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Legislative Council - Fifty-First Parliament, Second Session (51-2)
2008-07-23 Daily Xml
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PIPI FISHING QUOTA

Adjourned debate on motion of Hon. C.V. Schaefer:

That the regulations under the Fisheries Act 2007 concerning Pipi Units, made on 13 December 2007 and laid on the table of this council on 12 February 2008, be disallowed.

(Continued from 18 June 2008. Page 3372.)

The Hon. C.V. SCHAEFER (19:48): I sought leave to conclude the last time I was speaking to this motion. My understanding was that the minister was going to negotiate with the shadow minister to try to reach a compromise in this matter. I understand that that has not happened. In fact, as it has been related to me, it seems that scuttlebutt has been circulating that we are seeking to totally deregulate the industry—all sorts of things which are simply not true. I think we should proceed with this motion and I seek the support of my colleagues to disallow.

The Hon. CARMEL ZOLLO (Minister for Emergency Services, Minister for Correctional Services, Minister for Road Safety, Minister Assisting the Minister for Multicultural Affairs) (19:49): I wish to inform the council that the government is bemused. The member is aware of the exhaustive consultation process undertaken by Primary Industries and Resources SA Fisheries Division, the office of the Minister for Agriculture, Food and Fisheries and members of the opposition. Indeed, both the members for Hammond and Finniss were integral contributors in the setting of the exceptional circumstances quota through their involvement on the Exceptional Circumstances Panel.

In fact, the Exceptional Circumstances Panel consisted of the Minister for Fisheries as chair, three members of the opposition (one of whom, the member for MacKillop, was unable to attend) and two industry representatives. They and other members were also present at the meeting of Lakes and Coorong fishers on 17 October 2007 when unanimous decisions were made in relation to the setting of a quota for this important fishery. The introduction of a quota management system in the Lakes and Coorong pipi fishery is aimed primarily at protecting and improving the biological sustainability and economic productivity of the pipi fishery. The introduction of the proposed quota management system follows an extensive two-year review process that was underpinned by significant industry consultation and involvement.

Quota management is a standard fisheries management tool with demonstrated success in South Australia and in fisheries around the world. The majority of the larger, more successful fisheries in South Australia are managed under systems of individual transferable quota, including the blue crab fishery, three abalone fisheries, two rock lobster fisheries and the sardine fishery. The trend in increased catch and effort and declining catch efficiency in the pipi fishery over more than a 10-year period has been a growing cause for concern for fishery managers. Under the previous scheme there was significant potential for activation of latent effort (that is, licences with pipi access that have not previously targeted the resource becoming active).

Current protracted drought conditions in the River Murray have increased this risk as the health and availability of other fin-fish species in the Lower Lakes and Coorong areas of the fishery decline. The development of a human consumption market for pipi has increased its value and contributed to increasing catch and effort in recent years. It has become the most important species in the Lakes and Coorong fishery in terms of both value and production. From 1 July 2006 a food safety program was established to regulate pipi sold for human consumption.

These regulations introduced water testing, harvesting and processing requirements for relevant licence holders for the first time. Many licence holders sell pipi for human consumption directly to Melbourne or Sydney markets. PIRSA Fisheries has no way of validating the proportion or quantity of pipi sold as bait or for human consumption markets by individual licence holders in the fishery in the past. Discussions between the Department of Primary Industries and Resources South Australia (PIRSA) Fisheries and the fishing industry began in November 2005, when agreement was reached that the Southern Fishermen's Association would engage with fisheries' managers to develop options for the future management of the pipi resource.

On 22 November 2005 PIRSA Fisheries advised all licence holders of its concerns about the levels of catch and the effort in the pipi industry, and indicated that other long-term management measures would be developed in consultation with the industry to strengthen the management framework in the fishery. During the following 12 months PIRSA Fisheries formally met with industry representatives five times to progress the development of management options. Many alternative options were considered during this review and at the industry workshops. These included more restrictive gear regulations, area closures and seasonal closures, determining effort units, 'shelving' fishing effort, 'pooling' fishing rights for auction among licence holders and using an 'Olympic' quota system where all participants fish without any individual limit until the total allowable commercial catch is taken.

