Notes of issues discussed and decisions made.

Present:
Amateur fishers (AF):
Paul Barnes
Scott Macindoe
Jason Foord
Steve Tee
Kim Walshe
Ross Gildon
Keith Ingram
Richard Baker
Jeff Romeril
Officials (O):
Stan Crothers
Mark Edwards
Peter Cole
The meeting commenced at approximately 1.30pm at the Bucklands Beach Yacht Club.

There were two main agenda items:

• Matters arising from the 29 January meeting;
• Development of reform options consistent with the constraints set out in the Minister of Fisheries letter of 21 January 2003 and the principles set out in the joint letter dated 8 December 2002.

Notes from the last meeting

Notes from the last meeting were accepted with amendments to the spelling of several alternate members of the group.

Actions arising from the last meeting

The paper setting out how (and at what point) the right to fish by amateur fishers became subject to constraints was discussed. AF thought it didn’t think it covered a key issue originally raised about the right to fish for food or sustenance. O indicated that the law didn’t distinguish between amateur sport and sustenance fishing. AF asked about the legal status of the paper. Had it been reviewed by the Ministry’s legal section. O indicated the paper was largely historical in its scope. The legal aspects were addressed in the occasional papers-paragraphs 25-51. This paper had been peer reviewed by Crown Law and the Ministry for Foreign Affairs and Trade. A wide-ranging discussion followed about the difficulties of managing a shared fishery where the groups sharing the resource had different needs and significantly different access rights. AF raised the issue of the Crown’s obligations to provide for sustenance fishing under various UN conventions. Officials stated that these “soft law” statements did not bind the Crown. [This issue is addressed in paragraphs 44-49 of the occasional papers.] Officials undertook to provide a further paper specifically addressing when the right to fish for sustenance purposes became subject to constraints.

Development of Reform Options

A “talking points” paper prepared by officials was circulated. [Attached as an appendix to these notes.] This focused on the nature of the principles from the 8 December letter and the constraints set out in the Minister’s letter. AF made it clear that any papers to be discussed at the Reference Group meetings needed to be emailed at least three days prior to the meeting in order to ensure meaningful discussion. Officials accepted the desirability of this but noted that it might not always be possible.

Priority
AF indicated that the priority right referred to in the joint letter shouldn’t be read in isolation from the other principles particularly the principle relating to the ability to devise plans. Amateur fishers were not seeking an absolute unconditional priority right. It will be conditional on not wasting or squandering the resource. What they are seeking is a planning process to improve the utilisation of the resource. The right to develop plans and sustainability measures- [changes as appropriate to method or gear use, size limits, bag limits etc]- to achieve improved utilisation of the resource.

If the stock assessment suggested the need to reduce take both commercial and amateur fishers should be given the opportunity to implement measures that reduced fishing mortality and wasteful fishing practices. If, after the implementation of these measures, it was apparent that the abundance of fish was insufficient to meet the needs of commercial and amateur fishers, then the priority would be invoked and a reallocation take place to restore the “recreational” allowance to a level that provided a reasonable daily bag limit. Any allocation process needed to ensure that those groups who contributed to sustaining and rebuilding fish stocks benefited according to their contributions. AF felt all to often the benefits of their contribution to rebuilding fish stocks were appropriated by the commercial sector.

The concept of a limited spatial priority as suggested in the “talking points” paper was discussed. AF expressed the need for the priority right to reflect the nature of the fish stocks. Some popular recreational species were migratory (kingfish). A limited spatial right might not prove effective in these circumstances. Other species were more sedentary (shell fish and crayfish). Spatial priority might be appropriate in these circumstances.

