Fisheries Services for 2004/05 and statement of Intent for 2004/08
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21 April 2004
Minister of Fisheries
cc Associate Minister of Fisheries
Purpose of this paper
1 This paper seeks your approval of:
a) the fisheries services to be delivered in the 2004/05 financial year;
b) the Statement of Intent (SOI) for the period 2004/08.
2 The two are a part of the same document, but the reason for seeking individual approvals is to:
a) reflect the requirements of the Fisheries Act 1996 that the fisheries services to be delivered in any year must be agreed between the Minister and the Chief Executive;
b) adhere to the 2004 Budget process, which requires the Statement of Intent to be approved as a separate document within that process.
Fisheries services to be delivered in 2004/05
3 Fisheries services are defined in the Fisheries Act 1996 to include:
a) the management of fisheries resources, fishing and fish farming;
b) the enforcement provisions relating to fisheries resources, fishing and fish farming; and
c) research relating to fisheries resources, fishing and fish farming including stock assessment and the effects of fishing on the aquatic environment.
4 Approval of the services provides the Ministry with the authority to undertake each of those services in 2004/05 and forms the basis for the determination of cost recovery levies to be set for the fishing season commencing on 1 October 2004.
Approvals required from you
5 You are required to approve the services detailed in:
a) Appendix 1 - the near final SOI which contains the recommended fisheries services for 2004/05
b) Appendix 2 - the recommended fisheries research services for 2004/05
6 A “Statement by the Minister of Fisheries” is enclosed as Attachment 1 to this advice paper for you to signify your approval, or approval as amended, to the recommended services for 2004/05. This allows you to sign as approving the totality of these services rather than signifying your decision on each individual service.
Statement of Intent
7 The Budget process also requires that the central agencies (Treasury, State Services Commission, Te Puni Kokiri) review the proposed SOI for the key messages being delivered and to ensure that the financial figures are as agreed through the bilateral discussions between Ministers and reflect the final Budget decisions to be taken by Cabinet on 26 April.
8 The Ministry has already had substantive discussions with the agencies during the development of the SOI and has incorporated comments into the present document. The Budget process requires that we seek comments from them on the ‘near final’ draft of the SOI. A further copy was sent to them on 14 April for this purpose.
9 The central agency comments were required in the week ending 23 April. No substantive changes were requested. At this stage it is not expected that there will be any amendments to the financial figures. The documents attached are therefore as “near final” as is possible.
10 It is proposed that you agree to the Ministry making any required changes that are of a minor or technical nature without referring the documents back to you.
11 The “near final” draft Statement of Intent for 2004/08 is attached as Appendix 1. As noted above, this Appendix also contains the recommended fisheries services for 2004/05.
12 The SOI provides commentary on the way in which the Ministry contributes to the fishery outcome of maximising the value New Zealanders obtain through the sustainable use of fisheries resources and the protection of the aquatic environment, the factors impacting on the fishery outcome, and the new initiatives proposed for 2004/05. Also included is a copy of the 2003/08 Strategic Plan issued to stakeholders in January 2003.
13 The Ministry has five new initiatives for 2004/05 - the implementation of the Ministry’s Fisheries Deed of Settlement; Improving Estimates of Marine Recreational Harvest; Health nd Safety initiatives for Fisheries Officers; additional resourcing for the Compliance Serious ffences Unit; and improvements to the Ministry corporate infrastructure.
Timing
14 The 2004 Budget timetable requires that responsible Ministers sign-off Departmental tatements of Intent as “OK to print” no later than 3 May 2004. Your approval to this effect is enclosed as Attachment 2.
The consultation process
15 For the 2004/05 year, it has been necessary to split the consultation process with stakeholders into two separate stages:
(a) Consultation on the main services to be provided by the Ministry; and
(b) Consultation on the proposed new initiatives to be considered for inclusion in the 2004 Budget.
16 Consultation is normally conducted as a single process with proposed new initiatives being incorporated, but separately noted, in the draft document. For 2004/05, Budget Ministers desired to consider all proposed initiatives from Government agencies and to then determine which would be retained for further consideration. Delays in this consideration meant that the new proposals could not be included in the December 2003 distribution of the draft document.
