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Occasional
Papers - Shared Resource:
Allocation
Between Stakeholders
The Occasional Papers
were presented to the meeting between the Minister of Fisheries,
Ministry officials and recreational interests in December 2002.
The papers were discussed with the Minister and later reviewed by
option4, New Zealand Big Game Fishing Council (NZBGFC) and the New
Zealand Recreational Fishing Council (NZRFC).
There are 4 parts to the
Occasional Papers.
Links to others are provided below.
PART 1 Shared Resource: Allocation
between stakeholders
PART
2 The legal nature of recreational fishing rights
PART
3 Obligations to Maori
PART
4 Maintaining the marine environment and recreational
fishing rights
PART
1
Shared Resource: Allocation between stakeholders
1. This paper discusses the matters that the Minister of Fisheries
is required to address in determining catch limits for particular
fisheries and the process followed in allocating the allowable catch
between the various stakeholders. Some of the important considerations
are addressed in more detail in the associated papers “Maintaining
the marine environment and recreational fishing rights”; “Obligations
to Maori”; and “The legal nature of recreational fishing
rights”.
Setting a total allowable catch
2. The Fisheries Act 1996 requires the Minister of Fisheries set
a total allowable catch (TAC) with respect to each quota management
area for each stock subject to the quota management system (QMS).
For fish stocks not yet subject to the QMS the Minister may set
a catch limit including a commercial catch limit but is not required
to do so.
3. The TAC is divided into shares for each of the respective stakeholder
groups’ catch allocation, after allowing for other fish mortality
arising from the exercise of the catch entitlements in a particular
fishery. For non-commercial interests, that interest is expressed
as an allowance. The commercial entitlement is specified in the
Act as a total allowable commercial catch (TACC). The process by
which the allowance for non-commercial interests in the fishery
is made is undertaken in conjunction with the setting of the TACC.
4. The Fisheries Act does not prescribe the extent of the respective
allowance for each stakeholding interest, or the priority to be
accorded to those interests. The Minister has wide powers of discretion
in deciding the allocation to each stakeholder. However, the Act
does contain provisions establishing the nature of a stakeholders
right and the manner in which it can be modified. In addition, a
number of court decisions have provided further guidance as to the
nature of the Minister’s responsibilities when allocating
the TAC between stakeholders.
5. In allocating the TAC the Minister is required to consider the
following factors under the Fisheries Act:
- Maori customary non commercial fishing interests [section 21(1)(a)(i)];
- Recreational fishing interests [section 21(1)(a)(ii)];
- Commercial fishing interests [section 20]; and
- All other mortality of the stock caused by fishing [section
21(1)(b)]
6. The Act requires the Minister to give consideration to the Maori
customary non-commercial and recreational interests and all other
mortality before setting a TACC. Although the Act does not accord
any of these factors priority there are practical reasons why the
“other mortality” caused by fishing is considered first.
Illegal catch (under reporting, poaching, and discards), incidental
gear mortality, and scientific research are sources of “other
mortality”. Such mortality is a fundamental element that affects
the TAC available for apportionment between competing interests.
Attributing priority to this factor acknowledges that such mortality
is an unavoidable component of the utilisation of fisheries resources.
However, where the “other mortality” can be attributed
to a particular source it is equitable that the attributed mortality
is subtracted from the share of the TAC apportioned to the relevant
sector.
Maori Customary Interest
7. The Crown has obligations under Section 10 of the Treaty of Waitangi
(Fisheries Claims) Settlement Act 1992 and Section 5 of the Fisheries
Act 1996. [See “Obligations to Maori” paper.] The setting
of the customary allowance under section 21 should account for the
extent of customary non-commercial take as authorised under the
customary regulations. The Minister must balance these sets of rights
with those rights enjoyed by recreational and commercial fishers
set out elsewhere in the Act. There may be some circumstances where
the TAC is set so low that only Maori customary non-commercial fishing
can be accommodated and the Minister chooses to exclude other fishers.
Recreational Interests
8. Every person has a right to fish for recreational purposes. This
right is subject to statutory controls in New Zealand. [See the
paper “The legal nature of recreational fishing rights”.]