AF suggested it might be useful to test priority options by looking at the likely outcomes for key recreational species such as snapper, kahawai, blue cod, kingfish, rock lobster, scallops. Working through an example produced the following important issues:

• Need to research biomass, harvest levels and sustainability levels;
• If harvest is above sustainable levels, need to look at alternative ways of accommodating harvest but with reduced impact on sustainability e.g gear changes [commercial sector still using diamond netting was used as an example], and performance standards. Might need to poll amateur fishers on the options and outcomes;
• Recreational demand is highest near population centres so fishery management may need to be different in these localities;
• AMP programmes were not appropriate in shared fisheries unless all sectors shared in the benefits
• Other innovative ways to retain recruitment (such as closures after those year where recruitment is very abundant to give these juveniles are better chance to mature and add to the biomass);
• Population growth in regions such as Auckland leads to increases in overall fishing effort in fisheries accessible from Auckland and to increased harvest take;
• Incentive structures not working as well as expected. Competitive pressures were seen by officials as a disincentive in some circumstances to work collectively;
• Msy v Mey ; sustenance needs v sports (larger fish) needs;
• Need for fishery management processes to be such that amateur fisher contribution to sustainability were recognised and secured and not given to other sectors;
• If after available fishery management tools not successful in improving sustainability of fish stock then allocative criteria needed to give effect to amateur priority through a gradual reallocation over time from commercial to recreational.

Point of Agreement

• Officials and amateur fishers agreed that some aspects of the incentive structures implicit in the QMS model are not working as well as expected. For example, the incentives commercial fishers had to fish on sustainable basis were not totally effective. Commercial fishers still used diamond netting in the snapper fisheries that resulted in many undersized juvenile fish being landed, increasing mortality levels and negatively impacting on the sustainability of the fishery;
• Commercial and amateur fishers have different demands-catch rate generally more important to amateur fishers;
• Two important rights for New Zealanders-to harvest sea food for your family, and to be able to purchase fish for your own use.
  

Allocation
Officials suggested that specific allocation criteria should be a key component of any reallocation process and drew attention to a section in the occasional papers outlining possible criteria. [See paragraphs 15-17]. At present the Fisheries Act 1996 was silent about the matters the Minister should take into consideration when making allocative decisions. Specifying the matters the Minister had to take into consideration, such as equity issues arising from the actions of particular user groups in contributing to or undermining sustainability efforts; participation rates; population trends; fishing practices was important. These were all issues that had been raised in the discussion but amateur fishers felt were not adequately reflected in current allocative decisions.

• Criteria to guide allocation decisions would be useful;
• Amateur fishing rights not adequately specified in legislation;
  

• Officials and amateur fishers agreed that equity is an important consideration in any allocative decision. It is inequitable if one group’s contribution to ensuring a sustainable fishery is not reflected in its allocation. Similarly, it would be inequitable if all groups were expected to bear the burden of sustainability measures (such as reduced allocations) necessitated by the actions of one group;
• Sectors need security about fishery management outcomes to provide incentives to take proactive management initiatives.

The issue of whether the s 308 protection applied to decisions to set a TAC for the first time to fish stock already in the QMS [such as the recent SNA2 decision] was discussed. O indicated it did not. This lead into a discussion about how these circumstance came about. [QMS was established under the 1986 amendment to the 1983 Fisheries Act but there only existed a provision to establish a TACC under this legislation. Quota were for fixed amounts, with compensation provided for reductions in quota. In 1990, this changed to a regime of proportional quota.] Officials undertook to provide a paper on the regime changes that took place at that time. AF requested that this paper include purpose and intent of changes to legislation, consultation process followed and summary of said consultation results. Officials indicated that the project didn’t have the level of resources necessary to provide this degree of detail.

Officials suggested that in many respects the arrangements in place to manage amateur marine fishing in some of the Australian States (New South Wales and Victoria in particular) had addressed the issues (such as allocation and compensation) the Reference Group was debating and that it might be useful to draw on their experience. The possibility of sponsored travel to Australia to talk with amateur fishers and officials was raised. Officials undertook to prepare a paper setting out fishery management structures and processes in a range of Australian states.

The meeting concluded at 5.15pm

Agreed Actions

Officials undertook to provide a further paper specifically addressing when the right to fish for sustenance purposes became subject to constraints.

Officials undertook to provide a paper on the fishery management regime change implemented through the Fisheries Amendment Act 1990. AF requested that this paper include purpose and intent of changes to legislation, consultation process followed and summary of said consultation results.[As indicated above officials did not agree to provide a paper with this level of detail.]

Officials undertook to prepare a paper setting out the fishery management structures and processes in a range of Australian states.