17 The attachments to this paper document the outcome of the consultation processes:
a) Appendix 3 provides a summary of the issues raised in stakeholder submissions
b) Appendices 4 and 5 set out the issues raised in the written submissions from stakeholders and the Ministry’s responses to those issues; and
c) Appendix 6 provides copies of the written submissions from stakeholders on draft statement of intent, including the main MFish services proposed for 2004/05;
d) Appendix 7 provides copies of the written submissions from stakeholders on the proposed new initiative bids for 2004/05.
Consultation on the main MFish services
18 In December 2003, your predecessor agreed to release to tangata whenua and stakeholders the Ministry’s draft SOI for 2004/08. The draft was issued to around 90 people and organisations, including iwi, listed on MFish databases. In the letter accompanying the document, the Ministry:
a) indicated that a stakeholder plenary would be held on 4 February 2004 in Wellington to discuss the proposals
b) indicated that the Ministry was willing to discuss at any time its content
c) invited tangata whenua and stakeholders to submit any questions in writing before the plenary and undertook to post written responses to these questions on the MFish website
d) undertook to provide answers to any questions raised at the plenary and which could not be answered at that time, within a few days after the plenary
e) noted that the deadline for stakeholders to provide written submissions on the draft plan was Friday 20 February;
f) noted that the proposed new initiative bids would be released separately.
19 Representatives from 9 iwi/stakeholder organisations attended the Plenary. A copy of the responses to questions asked before the meeting and those raised at the plenary was posted on the Ministry’s website on 13 February. The deadline of 20 February for written submissions was extended to 23 February to allow full consideration of these responses.
20 Written submissions were received from 11 stakeholder groups. These are contained in Appendix 6.
Consultation on proposed new initiatives
21 Information on the Ministry’s proposed new initiatives for 2004/05 was released to iwi and stakeholders in a letter dated 10 March 2004. The letter also stated that the deadline for written submissions was 31 March. No formal meeting was to be held, but stakeholders were invited to address any questions to the Ministry, who would then post the responses on the MFish website.
22 Ten submissions were received. These are contained in Appendix 7.
23 The list of stakeholders providing written submissions is shown below
Title |
Abbreviated name |
Submission on |
|
|
SOI |
Proposed new initiatives |
The New Zealand Seafood Industry Council |
SeaFIC |
Y |
Y |
Te Ohu Kai Moana |
TOKM |
Y |
Y |
Sanford Limited |
Sanford |
Y |
N |
The Northern Inshore Fisheries Company Ltd |
TNIFCL |
Y |
N |
Hoki Fishery Management Company Ltd and
Squid Fishery Management Company Ltd |
HOKI |
Y |
N |
New Zealand Aquaculture Council (Inc) |
NZAC |
Y |
N |
Fisheries Audit Services (NZ) Ltd |
FAS |
Y |
N |
Area 2 Inshore Finfish Management Company
Ltd |
AREA 2 |
Y |
Y |
PAU2 Industry Association Inc |
PAU2 |
Y |
Y |
Solander |
Solander |
Y |
N |
Environment and Conservation Organisations of NZ Inc
Forest and Bird Protection Society of NZ Inc |
ECO |
Y |
Y |
Talleys Fisheries Ltd |
Talleys |
N |
Y |
Te Runanga A Iwi O Ngapuhi |
TRAION |
N |
Y |
Ngati Ruanui Group Management |
Ngati Ruanui |
N |
Y |
Mai I Nga Kuri a Wharei ki Tihirau
(Bay of Plenty Regional Fisheries Forum) |
BoP RFF |
N |
Y |
GG Herbert (individual submission) |
|
N |
Y |
Stakeholder submissions and Ministry responses 24 The Ministry’s responses to the issues raised in stakeholder submissions are contained in Appendix 4 (the draft SOI/fisheries services to be provided) and Appendix 5 (fisheries research proposals). A bullet pointed summary of these issues is attached as Appendix 3.
