Keynote Address Seafood Industry Conference

Honoured guests, parliamentary colleagues, ladies and gentlemen. Thank you for the opportunity to speak here today at what continues to be the most prestigious gathering of the fishing industry.

I can't believe a year has passed since I last addressed your conference. Either that's because we are all getting older, or because it's been a very busy year. I prefer to think it's the latter.

When I stood before your conference a year ago, the theme was challenges and self-management. This year, it's very apt that you are seeking to build on recent milestones, as your industry moves forward to the new millennium and the era of devolution and co-management - an era of greater responsibility.

Today when I look at some of the highlights of the past year, we have achieved a great deal. Some of the decisions were relatively straightforward and had the support of the whole sector. Others were harder even unpopular, but it is the nature of Government that tough decisions have to be made. Nevertheless the results speak for themselves. And I am confident that in the next 12 months together we will make even further progress.

Fisheries Reforms

This time last year, the Review of the Fisheries Act 1996 was still underway.

Twelve months on, I am pleased to say that the Review has now been completed and we have the Fisheries Amendment Bill 1998 before Select Committee. If all goes to plan this Bill will be enacted this year.

The Fisheries reforms are split into two parts with separate processes and timing for each.

The first part of the reforms include

- the introduction of a new simplified catch balancing system,
- amendments to the offences and penalties regime,
- provision for devolution of non-core Government services, including commercial registry services to commercial sector at the Minister's discretion,
- provision for regulations to set standards and specifications for information custodianship and access requirements,
- facilitation of direct purchase of non core Government fisheries services.
- and other technical amendments, all designed to simplify and to introduce greater flexibility into fisheries management.

There are a number of important changes afoot and work is well underway to achieve the objectives of the reforms and to minimise risk to the Crown.

The second part of the package proposes reforms relating to recreational fisheries, aqua-culture, and co-management.

In January, Cabinet decided to delay consultation on the second part of the reforms until after the enactment of the Fisheries Amendment Bill, although much of the developmental work has already been done.

Already the examples are there to show us that co-management is the way to go.

- The Rock Lobster Management Council
- The Orange Roughy Management Company and
- The Challenger Scallop Enhancement Company

These organisations are proof that your industry has the capability and accountability for the new direction of fisheries management to be a success.

The Government is committed to the reforms because we believe that there are real benefits for New Zealanders including all those who have a specific interest in fisheries management.

The reforms require an even greater level of adaptability, leadership and accountability than industry displayed during the introduction of the QMS. At the end of the path we are heading down, there are real benefits for industry. But that is not the only reason to head down that path.

Other stakeholders also have legitimate interests in our fisheries. So we have to move away from the old one size fits all, centralised, prescriptive regime towards a regime where all those with an interest in fishing have a chance to have input into the management of our fisheries. I'm pleased that the Cray fishery seems to be able to operate in this manner and I'm sure others will also.

And that means balancing competing demands. Sometimes the decisions will go your way and sometimes they may not. But the message I want to give you today is that to make any progress there needs to be open communication and a constructive working relationship. And I am heartened that of late there has been just that.

Cost recovery working group

Another milestone is the recent establishment of the cost-recovery working group. Last year the issue of cost-recovery was still a long way from being resolved. Now, a Supplementary Order Paper enshrining the principles of a new cost recovery regime is before a Select Committee.

No-one is more pleased than I am that the cost recovery working group is finally under way. Fast tracking the working group is the first step towards putting in place a regime that is considered fair and equitable by all parties.

The success of the working group however depends upon the quality of input from everyone involved. The working group is tasked with putting in place a durable solution. For that to be achieved, all parties need to focus on the common goal and discussions need to maintain a high level of honesty, openness and trust.

It is often difficult to please the industry but I have been heartened by the willingness of both the industry and my officials to get this issue sorted out. I hope this heralds a new era in the relationship between industry and Government. Only by working together will we ensure the best for the country through improved economic returns and the sustainability of our valuable fisheries resources.

I am aware that there is cynicism in the industry about this working group. Let me assure you that the Government is committed to delivering on our promise to reform the current fisheries cost recovery regime so that we have a sustainable and durable regime for the future.

