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.
  • “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?);
  • “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;
  • “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