Fisheries (Foreign Charter Vessels and Other Matters) Amendment Bill

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Commentary

Recommendation

The Primary Production Committee has examined the Fisheries (Foreign Charter Vessels and Other Matters) Amendment Bill and recommends that it be passed with the amendments shown.

Introduction

The bill seeks to amend the Fisheries Act 1996 to improve the management of matters pertaining to vessel safety, employment, and fisheries management on foreign charter vessels (FCVs) operating in New Zealand waters. The proposed amendments to the Act seek to protect the human rights of crews, and to ensure that New Zealand’s reputation as a responsible and sustainable fishing nation is maintained.

The bill proposes to introduce a new regime that would widen the range of matters the chief executive could consider when deciding FCV registrations. It would also expand the chief executive’s powers to include the suspension of consent for registration, and extend the functions of on-board observers.

The bill aims to strengthen the Government’s ability to enforce New Zealand law by requiring all FCVs except those operating within certain specified criteria to be reflagged to New Zealand while operating within New Zealand’s Exclusive Economic Zone (EEZ).

Our commentary covers the main amendments we recommend to the bill.

Registration of fishing vessels

We were concerned that although the bill as introduced would amend the conditions for the chief executive’s consent for vessel registrations to include employment and vessel safety matters, it did not allow the chief executive to consider issues, or impose specific conditions, relating to pollution and waste discharge. We recommend amending clauses 4(2) and 4(4) to supply these deficiencies. We considered whether environmental matters should be explicitly set out, but on balance we were assured and wish to record for the avoidance of doubt that the powers of the chief executive include those set out in sections 8 and 9 of the Fisheries Act.

Extension of powers to New Zealand-owned vessels

The bill seeks to extend the chief executive’s powers to consent to, suspend, and cancel vessel registrations to include New Zealand-owned vessels. We consider that these proposed powers are not required and so recommend that references to New Zealand-owned vessels be removed from clauses 5 and 6.

Suspension of consent to registration and rights of review and appeal

The bill seeks to introduce new powers to suspend vessels’ registration, and expand cancellation powers to give government agencies more tools for managing risk. We are concerned that while the bill’s provisions would strengthen the powers of the chief executive, there was no provision in the legislation for an appeals process for affected operators.

We recommend amending clause 5 to limit the suspension power so that it applies to the consent to registration (rather than registration itself) and by inserting new section 106B, which sets out a review and appeals process for parties to a decision, and sets a time-limit on the chief executive’s review of a decision.

We recommend that clause 6 be deleted, as we are satisfied that sufficient management tools are already available under the Fisheries Act 1996 to manage the risks posed by FCVs, and that the proposed cancellation powers are not required.

We sought advice on the risk of litigious behaviour by industry participants pertaining to the narrow suspension criteria and new appeal rights. We received assurance from officials that they consider that a balance had been struck, but we would expect that careful monitoring would occur to ensure that the intent of the legislation is maintained.

Mandatory reflagging of all FCVs to New Zealand

The bill as introduced includes the mandatory reflagging of all FCVs to New Zealand while operating in the New Zealand EEZ. We are aware of a weight of opinion that the “deeming” model used by Australia, whereby FCVs are “deemed” to be operating under the host country’s jurisdiction while within its waters, would be more appropriate. Reflagging could result in some countries such as Japan being unable to comply with the new requirements because of domestic legal complications.

Some FCV operators that catch certain highly migratory species spend only a short time in the zone before moving to fish elsewhere, and would find it uneconomic and excessively time-consuming to reflag each time they did so. Such fisheries are unique among those fished by FCVs in that they are managed under international agreements.

However, after a detailed examination of the issues involved, we were persuaded that the deeming model would not allow the government to meet its principal objectives for the management of FCVs. We noted advice from officials that the species for which the highly migratory species exemption should be limited to tuna and support the narrowing of these exemption provisions.

We consider that the requirement to reflag should be retained as introduced, with exceptions for certain circumstances; we recommend amending clause 10 by inserting section 103A(1AA) to specify these exemptions. Section 103A(1AA) would require the chief executive when approving an exemption to consider whether it would be “in New Zealand’s interest”, and whether there would be “sufficient control” over the operations of the FCV during the period of exemption. We considered the desirability of inserting definitions of these terms, to provide some protection from possible litigation against the chief executive’s discretion, but decided on balance that the wording of the amendment would give the chief executive sufficient flexibility in making an assessment, and that this discretion is desirable.

We urge the Ministry to liaise with foreign governments and vessel operators who may be affected by the reflagging requirement, to discuss ways to minimise any adverse effects.

The role of observers

The bill as introduced would expand the purpose of the observer programme to include collecting information about vessel safety and employment issues. We recommend that clause 20 be amended to include a requirement in section 223(1) to collect information about compliance with maritime rules relating to pollution and waste discharge.

We note that monitoring environmental effects is already covered in the Act and we were assured and wish to record for the avoidance of doubt that the powers of the chief executive include those set out in sections 8 and 9 of the Fisheries Act.

