Fisheries Amendment Bill (No 2)

I move, That the Fisheries Amendment Bill (No 2) be now read a third time. This bill implements a settlement agreed between the Crown and the commercial seafood industry concerning the under and over-recovery of conservation and fishery levies since 1994. The intent of the bill is to provide a full and final resolution of all cost recovery issues up to 30 September 2002. This ensures that each and every levy order relating to any period on or before that date may not be the subject of any legal challenge on any basis. This is a technical and complicated issue that has taken both hard work and goodwill to resolve.

First of all, I would like to thank the members of the seafood industry and the Ministry of Fisheries, who have worked on this issue over a number of years. The solution reflects a collaborative approach to this longstanding issue, and provides a sound basis for moving forward. I take this opportunity also to thank the members of the Primary Production Committee for the very solid work they put in on this bill, which ensured that it had majority acceptance when we considered it at the Committee of the whole House yesterday, and I thank in particular the chair of the select committee, David Carter, who took the bill through the Committee.

The second function of this bill is to amend section 233 of the Fisheries Act 1996, to ensure that the law reflects the original parliamentary intent. This section contains the Act’s highest band of offence provisions, and is aimed at serious offending, including poaching, black market, and fraud offences. The bill rectifies a drafting error to ensure that this kind of serious offending is subject to appropriate offence provisions. This bill ensures that those people who knowingly contravene the Act understand that they are stealing from the whole community by taking a natural resource for their own benefit, or with intent to obtain such a benefit, and are committing an imprisonable offence. This bill will give the Ministry of Fisheries the power to take effective enforcement action against those people who knowingly act in that manner.

Finally, this bill introduces a technical amendment to place it beyond doubt that the word “Act”, as used throughout the Fisheries Act 1996, includes rules and regulations made under the Fisheries Act 1996. I support this bill, as it provides a basis for the commercial fishing industry to progress forward in relation to cost recovery issues, and provides for effective penalties relating to serious offending, to further protect our most important fishing resource. I commend the bill to the House.

I stand on behalf of my National Party colleagues—

💬 Hon David Carter: And friends.

PHIL HEATLEY:—and friends, and I support the Minister in his statement regarding this bill. As the Minister said, the bill ensures full and final settlement of historic under and over-recovery of levies under-spent by the Ministry of Fisheries and the Department of Conservation over a large number of years—I might add, an unacceptably large number of years. It also seeks to ensure that any reference to “Act” in the Fisheries Act 1996 includes both the Act and any regulations and rules made under it. We encountered some time ago a number of poachers who could not be prosecuted under regulations that were inadequate at that time. So we are fixing that, and anyone who plunders our seas now will not have that loophole as a means of escape.

The cost recovery regime was introduced into fisheries legislation in 1994—members will recall that. That allowed the Crown to recover the cost of fisheries and conservation services associated with commercial fishing. The Minister of Fisheries must have regard under those provisions in the Act to any under-recovery and over-recovery of costs in a previous year when setting a new levy order. The interesting issue that came about with this legislation was that up until now, Ministers of Fisheries have considered the previous year when setting the future year’s levies. In this particular case, the Minister now has to consider a series of years when setting a new levy order. However, there was a recent recognition of a failure to consider historic under-recovery and over-recovery levies of previous years when setting the 1997-98 and 2001-02 levy orders. It was recognised in 2002, when Parliament passed the Subordinate Legislation (Confirmation and Validation) Act. That Act came about because a couple of fisheries companies were smart enough and determined enough to challenge the Ministry of Fisheries and the Department of Conservation on the levies that they had charged up until that time.

Since 1999 the Ministry of Fisheries has worked in a joint working-group, which recommended the settlement of $24.1 million and a few extra thousand dollars of interest as a rebate to future levy payers. We, as the National Party, have supported this bill all the way through, and we certainly recommend that the entire House support this bill tonight in its third reading. This is for three reasons: firstly, it fulfils the agreement coming out of the passing of the Subordinate Legislation (Confirmation and Validation) Act; secondly, it supports an agreement that came out of the joint working-group that included representatives of the Seafood Industry Council, which represents the lion’s share of the commercial fishing industry, and so it has wide industry support; and, thirdly, when considering the opposition to the bill and the reasons for it, we find that although they are fair enough, we believe that on balance those parties do not put up a strong enough case for us to oppose this bill.

Opposition to the bill comes from those who believe that the distribution of the $24 million, as a reduction of future levies, is unfair to those who paid cost recovery levies in earlier years and who have since left the industry. They argue, of course, that they should also be beneficiaries of a cash refund, even though they sold their quota and their businesses. Usually, one would find that if someone sold his or her business, he or she would sell all bills and all income with the business. Those people are arguing that although they have sold the business, they should have access to the refund. However, the settlement is consistent with the cost recovery regime, where under-recovery is to be debited and over-recovery to be credited in a future period to the same general group of levy payers, but not to a specific levy payer. The bill takes a holistic view. It is concerned with the benefit that services deliver to the industry, not to individual fishers. With that in mind, the National Party happily supports this bill, and we would like to see it pass its third reading this evening.

