PRINCIPLE 3 – Our fisheries are publicly owned

The situation

We admit, this is a tough one to fully grasp the significance of. We openly encourage your questions – it’s a humongous topic but one that LegaSea will no longer shy away from!

According to the United Nations Convention On the Law Of the Sea (UNCLOS), all of the fish in our Exclusive Economic Zone belong to the people of New Zealand, and at no point in the past has this changed. Today, the fish remain the property of New Zealand.

The quota management system (QMS) did not ‘privatise’ the fisheries. It simply tries to assign catch within the commercial allocation. That commercial allocation (TACC) is not ownership of fish. All commercial allocation is made at the minister’s discretion.

As a rough comparison, your drivers license gives you a right to drive on the road, but it doesn’t give you ownership of the roads. Owning TACC shares (commonly called “quota”) gives a right to catch a certain amount of fish each year (as decided by the minister) but does not give the quota holder ownership of the fishery or part thereof.

  • Our nation’s fisheries resources are being exploited for private profit and no resource royalty is being paid to the owner of the resource!
  • Royalties are being collected, but only by 1,500 or so private quota owners, acting as if they own the resource. The public, us, the owners, are receiving zero royalties!
  • 90% of commercially caught fish is exported, most of it caught using foreign vessels and crew from countries such as Russia, Korea, China, and Indonesia to benefit from exploitatively cheap labour costs. The frozen fish is then shipped direct to China for further processing, leaving New Zealand with hardly any benefit at all.

The current situation is akin to a landlord renting out a property to a tenant and the tenant not paying rent whilst trashing the place.

All the benefit falls to one party and all the cost to the other.

Why you
should
care

Our country is missing out on significant revenues that should rightfully be collected by the Treasury. It’s important to realise that a resource royalty is currently being collected – but it’s going to private quota owners, who don’t even need to have anything to do with fishing and certainly don’t own the resource!

As an example, about $15 for every kg of snapper fillets sold in a supermarket is being paid to the quota owner by the fisherman who actually caught the fish. That fisherman is only receiving a few dollars for himself yet he did all the hard work!

There is no excuse for New Zealand allowing the public royalty for exploitation of it’s fishery resources to be captured by private interests. This isn’t permitted in other industries that exploit publicly owned resources, such as forestry, commercial ventures on DOC estate, marine farming, oil and gas, and was never intended to happen in fisheries.

The monopoly the QMS sets up creates royalties and it’s vital that these are collected on behalf of the public. Leaving them to be collected by private interests is what drives dumping and illegal activities, and destroys all the national benefits the QMS has to offer.

Iceland has experienced similar failures of the top down approach in their fisheries. The wealth simply didn’t “trickle through” their economy when it was in the hands of private companies – it never does. Iceland are now seeking to address the failures and ensure the wealth generated by the use of their fisheries is shared with the nation.

LegaSea’s solution

LegaSea says its time to Tip the Scales and impose a royalty on commercial fishing so that the nation can get fair compensation for the private utilisation of the resources that we all own.

If implemented well, collecting a resource royalty from fishing will:

  • Produce an income for the nation from the sale of billions of dollars worth of national fisheries resources.
  • Reduce the cost of fish for sale to the public as market competition returns to the sector and stops corporate quota owners from renting out the resource as if they are the owners
  • Reduce the price of quota, allowing smaller operators in coastal towns to buy back quota back and re-establish themselves. They would be able to “afford” to go fishing. That was the original intention of the Quota Management System!
  • Reduce the price pressure that results from the current corporate monopoly and the demands that drive illegal dumping.

FAQ

The public are the sole owners of the fish stocks and minerals in the New Zealand Exclusive Economic Zone and therefore our fisheries should be managed in ways that deliver public benefits from the fishery, this includes social and cultural benefits. The economic exploitation of fish and minerals in the NZ EEZ must deliver economic returns to us, the owners. The oil and gas, mining, any commercial industry that exploits public resources always pay a resource rental; it recognises that the public are the owners and are deserving of a return.

Recommendations:
1. Recognise fish stocks as public resources and consider applying a Resource Rental regime to captures the extra competitive profit that arise from commercial fishing in the EEZ.

2. That your party unequivocally states the intention to keep managing recreational fishing outside the Quota Management System (QMS).

3. Encourage the public to conserve fish by resourcing public led research and consultation aimed at developing a raft of measures to accelerate rebuilds without fear of those fish being later allocated to export driven commercial fishing.

Notes: Government needs certainty and safety when regulating public fishing interests. Both Government and the public are tired of being ‘gamed’ by Ministry led regulatory measures designed to increase commercial access at the expense of public utility and wellbeing.

Theoretically this should reduce the price of fish. Lower private rents will lower the costs to fishermen, allowing new entrants and more competition. Speculative investors will exit the quota market and fishermen will be able to buy their own quota – that’s the way it should be.
Not at all. The resource royalty has always played a pivotal role in the QMS. It was designed to be the mechanism that kept quota prices down and allowed people to enter and exit the industry with ease. Of course the corporate players didn’t like these resource royalties as they prevented the monopoly created by the QMS from being exploited for private gain. In the early 1990s the industry managed to convince an unsuspecting government to abandon the royalty and replace it with a user pays scheme.
Resource royalties were always a lot more important than simply recovery of users costs, and with it’s abolition went all the price balancing mechanisms of the QMS. Quota prices have been distorted ever since
If quota has been sold as if it was some physical asset then gross misrepresentations have occurred. Quota is simply shares in a TACC, and it is these share values that are under question.

As in all share trading, providing full disclosure is made then it’s buyer beware. Due diligence by any purchaser would uncover the risk

Currently the fishing industry contributes to research in fisheries they exploit. Due to their dominance the commercial industry can and usually do dictate what research is undertaken. Therefore cost minimisation, rather than valuable data, is the underlying driver of fisheries research.

LegaSea considers all fisheries research should be government funded. The fisheries resources are State property and the government needs to administer these resources while being in full control of both science and management functions.

If the government seeks to recover costs from the commercial sector, those costs can be factored into a resource royalty regime and adjusted as required

Shaun WilsonPrinciple 3 – Our fisheries are publicly owned