The Primary Production Committee has examined the Aquaculture Legislation Amendment Bill (No 2) and recommends that it be passed with the amendments shown.

This bill addresses policy and technical issues associated with establishing aquaculture management areas (AMAs). The bill would provide some limited improvements to the regulatory framework for aquaculture, specifically by adding provision for aquaculture agreements regarding areas with applications that are subject to transitional processes, amending the invited private plan change process to enable regional councils to manage proposals which relate in part or wholly to the same space, and allowing experimental aquaculture and environmental monitoring outside of AMAs.

This commentary focuses on the main amendments we recommend and outlines the main issues we considered.

Clause 4 would amend section 10 of the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004 (the Transitional Act), which provides for certain leases and licences under the Marine Farming Act 1971 to be deemed coastal permits. We recommend two amendments to clause 4 to provide more certainty for holders of deemed coastal permits.

The first amendment we recommend is to clarify that under section 10(4) councils could amend conditions only as a result of a review conducted in accordance with section 10(4)⁠(a).

We also recommend amending section 10(6) to clarify that a holder of a deemed permit could appeal or object against the decision of a consent authority to vary, add, or delete conditions of a deemed permit, whether the review was requested by the consent holder or not; and appeal or object against the decision of a consent authority not to commence a review or, following a review, the decision not to vary, add, or delete the conditions of a deemed permit, but only where the review has been requested by the consent holder.

We recommend inserting new section 17A in clause 4A to amend the Transitional Act to extend the term of marine farm leases that are due to expire in the next three years, so that they would end three years after the date on which this legislation came into force. We also recommend reinstating Marine Farm Lease Number 42, which expired in December 2006 before forfeiture was completed or discontinued, with a term that would end 3 years after this legislation came into force.

This amendment was sought to extend the term of some marine farm leases in the Waikare Inlet, which are still the subject of forfeiture action under the Marine Farming Act 1971. The amendment would also allow all the farms in the Waikare Inlet that are subject to forfeiture action to continue to operate and the area to be cleaned up so forfeiture action can be discontinued and the farms’ leases can become deemed coastal permits under the Transitional Act.

Clause 5 amends section 20 of the Transitional Act, providing for marine farming permits granted under section 67J of the Fisheries Act 1983 to be deemed coastal permits. We recommend two amendments to clarify the timing of review and rights of objection and appeal against council decisions.

We recommend amending section 20(3) to make it clear that councils could amend conditions only as a result of a review conducted in accordance with section 20(3)⁠(a).

We also recommend amending section 20(5) to make it clear that a holder of a deemed permit could appeal against or object to the decision of a consent authority to vary, add, or delete conditions of a deemed permit whether the review was requested by the consent holder or not; or against the decision of a consent authority not to commence a review or following a review; or the decision not to vary, add, or delete the conditions of a deemed permit, but only where the review had been requested by the consent holder.

We recommend inserting new section 20A in clause 5A to validate the marine farming permit MFP 364. The Coromandel Marine Farmers Association raised the situation of the area in the Waikato that they farm communally under a single permit, and the difficulties that the Transitional Act creates in respect of it becoming a deemed AMA. The area is subject to ongoing litigation regarding the validity of the permit, and the treatment of the area in the proposed regional coastal plan. We recommend validating the permit to allow the area to become a deemed AMA under the Transitional Act. We do not support any intervention in the matter of the treatment of the area in the regional coastal plan. A coastal permit for occupation under the Resource Management Act 1991 will also be required.

Clause 6 amends section 21 of the Transitional Act, providing for spat catching permits granted under section 67Q(2) of the Fisheries Act 1983 to be deemed coastal permits. We recommend amendments to clarify the timing of review and rights of objection and appeal against council decisions.

First, we recommend amending clause 6 to make it clear that councils could amend conditions only as a result of a review conducted in accordance with section 21(3)⁠(a).

We also recommend amending the legislation to make it clear that a holder of a deemed permit could appeal or object against the decision of a consent authority to vary, add to, or delete the conditions of a deemed permit, whether the review was requested by the consent holder or not; and against the decision of a consent authority not to commence a review; or following a review, the decision not to vary, add to, or delete the conditions of a deemed permit, but only where the review had been requested by the consent holder.