None of these options were generally regarded as suitable by the industry, and no alternative options were provided by the industry to address concerns about the stock. The effect on current commercial operations, in terms of uncertainty in access security, was also a major factor. During this time, a scientific stock assessment report for pipi was published which suggested that the resource was in its weakest position for several years and that the trends in the fishery data were particularly concerning, given the high levels of catch and latent effort in the fishery.

At the request of industry, a two-day workshop was convened at Goolwa on 20 and 21 December 2006 with stakeholders in the pipi fishery to develop new management arrangements for the fishery. Many options were considered, and discussion resulted in general agreement that the fishery should move to a quota management system. A formal investment warning was issued by PIRSA Fisheries on 16 January 2007, following this decision to adopt a quota management system. It advised that, should historical activity in the fishery be used to allocate a future access, only pipi fishing activity prior to and including 21 December 2006 would be considered.

An industry working group was established to advise PIRSA Fisheries on the arrangements associated with the introduction of the quota management system. PIRSA Fisheries formally met with the working group four times during 2007, before the new management arrangements were finalised. The minister established an independent allocation advisory panel—known as the panel—comprising a presiding legal member, an economic member and a fishing industry member. The panel was required to provide advice to the minister on the most appropriate method for allocation of the pipi resource among licence holders, with an authority to take pipi for commercial purposes in Coorong coastal waters. Industry was invited to comment on the panel's terms of reference before they were finalised.

The panel wrote to licence holders and placed advertisements in local newspapers, inviting written and oral submissions from interested parties. The notice also advised of a public meeting to be held at Wellington on 8 June 2007. Fifteen written and 13 oral submissions were made representing 30 of the 32 fishery licences. Written submissions and records of oral submissions were made available to all licence holders in the fishery. The public meeting was well attended and provided interested parties with a further opportunity to provide information to the panel.

The panel submitted its report to the minister in July 2007, recommending a mechanism for the allocation of quota entitlements in the fishery. The panel recommended that the quota be issued based on a combination of access entitlements and catch history over the past 3½ years in a ratio of 32:68 (access entitlement to catch history). The minister accepted these recommendations and advised industry of his decision. Copies of the report were provided to the industry.

The minister then considered submissions received from licence holders between August and October 2007, on a range of issues associated with his decision on allocation. The minister held a briefing for all members of parliament on the introduction of a quota management system for Goolwa cockles in the Balcony Room of Parliament House on 17 October 2007.

The minister also chaired a meeting with local parliamentary members and all licence holders at Parliament House on 24 October 2007. A number of unanimous decisions were made on the allocation mechanism and the quota management system for pipi. This included that 75 tonnes of quota would be set aside to address exceptional circumstances cases and that an exceptional circumstances panel would be established immediately to consider applications of hardship.

The exceptional circumstances panel met on 12 November 2007 to consider submissions regarding quota allocation in the fishery. It was chaired by the minister and comprised the local parliamentary members for Hammond and Finniss, with two fishing industry representatives. The member for MacKillop was an apology and did not attend. It was agreed that additional quota units should be allocated to six licence holders based on their exceptional circumstances applications.

In December 2007, PIRSA Fisheries advised licence holders of the proposed new quota management arrangements and also that a TACC of 1,150 tonnes had been agreed with the industry group. Licence holders' appeal rights under sections 111 and 112 of the Fisheries Management Act 2007 were outlined. No formal appeals were made to the allocation process.

Since the regulations were made on 30 December 2007, a number of licence and quota transfers have taken place, with significant economic investment in the fishery. The removal of the existing quota management arrangements, which have been in operation for an entire fishing season, would now place the pipi fishing industry in complete economic and social disarray and have a significant financial impact on licence holders. It would also leave PIRSA Fisheries with very limited management options to protect sustainability of the pipi resource. It is likely that the current closed season would have to be significantly extended to ensure that the resource is not over-exploited.

I note from the motion of a member in another place that the opposition supports quota-managed fisheries in preference to effort-based fisheries but believes that one fisher has not received the outcome he was looking for in the allocation process (I will come back to this fisher's case shortly) and that fishers who harvest for human consumption should be treated differently from those who harvest for the bait market. The minister agreed to further consider whether the human consumption and bait markets could be treated differently. Having considered this concept, the minister advises that pipis are freely traded between different uses and that he does not accept nor support the notion that there are distinctly differentiated beach-based operations.