These talking points have been developed for the meeting with amateur fishers on 18 February. The agenda for this meeting focuses on the development of a reform option having regard to the constraints set out in the Minister of Fisheries letter dated 21 January 2003 and the principles set out in the amateur fishers joint letter of 8 December 2002.

8 December letter

The 8 December letter sets out four principles. They are:
(i)A priority right over commercial fishers written into legislation;
(ii)The ability to exclude commercial methods that deplete recreationally important areas;
(iii)The ability to devise plans to ensure future generations enjoy the same or better quality of rights while preventing fish conserved for recreational use being given to the commercial sector; and
(iv)No licensing of recreational fishers.

• An absolute priority right (with no conditions) cuts across the settlement with Maori, is likely to create a fresh grievance with Maori, undermines the present incentive structures underpinning the QMS, and impacts on the rights of other fishery users. The Minister’s response to the 8 December letter suggests he is most unlikely to support an absolute priority for amateur fishers. This suggests that if we are to further investigate a priority right it may be best to do so in the form of a limited spatial priority right.
• The wording of both the preface to the 1989 National Policy for Marine Recreational Fisheries and the policy statement itself suggests the Minister at that time had a more limited right in mind. The preface does not refer to an unlimited right but one in those circumstances “where a species of fish is not sufficiently abundant to support both commercial and non-commercial fishing”. The National Policy itself provides further elaboration under “objective one” where it states “preference will be given to non-commercial fishing in areas readily accessible to and popular with the public, where a species is not sufficiently abundant to support both non-commercial and commercial fishing.”
• A limited spatial priority right raises issues relating to the nature of the limitations - defined area, specie limitation, season limitation; and what would trigger the decisions to apply the spatial priority? [The National Policy for Marine Recreational Fisheries refers to preference being given in areas readily accessible to and popular with the public where a species is “not sufficiently abundant to support both non-commercial and commercial fishing”. How will we know when this is the case? If present harvest allowances are used as this yardstick, trigger points that either currently exist or have existed in the fisheries legislation might be used. For example, the spatial priority might apply when commercial fishing methods have “an undue adverse impact” on the amateur fishers ability to catch the daily bag limit; or when commercial fishing methods “unreasonably affect” the amateur fishers right to harvest the specified daily bag limit or “prevent” the harvesting.] It also raises compensation issues-at what point? How much? How will it be funded? See compensation issues below.
• There are also fishery management policy and enforcement issues relating to an amateur priority area that need clarifying. If the priority area is a subset of a QMA,would the same controls (bag limits etc) apply within the priority area as apply within the larger QMA? What would be the rationale for different controls? If the controls are the same, does an amateur priority area have any significance other than an area where commercial fishing doesn’t take place for particular species? What are the incentives on fisher behaviour? If a priority area is for specified species only, what are the enforcement implications?
• The “ability to exclude commercial methods that deplete recreationally important areas” implies a spatial priority. This seems similar in concept to the limited priority referred to in the National Policy and discussed above.
• The principle “the ability to devise plans to ensure future generations enjoy the same or better quality of rights while preventing fish conserved for recreational use being given to the commercial sector” contains three distinct issues that need further elaboration and discussion.
o “the ability to devise plans” raises issues relating to who (the Minister, amateur fishers ?), how (is this a statutory ability? would other sector right holders be involved?) and on what basis ( process issues-who would approve these plans? what would their status be? how would they be implemented?);
o “better quality of rights” isn’t clear as to its intention. Does the “same or better quality” refer to improving the current expression of the amateur fisher right to fish as set out in the various amateur-fishing regulations ie. higher bag limits and the examination and removal of some of the regulatory constraints? If the expression of the present rights are to be examined at some point in the future the Crown will want to insure that these rights are examined through a process undertaken the Crown;
o “Preventing fish conserved for recreational use being given to the commercial sector” can relate to the present fishery management arrangements where fishery resources are shared between various groups with amateur and commercial fishers having no priority over the other. Under the present arrangements, the most certain way of ensuring the envisaged circumstances did not occur would be to have :
? an allocation of the resources between commercial and amateur fishers that precludes any subsequent transfer between these groups; or
? allocation criteria set out in statute; or
? a combination of both of the above.

