Speech New Zealand Seafood Industry Council Conference

19 May 2000

Speech
New Zealand Seafood Industry Council Conference
Matai Room, Rutherford Hotel
Nelson

Hon Pete Hodgson
Minister of Fisheries

Thanks for the opportunity to speak. I've been looking forward to today. Looking forward to the earlier sessions on research, to the dinner yet to come, to the chance to meet with the industry as a whole for the first time, and the chance of a day off in Nelson.

I've spent a bit of time on this speech. It is an important one for me. It's a chance to tell you, briefly, about myself. It is a chance for me to have a go at judging where the industry might be 20 years from now. It's a chance to tell you what the Government is working on in public policy initiatives.

I want to spend a bit of time on science and sustainable development, to mention biosecurity and to mention the importance of good process.

I want to wrap it up with some comments on oceans policy, and then look at where we've come from in this industry and why we should celebrate progress made to date.

I'll tell you a bit about myself. I am or have been a vet, a physics teacher, a small business owner and a failed amateur marine researcher.

I was born next to the sea in Whangarei and I live next to the sea at Port Chalmers. I can swim, skindive, waterski, surf and sail. But I can't handle a windsurfer unless it's below five knots.

I fish and gather shell fish. I started spearfishing when I was nine and stopped when I was nineteen, because I realised I had the power to shoot out a whole bay. I haven't used my spear gun for thirty years and it's now corroded. I used my cray gloves for quite a while longer until my sinuses packed up. I can still get a feed of paua in about ten minutes, but I'm not saying where.

We have a big old house. At one end down a few steps is a room we call the dungeon. It has a 1000 litre recirculating saltwater aquarium in it and 10 years ago I kept crayfish in it. I got the adults to feed, mate and spawn. That was easy, even if they spawn at the ungodly hour of about 6.00am. I then tried to grow the larvae through their thirteen stages in captivity. That was hard. I only got them through to stage four and they all died. I don't know why but so far neither does anyone else. This is a bit of science that has yet to be cracked.

If I get thrown out of this job, that's what I'm going to go back to. If we can get that science to work, then we can have a new aquaculture industry. Perhaps.

Soon after the election, in an intense conversation, a clever man who knows the seafood industry backwards asked me, simply and without warning: 'What sort of Fisheries Minister do you want to be?'.

I could have given an answer as shallow as a birdbath or I could have constructed a bunch of lies on the spot. Instead I looked back at him and said 'I don't know'.

In the weeks that followed I pondered that question at length. I now feel confident that I can answer it, and today I want to.

I want to be a Fisheries Minister whose sights are set firmly on the future, both medium term and long term. The day-to-day work is mostly short term. But I want to be a minister who does not let the urgent crowd out the important.

I want to give effect to the sustainable development parts of the Fisheries Act. I want to ensure that my descendants and yours have the options and opportunities we have, either as people working in the industry or as members of the public.

I want to get on with the work programme. I want to get things done.

I want progress to be evolutionary. Revolutionary progress is rarely called for and rarely works.

I want to be held accountable for my actions or inactions. I want to be in the habit of supporting a decision or a policy change with a reason. I want good process.

I don't want to street-fight. I can and I have and I do. But it's usually a dumb option. I usually end up regretting it.

Let me say this much bluntly. I am not available for capture. Not by you as a stakeholder group. Not by environmentalists, nor Maori, nor recreationalists, nor anyone else.

The reason is blindingly obvious. Any minister who becomes captured by one side or any debate quickly loses credibility and effectiveness. Being held hostage in one camp is decidedly silly. It won't happen.

More than anything I want marine-based industries to grow, to prosper, to diversify and to do new stuff or do old stuff better. The potential for progress is very substantial and I want to play my part in helping secure it.

Now let me turn to this last goal of mine and examine the future of the seafood industry.

The theme of the Conference is future fishing. So I want to lay out where I think the industry might be 20 years from now. You can call it a vision, or you can call it a bit of guess work. Either way if I try and predict where things will be in 2020, then I can also perhaps identify what the barriers are to getting there.

In 20 years time the earning capacity of the industry will have undoubtedly grown markedly, in real terms. And it will be value not volume that will characterise that substantial increase.

Volumes of fish extracted from the marine environment will have increased to an extent. But the volume increase will not be huge for one obvious reason. The reason is that the rate of utilisation must be sustainable.