I advise all members that a number of licence holders would like more quota but, in reality, if you rob from Peter to pay Paul, someone must lose out. The quota pie is only so big, and it is not possible to recognise every person's desires in implementing this quota system. The fisher referred to in the disallowance motion (Mr Alexander) bought his Lakes and Coorong fishing licence in October 2004 for $100,000, but he chose not to commence his fishing operations until November 2006.

The independent panel allocated him 10 to 67 units, based on access and catch history. As a consequence of the industry putting 75 tonnes back on the table, the Exceptional Circumstances Panel allocated a further 10 units (or 11.5 tonnes) to Mr Alexander. He is a major beneficiary of the Exceptional Circumstances Panel's distribution of the EC quota; in fact, his allocation has exceeded his total historical catch for the entire 2006-07 fishing season. I am advised that Mr Alexander now has a licence valued at $125,000, with a 20 to 67 unit pipi allocation (which equated to 24 tonnes last season and currently trades at $6,000 to $8,000 per unit). I am advised that his investment in 2004 of $100,000 is now worth in excess of $250,000, following the introduction of these regulations.

Finally, I advise the chamber that the Lakes and Coorong Fishery was awarded certification by the Marine Stewardship Council on 16 June 2008, and this was fundamentally based on the management arrangements in place for the fishery. To disallow these regulations now would result in major biological, economic and social problems in this fishery. Many fishing families would be adversely affected and their businesses compromised in the absence of the certainty provided by the regulations we now have in place. Important financial and contractual decisions may not be executed, all as a consequence, I am advised, of one disaffected licence holder in this fishery who has had more than a fair hearing in relation to his personal situation. The government does not support the disallowance motion, and I urge all members to consider the facts very seriously when voting on this disallowance motion.

The Hon. M. PARNELL (20:05): The Greens support the move to a quota regulated fishery because we believe that is a sensible way to protect this resource for years to come. As the minister has said, it is almost inevitable, when you move to a quota regulated fishery, that there are swings and roundabouts; there will be winners and losers. The aim of the exercise must be to treat all people as fairly as possible without losing sight of the overall objective of moving to a quota regulated fishery, which is to preserve the resource into the long run.

I have had a great many conversations with a number of stakeholders in relation to this. I have received a very thorough briefing from the shadow minister, the Hon. Mitch Williams, and I commend him for the effort that he put into presenting material. I had an equally thorough briefing from the minister and from Will Zacharin, the Director of Fisheries.

I have had a range of cockle fishers contact me, from Mr Alexander, who is not happy with the current arrangement, to a number of other fishers, who have urged me not to support the disallowance motion. I note that Tom Robinson is one who has written to me and phoned me a number of times on behalf of the Goolwa Cockle Working Group, and also a Mr David Backen has contacted me and urged me to not support the disallowance motion.

We have to be careful in this matter not to think of this as a popularity contest, where we simply tot up the number of people for and against. What we must do, as I said, is be as fair and balanced as we can, bearing in mind that there will always be people who believe they should get more. On balance, I think that the process the government has gone through, including the establishment of the exceptional circumstances panel and the allocation of additional exceptional circumstances quota, has sought to treat all of the stakeholders as fairly as possible.

I will not be supporting the motion to disallow these regulations. I hope that the regulations will stand and that the quota regulated fishery will succeed in its aim of preserving this resource into the future so that it can continue to exist, both in its own right and as a resource for people.

The Hon. SANDRA KANCK (20:08): It is important that we look beyond marine life as being just for the taking; as merely a resource for us to exploit. Ecosystems are exactly that; they are systems. That means that there are component parts and they are all interdependent. So, having regulations that control the rate of exploitation of pipis, or cockles, as they are also known, is important. We need regulations that ensure sustainability.