25 Overall, the stakeholder comments can be categorised into the following approaches:
Commercial fishing interests: a) Believe the Ministry should be concentrating on the utilisation aspects of the Fisheries Act 1996, while acknowledging the aquatic environment only so far as it is directly impacted on by fishing activities;
b) Offer qualified support of the new approach to fisheries management through stock strategies and fisheries plans, but want much more detail before full endorsement;
c) Express concern at the impact of cost recovery levies on an industry that has seen reduced revenues through depressed market prices and a high New Zealand dollar and advocate that non-essential or high cost research projects should be withdrawn.
ECO d) Argues the Ministry is not focused on its protection of the aquatic environment responsibilities;
e) Rejects totally what it sees as the Ministry abdicating fisheries management to industry;
f) Considers all research projects to be of a high priority.
Tangata Whenua
g) Support the development of fisheries management plans to provide for greater stakeholder input and participation in fisheries management;
h) Join with commercial interests in expressing concern at the financial plight of the commercial fishing industry as a result of depressed market prices, substantially increased input costs and an ever worsening currency position;
i) Are dissatisfied with MFish’s commitment and performance relating to the development and implementation of customary fishing regulations;
j) Express support for the new initiative related to the Fisheries Deed of Settlement.
Changes from draft to final SOI 26 The table shown in Annexe 1 lists the changes from the draft to the final SOI plan following the plenary meeting held in February 2004 and the subsequent stakeholder submissions on the draft plan and the proposed new initiatives.
Financial information 27 The level of planned expenditure in the near final SOI is within the Ministry’s baseline for the 2004/05 financial year. The tables below provide specific information on fiscal trends. All figures are in $000 and GST exclusive.
Table A Fiscal Trend of Services
The following table shows the trend in the costs of Ministry services over the period from 2002/03 to 2004/05. The research figures are the direct costs for the provision of research services and do not include any share of Ministry overheads.
|
2003/02 |
2003/04 |
2004/05 |
Actual
|
SOI
|
Plan
|
Core departmental services |
49,481 |
49,855 |
60,507 |
Fisheries research |
17,371 |
19,349 |
18,698 |
Biodiversity research |
2,084 |
3,099 |
1,884 |
Biosecurity reseach
|
1,725
|
1,781
|
1,192
|
Total |
70,661 |
74,084 |
82,281 |
Table B Industry Contributions (including share of overheads)
This section shows the extent of industry contributions to the cost of delivery of the Ministry’s outputs.
|
2002/03 |
2003/04 |
2004/05 |
Actual |
SOI |
Plan |
Core departmental services |
18,288 |
16,844 |
17,008 |
Research
|
15,437
|
15,223
|
14,704
|
Total - cost recovery levies |
33,725 |
32,067 |
31,712 |
Transaction charges
|
2,508
|
1,733
|
2,356
|
Total industry contributions |
36,233 |
33,800 |
34,068 |
28 It is necessary to note that the above industry figures are gross numbers and that several adjustments will be made to arrive at the actual industry contribution for the fishing year commencing on 1 October 2004. These include:
a) Application of the settlement credit related to under and overs for the period 1994/95 to 30 June 2002.
b) Application of unders and overs for 2002/03 and 2003/04, when determined.
c) Adjustment for carry forward of expenditure from 2003/04 to 2004/05
d) Adjustments to the research programme as better information becomes available.
29 It should be noted that the cost estimates for individual research projects have not been disclosed in either the draft plan or the final SOI, as this would not be consistent with the Ministry’s commercial tendering process.
30 The main changes between the draft consultation document plan and final SOI can be summarised as:
- the inclusion of proposed new initiatives for 2004/05;
- the archival tagging scheme for southern bluefin tuna;
- the State Sector retirement savings scheme;
- the withdrawal of four research projects as noted in annexe 1;
- projects/activities carried forward from 2003/04 into 2004/05 –a transfer of $100,000 related to the implementation of the aquaculture reforms in output class D4 Fisheries Access and Administration.
