On 28 September 2019, the Minister for Primary Industries and Regional Development announced a full ban on snapper fishing in the Spencer Gulf, West Coast and Gulf St Vincent until 31 January 2023.
Snapper is one of the four most commercially significant species (by total production weight and value) of the more than 60 species which make up the Marine Scalefish Fishery (MSF) in South Australia. We have previously written an article which discusses this ban in more detail which you can read here.
The ban affects commercial, charter and recreational fishers and has left many fishers asking where to next?
Unfortunately, at this stage there are no concrete answers. In this article, we will explain the background to and the current status of the Marine Scalefish reform process, including the licence buy-back scheme.
According to Government records the total overall catch, and total catch for effort, in the MSF has been in decline since (at least) the 1990s. The Minister recently said, “the underlying issue prompting the need for the reform of the fishery is that there are too many commercial fishers and not enough fish to sustain a vibrant and profitable industry. This is a legacy from the open access policy prior to the late 1970s when commercial fishing licences were issued to anyone who wanted to participate in the fishery, and compounded by Labor’s marine parks policy which concentrated fishing effort on a smaller area of water.”
In 2014, in response to the increasing concern about the declining fish stock, the Government at the time ordered a strategic review of the fishery by PIRSA and other stakeholders. The review was driven by a working group established by the (former) South Australian Fisheries Council.
The 2014 working group was tasked with determining what outcomes or action were necessary to achieve a commercially viable and environmentally sustainable future for the fishery.
The key recommendations of the working group included:
- a review of the current licensing strategies;
- an assessment of the feasibility of zoning the fishery;
- the introduction of individual transferable quotas (ITQs) or individual transferable effort units (ITEs); and
- a review of the existing regulatory regime with a view to reducing the regulatory burden on fishers.
- Regionalise: the introduction of fishery management zones to meet the needs of each specific region.
- Unitise: determine shares in the fishery that can be traded among licence holders. This can be either in terms of total catch (ie output) or total effort (ie input, such as the number of fishing days or number of lines, etc).
- Rationalise: improve the economic efficiency of the fishery.
- The Government offers to buy-back MSF licences at a fixed price;
- A ‘competitive tender process’ whereby individual licence holders nominate their surrender price and the Government selectively purchases the licences (starting with the lowest price first) until its buy-back target is reached; or
- A ‘clearing price’ auction, which is a variation of the tender process discussed above, but would involve the Government assessing the ‘tenders’ to determine the ‘clearing price’ based on the buy-back target. All licence holders who nominated a price equal to or lower than the ‘clearing price’ will be successful and will have their licenses purchased for the clearing price (even if they tendered a lower price).
In December 2018, the newly elected Government established the Commercial Marine Scale Fisheries Reform Advisory Committee. The Advisory Committee was tasked with considering how the outcomes identified by the strategic working group should be implemented.
In August 2019, the Advisory Committee published a consultation paper entitled ‘Options for the Reform of South Australia’s Commercial Marine Scalefish Fishery’ (the Report).
Below we have provided a summary of the Report. It is important to note that some of the key findings have been simplified for the sake of brevity. The full Report can be found on the PIRSA website or here.
The Report states, “there are too many commercial fishers and not enough fish to sustain a vibrant and profitable industry. To address this, the Government of South Australia is committed to investigating and implementing key reforms in the commercial sector of the MSF to ensure long-term resource sustainability and improve the industry’s future viability.”
The Report makes a number of recommendations about how the strategic objectives (the ‘whats’ identified by the working group) can be achieved. The key recommendations fall under three headings:
The Report concludes by proposing ‘seven steps to fishery reform’ (see the infographic in attachment 6.2 of the Report). Importantly, however, even that seven step process sets out a number of different options for consideration.
Public consultation on the Report closed on 11 October 2019. The Advisory Committee is currently reviewing the submissions ahead of their next planned meeting on 23 October 2019, with a view to providing a formal proposal to the Government by 31 October 2019.
Licence buy-backs, and licence reform generally, are considered in the Report as a form of ‘unitisation’ of the MSF.
Step one of the ‘seven steps’ referred to above is the ‘voluntary surrender of licences funded by Government’. In making this recommendation, the Report acknowledges that there may be licence holders who are unwilling or unable to accommodate the reform process. To address this, the Advisory Committee recommends a voluntary licence buy-back scheme at the beginning of the reform process. The Report proposes that this buy-back take place in one of three ways:
The Report also acknowledges “the current poor state of the fishery, despite decades of management, and the limited resultant financial capacity of licence holders in the fishery to achieve the required reforms without Government funding assistance”.
However, it must be noted that the proposed buy-back scheme is merely a recommendation at this stage. The Government is yet to announce whether it wishes to implement such a process. As touched upon in my earlier article in relation to the snapper ban (here), the Government can implement its reform regime in a number of ways that do not require it to commit to a licence buy-back scheme or any other form of compensation.
What about the previous announcement about licence buy-backs?
In December 2017, the -Government at the time announced a $20 million package for a licence buy-back scheme for the MSF. However, that proposal was formally scrapped by the current Government in June 2019. The announcement (and the timing of it) made by the former Government was not consistent with the review process being undertaken by the Advisory Committee. That move does not necessarily mean that the Government will not consider a buy-back scheme in the future. Indeed, at the time of announcing the decision to scrap the previous Government’s buy-back scheme, the Minister made it clear that he would await the Report from the Advisory Committee before making any decision on that issue.
It is also worth noting that the snapper ban was introduced after the Report was published and does not appear to have been contemplated by the Advisory Committee. That said, the Minister did flag the potential for immediate reform with respect to snapper at the time the former Government’s buy-back policy was formally dumped.
What should fishers do now?
For now, we need to wait to see what recommendations are put to the Government and how the Government chooses to respond. Ultimately, any reforms that are implemented, including whether there are licence buy-backs, will depend on a number of factors, including budgetary and political pressures.
Once an announcement is made regarding Government policy, those affected should seek professional advice regarding the implications any changes will have for them and their business.