The essential argument to support the disallowance of these regulations is that they are not fair to everyone; that they tip the balance in favour of some fishers to the detriment of others. It is not a simple argument; it is not black and white, by any means. Like the Hon. Mark Parnell, I have heard from a variety of people. I met with Steve Alexander and Gary Hera-Singh, I have received a fax from the Goolwa Cockle Working Group and my staff have taken, I think, three phone calls from fishers who are members of that particular group. It is a complex situation and not black and white. I suppose it is summed up in probably one part of an affidavit of Steve Alexander's, which says:

As a consequence of the regulations the quota allocated to my active licence does not even come close to what I estimated would be realistically required to keep our business viable and, in fact, such an allocation would not even provide our business with sufficient income to meet the business overhead running costs.

In that affidavit he explains that they took out a loan of $150,000 through Elders Rural Bank to finance the initial purchase of the licence in 2004. He states:

We used a $30,000 overdraft towards purchasing equipment for the building of a cockle purging facility so that cockles could be sold for human consumption. We took a further $10,000 loan from the National Australia Bank towards purchase of our beach vehicle and spent approximately another $5,000 equipping the vehicle with graders. We spent thousands more on miscellaneous items, including rakes, bags, wetsuits, cockle graders, labelling, business name registration, HACCP and food safety accreditation.

It seems that, as so often happens in these rationalisation processes—we saw it in the dairy industry some years ago—the small business operators are the ones who end up being the hardest hit, and it certainly seems to be the case in this instance. Ultimately it appears that, although we are talking in particular about Steve Alexander's situation, these regulations may well mean that people like Steve will have to sell out in order to be able to pay the loans they have to the banks, and the winners, of course, are always the big guys. I have a certain sympathy for the little guy in these circumstances.

Having a commercial fishing licence is somewhat akin to having a taxi licence in the city, and it is clear from Steve Alexander's affidavit that it was partly seen as an investment. It has value and can be sold later in life if needed and can act like a form of superannuation for the self-employed, but in the case of Mr Alexander, which is the basis for so much of this motion, it may be that his licence has been devalued as a consequence, and it does not have that resale value.

Last month I attended the launch of the Marine Stewardship Council's certification of products from the Southern Fishermen's Association. The Marine Stewardship Council website states:

The MSC is an independent, global, non-profit organisation which was set up to find a solution to the problem of overfishing. We were first established by Unilever, the world's largest buyer of seafood, and WWF, the international conservation organisation, in 1997. In 1999 we became fully independent from both organisations and today we are funded by a wide range of organisations, including charitable foundations and corporate organisations around the world.

We spent two years developing our environmental standard for sustainable and well managed fisheries. This standard was put together following worldwide conservation with scientists, fisheries experts, environmental organisations and other people with a strong interest in preserving fish stocks for the future.

We reward environmentally responsible fisheries management and practices with our distinctive blue product label. If you are concerned about overfishing and its environmental and social consequences you will increasingly be able to choose seafood products which have been independently assessed against our environmental standard and labelled to prove it. Our label will assure you that the product comes from a well managed fishery and has not contributed to the environmental problem of overfishing.

The invitation to attend the launch had on it the following quote from an SFA and WWF partnership brochure:

The Southern Fisherman's Association believes that MSC certification, coupled with independent science, aggressive environmental partnership with local conservation groups, and active communication of our role as environmental watchdogs to our local community will guarantee our future. If, like most fishermen, we just keep fishing and don't work for the future, we won't have a future.

The Southern Fishermen's Association is only the 27th area globally to achieve such certification. It means that it will now be able to put the MSC logo and this statement on all the packaging that contains its produce and on its letterhead. When I read out information about the MSC, I mentioned that the World Wide Fund for Nature was involved in its formation. A representative from WWF was at the launch. A statement from the Southern Fishermen's Association states:

As a commercial fishery that operates inside a National Park and includes a RAMSAR wetland of international importance, the SFA understands that the fishers have an obligation in responsibly managing the resource on behalf of the community. This means not only maintaining the environmental integrity of the region but wherever possible to enhance it.

These statements are clearly not taken lightly. In checking out the MSC website, I saw from its December newsletter that it had taken away that certification from a lobster fishery because of doubts that the resource was being fished at a sustainable level. Having the certification is a badge of honour for the SFA. The Marine Stewardship Council gives out such accolades very rarely, and it is clear from looking at the website that it keeps an eye on the fishing grounds to ensure that the certification continues to be deserved. In many ways, it is pleasing to know that our fishers in that area are doing things in such a responsible manner, and that these regulations are an add-on, albeit a very good one, to what is being done there.