But we will be harvesting some new species and some new stocks of existing commercial species will have been discovered. Off-setting this will be some reduction in commercial use of some species because of science, recreational pressure, some unforeseen ecological effect, some customary rights issue or whatever.

So an increase in volume, but not anywhere near as large as the increase in value.

In fact 20 years from now the largest volume increases, at least on a percentage basis, are likely to have come from aquaculture. Probably by then land-based aquaculture will be going through, or will have gone through, a rapid growth increase.

So volumes will increase, but value will increase faster. What will be the drivers for this all-important value increase?

Firstly it seems logical to predict that prices will increase over the next 20 years for straight supply and demand reasons.

When I was a child we were only allowed two meals of meat a week. The rest of the week was fish. Mostly snapper and gurnard, sometimes a kingy, which my Dad and I caught either after he got home from work or in the weekend. The reason was money. Sausages and mince cost too much. We had a forequarter of mutton a month, and a roast of pork at Christmas. We didn't need to buy fish, but if we had had to it was cheap.

Today of course the price structure for food is markedly different. My childhood diet would be considered a rich family's diet, not a poor family's. My point is that those trends will continue. Fish will become more valuable.

Part of the reason for that prediction is the damage being done to many global fish stocks and the blunt reality that unsustainable fishing practices are unsustainable. Globally, crunches will arrive with greater frequency. We have a tool to avoid any such crunch in New Zealand, the quota management system. We should be proud of it, we should defend it and we should strive to improve on it.

But there is a second substantial driver for higher value. It is smarter catching techniques, processing techniques and marketing techniques. It is moving further and further away from commodity production. It is learning more about the post-mortem physiology of the flesh. It is e-commerce, it is using our sustainability practices as a marketing tool in a discerning international market.

We have of course started adding lots of value already, in many ways - how to cut a hoki fillet, how to handle live product, how to maximise value from by products, and on it goes.

My point is that the potential for increased value is still far from realised. For example we have virtually no marine pharmaceutical industry, a very modest marine jewellery industry, a still underdeveloped fishing charter industry and so on.

In some fisheries the product is still just fished, filleted and flogged. Still commodified to an extent. Still the equivalent of hocking off lamb in muslin bags.

So there: in 20 years, a substantial increase in value. Some of it driven by volume and new species. Most of it by added value and product diversification. Presumably that's an unsurprising set of predictions.

The other changes I expect are also unsurprising.

Our knowledge of the marine environment, of the effects of fishing, of the relationship between marine species and of specific fish stocks will be significantly advanced in 20 years time.

Learning by doing. Learning from research. Learning from international experience. The pace of learning will not abate. More likely, it will increase. So will changes in sustainable fishing techniques.

We will see a lot more technology. Better acoustics, better techniques to reduce by-catch, techniques to improve food conversion efficiency in aquaculture, better techniques to limit damage to the benthos, better techniques to maximise pharmaceutical or food ingredient production.

In short we will have learned that reducing the environmental impacts of fishing adds value to the industry.

But what about conflicts? Conflicts over space. Conflicts between stakeholders or between fishers or with the Government. How will we be doing in 20 years time?

My expectation is that we have developed and implemented processes to better manage those conflicts. In particular we need to spend some time developing an over-arching framework in which the processes and mechanisms we currently have can better operate.

Conflict resolution at the moment is patchy. There are some stunning examples of stakeholders coming together and getting stuff sorted. Talking, agreeing, planning, implementing. They are to be congratulated, because they are showing us it can be done.

But there are still plenty of stand-offs, terse letters and court cases. I am not naïve enough to think that conflicts are going to go away. We are, after all, dealing with a resource which is the commons.

But I am sure that by 2020 we will have a better framework to resolve conflicts. And my guess is that we will have made good progress well before 2020. We certainly need to.

So if that's where we might be in 2020 - a more valuable industry, a more diverse industry, a more technical industry, an industry that has continued on the journey from hunting to farming, including land-based farming, a more informed industry and an industry better able to resolve conflict - if that's where we might be, then what are the barriers?

From where I am there is a lot of public policy work to be done.

A hard area is the moratorium on new permits. Like you I want it lifted. My undertaking to you today is that I will explore in more depth when and how this might be done. There is industry pressure to make progress, to which I want to add my own. There are lots of embryonic industries to get started here. It's important stuff. We will need to do it properly, but we do need to make progress.