Clause 8 would apply to coastal permits that were not caught by the moratorium if the corresponding Fisheries Act permits were applied for before but not determined before the coastal permit expired (or could not be determined before the Resource Management Act coastal permit is due to expire). We recommend amending clause 8 to extend the duration of any pre-moratorium Resource Management Act coastal permits for occupation of the coastal marine area for aquaculture activities that have expired or might expire before the corresponding Fisheries Act 1983 applications have been determined. In respect of coastal permits that have expired their duration would only be extended if the Fisheries Act applications were applied for before the coastal permit expired. In addition, we recommend that Resource Management Act coastal permit holders be allowed to have a single Fisheries Act permit determination under section 25 of the Transitional Act from the date of enactment of this bill.

Parallel amendments to sections 26 and 50 of the Transitional Act would be made in clauses 10 and 15. A further amendment would be made in each of these clauses to ensure that once a Fisheries Act determination declining the permit had been made no further Fisheries Act applications could be made under sections 26 or 50 of the Transitional Act.

Clause 9 inserts new sections 25A and 25B in the Transitional Act. Section 25A would ensure that if applications made under the Fisheries Act 1983 were assessed as having an undue adverse effect relating only to commercial fishing, then applicants would have the opportunity to seek aquaculture agreements with fisheries rights holders. Previously, such applications would have automatically been declined.

Section 25B provides a number of additional provisions associated with section 25A. Our proposed amendments would ensure that under section 25A notification of the Chief Executive’s decision relating to undue adverse effects on fishing would extend to the parties consulted at the assessment stage. They would also clarify that the Chief Executive could not decline an application on the basis of undue adverse effects on commercial fishing if an aquaculture agreement had been lodged, within the legislated timeframe, to address the relevant adverse effects. The amendments would also simplify the aquaculture agreement process for “backlog” applications, without altering the proposed test and processes (as provided for in the Fisheries Act 1983).

Section 25B would clarify that the right of appeal would apply to all decisions regarding undue adverse effects on fishing, that is, decisions on approving or declining an application, or identifying areas in which there is an undue adverse effect on commercial fishing.

Clause 13 amends section 45, which deems certain coastal permits to be aquaculture management areas. We recommend amending subsection (5) in clause 13 to delete all references to “is modified as” and to clarify that a deemed AMA would lose this status only to the extent that an operative plan provided that the area ceased to be deemed an AMA and the relevant plan was notified after the commencement of the Transitional Act.

We also recommend amendments to clarify the interaction between off-site reviews and section 45. In particular, we recommend making it clear that if, as a consequence of an off-site review, the council amended a deemed coastal permit to reflect the actual space involved, the actual space would be deemed to be an AMA. This would apply notwithstanding the rules in the plan or proposed plan; and the plan rules that applied to the authorised space would be deemed to apply to the actual space. We are aware that in some instances the physical location of an AMA is slightly different from the location indicated on paper, for minor technical reasons, and to rectify this would have otherwise required a new plan change.

Clause 17 amends section 53 of the Transitional Act which applies to deemed coastal permits under any of sections 10, 20, or 21 for which the actual space being farmed is not the authorised space. We consider that an amendment to extend the time period is appropriate, as we are aware the timeframe in the 2004 reform legislation has proven too short for some regions.

We recommend amending clause 17 to provide for a 12-month period for the review of off-site farms whose marine farming leases or licenses are subject to forfeiture at the date of commencement of this Act. The period should run from the date that the lease or licence is deemed to be a coastal permit under section 10 of the Transitional Act.

Clause 21 inserts new sections 186DA in the Fisheries Act 1996. We recommend amending clause 21 to replace any reference to “at the same time” with “before 5pm on the same working day” to remove any uncertainty; to ensure section 186DA covers all requests for aquaculture decisions and not just invited private plan change requests; to clarify that for the purposes of section 186DA, for each area to be included in a proposed regional coastal plan as an AMA, the Chief Executive would make a separate aquaculture decision (whether they were received as one request or not); and clarify that the Chief Executive would need to be satisfied that he or she had sufficient information about the impacts on fishing of each request to rank requests in terms of their relative impacts. This would provide a more transparent process for the Chief Executive of the Ministry of Fisheries to follow when a number of requests for aquaculture decisions were made on the same working day.