New Zealand First, likewise, is happy to support the Fisheries Amendment Bill (No 2) in its third reading. There is no question that overcharging of levies took place. In spite of the arguing over semantics, this bill is designed to redress that situation—to return a large part of the overcharged levy to people who are still within the fishing industry and offset it against future levies. We believe that not only is that the fairest way it could be done, it is the only way it could be done. New Zealand First is very, very happy to support this bill.

I do not intend to take long in making a contribution to this legislation—[Interruption]—because, as Phil Heatley interjects behind me, he has said it all, and it is legislation that is completely supported by the Primary Production Committee.

As chair of that committee, I want to take this opportunity to thank my fellow members for the way they worked through this legislation. I particularly want to thank the officials who helped us, and Mr Murray from the Ministry of Fisheries, who, I thought, did a superb job answering some difficult issues for us with regard to the submissions we received—particularly from tuna and scallop fishers, who tended to have left the industry over a period of time.

This legislation is before the House because the Fisheries Act of 1996 was not implemented as we politicians thought it would be. It is with some regret that we are here now, passing an amendment bill to tidy up that Act. I hope that in future we can have confidence that the officialdom of both the Department of Conservation and the Ministry of Fisheries will take care and accurately allocate levies to the various species so that we are not back passing similar legislation in another 8 years’ time.

The ACT party will also support the Fisheries Amendment Bill (No 2). The point has been made that there was clearly mismanagement of the levying system. I think I am the only member of this House who actually sat on the committee that did the substantive legislation in 1986. [Interruption] I am talking about the Fisheries Act of 1986, which first introduced the quota management system, provided the levying procedures and, indeed, the resource rentals, which are with us no more.

It is regrettable that fisheries legislation has for generations been a very difficult area of public policy. It is very prescriptive by nature. Certainly, in this case, the regime of levies collection was not what the politicians envisaged. In other words, the bureaucrats—or the Government department with responsibility for that area—departed from the intent and object of Parliament. That has been found to be so, and in a way this bill represents Parliament’s attempt to remedy that. There is a bit of rough justice associated with it, but having looked at the bill, I think it has been done in the best way possible. So to that extent we will be supporting the bill.

Last week was Seaweek. It had the theme “our amazing marine life—let’s protect it”. That is a fine sentiment indeed, but how can we protect it when we know so little about it? Not only do we know almost nothing about the marine ecosystems from which we extract fish, but we also know very little about the species we catch for their commercial value. The Ministry of Fisheries acknowledges that estimates of stock status and sustainable yield are available for fewer than half the stocks in the quota management system in 2003. Still less is known about those species it is planning to add to the quota management system this year.

We know so little because we do too little research on anything other than stock assessments. Marine and fisheries research is currently funded through the conservation services levy, and the fisheries services levy—which is funded by the Ministry of Fisheries from non-levy funds—and by the Foundation for Research, Science and Technology. The conservation and fisheries levies are set each year, taking into account any over or under-expenditure of the levies from the previous year after consultation with the industry. The conservation services levy can be used only for studying the effects of the interaction between commercial fishers and protected species. It is designed to develop measures to mitigate the effects and the development of population management plans. The Department of Conservation typically over spends on conservation services levies by about $1.5 million per year, and gets a top-up annually in the Budget.

On the other hand, the fisheries services levy can be used only for the management of fisheries; enforcement of provisions related to fisheries, fishing, and fish farming; research relating to fisheries, fishing, and fish farming, including stock assessment and the effects on the aquatic environment; or carrying out the functions of the ministry with respect to fisheries, fishing, or fish farming. In practice, the research funded by the fisheries services levy is mostly used for stock assessment. About $1 million is used for studying the impacts of fishing on the aquatic environment. In other words, the overwhelming portion of the fisheries services levy is used for assessing how much fish is there for people to catch. Practically nothing of it is used for studying the impact on the aquatic environment.

Services that are provided in the general public interest rather than in the interest of an identifiable person cannot be recovered. They must be funded either through non-levy Ministry of Fisheries funds, or through the Foundation for Research, Science and Technology. For the period between 1994 and 2002, the conservation services levy totalled $8,550,000, whereas the fisheries services levy totalled $262,780,000—a huge difference. In 2003 alone, the conservation services levy was $2.65 million and the fisheries services levy $31.33 million. The huge difference is partly due to what each of them can be spent on, but it also reflects the emphasis on resource extraction rather than resource system management.

A critical part of both fisheries and conservation services research is the observer programme, which assesses target catch and non-target by-catch. That is essential work for the functioning of the quota management system, and for assessing the interaction of fishing with non-target species. Between 1995 and 2003, the programme cost a total of $17 million, at an annual rate of between $1.8 and $2.6 million. The conservation services levy pays about one-third of the cost of the observer programme, in order to cover the by-catch assessment role of observers.

