CRA 8 Rock Lobster Fishery– Proposal to Allow the Sale of Southland Concession Area Rock Lobster in New Zealand

Executive Summary

1. Commercial stakeholders in CRA 8 have asked for an amendment to the Fisheries (Southland and Sub-Antarctic Commercial Fishing) Regulations 1986 (the Regulations) to allow the sale of Southland Concession Area rock lobsters in New Zealand (NZ). The 'export-only' rule limits the ability of commercial stakeholders to maximise economic returns from the CRA 8 fishery.
2. Concession areas are specific areas where commercial fishers can take rock lobsters (lobsters) that are smaller than the national minimum legal size (MLS). The intent of the export-only rule is to limit opportunities for fish thieves to move and sell undersize lobsters within NZ.
3. Allowing Southland Concession Area lobsters to be sold in NZ would most likely increase illegal take of undersize lobster by providing more opportunities for fish thieves to hide trafficking in illegal, undersize lobster. Increasing opportunities for fish thieves is undesirable because illegal catch directly impacts on the fishing opportunities of legitimate fishers and, if significant in quantity, can affect the sustainability of a fishery.
   
4. Consideration of whether to remove the export-only rule is therefore focussed on the size of the compliance risk posed by removing the rule (ie, the additional amount of undersize rock lobster that might be taken) and the effectiveness of additional measures that might avoid, remedy or mitigate the compliance risk.
   
5. MFish has little information to inform a judgement about the size of the compliance risk. However, MFish’s initial judgement is that removing the export-only rule would result in a small to moderate increase in take of illegal undersize lobsters. MFish invites stakeholders to submit any relevant information they hold that would further inform a judgement on the size of the compliance risk.
   
6. MFish also considers appropriate packaging and documentation requirements, similar to those used for Otago Concession Area lobster, could be developed to reduce the compliance risk. MFish invites stakeholder views on the types of packaging and documentation requirements that would adequately reduce the compliance risk.

Proposal

7. The CRA 8 commercial stakeholder organisation, CRA 8 Management Committee, has requested r 5E(1) of the Regulations be amended to allow the sale of Southland Concession Area lobsters in NZ.
   
8. Concession areas are specific areas where commercial fishers can take lobster smaller than the national MLS¹. The boundaries of, and sizes of lobster able to be taken from, a concession area are specified in relevant regional commercial fishing regulations. The Southland Concession Area lies in CRA 8. The Regulations state that female lobsters with a tail width not less than 57 mm (the national MLS for female lobsters is 60 mm) can be taken from the Southland Concession Area. Consequently ‘Southland Concession Area lobsters’ are female lobsters with a tail width of 57-60mm.

Summary of Options

9. This paper considers the following management options:

Rationale for Management Options

10. MFish’s overall fisheries outcome is: “The value New Zealanders obtain from the sustainable use of fisheries resources and protection of the aquatic environment is maximised”.
    
11. Regulation 5E(1)(c) of the Regulations requires the export of all Southland Concession Area lobsters. This export requirement limits the commercial sector’s ability to maximise economic returns from the CRA 8 fishery – concession area lobsters must be exported even when the export price for lobster is lower than the NZ price, and a concession lobster not up to export standard cannot be sold at all.
    
12. The original intent of the export-only rule was to mitigate compliance risks relating to undersize lobster – requiring all concession lobsters to be exported limited opportunities for fish thieves to move and sell (‘traffic’) illegal undersize lobster within NZ.
    
13. Rock lobster is a prime target for fish thieves because of its high value and accessibility. Increasing opportunities for fish thieves is undesirable because illegal catch directly impacts on the fishing opportunities of legitimate fishers and, if significant in quantity, can affect the sustainability of a fishery. Increased theft of undersize lobsters is particularly undesirable as MLS limits are set at levels that provide appropriate opportunities for fish to breed and contribute to future fisheries.
    
14. Commercial stakeholders in CRA 8 state removing the export-only rule would enhance their ability to maximise value. They consider:
    1. There is an inequity with the neighbouring Otago Concession Area (in
       CRA 7), as the Fisheries (South-East Area Commercial Fishing) Regulations 1986 allow the sale of Otago Concession Area lobsters in NZ;
    2. The existence of a size differential neither increases nor decreases any compliance risk as the opportunity to pass off rock lobsters stolen from other areas as CRA 8 lobsters exists regardless of size restrictions;
    3. Introduction of the Fisheries (Reporting) Regulations 2001 and the Fisheries (Recordkeeping) Regulations 1990 has enhanced MFish’s ability to monitor the flow of fish product, including concession area lobster.
       
15. The CRA 7 and CRA 8 commercial fisheries are quite different in size (total allowable commercial catches (TACCs) are 120.2 tonnes and 755.2 tonnes respectively) and operation; hence the set of management tools appropriate for each fishery differs. Consideration of whether to remove the export-only rule for the Southland Concession Area must therefore be case-specific.
    