In supporting the motion, I understand the importance of these regulations and the facts that came to me from the Cockle Working Group, which indicated the group's concerns about what might happen if the regulations are successfully disallowed. I indicated to Gary Hera-Singh and Steve Alexander, when I met with them, that the process of disallowing, even if successful, may not necessarily achieve anything. As I told them—and they were very crestfallen to know this—the very next day the minister can reintroduce those regulations.

I spoke with the minister yesterday about this motion, and he told me that he in fact was going to do that—if we succeed, tomorrow he will re-gazette the regulations. From that perspective it may not achieve much. Yes, the minister will reintroduce these regulations tomorrow if we succeed in passing this disallowance motion. Perhaps he may need to do so to ensure that all the rules are followed and that the sustainability can be guaranteed. However, I invite him to have one more look at this situation to see if there is a way that all the cocklers can be guaranteed a continued existence in this particular fishery. I will be supporting the disallowance.

The Hon. A. BRESSINGTON (20:19): To start, I would like to make the point that this debacle, if you like, basically comes down to one group of cockle harvesters, whose operations have been split down the middle by these regulations and the issuing of licensing and whatever else.

At the beginning of this they were all talking to each other, but there has now been a split because the minister appears to have preferred to lean towards a working group that represents only 30 per cent of the cockle harvesters in this state; they are getting more than their fair share. Some of the people from this working group have been cockle harvesters themselves for only five years, whereas the ones on the other side of the fence, the ones the Hon. Sandra Kanck was talking about, who are associated with the Southern Fisheries Association and who have been involved in that certification process for sustainability, actually represent 70 per cent of South Australia's cockle industry.

Through this entire process we have been led to believe that these regulations were being disallowed for just one man, Mr Steven Alexander. He has been portrayed as someone who is out there trying to grab more of a quota than he has been allowed, that he has invested money in this industry and is now just a little peeved because he has not been given the allocation he thought he would get. That is actually not true; it is not about one man. I also met with Gary Hera-Singh, a third generation fisherman who has been involved in all this for quite some time and who has also been involved in the certification process. He came to see me today. They actually represent 70 per cent of this industry.

Mr Steve Alexander is the man who has put himself out there—he is the one who has done the lobbying, the one who has raised the issues—and it seems that, for convenience's sake if you like, it has been made simply about him. It is not; there are 11 or 12 other family businesses that will go to the wall if these regulations are allowed and if the minister refuses to bring these two groups together and renegotiate these regulations. The smaller harvesters of cockles are small because they choose to be; they have specific contracts for specific quotas and all they want to do is be able to get the quota to fulfil those contracts. They are not asking for many, many more tonnes of quota.

Neither side of this—neither the working group nor the other side of this argument—are disagreeing with the fact that we need a quota management system. Everyone is agreed that that is the way this industry needs to go; everyone is agreed that sustainability is the key to this, because they have made investments in this. It is a lifelong investment; they did not intend to be in this industry for two or three years, make a killing, and then bugger off. They expected to be in this for a very long time. It is interesting that many of those in the 70 per cent group that is represented on the other side of this are long term cockle harvesters. Another gentleman who came in to see me yesterday has been in this business since 1994, and he has had a raw deal out of these regulations.

There is a whole lot more information about this that I believe members of this place have not been given. If they had pursued it they would have uncovered the fact that the story we got from our briefing and so on was only a snapshot of the overall story. The whole 'little guy' thing, the 'Steve Alexander the little guy', the 'one-off', the 'we're making an exception to the rule for one man', is just not true. We need to get our head around that.

The quota management system is not up for debate; none of these guys want to see this industry run by a non-quota system. That is established.

As I said, there are families who will be adversely affected by these regulations and a small group, representative of 30 per cent of the industry, who will gain. Tell me how that works out. Whether or not it is economic rationalism, there is no need to send people to the wall when what we need to do is bring a spokesperson from each side to put across their point of view to the minister and have it listened to.