31 It should be noted that the “in principle” expense transfers from 2003/04 to 2004/05 signed recently by yourself and the Minister of Finance are not included in the above final plan figures because the actual amount of carry forward will not be determined until after the audited year-end financial results for 2003/04. Once confirmed, the actual carry forwards will be included in the October Baseline Update process later this year. The potential impact on cost recoveries from industry is between nil and $3.2million
Reconciliation between Statement of Intent and Main Estimates 2004/05
32 There are some differences between the final figures in the Statement of Intent and those in the Main Estimates for Vote Fisheries. The Main Estimates will show higher figures for three reasons:
(a) National Plan of Action for Seabirds
This relates to an increase in funding of $2,190,000 approved in the 2002 Budget for improved observer coverage to monitor incidental captures of seabirds in commercial fishing operations. Implementation of this activity is subject to consultation with fisheries stakeholders and so the amount is not included in the SOI.
(b) Serious Offences Unit
An amount of $296,000 (excluding GST) has been included in the appropriations to fund the full implementation of the Serious Offences Unit new initiative. Because it is now intended to phase this initiative in over a period of three years, the SOI will show $148,000 for 2004/05 and 2005/06, rising to 100% in 2006/07 and thereafter.
(c) Adjustments after consultation
Due to the veracity of the stakeholders’ submissions, the Ministry conducted a second level of internal analysis of the proposed services for 2004/05 in the light of the economic challenges facing the commercial sector. This additional review concluded that certain deferrals and reductions were appropriate, although they are not expected to be seen as sufficient by the commercial stakeholders. The Ministry recommends the withdrawal from the Statement of Intent of four fisheries research projects at a cost of $365,000. These are however, still included in the Main Estimates figures in output class Fisheries Information and Monitoring.
The adjustments following the consultation process will be reflected in the October Baseline Update, at which stage the figures in the Main Estimates will correspond with those in the Statement of Intent.
Other adjustments were made in the SOI to reflect changes in effort directed to Ministry outputs.
Cost recovery process
33 Following your final decisions on the fisheries services for 2004/05 and release of the SOI after the Budget announcement, the Ministry will distribute the final document to stakeholders along with a proposed cost recovery levy consultation document.
34 The cost recovery levies incorporate both fisheries services supplied through the Ministry of Fisheries and fisheries related conservation services provided by the Department of Conservation. As part of the consultation process, a cost recovery plenary with industry stakeholders will occur, with stakeholders being given time in which to provide written submissions on the proposed levies. The Ministry will then provide you with the advice paper and associated Cabinet Legislation Committee paper on the levies to be struck for 2004/05. In order to have the new levies gazetted in time for 1 October 2004, the Ministry will be seeking your approval to the proposed levies in July 2004.
35 The Department of Conservation has advised that its proposals on fisheries related conservation services for 2004/05 are presently being consulted on with stakeholders. It is expected that the final services will be forwarded to the Minister of Conservation for consideration in mid May and that the approved services will be provided to the Ministry of Fisheries by 31 May.
Observer services for 2004/05
36 In previous years, cost recovery levies for observer services have been based on the planned costs of the services as included in Ministry business plan. At that stage the number of observer days to be provided during the year was uncertain and the costs (around $1.8 million) were a “best estimate”.
37 Traditionally, the Ministry has sought an increase at Supplementary Estimates time when the level of demand has become firmer. Inevitably, because this increase was not reflected in a revised cost recovery levy order, levies for observer services were understated or inappropiately attributed. This has lead to significant amounts that could not be recovered.
38 For 2004/05 and beyond, a new process has been adopted. In September 2003, a project team, consisting of industry and Ministry personnel was established to review and recomnmend developments in the Observer programme’s planning, funding, purchasing processes and systems. The current plan for 2004/05 is to deliver about 7000 observer sea days at an estimated cost of $3.4 million and it is intended that cost recovery levies will be based on this figure, rather than the amount included in the SOI. Industry has been consulted on this and accepts the new approach.
National Plan of Action for Seabirds
39 On page 43 of the Statement of Intent, the Ministry has noted that over the past four years, it has been working with the Department of Conservation and stakeholders on the development of a National Plan of Action for Seabirds (NPOA). The NPOA provides for the establishment of a long-term strategy to reduce the incidental catch of protected seabird species in fishing operations. Formal consultation on the NPOA was completed by 30 September 2003 and final decisions were made by the Ministers of Fisheries and conservation recently. The approved document was released to stakeholders on 8 April 2004.