16. Removing the export-only rule would increase compliance risk as increasing the amount of legal undersize lobster sold on the legitimate market would provide more opportunities to hide trafficking in undersize lobster. Current opportunities for trafficking undersize lobster are limited because of the limited amount of legal, undersize, NZ lobster able to be sold in the NZ marketplace. The only undersize NZ lobster legally able to be sold in NZ is Otago Concession Area lobster. Otago Concession Area lobster constitutes around 70-75% of the CRA 7 TACC (ie, 70-90 tonnes)². The size of the Southland Concession Area fishery³ means, if the export-only rule was removed, the amount of legal undersize lobster able to be sold on the legitimate market could triple.
    
17. Introduction of the Fisheries (Reporting) Regulations and the Fisheries (Recordkeeping) Regulations has greatly enhanced MFish’s ability to monitor the flow of fish product. Consequently, MFish is now better able to track the movement and sale of lobster (and hence identify illegal lobster) within NZ at certain points in the market chain. The regulations are generic however, and would not enable the tracking of Southland Concession Area lobster specifically.
    
18. The focus of considerations of the export-only rule are therefore focussed on the compliance risk posed by removing the rule (ie, the additional amount of undersize rock lobster that might be taken) and the effectiveness of measures that might avoid, remedy or mitigate the compliance risk.
    
19. MFish has little information to inform a judgement about the size of the compliance risk. However, because rock lobster is highly valued by all stakeholders and is a prime target for fish thieves, MFish considers a cautious approach is required. Consequently, the options proposed in this paper are: (i) retention of the export-only rule; and, (ii) removal of the export-only rule, but only in conjunction with additional measures to address the compliance risk.

Assessment of Management Options

Option 1: Retain the provision preventing sale of Southland Concession Area rock lobster within NZ (status quo)

20. Retaining the existing export-only rule would not improve the commercial sector’s ability to maximise economic returns from the CRA 8 fishery. However, retention of the export-only rule is justified if:
    1. The likely increase in illegal take of undersize lobsters as a result of removing the export-only rule is likely to be significant, and
    2. The increase cannot be avoided, remedied or adequately mitigated.
       
21. As noted, MFish has little information to inform a judgement about the size of the compliance risk. A large increase in illegal take could reduce the value obtained from lobster fisheries generally (less fish available to legitimate users), and negate the benefit to CRA 8 commercial stakeholders of removing the export-only rule. A large increase could also impact on the sustainability of one or more lobster fisheries.

Option 2: Remove the provision that prevents the sale of Southland Concession Area rock lobster within NZ and insert provisions requiring Southland Concession Area lobster sold in NZ to be subject to appropriate packaging and documentation requirements

22. Removing the export-only rule would better enable the commercial sector to maximise economic returns from the CRA 8 fishery. Sellers of Southland Concession Area lobsters could target best price for their lobster (rather than best export price), and could sell lobsters not up to export standard on the domestic market.
    
23. Removing the export-only rule is justified if compliance risk relating to trafficking of illegal, undersize lobster can be adequately mitigated. For Otago Concession Area lobster, the risk is mitigated by mandatory packaging requirements (s 7 of the Fisheries (Southland and Sub-Antarctic Commercial Fishing) Regulations 1986). The packaging requirements make it easier to identify and track Otago Concession Area lobster at certain points in the market chain, and hence also make it easier to identify illegal undersize lobster.
    
24. Removing the export-only rule for Southland Concession Area lobster increases the compliance risk by providing more opportunities to hide trafficking in undersize lobster. MFish’s initial judgement is that removing the export-only rule would result in a small to moderate increase in take of illegal undersize lobsters and that appropriate packaging and documentation requirements similar to those used for Otago Concession Area lobster could be developed to mitigate the compliance risk. The final form of such requirements would need to be developed in conjunction with stakeholders.

Additional information

25. MFish invites stakeholders to submit any relevant information they hold that would inform a judgement on the size of the compliance risk.
    
26. MFish also invites stakeholder views on the types of packaging and documentation requirements that would be appropriate, and on the cost of such requirements.

Statutory Considerations

27. The management options proposed relate to the sale of Southland Concession Area lobster. They do not set or vary catch limits (s 13 and s 21) or sustainability measures (s11), or seek to regulate or control fishing (s 11(2A)) in either the Southland Concession Area or CRA 8. In forming the management options, the following statutory considerations have been taken into account.
    1. Section 8: None of the management options are contrary to the purpose of the Act, which is to provide for the utilisation of fisheries resources while ensuring sustainability. A potential impact of Option 1 is increased trafficking in undersize, illegal lobster, which could affect sustainability and utilisation of lobster fisheries by legitimate rights holders. Option 1 includes mitigation measures that seek to address this potential impact.
    2. Section 9: None of the management options change commercial fishing behaviour. Consequently, impacts on associated and dependent species, biological diversity and habitats of particular significance are considered negligible.
    3. Section 5 (a): A wide range of international obligations relate to fishing. MFish is unaware of any international obligation that would be affected by the management options.
    4. Section 5 (b): Lobster (koura) is an important taonga species. As already noted, a potential impact of Option 1 is increased trafficking in undersize, illegal lobster, which could affect utilisation of lobster fisheries by legitimate rights holders, including customary fishers. Option 1 includes mitigation measures that seek to address this potential impact.