Clause 22 amends section 186S of the Fisheries Act, which deals with granting or declining applications to register a fish farmer. We recommend that clause 22 be amended to clarify that, where an application for registration as a fish farmer was received from a person for multiple fish farms, the Chief Executive could decline the application in part or in whole; and that the Chief Executive could decline an application in whole or in part only where the activity proposed by the application was subject to an exemption under section 186Q of the Fisheries Act where the fish or shellfish were to be used for the purpose of monitoring the environment. We also recommend two consequential amendments to implement this change. One is an amendment to make it clear that an exemption could be granted where the fish or shellfish are to be used for the purpose of monitoring the environment. The second is an amendment to allow the person doing the monitoring to take the fish or shellfish without having a fishing permit. Overall these amendments will ensure that fish or shellfish that are used for the purpose of monitoring the environment cannot be sold.

Clause 23 amends section 186ZF of the Fisheries Act. We recommend that clause 23 be amended to specify a clear starting point for the negotiation of an aquaculture agreement under all possible allocation scenarios under the Resource Management Act 1991 as well as under the Maori Commercial Aquaculture Claims Settlement Act 2004, so that the appropriate fisheries rights holders (quota holders or permit holders) can be identified. The scenarios include the following:

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  allocation of available space in a council-initiated AMA by way of offer of authorisations

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  allocation of available space in a council-initiated AMA other than by offer of authorisations

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  allocation of available space in an AMA established using the invited private plan change process

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  allocation of space subject to existing pre-moratorium frozen application (referred to as section 150B(2) applications)

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  allocation of space subject to existing SMW type applications (specifically recognised under section 165BC of the Resource Management Act)

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  where authorisations for new space have been allocated to the trustee under section 9 of the Maori Commercial Aquaculture Claims Settlement Act 2004.

This amendment is to ensure that potential marine farmers would continue to have the opportunity to seek aquaculture agreements with affected fisheries rights holders in situations where there were considered to be undue adverse effects only on commercial fishing.

Clause 24 amends section 186ZI of the Fisheries Act to establish the period for negotiating an aquaculture agreement as 6 months commencing from the dates specified in the various allocation scenarios listed above. We recommend that clause 24 be amended to link the date for the start of the 6-month period for negotiation of an aquaculture agreement to the date established under section 186ZF for identifying affected fisheries rights holders; or where space is subject to authorisations provided to the trustees under section 9 of the Maori Commercial Aquaculture Claims Settlement Act 1991, the date on which a notice of receipt is given under section 15(3) of the Maori Commercial Aquaculture Claims Settlement Act 2004.

Section 186ZL would ensure that a memorial was placed on all quota for stocks where there is a reservation in respect of an undue adverse effect on commercial fishing, once the 6-month period for negotiating an aquaculture agreement began. We recommend amending clause 25 in respect of section 186ZL of the Fisheries Act to ensure it covers all allocation scenarios, by linking the recording of a memorial with the notice provided to the Chief Executive under section 165G of the Resource Management Act, and with the application of section 15(1) and 15A(1) where the Chief Executive gives notice under section 15(3) and 15A(3) respectively of the Maori Commercial Aquaculture Claims Settlement Act; and providing for the cancellation of a memorial recorded on the expiry of the 6-month negotiating period under the relevant provisions of section 186ZI.

Clause 26 inserts a new subpart 5 into Part 9A of the Fisheries Act (comprising new sections 186ZM to 186ZP) and sets out a two-stage process for the Chief Executive to consider the effect on fishing of a proposal for an experimental aquaculture activity.

We recommend amending clause 26 by inserting a new subsection in section 186ZP to require notification of the decision to persons and organisations notified of the application under section 186ZO(5).

We recommend amending section 15 of the Maori Commercial Aquaculture Claims Settlement Act 2004 and section 186ZF and 186ZL of the Fisheries Act 1996 to provide iwi with the option of authorising the trustee to negotiate an aquaculture agreement on their behalf within the same timeframe as other aquaculture interests and fishing interests. The statutory scheme currently provides that aquaculture agreements cannot be negotiated by iwi until their respective settlement asset entitlements within a region or harbour have been determined.