I have asked the working group to report back by the end of June. The Government will consult widely with stakeholders to seek their input into the regime. A cost recovery regime will only be sustainable if it has some buy-in from the different interests. The willingness to work together will ensure the success of this joint mission, but the industry should not expect large reductions in the costs of operating our sustainable fishery, around half of which is met by the taxpayer already.

Of course the introduction of the new regime is still dependent on the passing of the Fisheries Amendment Bill. And while there are no guarantees, I hope that by this time next year, cost recovery will have been resolved to the understanding of all parties.

Management Contract

When I last spoke to you, industry was working with the Ministry on an interim arrangement to manage the 1983 Act services. Today we are very close to signing a management contract for Commercial Fisheries Services Ltd to deliver these services, and develop the services needed to support the amended Fisheries Act.

The management contract provides a perfect opportunity for the Crown and industry to work towards a common outcome, and provides industry with a significant new responsibility to "cut your teeth on".

It's also a great opportunity for industry to demonstrate the maturity and leadership which the wider fisheries reforms will require of you.

This arrangement shows the faith the Government has in your industry to provide quality services. If we did not believe this, we would not be moving toward devolution and co-management.

Industry's role

The Government and industry are now a lot closer in their vision to ensure fish for the future. SeaFIC represents the fresh face of the industry where sustainability is the accepted cornerstone of fisheries management.

We need to build on the positives of having a cohesive industry view. So I will be watching closely to see what leadership the new leaner SeaFIC Board provides at a critical time in the industry's development.

The establishment of the Policy Council will also provide the industry a platform to make recommendations to SeaFIC giving them an opportunity to chart the future of the industry. This must mean that smaller players will not be without influence.

There have and always will be tensions between industry and the Ministry over fisheries management issues as the Government balances its statutory obligations against the economic development of our fisheries resources.

The challenge is to remember that we are not managing the fisheries resource for the next quarter. We are safeguarding it for future generations. We must also look at ways in which new fisheries can develop, something nigh on impossible with the current legislation. As Minister I must weigh up all these aspects of use and the various interests, against the ongoing sustainability of what is a fragile resource.

Rock Lobster

It was therefore heartening this year to be able to announce significant increases in TACCs for CRA3 and CRA4. The involvement of all sector groups in the national Rock Lobster Management Group is a significant advance.

The improvements gained through this approach, and the restraint practised by rock lobster fishers, is proof that this combined approach to managing fisheries can work for everybody involved in the fishery.

Mussel exports

The phenomenal increase in mussel exports is also a tribute to all those involved. I see Sanford has just announced a multi-million dollar expansion for its mussel business at Havelock, which will create 40 jobs. And the production level is expected to double to 16,000 tonnes a year.

We should make even more headway in this area when the aqua-culture reforms become a reality. These reforms should reduce compliance costs for those in the sector, ease entry into the sector and streamline its management.

Bluff oysters

Another gratifying task for me this year, was the early opening of the Bluff Oyster season as a result of a clean bill of health. This was another example of where co-operation restraint and good management has paid dividends.

With the continuing growth of the oyster beds, there is also a possibility of increased catch limits next year if a survey scheduled by the Ministry of Fisheries shows that the beds are continuing to grow.

Customary Fishing Regulations

And we must not forget another great achievement of the last twelve months, the most successful and advanced devolution strategy the Crown presently has going. I am of course talking about the implementation of the Customary Fishing regulations for the North Island, South Island and Chatham Islands. Here we have seen tangata whenua pick up the responsibility and accountability for their own fishing destiny.

Hoki exports

Hoki is another good example of where the Crown and industry have worked closely together to benefit all New Zealanders. The reduced tariffs for hoki and squid exports to Europe this year are a real success story adding $4 million to industry income.

European markets have grown dramatically in importance for New Zealand seafood exports and we need to continue seeking new ways to level the access playing field for New Zealand seafood in the world's wealthiest seafood market.

The TACC for this fish stock has remained constant for several years now, but the benefits only seem to increase. Hoki is already earning New Zealand nearly $300 million dollars. Hoki prices are up by as much as 50-100% over the last year in some cases.

I am pleased to see industry maximising the benefits of this resource in a way that does not compromise the long-term sustainability of the fishery.