We have had debates in this chamber many times about this government's form of consultation. We hear all the time, 'It was an extensive consultation process and, at the end of it, everyone agreed.' That has not actually been the case. Today, my information from four of these people was that one meeting was held to discuss management fees for the cockle industry, and there was an agreement that there needed to be a fee. At the end of the meeting, it was agreed that they would go away and think about what had been proposed, and they expected a second meeting, but it never happened.

Mr Steve Alexander, who has been held up as the one-man show of this, has not even had access to the minister (Hon. Rory McEwen), who has refused to meet him on several occasions because he does not want to hear what he has to say.

The Hon. J.S.L. Dawkins: Surely, not Rory!

The Hon. A. BRESSINGTON: Yes. I have spoken to both sides of this issue—to the working group and to people from the other side—and I have found it to be a highly confusing situation. There is much more to this than meets the eye: the fact that PIRSA cannot verify the catches, that people are allowed to have their allocation and that the catch is weighed in 20-kilo bags. Every bag is ticked off as a bag, but it could contain only five kilos of pipis.

Allegations have been made or alluded to that perhaps this bigger conglomerate of pipi harvesters has not been quite honest about the fact that it has not filled these bags and pushed up the quota. Of course, when the quota has been estimated, the actual catch rate has gone down. I am told that the figures and graphs can be provided to the minister, but he has just not been interested in hearing this side of the argument. There are concerns about how PIRSA is conducting itself. The whole thing is basically a mess, and I have also heard that it is a problem with not just the pipi sector of the fisheries but right across the board.

I ask the minister, as did the Hon. Sandra Kanck, to take this opportunity to sit down and do some conflict resolution. At one stage, these two groups were talking to each other and working together, but something caused a split. It is not all about quotas. As the Hon. Mark Parnell said, this should be a quota-based system, and all these cockle harvesters agree with that. No-one is saying that they do not want a quota system.

I urge the minister to consider not reinstating these regulations tomorrow but to take some time out and think that this could be a win-win situation. The other 70 per cent of this group of people are not asking for a major increase in quota: they are asking for a fair system of working out these quotas, rather than their catering just for people who represent 30 per cent of the industry.

If the minister decides to go ahead and reinstate these regulations tomorrow, then I would urge members of the Legislative Review Committee to have an inquiry into this with just these two groups that are involved: get all the information and maybe bring in the executive officer of PIRSA, Mr Will Zacharin, and ask him some revealing questions, because—

The Hon. Carmel Zollo: You should make sure you go and see the transcript after.

The Hon. A. BRESSINGTON: Make sure I go and see what?

The Hon. Carmel Zollo: I'm sure the report will come to parliament. It's all right.

The Hon. A. BRESSINGTON: Well, when you have two groups of people who are in such conflict about this—and it is basically not about the issues that have been raised in here; it is not about whether or not we go to a quota system—then someone has been misinformed. The other side have been involved in this certification process for sustainability and whatever else, and the 30 per cent who are quite happy with these regulations have not been involved in that process.

We are talking about sustainability. Why would you not go with the group that have put in the effort to do this independently of PIRSA and have done it out of their own pocket and taken the time to make sure that they have a reputable business? I would hope that the Legislative Review Committee would have an inquiry into this and that one of the members on that committee would actually propose that if the regulations go back. I am not quite sure if the regulations will go back to Legislative Review or not, but I have been told that it is possible for that inquiry to occur. I support this motion in opposition to these regulations, and I hope that there can be a reasonable outcome for both sides concerned with this matter.

The Hon. C.V. SCHAEFER (20:31): I thank members for their contributions. All that needs to be said about pipi tonight probably has been said. The Liberal Party's view has not changed. There is a certain amount of injustice at least to the method which has been used, and we would seek to vote on this motion.

The council divided on the motion:

AYES (10)

Bressington, A. Dawkins, J.S.L. Hood, D.G.E.
Kanck, S.M. Lawson, R.D. Lensink, J.M.A.
Lucas, R.I. Ridgway, D.W. Schaefer, C.V. (teller)
Stephens, T.J.

NOES (8)

Darley, J.A. Finnigan, B.V. Gazzola, J.M.
Holloway, P. Hunter, I.K. Parnell, M.
Wortley, R.P. Zollo, C. (teller)

PAIRS (2)

Wade, S.G. Gago, G.E.


Majority of 2 for the ayes.

Motion thus carried.

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