This amendment would give iwi the opportunity to reach an aquaculture agreement at the same time as other aquaculture interests if they chose to do so, but where they made this choice they would forgo the current option of waiting until iwi entitlements were determined before negotiating with affected fishers.

We recommend inserting new sections 18A to 18D into the Maori Commercial Aquaculture Claims Settlement Act 2004 to provide aquaculture applicants and the trustee or iwi with 6 months to negotiate an agreement on the 20 percent of new space to be allocated to iwi. If agreement could not be reached within this timeframe the current statutory process would then apply, whereby the regional council must identify the 20 percent of new space according to criteria set out in the Settlement Act, primarily requiring that it be “representative” space or of economic size.

Recognising the potential difficulty of identifying “representative” space, and the potential for one or more aquaculture applicants to be disproportionately affected by a regional council decision (and then to appeal the council’s decision), this amendment would provide aquaculture interests with an opportunity to reach an enduring agreement among themselves on the 20 percent of space to be allocated to iwi.

We recommend inserting new sections 30A and 30B in the Maori Commercial Aquaculture Claims Settlement Act 2004 to change the point at which the 12 months to reach an agreement on assets allocation entitlements under section 45(4) would commence to the time of the delivery of the first settlement assets in a region.

We also recommend amendments to provide for continuation of the agreement process beyond the 12 months where all the iwi aquaculture organisations concerned remain committed to the process. If any of the organisations chose to withdraw from the process of seeking agreement after the initial 12-month period had passed, the current statutory scheme (the coastline methodology) would apply in default. The intention is that iwi have more flexibility to reach an agreement among themselves on their shares of settlement assets.

Clause 35 amends section 12A of the Resource Management Act 1991, which contains restrictions on occupation of the coastal marine area for the purposes of aquaculture activities and on occupation of an AMA for other activities. The amendments we recommend would clarify that new subpart 4 of Part 7A relating to experimental aquaculture provides a limited exception to the requirement for all aquaculture activities to take place in areas that are AMAs in operative plans. The amendment would also clarify that coastal permits for occupation of the coastal marine area for aquaculture activities granted before the commencement of the bill would be treated as granted for the purpose of section 12A(1)⁠(b).

As a consequence of clarifying section 12A, section 12C can be deleted.

Clause 50 inserts new section 165VA to provide a general outline of the invited private plan change process, and particularly the relationship between the new optional expressions of interest and the process for inviting private plan change requests to establish aquaculture management areas without using the expressions of interest route.

We recommend amending new section 165VA(7) to clarify that a regional council could not invite requests under section 165Z and expressions of interest in relation to the same coastal marine area at the same time.

We recommend amending new section 165VA(8) to describe the purpose of inviting expressions of interest as providing a process for identifying and resolving competition for the same space in the coastal marine area.

We also recommend that new section 165VA(9)⁠(c) be amended to clarify that if a council decides to depart from the statutory default of financial tender and adopt an alternative process for resolving competition between expressions of interest it must undertake consultation in accordance with section 82 of the Local Government Act 2002; and to delete reference to the need for any alternative process to be “fair and reasonable”.

New section 165VA(11) should be amended to address the cross-references required; it would then require a regional council to process a request in accordance with sections 165Z(2) and (3) whether the request was made in response to an invitation under section 165Z(1), or as a result of an acceptance of expression of interest under section 165ZFD(2), 165ZFE(7), 165ZFF(3), or 165ZFG(3).

We recommend amending clause 56 by amending new section 165Z(1A)⁠(a) to clarify that a council must not invite requests and expressions of interest over the same area at the same time.

Clause 61 inserts a new heading “Expressions of interest” and new sections 165ZFA to 165ZFI, which specifies technical details of the expression of interest process. Clause 61 introduces an optional expression of interest phase, and related mechanisms, to manage competition for overlapping proposals to establish aquaculture management areas. The process is intended to allow spatial overlaps to be identified and resolved before a full request for a plan change to establish an aquaculture management area in a regional coastal plan is lodged with a regional council.

