Dear Mr Howard

Thank you for your letter of 4th November 1997 raising a number of concerns about the Fisheries Act 1996 and its implications. The Ministry of Fisheries has considered your concerns in detail and I wish to make the following comments.

Fisheries Act 1996 Penalty Regime

The penalty regime in the Fisheries Act 1996 is based on the concept of strict liability for most offences. Intent is irrelevant for the purposes of establishing proof of offence. This approach is compatible with much regulatory law where the intent is to control behaviour to achieve a behavioural 'norm'. The exceptions to this are for a number of serious mens rea offences that are directed at high value black market fraud offences and incur a high penalty to deter and punish such offending.

However, liability is not 'absolute'. In common with other regulatory law the Act provides defences that allow an offender to avoid punishment if the person's behaviour is considered to not justify punishment.

In particular section 241 provides a general defence to any offence under the Act, (except mens rea offences). In essence the defendant must show that:

  1. The actions were not 'culpable'; and
  2. The defendant took reasonable precautions and exercised due diligence to avoid the contravention.

The second part of the defence requires an understanding of what could/should have been done to avoid the conduct that is proscribed. Therefore it requires an understanding of the likely or possible consequences of behaviour. It implicitly requires the fisher to know what is likely to happen, in order to modify their behaviour to ensure that undesirable consequences do not occur. Any examination of a fisher's behaviour will therefore require analysis of what was possible in terms of controlling outcomes.

Fisheries Act 1996 ACE Balancing Regime

I agree with your inference that the current administrative regimes are costly and inefficient. The introduction of a single generic harvesting right called an Annual Catch Entitlement (ACE) is designed to reduce much of the complexity in the current system for the balancing of catch against quota that is caused by at least seven different permutations of the catching right.

The new balancing regime is based around the principle that all catch must be covered by ACE. This is absolutely fundamental - and the key to an underlying concept of the QMS - that a control on the total removals of each stock should be applied to ensure sustainability. I agree that within this constraint a flexible and practical administrative scheme should be in place.

The balancing regime in the new Act takes into account the variability in many mixed species fisheries, in that the composition of the catch by species cannot be predicted precisely. Where particular problems are evident in restraining catch to the limits, or in single species target fisheries, the operator will need to balance by 15 days after the end of the month. A qualified defence is provided if the fisher can show that the contravention was an accident, outside their control and they took reasonable precautions. But for the majority of species a less restrictive regime will provide up until the end of the fishing year to obtain catch entitlements with incentives to balance through short term financial penalties. This recognises the variability in catch, introduces considerable flexibility in comparison to the current scheme which is based around monthly balancing, and therefore enhances the tradability of the catching right. The Ministry advises me that there is a degree of predictability in catch mixes. Where catches are outside this 'norm', the Act provides appropriate defence provisions.

The balancing regime was set to achieve a number of principles that were discussed with industry groups in consultative meetings:

1. Secure sustainability by ensuring:

2. Enhance the value of individual property rights in the stock (linked to incentives for husbandry) through:

3. A system that:

Considerable work was put in to develop a scheme that achieved the objectives outlined above including months of discussion with industry and considerable time in the Select Committee. I am therefore reticent about making any changes to the regime without very careful consideration.

I am aware of concern from industry - but as yet have not received detailed alternative proposals that will satisfy the key objectives. You discuss some elements of a scheme called 'Associated Species Balancing'. I will be interested to receive more detail on this scheme, but an intitial concern is the inference that ACE for that stock, or an associated stock could be used to balance some time after catching. I know that the bycatch trade-off (BCTO) scheme is an element of the balancing regime in the Act, but it has the flaw that no amount of ACE for an associate species will compensate for the over-catch and unsustainable removals from another species. That said, it is recognised that if the BCTO scheme is effectively applied, it can result in attenuated fishing by having fishers off the water sooner, and in that way mitigate sustainability issues.

