpose of the Act.

Environmental Principles

32. The Act prescribes three environmental principles that the Minister must take into account when exercising powers in relation to utilising fisheries resources and ensuring sustainability. First, associated or dependent species (including non-fish bycatch) should be maintained above a level that ensures their long-term viability. Secondly, biological diversity of the aquatic environment should be maintained (ie, the variability of living organisms, including diversity within species, between species, and of ecosystems). Lastly, habitat of particular significance for fisheries management should be protected.
33. The Act defines associated and dependent species as any non-harvested species taken or otherwise affected by the taking of a harvested species. The term ‘long term viability is defined in the Act as a low risk of collapse of the stock or species, and the stock or species has the potential to recover to a higher biomass level. Long-term viability may be considered in the context of the natural dynamics of populations. At one level the concept implies the need to ensure the continuing existence of species in the sense of maintaining populations in a condition that ensures a particular level of reproductive success. At another level, long-term viability implies an ability to maintain populations at a level that ensures the maintenance of biodiversity. Long-term viability could be achieved at very low levels of population size, depending on associated risks, such as recruitment failure at low population sizes. Long-term viability also needs to be considered with respect to utilisation by different sector groups. Equally, where fishing is affecting the viability of associated and dependent species, there is an obligation to take appropriate measures, such as method restrictions, area closures, and potentially adjustments to the TAC.
34. ‘Biological diversity’ includes the variability among living organisms, including diversity within species, between species, and of ecosystems. The aquatic environment is of broad scope and encompasses:

1. The natural and biological resource comprising any aquatic ecosystem; and
2. All aquatic life and all places where aquatic life exists.

35. The maintenance of biodiversity needs to be considered in the context of the purpose of the Act that assumes that, where possible, a resource should be used to the extent that sustainability is not compromised. Determination of the extent of fishing or the impacts of fishing that can occur requires an assessment of the risk that fishing might cause a species to become extinct or biodiversity is reduced to an unacceptable level. In the absence of information to undertake a detailed assessment, the information principles specified in the Act provide guidance for decision makers on the approach to be adopted.
36. Habitat can be defined as ‘the place or type of area in which an organism naturally occurs’ (NZ Biodiversity Strategy). The Magnuson-Stevens Fishery Conservation and Management Act (USA) defines ‘essential fish habitat’ as ‘those waters and substrate necessary to fish for spawning, breeding, feeding or growth to maturity’. The maintenance of healthy fishstocks requires the mitigation of threats to fish habitat. However, the source of the threats may not be confined solely to the activity of fishing. A range of terrestrial activities may impact on fisheries habitats. Habitats that assist in the reproductive and productive process of a fishery, hence are of special significance, should be protected. Adverse effects on such areas are to be avoided, remedied, or mitigated.
37. Insufficient information is available to undertake a systematic assessment of biodiversity for the stocks to be introduced to the QMS on 1 October 2003. No ecosystem, population, assemblage assessment has been undertaken in respect of the stocks reviewed. However, an assessment of the relative information available and the degree of risk in relation to the environmental principles are outlined in this document for each stock.

International Obligations (s 5(a))

38. There are a range of international obligations that relate to fishing. The two key pieces of international law relating to fishing, and to which New Zealand is a party, are the United Nations Convention on the Law of the Sea, 1982 (UNCLOS) and the United Nations Convention on Biological Diversity 1992 (the Biodiversity Convention). It is MFish’s view that the provisions of the Act, and the proposed exercise of powers under the legislation are consistent with New Zealand’s international obligations.
39. The Act is to be interpreted, and all persons exercising or performing functions, duties, or powers under the Act are required to act, in a manner consistent with New Zealand’s international obligations relating to fishing. As a general principle where there is a choice in the interpretation of the Act or the exercise of discretion, the decision maker must choose the option that is consistent with New Zealand international obligations relating to fishing (s 5(a) of the Act).
40. MFish is involved in a number of initiatives relating to the management of stocks within the EEZ that are consistent with its international obligations. MFish seeks to give effect to those obligations on a generic basis. Application of generic policies, such as the marine protected area strategy and MFish’s environmental management strategy, to the management of specific stocks will follow in due course.