We recommend a number of changes to clause 61 to clarify the expression of interest process. We recommend amending new section 165ZFA(2)⁠(a) to clarify that a council must not invite requests and expressions of interest over the same area at the same time; to clarify that if a council intends to use an alternative process to the tender process set out in new sections 165ZFF(2) and 165ZFG it must have adopted that process after undertaking consultation in accordance with section 82 of the Local Government Act 2002; and to provide that if an alternative process involved payment of money by persons submitting expressions of interest then that money would have to be applied in the same way as under section 165ZFH.

We also recommend amending new section 165ZFB to clarify that a public notice inviting expressions of interest must specify the part of the coastal marine area in respect of which expressions of interest are sought. Similarly we recommend amending new section 165ZFC to clarify that a council must reject an expression of interest that relates to an excluded area or to an area outside the area specified in the public notice.

We recommend amending new section 165ZFE to clarify the parties that must be given the opportunity to negotiate with each other to resolve overlapping expressions of interest, and the area to be subject to those negotiations (165ZFE(7A)). We also recommend amending that section to clarify that the purpose of the negotiations is to reach an agreement so that expressions of interest do not overlap or that the area of overlap is reduced. Following negotiations, expressions of interest could be withdrawn or substituted. New subsections 165ZFE(6) and (6A) clarify when the council must refuse substituted expressions of interest. We recommend inserting new section 165ZFE(8) to provide examples for the purposes of illustrating section 165ZFE.

We recommend that new section 165ZFF, which would apply if expressions of interest continued to overlap after the expiry of the negotiation period, be amended to clarify that the tender process would apply to the overlapping expressions only in respect of the overlapping space. New section 165ZFF(3) would require that where a council had adopted a process other than tendering it must follow that process to resolve remaining overlaps.

We recommend that new section 165ZFG be amended to provide that if the person who submits the highest tender does not pay the tender money within the required time, the tender of the person submitting the next highest tender is accepted. That process would continue to apply to each next highest tender until the tender money was paid. This change would mean that even if the person submitting the highest tender did not wish to pursue a private plan change request in respect of the area, other persons would have an opportunity to do so. We also recommend amendments to clarify what would happen if the council did not receive any tenders, or received tenders but did not receive tender money.

We recommend that new section 165ZFI(1) be amended to include the required cross-reference to new section 165ZFF(3) and to provide that if a person holding an accepted expression of interest does not lodge a plan change request in the prescribed time, that the person who submitted the next highest tender must be given the opportunity, subject to the payment of tender money, to lodge a plan change request.

Clause 63 inserts a new subpart 4 in Part 7A (comprising new sections 165ZK to 165ZQ) to provide for the grant of coastal permits for occupation of the coastal marine area for experimental aquaculture activities in areas that are not in an aquaculture management area in an operative regional coastal plan.

We recommend amending clause 63 to clarify that a council must decline an application if it considered that the proposed activities were not experimental aquaculture activities; that new section 165ZM(a)⁠(iii) should not be limited only to circumstances where a council has accepted an invited private plan change (IPPC) request, but should also apply where a council had adopted an IPPC request; that an experimental aquaculture permit authorising occupation would be required for all of the infrastructure, but that the area required by the anchoring infrastructure would not be used in calculating whether or not the 2-hectare size restriction was exceeded.

We received a number of submissions on increasing the size of experimental aquaculture areas, but we recommend that the area remain restricted to 2 hectares. We recommend amendments to clarify that this limit does not include the anchoring infrastructure. This would provide certainty about the maximum area for farmed space, whilst retaining flexibility regarding the area needed for anchoring structures, as this may vary depending on environmental conditions.

Clause 69 amends section 401A of the Resource Management Act which provides for transitional coastal occupation changes. We recommend amending clause 69, replacing the term “12 months” with “3 years”. This would defer the requirement for a regional coastal plan that was notified to include provisions relating to coastal occupation charges (if the plan did not already deal with charges) until three years after a new New Zealand Coastal Policy Statement had been issued in the Gazette after the commencement of the bill. We accept that the 12-month timeframe is unworkable.