The Crown remains one of the largest quota holders despite having sold around 13 billion shares since 2005.
There are several ways in which the Crown can acquire quota shares. The most common are:
a) New stocks entering the Quota Management System (QMS)
The majority of stocks that have entered the QMS to date have had quota allocated to fishers based on catch history. For some stocks there is a difference between the sum of catch history, the 20% of quota allocated to Maori (Te Ohu Kai Moana Trustee Limited) and the Total Allowable Commercial Catch (TACC). Any ‘headroom’ quota is allocated to the Crown.
Except for certain species listed on Schedules 4C and 4D of the Fisheries Act 1996, quota allocation for future QMS introductions will not be by way of catch history; 80% of quota will be allocated directly to the Crown and 20% to Maori (Te Ohu Kai Moana Trustee Limited).
b) Forfeited quota
If a quota owner is convicted of certain offences their quota may be forfeited to the Crown. After all legal processes are completed (i.e. appeals etc) this quota is transferred to the Crown.
c) Surrendered quota
When fishers wish to quit the fishing industry they may find themselves in a position where they are unable to sell very small parcels of quota as the cost of transferring the quota is greater than the value of that quota. Section 49A of the Fisheries Act 1996 allows fishers in such a position to transfer that quota to the Crown, who pays the transaction costs for the transfer.
Sale / Divestment of Crown-held quota
In 1994 Cabinet agreed that, in principle, the Crown should not be a quota holder in future. This removes any perception of conflict with the other roles that the Crown plays (i.e. regulator and decision-maker). Cabinet also agreed to a process of divestment of Crown quota involving an open public tender and a reserve price set sufficiently high to ensure that sales by tender realise current average market prices. Additionally, Cabinet agreed that no preferential access should be given to any interest groups.
After a review of the sale of Crown-held quota in 2005, the Minister of Fisheries agreed that the Ministry should continue to dispose of Crown-held quota (and ACE) through an open public tender, except in specific circumstances, and that a reserve price should be employed in all circumstances. The Ministry will generally include all Crown-held quota shares in a tender round unless:
- There are concerns about the sustainability of a stock
- The stock is in the Kermadec Fishery Management Area (area 10 stocks)
- The species is the subject of litigation (e.g. scampi)
- There are outstanding Catch History Review Committee appeals to be resolved
- The chief executive considers it would not be in the public interest to do so
Tenders of Crown-held quota and Annual Catch Entitlement (ACE)
As long as the Crown continues to hold quota shares and the ACE generated by those quota shares, the Ministry of Fisheries will continue to conduct tenders of Crown-held quota shares and ACE. The Ministry has contracted Commercial Fisheries Services Ltd (FishServe) to act as its quota and ACE broker. All tenders of Crown-held quota and ACE will be conducted by FishServe. Information about tenders will be available on the FishServe website (www.fishserve.co.nz).
ACE tenders will be conducted at the start of the fishing year (April/May for stocks with a fishing year commencing on 1 April and October/November for stocks with a fishing year commencing 1 October). Quota tenders may occur at any time throughout the fishing year.
The Ministry uses reserve prices when conducting quota tenders. Reserve prices are not disclosed, and therefore the method by which they are calculated is not public information. Reserve prices are calculated on a stock by stock basis using all available information and are approved by the National Manager Fisheries Operations prior to consideration of the tenders. Reserve prices are not currently employed for ACE tenders.
All funds raised by selling quota and ACE are transferred directly to the general government account.
Results of tenders for Crown-held ACE and quota
Although FishServe conducts tenders on behalf of the Ministry, results of the tenders are available on this website.
For more information about Crown-held quota please email firstname.lastname@example.org.