Mandatory New Zealand crew requirement

We are aware of the argument that the bill represents an opportunity to impose a mandatory New Zealand crew requirement. We note that the Seafood Industry Council submitted that it is already training New Zealand crews to supply potential demand. We note the need for wage rates on all New Zealand fishing vessels, including on FCVs, to meet New Zealand minimum standards and market wage rates, after all deductions, to ensure that fishing becomes an attractive career for New Zealand workers. We note that under current immigration regulations and practices, FCV operators are required to meet New Zealand’s minimum standards and the industry code of practice which includes paying market wages above the New Zealand minimum wage. We recognise that developing minimum crew requirements should be considered as part of a broader workforce and industry development approach, and would recommend further consideration of these issues in another context.

Transition period

The bill as introduced would require the reflagging of FCVs from 1 May 2016, but we recognise an argument for a shorter transition period. We believe however that on balance a shorter period would demonstrate New Zealand’s commitment to addressing the issues concerning FCVs promptly; a shorter transition may be considered impractical for some operators because of the complexity of the process for both foreign operators and the government agencies involved.

Settlement quota

The committee received amendments immediately prior to deliberation. Unusually the committee did not receive written departmental advice pertaining to these amendments. Acting on reliance on the oral advice we received from officials we have recorded below our questions and their responses.

New subsection 103A(1AA)(a)(iii) provides an additional exemption for vessels operated by an operator who, on 30 April 2012 held annual catch entitlements that were derived from settlement quota that represented a “significant proportion” of all annual catch entitlement held by that operator or operators.

We were concerned that unless clearly defined, that clause could result in operators with only a relatively small proportion of Annual Catch Entitlement (ACE) derived from settlement quota, or those that might seek to acquire a settlement quota could seek to qualify for an exemption beyond the intent of the Act.

We note that the exemption is limited to ACE held on 30 April 2012, which effectively means the holdings cannot be manipulated post implementation of the Act.

We note that settlement quota is only quota defined as such in the Act and the Maori Fisheries Act.

We discussed whether the term “significant proportion” should be defined in the Act. We were advised that the Government preferred it to be a matter of the chief executive’s discretion, reflecting the intent of the Act to remove undesirable FCV activities. This discretion would be subject to criteria including promotion of the New Zealand national interest, and retention of effective national control. In addition, for the annual re-registration for vessels under this exemption, the other criteria that apply to the registration for consent apply.

We clarified that the new Order in Council provisions set out in (1AC)(b) would be strictly limited to the subsection (1AA)(a)(iii) and (iv) to which they explicitly apply. As such, we note this does not confer any new grounds for exemptions or broader regulation- making powers.

Green Party minority view

The Green Party recognised that the bill had exemplary aims, that of protecting the human rights of crew on FCVs operating within New Zealand’s jurisdiction, and to ensure a full observer programme on fishing vessels, for the purposes of vessel safety, employment, fisheries research, management, and enforcement.

Further committee consideration ran to pollution, waste discharge, and the environmental impacts of fishing.

Observers

An opportunity was lost by the bill’s observer programme emphasis being reduced to a FCV focus, and its environmental component effectively reduced, by not including wording such as, “the environmental impacts of fishing” which would have reinforced the Fisheries Act 1996, Purpose, Section 8.

Section 8 Purpose,

(2) In this Act—

ensuring sustainability means—

  • maintaining 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

Section 8 is supported by Section 9 Environmental principles, but only by taking into account, as in; ‘shall take into account the following environmental principles: …

Currently the environmental provisions of the Act are weak and weakly enforced. Ensuring that the observer programme collects information about the environmental impacts of fishing is necessary to support the purpose and principles of the Fisheries Act 1996, and as a step towards fishers having a sustainable economic and credible fishery into the future.

Exemptions

The Green Party does not agree with the exemption for fishing that targets “a tuna species named in Schedule 4B”. The exemption is unnecessary for the New Zealand registered vessels and fishers that are already significant fishers of tuna species and the other Schedule 4B Highly Migratory Species (HMS), so an exemption for individuals is inappropriate.

Capability is significant in the New Zealand fishing industry and individual companies already with New Zealand registered vessels should readily adapt to the provisions of this bill without exemptions. Other New Zealand fishers can be expected to pick up any opportunity presented by fishers choosing to exit the high- value tuna fishery.

The exemption for fishing that “targets a tuna species” also allows misuse, by the looseness of the term ‘targets’. Removing the exemption in its entirety, would have reduced the potential for gaming of targeting.

The Green Party will be watching the chief executive’s consideration of “whether it will be in New Zealand’s interests” when approving exemptions, as the significant flexibility in that term in the bill can allow for a wide range of outcomes. Such an exemption must not be a loophole that fails the original intent of the bill.

Appendix

Committee process

The Fisheries (Foreign Charter Vessels and Other Matters) Amendment Bill was referred to the committee on 14 February 2013. The closing date for submissions was 28 March 2013. We received and considered 48 submissions from interested groups and individuals. We heard 28 submissions in Wellington.

We received advice from the Ministry for Primary Industries, the Ministry of Business Innovation and Employment, the Ministry of Transport, and Maritime New Zealand.

Committee membership

Shane Ardern (Chairperson)

Steffan Browning

Hon Shane Jones

Colin King

Ian McKelvie

Hon Damien O’Connor

Eric Roy

Hon John Banks was appointed as a temporary member for consideration of this bill.

Hon David Cunliffe replaced Hon Damien O’Connor for this item of business.