Aquaculture agreements and arbitration

Pre-request and negotiated aquaculture agreements

Aquaculture agreements allow quota owners to be compensated by marine farmers for undue adverse effects of marine farms on commercial fishing.

A negotiated aquaculture agreement can be made when an aquaculture decision is a reservation due to undue adverse effects on a quota stock. If a negotiated aquaculture agreement is made for the quota stock, the reservation area can be developed for marine farming.

Negotiated aquaculture agreements must be lodged within six months of the aquaculture decision, unless an extension of time is granted by the Ministry. The six months is paused during any judicial reviews and/or applications to the High Court.

Marine farmers can also make pre-request aquaculture agreements with quota owners before the Ministry is asked to make an aquaculture decision. A pre-request aquaculture agreement must be lodged after an applicant has applied for a coastal permit and before the consent authority requests an aquaculture decision. Quota stocks covered by a pre-request aquaculture agreement do not get assessed in the undue adverse effects (UAE) test.

Pre-request aquaculture agreements and negotiated aquaculture agreements can include any terms or payments that can be agreed between the coastal permit applicant/holder and the quota owners in exchange for consent by the quota owners for the proposed marine farm.

Whose agreement is needed?

A marine farmer must get agreement from enough quota owners so that at least 75 percent of quota shares for a stock are covered by the agreement. For negotiated aquaculture agreements, if there is agreement for at least 75 percent of the quota shares, the marine farmer may apply to the High Court to get consent on behalf of the remaining quota owners to reach the required 100 percent.

Any quota owners who do not consent to a pre-request or negotiated aquaculture agreement are entitled to receive compensation. The High Court may make orders as it sees fit relating to the payment of compensation to non-consenting quota owners.

After a negotiated aquaculture agreement or pre-request aquaculture agreement is registered, no person whose consent is contained in the agreement may revoke their consent.

Arbitration

Arbitration is an option if the quota holder chooses not to attempt to negotiate an aquaculture agreement or an aquaculture agreement is unable to be concluded. A marine farmer may request an arbitrator to decide the amount of compensation to be paid to affected quota owners. However, an arbitrator can only determine compensation if the arbitrator first decides that the proposed marine farm would provide materially greater economic value to New Zealand than the affected commercial fishing.

If compensation is required, the arbitrator determines how much the marine farmer must pay to the quota owners. To proceed with the proposed marine farm, the marine farmer must then lodge a compensation declaration stating that payment to the quota owners has been made.

Like negotiated agreements, compensation declarations must be lodged within six months of the aquaculture decision, unless an extension of time is granted by the Ministry. This six month period is paused during any judicial reviews, applications to the High Court and/or the arbitration process.

Regulations specify the methodologies an arbitrator must use when determining whether compensation should be paid, and if so, how much should be paid.

When do aquaculture agreements and compensation declarations expire?

A pre-request aquaculture agreement comes to an end, if the coastal permit application is granted, when the relevant coastal permit expires, unless the permit is replaced by a new permit, or if the application for the coastal permit is declined or withdrawn.

Negotiated aquaculture agreements and compensation declarations expire when the relevant coastal permit expires, unless the permit is replaced by a new permit.

Fees

As of 1 October 2011 the fee for lodging an aquaculture agreement or compensation declaration is $276 for one stock plus $24.15 for each additional stock. The fee is charged under Part 4 of Schedule 2 of the Fisheries (Commercial Fishing) Regulations 2001.

If an arbitrator is used, there may be other costs. For example, if the coastal permit holder decides not to pay the compensation determined by the arbitrator (meaning the reservation will not be lifted), the coastal permit holder pays the reasonable cost (determined by the arbitrator) to quota owners for participating in the arbitration.

Who administers aquaculture agreements and compensation declarations?

FishServe, on behalf of the Ministry, plays a role in administering aquaculture agreements and compensation declarations. FishServe’s role includes:

• Receiving applications for aquaculture agreements and compensation declarations and the accompanying fees
• Registering aquaculture agreements and compensation declarations
• Advising applicants of the status of applications received
• H olding and maintaining the registers for pre-request aquaculture agreements, aquaculture agreements and compensation declarations

Information sheets with detail on the aquaculture agreement  and arbitration processes are available below.

  Download Aquaculture agreements  (PDF 373KB)

  Download Arbitration (PDF 728KB

The Cabinet Paper for the Fisheries (Aquaculture Compensation) Regulations 2012 is available below.

   Download Cabinet Paper  (PDF 584 KB)

Also see the Useful information for applicants and fishers page or contact the Ministry’s Aquaculture Unit (phone 03 548 1069 or email aquaculture@mpi.govt.nz ).