40 In the SOI, we have also indicated that, in 2004-05, we will be developing and putting in place an implementation plan for the NPOA in conjunction with the Department of Conservation and stakeholders. Part of this plan will be determining the nature and extent of observer coverage to monitor the incidental catch of seabirds.
41 It needs to be noted that, although the NPOA was initially funded in the 2002 Budget, and therefore included in the Estimates for Vote Fisheries, this funding was excluded from the 2002/03 Departmental Forecast Report (DFR) and the 2003/08 Statement of Intent. The initiative is subject to 100% cost recovery from the fishing industry, and to have included these costs in either the DFR or SOI would then have required MFish to incorporate the amounts in the the 2002 and 2003 Levy Orders. This was seen as inappropriate at a time when consultation on the development of the NPOA had not been concluded.
42 Nor, at this stage, is there any funding included in the 2004/08 SOI. However, now that the approved document has been released, the Ministry proposes to undertake further consultation with stakeholders on its implementation.
43 It is possible that implementation could commence later in the 2004/05 financial year and if that were to be agreed, then the Ministry would:
(a) seek to recover the costs associated with the implementation through appropriate amendments to the cost recovery levy order. This would likely be done in the April 2005 levy order amendment process.
(b) propose an amendment to the Statement of Intent to recognise the initiative as a new deliverable in the 2004/05 financial year.
Recommendations
44 It is recommended that you:
Peter Murray
Deputy Chief Executive
APPROVED / APPROVED AS AMENDED / NOT APPROVED
Hon David Benson-Pope
Minister of Fisheries
May 2004
Annexe 1
Changes from Draft to Final Statement of Intent
Statement of Intent and Output Plan |
Draft plan item and
page no. |
Changes in Final Output Plan |
Criteria for assessing the quality of policy and reports - Consultation - page 43 |
Add ‘and considered’ so that the criterion now reads
“The Ministry has consulted with other government agencies and other affected stakeholders (where appropriate) and possible objections to roposals/content are identified and considered.” |
Fisheries Research Projects |
Project no. |
Project title |
Research Services - Changes in Final
Plan |
HOK2004/05 |
Stock discrimination in Hoki |
Delete this project for 2004/05. |
BUT2004/01 |
Characterisation of the Cook Strait butterfish fishery |
Delete this project for 2004/05. |
OCT2004/01 |
Characterisation of octopus catches |
Delete this project for 2004/05. |
ENV2004/07 |
Investigating the effects of fishing on seamounts |
Delete this project for 2004/05. |
Attachment 1
STATEMENT BY THE MINISTER OF FISHERIES In considering the final fisheries services and fisheries research services to be provided by the Ministry of Fisheries for the financial year 1 July 2004 to 30 June 2005, I certify that:
- I have taken note of the written submissions from stakeholders as contained in Appendices 7 and 8 to this report.
- I have noted the responses by the Ministry of Fisheries to the issues raised in those submissions. These responses are contained in Appendix 4 – Summary of stakeholder submissions and Ministry of Fisheries analysis and recommendations on the draft consultation document, and Appendix 5 - Summary of stakeholder submissions and Ministry of Fisheries analysis and recommendation on fisheries research services.
- I have also noted the summary of issues raised by stakeholders and the Ministry responses to those issues as contained in Appendix 3 – Summary of main issues from stakeholder submissions and Ministry of Fisheries comments.
- In addition I have noted the changes from the draft plan issued for consultation and the final Statement of Intent contained in paragraph 25 of the advice paper.
I hereby approve/approve as amended by me:
- The fisheries services to be delivered in the 2004/05 financial year as detailed in Appendix 1 - Statement of Intent for the period 1 July 2004 to 30 June 2008; and
- The fisheries research services detailed in Appendix 2.
APPROVED / APPROVED AS AMENDED
Hon David Benson-Pope
Minister of Fisheries
May 2004
Attachment 2
2004/08 STATEMENT OF INTENT MINISTRY OF FISHERIES
Approved for printing
Hon David Benson-Pope
Minister of Fisheries
May 2004