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Brief Counsel

Supreme Court gives new ballast to QMS

08 June 2009

A decision by New Zealand’s highest court last week has injected new certainty into the Quota Management System.

A majority of the Supreme Court has found that recreational fishers do not have higher rights in the allocation of the Total Allowable Catch and indeed that the Minister of Fisheries must keep in mind that he or she is allocating “a limited resource and that what is allowed for non-commercial fishing interests will impact on the Total Allowable Commercial Catch”.

The effect of the ruling is to clarify the decision-making process and to confirm that, in modern fisheries management in New Zealand, no sector has innate primacy over any other sector.

This Brief Counsel looks at the judgment and its implications for the commercial fishing industry.

The case

The case was brought by the Recreational Fishing Council and the Big Game Fishing Council in the form of a judicial review of the kahawai allocations made following the introduction of kahawai into the Quota Management System (QMS) by the Minister of Fisheries (the Minister) in 2004. 

No specific relief was sought given the elapse of time since the Minister's decisions were taken. Instead what was at issue was the clarification of the meaning of the statutory provisions in the Fisheries Act 1996 (the Act) for setting the Total Allowable Catch (TAC) and the Total Allowable Commercial Catch (TACC) in the future.

Respondents were Sanford Ltd, Sealord Group Ltd, Pelagic & Tuna New Zealand Ltd, the Minister of Fisheries and the Chief Executive of the Ministry of Fisheries.In both 2004 and 2005, the then Minister fixed the TAC/TACC and allowances for non-commercial users on the basis of recent catch history, subject to a reduction of 15% in 2004 and 10% in 2005 to ensure sustainability.

The recreational fishing groups said that the Minister’s use of catch histories was inconsistent with the Act’s policy and objects as set out in s 8 and specifically with the provision that the Minister should “enable people to provide for their social, economic and cultural wellbeing”.They argued that this required a qualitative as opposed to a quantative (catch history) assessment of what their allocation should be.They also asserted that s 21 requires the Minister to set the allowance for non-commercial uses before setting the TACC and that this sequencing indicates a priority for recreational users.

The Court’s findings represent a comprehensive defeat for these arguments.

Key findings of the supreme court

The Court delivered two judgments: a majority judgment by four of the five judges and a minority judgment by the Chief Justice.

The majority decision found as follows: 

  • Providing for people’s wellbeing in s 8 is “not of direct relevance when apportioning the total allowable catch between commercial and recreational sectors”

  • As the Total Allowable Catch defines the amount of fish allowed to be caught, the catch is “available in full for utilisation”

  • “The sequential nature of the method of allocation provided for in s 21 does not indicate that non-commercial fishing interests are to be given any substantive priority over commercial interests. In particular, the allowance for recreational interests is to be made keeping commercial interests in mind.”

  • “It is unnecessary to consider the existence, nature or scope of (common law rights to fish) as, in relation to the quota management system, it is clear that the Act covers the entire ground that would be occupied by such rights.”, and

  • The Minister “makes a policy decision as to what allocations are appropriate” and “has room to make policy choices”. As a consequence if the Minister “is satisfied that the catch history of the parties in previous years provides a reasonable basis for assessment of allocations, it is open to the Minister to take that approach.”

While the Chief Justice would have allowed the appeal, her grounds for allowing it were not those put forward by the recreational fishing interests.

Comparison of the two judgments

The difference between the two judgments is driven by a difference of opinion on two critical factors.

Whether the TAC must be fully allocated

The majority judgment starts from the premise that the purpose of the TAC is to determine the total level of harvest that will be allocated. The Minister then makes an allowance for non-commercial interests and allocates the balance to commercial users through the TACC.

The minority judgment, by contrast, starts from the premise that it is not necessary to fully allocate the TAC. Instead the Minister evaluates how much fish non-commercial users are taking and then makes a separate policy decision as to whether the balance should be fully allocated to commercial uses or whether a proportion should be allowed to remain unfished so as to contribute to an increase in the biomass, thereby producing larger fish and faster catch rates for recreational fishers.

The primary problem with this reasoning is that (as the majority said) it ignores the fact that the TAC determines the total allowable catch. It defeats the Act’s very purpose, having determined that a certain level of harvest is sustainable, to then say that part of the TAC does not need to be allocated.

Importantly, the minority judgment also fails to recognise that TAC decisions are not purely based on sustainability criteria. They also include important utilisation considerations. If the Minister wishes to improve the quality of the recreational fishery by increasing the biomass, the answer is to be transparent and reduce the TAC. It is against the logic of the Act to allow the TAC to remain artificially high and to hold some of it back from harvest.

The need for comprehensive management of the total catch

The second primary difference between the two judgments turns on whether the Act envisages a comprehensive fisheries management regime for the catch of all sectors or the dislocated management of the catch of each sector.

The effect of the majority judgment is to require the Minister to consider the competing needs and demands of all sectors in one allocative process.  It described the two decisions as being "interdependent".  The minority judgment, however, would result in the dislocated management of the catch of each sector. The share to be allocated to non-commercial users could on this logic be decided quite separately from the commercial allocation. Recreational management controls, such as bag limits, would be determined in a vacuum.

It is not sensible to think that Parliament could have contemplated, let alone required, this degree of dislocation in decision making. It is widely recognised that good resource management depends upon a comprehensive approach to management. In practice it is not possible to separate decision making on inherently interconnected decisions. For example, a decision to improve the quality of the fishery for recreational fishers by increasing the biomass necessarily has an allocative component to it.

Conclusion

The Supreme Court’s judgment is a welcome and long-awaited confirmation that no sector has primacy over any other sector in modern fisheries management in New Zealand.

Sustainable resource use requires that Total Allowable Catch levels be determined and that these are then fully allocated through a single process among competing users.

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