The Fisheries Act 1996 provides for both commercial and recreational
fishing. It affords no legal priority to recreational interests
in terms of the allocation of the TAC for a fish stock. In New Zealand
Federation of Commercial Fishermen (inc) & Ors v Minister of
Fisheries & Ors (HC, Wellington CP237/95) (SNA1) McGechan J,
without determining the issue of whether recreational fishers are
accorded priority under the Act, stated that to allow for non-commercial
fishing interests, arguably does not mean that an allowance must
fully satisfy estimated non-commercial requirements.
9. Where there are competing demands, which will exceed the availability
of the resource, the Act does not require the Minister to satisfy
the needs of all groups. Justice McGechan concluded in SNA1 that
the requirement to “allow for” the recreational interest
is to be construed as meaning to “allow for in whole or in
part”.
10. The Minister of Fisheries has discretion under the Fisheries
Act 1996 to determine the nature and extent of any priority between
recreational and commercial interests on a case by case basis. [McGechan
J New Zealand Federation of Commercial Fishermen (Inc) 7 Ors v Minister
of Fisheries & Ors (HC, Wellington CP 237/95 page 89) and New
Zealand Federation of Commercial Fishermen (Inc) 7 Ors v Minister
of Fisheries & Ors(CA 82/97, judgement of the Court delivered
by Tipping J pages 17-18)].
Total Allowable Commercial Catch
11. The Minister of Fisheries is required to fix a TACC for all
QMS fish stock. The allocation of quota under section 47 of the
Act creates a property right for individuals who hold individual
transferable quota (ITQ) in a QMS fish stock. It is not an absolute
property right as the Fisheries Act 1996 makes it subservient to
the exercise of the Minister’s powers pursuant to the Act.
It is an inherent element of the QMS that the TACC can be reduced,
with a consequential reduction in ITQ. In considering a reduction
of the TACC the Minister is required to consider, amongst other
matters, the economic impact of his decision. The Court of Appeal
in CA82/97 held that it is in the Minister’s power to vary
the ratio between commercial and recreational interests once the
initial allocation was made. Similarly McGechan J in CP237/95 considered
that a conscious transfer of catch between interests is a legitimate
activity within the context of the Act.
12. The use of ITQ to settle Maori commercial fisheries claims places
an additional onus on the Crown to maintain the integrity of the
overall fisheries management framework – a framework based
on transferable property rights that provide access in perpetuity
to sustainably managed fishstocks. Crown actions [such as reallocating
fishstocks between commercial and recreational fishers] that may
diminish the worth of the fisheries redress accorded to Maori, directly
or indirectly, need to be considered in full light of their potential
implications for the longevity of the settlement and the need to
avoid creating a new Treaty grievance.
13. Section 308 provides that a reduction of the TACC for the purposes
of ensuring sustainability is not liable to compensation. The Act
is silent on the issue of compensation where a reallocation between
commercial and non-commercial interests takes place.
Determination of Stakeholder Interest
14. The primary method by which the extent of an interest in a fish
stock is assessed is by a measure of the existing utilisation of
the fish stock by each sector group. The manner of calculation of
that interest will vary according to the level of information available.
In the commercial sector, reported catches for each existing QMS
species is considered to be an accurate record of commercial utilisation.
Information detailing catch levels for other sectors is generally
less comprehensive. Monitoring of the recreational and Maori customary
non- commercial harvest occurs retrospectively through recreational
harvest surveys and liaison with tangata whenua. Increasingly information
on the Maori customary harvest is being provided through reporting
mechanisms under customary fishing regulations. In the absence of
precise information reliance is made on the best available information.
This is consistent with the information principles set out in section
10 of the Act. Consultation under section 12 of the Act is also
used to determine stakeholder interests.
Allocative Process
15. The Fisheries Act 1996 sets out an allocative process that involves
three steps-the setting or varying of a TAC; the provision of an
allowance for specified interests; and the setting or varying of
a TACC. These steps are interrelated but may occur independently
of each other. For example the TAC may be altered without affecting
the TACC.
16. No explicit mechanism to guide the apportionment of the TAC
between sector groups is set out in the Act. A number of provisions,
however, do provide some guidance. The purpose of the Act, as set
out in section 8, is to provide for the utilisation of fisheries
resources so as to enable people to provide for their social, economic,
and cultural well being. Section 13 (3) requires that the Minister
have regard to social, economic and cultural factors when considering
the way in which, and the rate at which, fish stocks are moved towards
a level that can produce a “maximum sustainable yield”.