Some fisheries, such as toothfish, are required to have observers on board, while others are not. Although there are practical difficulties in having observers on all vessels on every trip, vessels can be monitored by remote means, and that technology should be developed and utilised fully. No vessel should be permitted to take from the commons unless it carries either observers or remote monitoring devices.

There appears to have been a recent increase in the number of observer days performed, but they still fall far short of what is required. Fishers are not required to give more than 24 hours notice of their intention to sail, and it is often difficult to get observers to the port of departure quickly enough to get them on board. Even if this is achieved, a vessel may divert to a different fishery from the one for which observation is required. These factors all make the observer programme less effective than it needs to be, and we need much greater cooperation from the fishers. It is, after all, in their long-term interest to have observers.

An effective observer programme, while necessary, is far from sufficient to enable effective management of the fisheries in New Zealand waters. There are many individual areas of research that are needed, but which have not been getting funding—or getting enough funding. Some of these areas of research are as follows: first, the southern right whale, of which there are only 13 breeding females left; second, Maui’s dolphin, of which there are perhaps only 100 individuals left; third, the impact of marine farming on inshore nutrient flows and recruitment of other pelagic species, as well as on migration of offshore species; fourth, the use of molecular biology for biodiversity work, especially with invasive and cryptic species; fifth, the flow-on effect of marine reserves to unprotected populations; sixth, the baseline information for areas where aquaculture management areas are proposed, so that we can know if there are any adverse effects, and so on.

There are any number of areas where we need to do more research. In particular, we need to do more life-cycle research. I mentioned before that in 2003 less than half the species in the quota management system had their lifestyles properly understood. From my understanding of the 32 species in the quota management system a couple of years ago, profound knowledge of life cycles was known in relation to only seven species.

But there is a more profound problem with the funding of fishing research in New Zealand, and this is reflected—and partly caused—by the Department of Conservation’s levy, the fisheries services levy, and the quota management system itself. A belief seems to have evolved that the quota management system is sufficient for achieving sustainable fisheries. It is true that it has removed subsidies, and it also caps fishing effort, and in these ways it helps to prevent over-harvesting. However, it has resulted in an overemphasis on stock assessment, without enough understanding of the ecosystems within which these stocks exist. Although the Ministry of Fisheries could broaden and deepen the scope of the research it contracts for, it appears constrained both by its blind adherence to the quota management system and the fact that most of the research is cost-recovered from the industry through the fisheries service levy, and is hence subject to industry influence. Some say that the industry funds 70 percent of fisheries research through levies, so most of the research is short term and stock based.

We need to uncouple the payments by fishers from specific stock-related research to enable the Ministry of Fisheries to allocate more money to long-term research, rather than the $1 million or so that is currently allocated for impact-assessment research. We could then address questions such as the key elements affecting the abundance of species, or the influence of environmental variation and fishing on population sizes or targeted species, and also for other species, some of which are not very visible in the ecosystem. We cannot continue with the unscientific attitude that exists within the ministry that says, in effect, that a species of fish has been caught at a certain level for a while now, so it must be sustainable.

It is very hard to see how the ministry’s strategic view that we must protect the health of the aquatic environment can be implemented by the funding we have at the moment. We certainly need to change the basis on which that funding is developed.

I rise on behalf of United Future to speak on the third reading of the bill.

💬 John Carter: Take a short call!

I thank the member for that advice. United Future listened with interest to the debate in the Committee, predominantly because we did not have a member on the select committee. It has been very informative for us to listen to the issues being debated in the Chamber, and I thank those members who have made a very positive contribution to the debate. Phil Heatley from the National Party gave some very clear examples of the issues involved in the bill, and I think he has done an excellent job. I also thank Doug Woolerton for his contribution, and the Minister, the Hon David Benson-Pope, for his answers and explanations of some of the issues that have been raised.

We are happy to see the bill arrive at its third reading because it is an issue that has been around for a long time. It has been a major cause of concern within the fishing industry, and it is time for it to be resolved so that the industry can move on. We are pleased to be able to support the bill in its third reading today.

One of the issues that has not been debated quite as much in the Committee, but is part of what is dealt with in this bill, is closing some legal loopholes with regard to illegally obtained seafood around our coastline. The only thing that I want to add to the debate this evening is to emphasise again how important it is for us to continue to investigate these loopholes. The Ministry of Fisheries needs to have the resources at its disposal to effectively police our fisheries regulations with regard to the poaching that is occurring around our coastline, which is leading to the depletion of our very valuable resources.

This bill makes some amendments to that, and I believe it will be very beneficial to the nation and to the economy as a whole. With that, I am happy to indicate United Future’s support for the third reading. We commend the bill to the House.

Bill read a third time.

The House adjourned at 9.17 p.m.