Treaty of Waitangi (Fisheries Claims) Settlement Act 1992 (s 5(b))

41. The Act is to be interpreted, and all persons exercising or performing functions, duties, or powers under the Act, are required to act in a manner consistent with the provisions of the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992 (s 5(b)). This requirement is intended to further the agreements expressed in the Deed of Settlement referred to in the Preamble to the Settlement Act. In particular, Mäori non-commercial fishing rights continue to give rise to Treaty obligations on the Crown.
42. The species-specific papers in this document set out information relating to the customary interest in the species concerned. An allowance for customary fishing has been made for each stock on the basis of a qualitative assessment of that interest. The consultation process will provide Mäori with an opportunity to comment on the customary use and management of the stocks. However, no explicit consideration has been given to the application of the specific customary management tools available under the Act to the stocks concerned. Introduction of the species to the QMS will not preclude adoption of appropriate management measures in the future to provide for customary use and management practices.
43. In accordance with the Settlement legislation, the Treaty of Waitangi Fisheries Commission will be allocated 20% of all quota shares in the TACC set for the stocks on introduction to the QMS.

Additional Factors to be taken into Account (s 11)

44. Before setting or varying any sustainability measure (including a TAC) the following factors must be considered:

1. Any regional policy statement, regional plan, or proposed regional plan under the Resource Management Act 1991 and any management strategy or management plan under the Conservation Act 1987 that apply to the coastal marine area and which the Minister considers to be relevant;
2. Any effects of fishing on the stock and the aquatic environment;
3. Any existing controls that apply to the stock or area concerned;
4. The natural variability of the stock concerned;
5. Any conservation services or fisheries services;
6. Any relevant fisheries plan approved under this Part; and
7. Any decisions not to require conservation services or fisheries services.

45. Where any of the above factors are relevant, they are discussed in the species-specific sections. MFish is not aware of any specific plans, statements or strategies that are relevant to the stocks in this document. No fisheries plans have been approved to date. A fisheries plan for cockles in COC 3A has been submitted to the Minister but not approved. MFish is not aware of any other plans being contemplated at this time for any of the stocks being introduced into the QMS this year. No explicit decisions have been made not to require services in a fishery on the basis of any undertaking by stakeholders either within or outside a fisheries plan to undertake certain services directly.
46. Consideration also needs to be given to the most effective way of achieving the desired outcome of a sustainability measure. An important factor in supporting the use of non-statutory measures is the degree of support for the measure and the nature of the monitoring and enforcement regime proposed to support the measure. However, the process of introducing stocks to the QMS is unlikely to involve implementation of measures on a non-regulatory basis. The actual commercial participants in the fishery may be largely unknown until such time as quota is allocated.

Guidelines for Setting TACs for New Species

47. There are a number of closely interrelated factors that need to be taken into account when setting the TAC. The following factors are identified as being of particular significance:

• Identifying the appropriate TAC option for a stock (ss 13, 14, 14B): The level at which the TAC is set will be heavily influenced by the statutory TAC option proposed for the stock. Existing estimates of yield based upon on MSY or an existing catch limit for a stock might not be applicable for a stock managed under ss 14 or 14B.
• The biological and fishery characteristics of the stock and associated stocks: The biological and fishery characteristics of the stock will influence the TAC option adopted for the stock. Implications of catch levels for associated stock complexes (target and bycatch relationships) should be expressly considered. In some instances information about current catch levels may not accurately reflect actual catch ratios in multi-species fisheries due to the nature of the reporting obligations for non-QMS stocks.
• The effects of harvesting the stock on the aquatic environment: The relative effects on the environment of different TAC options should be considered. Interactions with protected species and areas of high biodiversity need to be actively managed. Consideration of predator-prey relationships is an important factor. The effects of different fishing methods should be considered.
• The capacity for development of the stock: The Act requires that consideration be given to the development of fisheries resources while ensuring the sustainability of those resources. In the purpose statement of the Act (s 8), the definition of the word ‘utilisation’ includes ‘developing’ fisheries resources. The QMS provides the most appropriate mechanism for development to occur. Development can be actively provided under the various TAC options. Rotationally harvested and enhanced fisheries provide scope for a TAC to be set at a level other than one that moves the stock towards BMSY. A stock managed below Bmsy may provide for additional catch to be taken. In some instances stocks introduced to the QMS have been lightly fished and are deemed to be in a near virgin state; hence the stock is well above BMSY. While there is no provision in the Act for TACs to be set at a nominal level, there is scope for additional catch to be taken in the short term as the stock is fished towards a level that can produce MSY.
• Important factors to be considered when considering development potential are that:

1. setting TACs at the level of current catch (in some instances a zero or one tonne TAC) may artificially constrain development of a stock where there is virtually no risk posed to the stock by setting a higher TAC;
2. existing catch limits (competitive or ICE) may not be appropriate for the purposes of setting a TAC/TACC. This is because they were originally designed to allow limited target fishing on a competitive basis for those fishers with existing permits. The competitive catch limits may not be reflective of actual total landings for the species concerned.
3. development may be constrained by a lack of a review of a stock in the immediate future once introduced to the QMS due to competing priorities for review of other stocks;
4. a TAC may be set at a level that moves the stock over time towards a level that can produce the MSY (BMSY);
5. if a TAC is set at a level in order to move a stock towards BMSY, information (catch and effort data or fishery independent research) needs to be forthcoming to assess when the stock is at or above the level that can produce the MSY;
6. setting a TAC that provides for some level of initial development offers an incentive for fishers to invest in the fishery and develop initiatives such as adaptive management proposals and fisheries plans.

• The information principles: The Act specifies that the absence of, or any uncertainty in, any information should not be used as a reason for postponing or failing to take any measure to achieve the purpose of the Act. As noted above, the purpose of the Act contains two distinct elements ‘ensuring sustainability’ and ‘providing for utilisation’. In the absence of an explicit hierarchy between the two objectives, a decision is to be made on a case by case basis that takes into account the available information to determine the relative weight given to each of the objectives. Any decision should explicitly identify the factors taken into account and the relative weighting placed upon the relevant information.
• Existing stock assessment information about the status of the stock: Information about current biomass and estimate of available yield may be available for only a limited number of stocks. An explicit CAY or MCY (or equivalent) management approach, complementary with the characteristics of the stock, may be adopted with the reasons stated for that approach. The certainty, reliability, and adequacy of that information needs to be taken into account. Existing estimates of yield might not be applicable for a stock managed under ss 14 or 14A.
• Current catch levels of the stock: In the absence of robust assessment information or an existing catch limit (competitive or ICE) current catch can be used as a basis for setting the TAC, subject to consideration of other relevant statutory obligations. The reliability of any information is to be taken into account.
• Monitoring of stock: Current and future monitoring of the stock is an important factor relating to an assessment of risk to sustainability. The ability to assess the stock, the nature of the assessment method and the likely robustness of that assessment, the level of observer coverage, and the nature of direct research are to be considered in the assessment of different potential TAC options.
• Relevant social, economic, and cultural factors: The ability to set a TAC at different levels will have commensurate social, economic, and cultural implications. The way and rate at which a stock is fished towards BMSY should explicitly take into account relevant social, economic, and cultural factors. The interests of future generations is an important social consideration that is reflected in consideration of the TAC option adopted, the level at which the TAC is set, and the effects of fishing for the stock on the aquatic environment. Treaty obligations arising in respect of a stock are encompassed within relevant cultural factors.