We need to move quickly to the point where the current imbroglio over aquaculture laws can be tidied. There have been some pretty strange goings-on in the top of the South. Gaps in public policy, and how existing policy is implemented are the underlying reasons for that. The Fisheries Act and the Resource Management Act just collided and it's all a bit of a mess.

We need to move quickly to identify some form of recreational right. That's hard for the simple reason that most recreational fishers don't organise, and never will. Some do, and I freely acknowledge their input. But organised recreational fishing is a contradiction in terms, an oxymoron. Just like radical conservatism. So we need a framework to recognise the rights of individual New Zealanders to drop a line in the tide, and to better define the responsibilities that go with that right.

We need to progress fisheries plans. Both industry and government are edging towards developing fisheries plans. The industry with quota-holder associations and the like; the Government with a fisheries plan draft policy framework, which should be ready early next year for you to take a look at.

In all these areas we are breaking new ground. In all these areas we are global innovators to some extent. In all these areas we must allow time, we must allow the tension between flexibility and certainty to exert itself, we must allow for small and medium sized cock-ups.

But more than all that, we must make progress.

Science and sustainable development influence my thinking quite a bit and I want to expand on that. I want to focus on the front bits of the Act and remind you that I, and you, are bound by them.

In particular I want to assert that it is really hard to manage a resource sustainably when you don't understand it. And we don't. I reckon that our knowledge of the marine ecosystem is about as good as our knowledge of the terrestrial ecosystem was 100 or 120 years ago. In other words it's poor.

Not that we need to know everything. We don't. Not that we can know a whole lot more instantly. We can't. But the scientist in me knows that a fair bit of our decision making is still done on a wing and a prayer. Some fish stocks we know well, very well. When I am presented with decisions on those stocks I don't feel the need to exercise precaution.

When I see science that is scant, then I will act in a precautionary way. The law requires me to.

One really important point to make about sustainability is that it is not the opposite of utilisation. Nor anywhere near it. Instead a sustainable management approach is a prerequisite for sustainable utilisation.

The tension between sustainability and utilisation is make-believe. It only exists in the short term, because unsustainable utilisation is by nature a short term idea. Long term unsustainable utilisation is a nonsense. It ignores the laws of nature just as surely as a perpetual motion machine.

Sustainability depends on good knowledge, and good knowledge depends on good R&D. So I see R&D as an investment, not a cost, so long as it is well directed and priced.

I want to reward R&D by applying less precaution to my decisions. I want to make R&D pay. You have a role to play here.

But so does the Government. Under the recently announced biosecurity strategy the Government is increasing its R&D effort into marine ecosystem research. We are making a start by trying to get a grip on marine biosecurity first. Undaria and stuff. In other words we want to understand how to help secure the ecosystem, instead of just trying to name it or understand it.

Please be interested in biosecurity. It's vitally important. Remember that you can make a grown sheep farmer faint by mentioning foot and mouth. Think about beekeepers and forest owners. Then think about starfish and dinoflagellates and bonamia …

We are behind on marine biosecurity and we need to catch up. Next month we make a start.

Enough of that.

One more thing about research. You know I've shelved the direct purchase of research for at least a year because I think we need to do some hard thinking before we go down that road. There are real questions here about whether industry-purchased research gets the incentives right. These are also questions about whether we can design standards and specifications robust enough to deal with potential conflicts of interest.

It may be that the next step in some fisheries is direct purchasing of research. I'm not ruling that out. I'm not ruling it in either. I'm cautious. I'm saying you're going to have to persuade me, as an industry, that your management structures are sufficiently mature to handle that step.

On the subject of maturity, I think the time has come for SeaFic to stop relying for its income on the outmoded mechanism of the Fishing Industry Board and its compulsory levies. A strong industry doesn't need compulsion.

So I've written to the Seafood Industry Council asking it to anticipate the end of levy collection under the Fishing Industry Board legislation by 31 March next year. I haven't yet received a substantial reply. But I think a mature industry body is one that can establish its mandate voluntarily rather than by leaning on the law. The Commodity Levies Act will let you do that.

A few words on process seem in order.

