04 September 2024

Fisheries: Te Ohu Kai Moana v. Attorney-General

 

While the argument is about fish, a High Court hearing saw a delicate dance between Maori, government and the judiciary seeking to remedy three decades of quota losses by Maori fishing interests; losses only highlighted when the system for recording quota holdings was revised.

Last century, New Zealand was a world leader in establishing private property rights in commercial fishing.  Previously, commercial fishing within New Zealand’s economic zone, as in the rest of the world, was a free-for-all.  Anyone could fish anywhere.

This amounts to what economists call ‘the tragedy of the commons.’  If everyone has rights to an asset, no-one has an interest in maintaining and controlling that asset.  For commercial fishers, there was no incentive to conserve stocks; better to get in first and grab what is available, before someone else does.     

Four decades ago, a fishing quota management system was established in New Zealand, creating a licence to fish for specified quantities of fish species; the ITQ system was born, the creation of Individual Transferable Quotas, which could be sold, leased and mortgaged.

Maori received substantial quota, in recognition of their historical customary fishing rights acknowledged and protected by the Treaty of Waitangi.  Te Oho Kai Moana Trust acts as an umbrella organisation, holding these fishing assets in trust for individual iwi.

The High Court was told an early re-assessment of sustainable catch sizes led to a reduction in allowable catches and a political decision to compensate ITQ holders for their reduced revenue.

Government faced an un-budgeted fiscal cost.  A compromise was reached; payment in kind or cash.  ITQ holders could take cash now, or be compensated later with the issue of ‘free’ quota when fish stocks improved and further quota issued.

In industry jargon, those commercial fishers deciding to later receive free quota were described as holding ‘section 28N rights;’ named after the section in a 1986 amendment to the Fisheries Act creating these deferred rights.  

A 2001 change saw ITQs transmogrified into annual catch entitlements, known as ACEs.  Commercial fishers with an existing right to fish in a specific fishing zone were given a share allocation for the ACE applying to that zone; what were loosely described as ‘proportionate ITQs.’

Kai Moana says it was only greater transparency arising from the new ACE system that highlighted how section 28N rights holders had for years been robbed of their continuing entitlement to compensatory free quota.

Kai Moana suggested Fisheries in the past had been less than open in its disclosures about catch allocation.

Kai Moana asked the High Court to issue a declaration that the loss of quota, which should have gone to section 28N rights holders, is a breach of the 1992 agreed Treaty of Waitangi Fisheries Settlement which defined the Maori share of total commercial fishing catches.

Legal argument centred on Kai Moana’s attempts to stop the Minister for Oceans and Fisheries setting a new total allowable catch for SNA8: a snapper fishing zone covering the west coast of the North Island.  Kai Moana is a section 28N rights holder for this zone.

Kai Moana’s entitlement to compensatory quota had to be sorted first, it said.

Judges are loathe to tell politicians what to do; part of the separation of powers between parliament and the courts.  The constitutional convention is for the courts to declare that politicians in a particular case have not complied with the law.  It is for politicians to then decide: comply; or change the law.

In the High Court, Justice Boldt only went so far as stating Kai Moana has a very strong case that its progressive proportionate loss of quota rights as a section 28N rights holder could be in breach of the 1992 Fisheries Settlement.

He warned government that delaying resolution will only compound the damage.

Te Ohu Kai Moana Trustee Ltd v. Attorney-General – High Court (4.09.24)

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