The balancing regime also has revised criteria for setting deemed values levels that removes the current element of providing an incentive to land catch. It was determined that to be effective deemed values could not achieve this objective and provide an effective disincentive to over-catch because those objectives conflicted. It was recognised that this could increase incentives to dump, but the increased flexibility of the annual balancing regime, and a more fluid market in ACE should mitigate those issues. If necessary, targeted observer coverage on a cost recovered basis can be used to address dumping issues in particular fisheries.

As I have noted in recent meetings with the industry I will be interested to receive alternative proposals for a balancing regime. I have asked that industry document these proposals, gain the consensus of other stakeholders and provide a fully documented proposal to my Ministry. I have indicated that the Ministry should make resources available to consider the industry's proposal early in 1998. Therefor I suggest you contact the trade associations and other stakeholders with a view to working with them in developing and documenting the proposal.

Definition of Maximum Sustainable Yield

Your letter also comments on the key principle that each stock should be managed to achieve the maximum sustainable yield (MSY) and suggests that this should be calculated instead for a group of associated stocks.

In reaching a conclusion that MSY was the appropriate legislative goal for fisheries management there was considerable debate within the scientific community, the Ministry and with other Government departments and stakeholder groups.

Many alternatives were considered. Managing at some environmental bottom line, for example 20% B0, was seriously discussed, but problems of risk and the lack of information for the majority of fish stocks meant this course of action was not pursued. For some specific fish stocks, particularly those for which we have a reasonable level of information, there are reference points that would theoretically be better to apply to maximise yield or achieve other management objectives. However, the conclusion reached is that there is no better reference point that could be applied generally. This has been acknowledged in other for a, and MSY is the most commonly used reference point in international law, for example in the United Nations Convention on the Law of the Sea.

In their considerations the previous Minister and the Select Committee clearly rejected the industry proposal that in mixed species fisheries one stock could be fished down in order to maximise the yield of another stock. I am not of a mind to relitigate that fundamental principle. Clearly there would be real risks to the sustainability of fish stocks. In many cases the first indication of a problem is a drastic decline in catch as more modest trends are masked by expected variability and changes in fishing practices. The well publicised collapse of many fish stocks throughout the northern hemisphere, some quite well studied and intensively managed, also provides a signal to decision makers. Overall, the Government decided, despite acknowledging that higher yields could be generated in some situations, that the best interests of the country would be served by a legislative goal that minimised risk and was widely applicable.

Fisheries Research

Fisheries research contracted by the Ministry of Fisheries became fully contestable on 1 October 1997. The Minister of Fisheries determines the nature and extent of the fisheries research services that will be commissioned in any given year. The Ministry runs a competitive tendering process to determine who will be successful in carrying out this research. The Minister welcomes science providers to submit tenders that employ innovative, cost effective approaches to carrying out research.

The Ministry has contracted projects that utilise remote data capture techniques for a number of years. An example of this is the acoustic survey technique being employed to estimate the abundance of hoki, southern blue whiting, orange roughy, and oreos. The development of the acoustic technique is seen as a major advance on the more traditional trawl survey techniques for these species. In addition, the Foundation for Research, Science and Technology has continued to fund a project on remote sensing of fisheries. The results of this work have been used to understand the distribution and abundance patterns of a number of fish species, particularly tunas and other pelagics.

Fisheries Act 1996 Implementation

Greater efficiencies will come about in the short term and the long term from moving the responsibilities of certain services, subject to audited standards and specifications, from the Crown to contestable service providers. You are correct in your assumption that a move to transferring responsibilities for certain services to rights holders may require some amendments to section 296 of the Fisheries Act 1996.

You have also identified that the Fisheries Act 1996 has a prescriptive nature. Although some revisions may be needed to move towards a more high level approach, it is unlikely that fisheries legislation would become, at least in the first instance, as high levelled as you have indicated.

Yours sincerely


Hon John Luxton

Minister of Fisheries


Reply-in Open Letter to the Minister 14 Jan 1998 - Ted Howard

- Detailed Critique of Minister's Response 08/12/97