Good process is really important. I've dropped the ball on process a couple of times already and I want to acknowledge that. Consultation on the fourth schedule got cut, even if we did decide to go you halves in compensation. Consultation on southern blue whiting was pitifully short, even if the participants all knew informally what was going on.

I'm going to try to keep those glitches to an absolute minimum. That's my undertaking to you, and it's freely given. In both cases timelines were the problem and in both cases that is not an adequate reason.

I am not however going to continue with the tradition of a TACC meeting. We must learn to get to decisions without that sort of ritualised lobbying. They may be fun evenings, but they can hardly be said to be good process.

Similarly I want better-informed, more widespread input from the other stakeholders - Maori, recreationalists, environmentalists and the community. I haven't worked out how to achieve that yet - fisheries plans may offer a chance - but I want to signal my aims in that regard.

With those few remarks on process I now want to head into a brand new area for you and for me.

It's called oceans policy and it happens to pull together all the threads of what I've been on about and quite a few more. Let me briefly set the scene for this idea.

We have extensive policies in this country for managing our land. But not for our oceans. A few basic facts suggest that doesn't make much sense. Our Exclusive Economic Zone is about 15 times the size of our land mass. It's the fourth largest in the world. It covers 405 million hectares and it will get even bigger once mapping of the continental shelf is completed.

We govern this vast resource in the face of competition between all users of the oceans - commercial fishers, recreational fishers, tourism operators, shippers, miners, those who want to use the sea as a rubbish dump, and land based activities that cause sedimentary run-off or pollution.

But there's no over-arching policy framework guiding a lot of the decisions we have to make when competition becomes conflict. A lot of those decisions are ad hoc, contradictory and inefficient.

On top of that, even though we're starting to understand how little we know about oceans, we don't have a policy framework that helps us set priorities for what we need to learn. Nor do we have any agreed principles for judging whether we are making the most of what we've got.

The recent collision between the Fisheries Act and the Resource Management Act may be the first of many. We want public policy to stay ahead of the game. We need some sort of framework.

We're not alone with these concerns. Australia and Canada have also seen the need for an oceans policy and they've both developed one. So it's new territory, but not uncharted.

Our vision for oceans management is something like this:

• a New Zealand surrounded by healthy oceans, rich in biodiversity, with abundant fish stocks, clean water and secure natural habitats;
• a high degree of collective responsibility for management of the resource accepted by stakeholders and the public;
• all interests in the resource identified and acknowledged, and the interaction between them understood;
• a maximised economic return from the oceans, without any compromise on environmental standards;
• accurate, comprehensive information about all aspects of the resource readily available to stakeholders and the public;
• a management framework reflecting the Treaty and the partnership between the Crown and Iwi;
• our marine resources managed in way that's consistent with our international obligations.

That said, we're at the very beginning of the policy development process. We have no pre-set ideas about any government structures or legislation we might need. We're still thinking hard about the nature of the problem. But it is a priority. The Prime Minister has put me in charge of the issue and told me to get on with it. The budget funding is in place.

Again, good process is important. I can assure you that the process of developing an oceans policy will include everyone with an interest in the resource. This is my first public comment on this issue. You are not in at the ground level, you are in at the basement level.

Let me wrap with some acknowledgments and plaudits. Having looked forward 20 years it's worth doing the opposite and seeing how far we have come.

Twenty years ago there was no QMS. The resource was under stress. The capital investment in the industry was excessive. Market development was by today's standards poor. Fishing techniques were clunky and wasteful. Aquaculture was barely off the ground. The science was weak.

On all those fronts progress has been remarkable. The law is in place and has been rewritten. A fishing industry has become a seafood industry. Our understanding of the ecosystem has begun. The rights-based system has bedded in. Employment and overseas earnings have risen rapidly.

There are some visionaries in this industry. Quite a few. I don't want to name them but I do want to acknowledge them. I want to do the same with some previous ministers and here I'll take a risk and name Duncan McIntyre, Colin Moyle and Doug Kidd.

Both the industry, and the public policy coming out of successive governments, have moved from infancy at least as far as adolescence.

The goal, 20 years hence and sooner if at all possible, is maturity. That means taking an even longer term view.

It also means taking a wider one that acknowledges all interests in our fisheries - commercial, recreational, environmental and Maori. It means accepting the value of a less combative policy and management process.

There are great opportunities ahead as well as a lot of work. I want us all to make the best of them.

Thank you.