This can be over a time period of the Minister’s choosing.
Section five requires the Minister to have regard to the Crown’s
international obligations, and those under the Treaty of Waitangi
(Fisheries Claims) Settlement Act 1992. Section 9 sets out environmental
principles that the Minister is required to have regard to when
reaching decisions. (See the paper “Maintaining the marine
environment and recreational fishing rights”.) Other factors
that may be relevant to informing a decision are:
• Current stock levels;
• Existing allocations;
• Current harvest levels;
• Previous decisions;
• Equity of allocation (shared pain/shared benefit);
• Participation levels and the importance of the resource;
• Population trends;
• Relative value of the resource to respective sectors;
• Current and past fishing practices (including over fishing
and voluntary closures by stakeholders)
• Investment and initiatives taken to develop or enhance the
resource;
• Impact on the ability of sector to take allocation provided;
• Economic impact of allocative decisions; and
• Social and cultural impacts of decisions.
17. Information about the current status of the stock relative to
the statutory target level, existing catch levels, existing allowances
and catch levels, plus previous decisions may indicate the actions
which need to be taken.
18. The Fisheries Act gives no priority to either commercial or
recreational interest. The Act is directed at providing for both
recreational and commercial [as well as customary] fishing. It permits
the preference of one sector to the disadvantage of the other (although
the reallocation of catch from commercial to non commercial fishers
may give rise to an issue in respect to the payment of compensation).
Although the Minister has discretion with regard to the allocation
between commercial and recreational fishers, case law suggests that
it is not unreasonable for both groups to share any of the pain
arising from a reduction in the TAC. There is no requirement for
the interests of both groups to be met in full. In the absence of
information about the relative benefits to be derived from allocating
a stock to one group or the other it would be reasonable for both
groups to ensure the sustainability of a fish stock through a shared
reduction in the TACC and the recreational allowance. Equally, both
groups should derive shared benefit from the rebuild of a fishery.
19. When the TAC and the TACC are to be reduced for sustainability
purposes there is a relationship between managing recreational catch
levels and reducing the TACC and vice versa over which the Minister
has discretion. Although there is no legal obligation to undertake
a proportional reduction between commercial and recreational interests,
consideration of fairness suggests that it would be unwise to reduce
one without taking steps to constrain the other.
20. Those parties who are responsible for the enhancement of a resource
should, for equity reasons, receive the benefit of their activities.
There are, however, difficulties in ascertaining the increased harvest
from a fishery arising from such activities. This is a matter the
Minister can consider at his discretion.
21. Population trends are reflected in the level of recreational
fishing undertaken at a regional and national level. Growth in urban
centres has a significant impact on some fisheries. The allowance
set and the associated management controls need to take account
of existing population growth and distribution.
22. Certain fisheries are considered to be of importance to particular
groups of fishers. The value attributed to a resource is not limited
to its economic value but may include its aesthetic and non market
values. Some species, such as snapper, are a medium to high value
fish, but also have a high value as an important recreational target
species. Certain species such as kingfish may be valuable to particular
groups, such as charter boats, and may have significance for tourism.
The abundance of a species and the availability of a particular
size of fish are also important factors determining the value of
a species of fish to particular groups. These factors need consideration
in allocation decisions.
23. Over fishing of a TAC may result in the subsequent reduction
of the TAC. Reported over fishing by individual commercial fishers
is subject to control under the Fisheries Act. The consistent over
fishing of the TACC or an allowance, that results in a reduction
of the TAC, as a general principle, should be attributed to the
stakeholder group responsible for the over fishing. This is a matter
at the Minister’s discretion.
24. The Minister has an obligation under the Act to consider the
economic, social and cultural impacts of altering the TAC and its
subsequent allocation. The Court of Appeal [SNA1] has suggested
that a careful cost benefit analysis needs to be undertaken to support
a particular decision and that it should cover a reasonable range
of options available to the Minister in rebuilding stock levels
towards that level allowing the maximum sustainable yield. The Court
considered it prudent for the decision to clear identify the economic,
social, and cultural factors considered relevant to the decision
and those not seen as relevant. Those affected by a decision ought
to be able to establish that all other reasonable possibilities
had been considered.
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