Bilateral links and trade liberalisation

In terms of economic performance and sustainability, New Zealand's fisheries and the fishing industry are among the top performers in the world.

Equally impressive is our fisheries management which has been singled out for international praise. New Zealand is way ahead of most countries in terms of allocating and managing fisheries resources.

Recently I met with members of the Moroccan Government who are very interested in establishing a relationship with the New Zealand fishing industry. Morocco,

like New Zealand, has an extensive exclusive fishing zone and the Moroccans are particularly interested in our quota management system.

Currently much of the Moroccan fishery is leased to Spanish and Portuguese companies, but the Moroccan Government is looking to build up its own industry. New Zealand and Morocco have a lot in common in relation to the increasing importance of their fishing industry and I hope the ties continue to grow.

Your industry is already benefiting from it's involvement in the Namibian fishing industry and I look forward to further opportunities coming to fruition.

APEC, and New Zealand's role as Chair, also provides some unique opportunities. For your industry it is the catalyst for getting seafood trade issues onto the international negotiating table. In the fishing and forestry industries alone it is estimated that removal of tariff and non-tariff barriers will add around $130 million a year to our $3 billion a year trade in these commodities. The accelerated tariff liberalisation program is also now being considered by the WTO as a result of APEC.

If it succeeds, it will lead to comprehensive tariff reduction and removal on a global basis and an end to non-tariff trade barriers.

On trade issues, industry and government are at one in seeking true trade liberalisation and an end to others undermining seafood markets through subsidies. Work on reducing subsidies is being undertaken in FAO and the WTO.

Ratification of United Nations Fish Stocks Agreement

We have also made progress towards ratifying the United Nations Implementing Agreement. This agreement will strike a balance between the interests of coastal states in protecting their fisheries resources and those states whose fishing vessels operate on the high seas.

As a country with the fourth largest EEZ in the world and with growing interest on the part of our fishing industry in fishing beyond our EEZ, New Zealand stands to benefit from the widespread adherence to this Agreement. Ratification by New Zealand will

- improve opportunities for New Zealand's fishing industry to undertake high seas operations;
- assist in ensuring that harvesting of fishstocks by other nations in waters beyond New Zealand's EEZ does not undermine our domestic management of fisheries within our waters, and
- maintain New Zealand's international credibility as a responsible fishing nation.

Fourth Schedule

Before I close, I'd like to touch on the 4th schedule.

The 4th schedule species have posed some considerable problems. The fact that permits cannot be passed on to younger generations is one obstacle. This year alone, several permit holders have died, and so too has their permit to harvest fish. The introduction of non-quota species into the QMS will alleviate this problem and creates considerable added value over that of holding a permit.

We all know that quota is of greater value than a permit and It will certainly strengthen the balance sheets of those who get it.

On the other hand, industry has clearly indicated that they believe compensation for any reduction in catch would be required. The Crown is obliged to meet its

obligations to Maori.

Government has yet to make the final Cabinet decision, however I have a window of opportunity within the legislative programme this year. If your industry is prepared to proceed on the basis of no monetary compensation, and work with the Ministry of Fisheries in relation to management options, then this window of opportunity can be used to introduce legislation relating to 4th schedule species this year.

It is therefore up to you as an industry to work with the Ministry of Fisheries and NIWA to consider the fullest range of management options for species introduced into the QMS, in accordance with the standard procedures in the Fisheries Act.

If you are not prepared to proceed on this basis, it may be that legislation will be shelved and 4th schedule species will not be introduced until after the election.

This is not a desired outcome for any of the parties involved.

The 4th schedule species do have to come into the QMS as soon as possible. Government is committed to resolving this once and for all and is committed to introducing South Island Eels into the QMS by 1 October 2000 as required by the Ngai Tahu Deed of Settlement Act.

This is election year and I hope the industry recognises the need to look at the big picture of progress being made in the fishing industry. Before you complain, think of the policies that this industry will face were there to be a Labour/Alliance/Green Government.

Jeanette Fitzsimons as the Coalition Minister responsible for Sustainable Fisheries and Sea Ecosystems would stop devolution and the industry in its tracks. Our Government expects however to continue the process of devolution and stakeholder management of fisheries during the next Parliamentary term.

I would like to end on that note and am happy to take any questions that you may have.