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CHANGES TO ITQ 1990


Changes to ITQ introduced in the Fisheries Amendment Act 1990, and the setting of the TAC and TACC


(Represents the views of the MFish author only)

Background

The 1983 Fisheries Act [s89(1)(g)] provided for the setting of a Total Allowable Catch (TAC) by the Minister of Fisheries through regulation. No such regulations were promulgated. The TAC was defined as “the amount of fish, aquatic life or seaweed that will produce from that fishery the maximum sustainable yield, as qualified by any relevant economic or environmental factors, fishing patterns, the interdependence of stocks of fish, and any generally recommended sub-regional or regional or global standards”.

The Fisheries Amendment Act 1986 introduced a quota management system which had the effect of restricting the output of almost all significant commercial fish species by way of individual transferable quota (ITQ) to take fish. The individual allocations were expressed in tonnage terms and represented that entity’s fixed allocation within the total allowable catch available for commercial fishing (TACacf) for that quota management area.

The TACacf represented the total allowable catch available for commercial fishing within a designated area. When setting a TACacf, the Minister of Fisheries was required to allow for “Maori, traditional, recreational and other non-commercial interests in that fishery”. These other removals while considered were not formally allocated an allowance as presently occurs.

Section 28D of the Fisheries Amendment Act 1986 permitted the Minister to reduce the TACacf and to compulsorily reduce ITQ. The Act required the Minister to give affect to a reduction, if made, either proportionately across all ITQ holders for that fishery (in which case compensation was to be made based on fair market value of the ITQ) or through the purchase of ITQ by the Crown. The TACacf could also be increased, thus allowing the Crown to either hold the additional ITQ arising from the increase or to sell it.

The Fisheries Amendment Act 1986 also provided for the payment of annual resource rentals by ITQ holders. These rentals were based on the tonnage amount of the ITQ and were payable irrespective of whether the ITQ holder landed fish or not.

At the time the ITQ allocation system was introduced the TACacfs set were considered to be conservative. It was thought likely that further research on the abundance of fish stocks could well lead to increases in the TACacfs. Government would therefore have the prospect of possible future gains arising from the sale of ITQ. It was also considered at the time that fixed ITQs were necessary to facilitate development and investment in the industry. In addition, at the time ITQ was implemented, the Government paid out substantial sums to reduce catch effort in fisheries under pressure. The Government considered with good management that these stocks would recover thus permitting it to recovery its “investment” by disposing of ITQ when it became available.

By early 1989 it had become clear that the abundance of fish stocks was more variable than was first thought and that some significant reductions in TACacfs might be required particularly for orange roughy and hoki. Substantial compensation might be involved. It was also apparent that a fixed ITQ provided the wrong incentives for ITQ holders and placed the risk of stock variability and management on the Crown not the industry. In mid 1989 Cabinet directed officials to discuss with industry and Maori the implementation of a proportional ITQ system that would place the risk of variations in the abundance of fish stocks on the industry rather than the Crown. These discussions eventually lead to an agreement with industry, referred to as the “accord”, which is largely expressed in the Fisheries Amendment Act 1990.

Fisheries Amendment Act 1990

The Amendment Act introduced the proportional ITQ arrangements reflected in the current Fisheries Act. It also established a staged process for the payment of compensation including the “freezing” of resource rentals .

In addition to these changes, the Act replaced the expression “total allowable catch available for commercial fishing” with a “total allowable commercial catch” (TACC). In setting a TACC the act stated that the Minister “shall-
After having regard to the total allowable catch for the fishery,……, allow for-

Maori, traditional, recreational, and other non-commercial interests in the fishery;”

This drafting change was intended to clarify the intent of the TACC and to avoid any confusion that may previously have existed between the TACacf and the TAC.

The Act provided a transitional arrangement whereby previously set TACacfs became TACCs. The effect of this, at the time of the amendment, was that QMS fisheries had TACCs but no TACs.

Fisheries Act 1996


Section 20 of the Fisheries Act 1996 requires the Minister when varying a TACC to set a TAC. Over time this has led to the Minister setting TACs for some QMS fisheries. There are still a number of QMS fisheries that do not have a TAC set by the Minister of Fisheries.

When the Minister sets a TAC for those QMS fisheries without a TAC, such as in the recent SNA2 decision, this decision making process isn’t protected by the provisions of section 308 2(b). These protections only apply when the stock is introduced into the QMS, not subsequently, even though the TAC might not have been established on introduction. This is the reason why, in the case of SNA2, the Minister could not have contemplated a reallocation from commercial to recreational fishers, without considering the issue of compensation.


Further information about this process can be found in Hansard 6 March 1990, and Hansard 29 March 1990 available at www.knowledge-basket.co.nz


Resource rentals were phased out and replaced with a cost recovery scheme in the Fisheries (Amendment) Act 1994.  

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