Constraints On The Crown

These are set out in the Minister’s letter to amateur fishers dated 21 January.
• Crown’s obligation to Maori under the Treaty and the settlement. The currency of the settlement was ITQ. [The preamble to the Maori Fisheries Act 1989, which records the outcome of the interim settlement, states that it is an Act “to make better provision for the recognition of Maori fishing rights secured by the Treaty of Waitangi; and to facilitate the entry of Maori into, and the development by Maori of, the business and activity of fishing…..”] Any reform proposal that undermines the value of the settlement has the potential to create a fresh treaty grievance. It is unlikely Ministers will accept any proposal that has this effect. It is possible a fresh grievance might be settled by monetary payments by the Crown but this raises other issues for the Crown such as will Maori willingly accept this (probably not given the negotiated outcome), how much will it cost, how will this be funded and if it is to be funded from the Consolidated Fund, does this fit with government’s expenditure priorities. These are significant issues.
• Not undermine the integrity of the quota management system. An absolute priority with no conditions (such as spatial and circumstance conditions) undermines the incentive structure on which the QMS is based. It would significantly reduce the incentives commercial fishers have to fish on a sustainable basis. Additional compliance and enforcement effort would not compensate for this. QMS is the corner stone of the Government’s fishery management regime. The Minister has indicated he will not compromise it.
• Compensation. The Fisheries Act 1996 provides a limited property right to commercial fishers in the form of ITQ and ACE. Granting priority to amateur fishers (even if limited to a spatial priority in defined circumstances) may impact on these property rights. This raises compensation issues for the Crown. The Minister has indicated that he is unwilling to accept proposals that ignore the legitimate rights of other resource users. Compensation issues will therefore need to be addressed in any proposal involving a priority right. [The issue of compensation is discussed below.]
• Fiscal issues. The Minister has expressed a preference that any proposal be fiscally neutral. He has, however, indicated a willingness to consider proposals that are not fiscally neutral subject to solutions to the fiscal issues being identified.

Compensation

• Providing a mechanism to grant amateur fishers a spatial priority right in defined circumstances impacts on the property rights of other fishers. The extent of the impact will depend on the spatial dimension of the decision and its impact on present commercial fishing patterns;
• The courts have scrupulously defended the principle that the title to property should not be compulsorily acquired without compensation (unless expressly provided for in statute). This principle extends to decisions that impact on the ability of the property right owner to exercise that property right;
• It is unclear from previous court cases and Crown Law opinions as to whether any particular decision granting amateur fishers priority in a defined area within a QMA would result in a successful claim for compensation from other property right holders. This very much depends on the impact the decision has on the ability of the quota holder to exercise the harvesting right the quota bestows and how widespread this impact is. If the impact is significant then compensation issues may well arise. Previous court decisions such as Sandford (South Island) Ltd v Moyle send a fairly clear signal to the Crown that where a decision (made for non sustainability reasons) impacts significantly on the quota holder’s ability to exercise quota rights then an examinable case for compensation exists;
• There are no sound policy reasons why the Crown should extend the liability protection provisions of s308 to cover decisions made with respect to a priority for amateur fishers. Parliament has already considered the broad issues relating to the protection of the Crown from liability arising from all fishery management decisions including those arising from non-sustainability issues (such as reallocation). Parliament decided that specific protection from liability should only extend to sustainability decisions; and
• The magnitude of any compensation arising from a decision to implement a spatial priority for amateur fishers will in large part depend on its impact on the ability of existing right holders to exercise their rights, and the subsequent outcome of consideration by the courts. These are unknowns and can only be determined on a case-by-case basis. It is possible with economic modelling using worst-case scenarios to develop a range of possible compensation values.

Other Reform Issues

The focus of the 8 December principles is primarily on a priority right. There are other issues which may be beneficial to amateur fishers and which might improve both the effectiveness of the allocation process and management of fishery resources.

• A more transparent allocation process setting out in statute the issues the Minister is required to consider. This would better secure the amateur right to fish;
• The management of important amateur fisheries at other than Bmsy. This will involve trade offs for amateur fishers as it may well involve lower over all fish stock numbers but increased numbers of larger fish. As most of the significant amateur fisheries are also commercial fisheries some additional consultation mechanism seems desirable if this is to be implemented.