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Re-flagging foreign fishing vessels threat to quota value

Re-flagging foreign fishing vessels threat to quota value: govt report

By Paul McBeth

May 22 (BusinessDesk) - The value of New Zealand fishing quota could drop because of the government's decision to require foreign-flagged fishing vessels to register under the New Zealand flag within four years.

The new policy was announced today in response to the mistreatment and underpayment of crews working on some boats, which has also sparked an investigation by the Korean government of Korean-owned vessels.

Primary Industries Minister David Carter and Labour Minister Kate Wilkinson jointly said foreign-flagged vessels won't be able to operate legally after a four-year transition period in a move to put the ships under New Zealand labour and maritime law. That means a foreign-owned charter vessel will operate under local law and will need a responsible New Zealand operator to hire crew.

The decision goes beyond the recommendation of a ministerial inquiry headed by former Cabinet Minister Paul Swain, which advised restricting registration to vessels on demise charter. A demise charter is a ship leasing arrangement where the use of the entire vessel and all associated expenses pass from the owner to the lessee.

The report said reflagging was seen as the "cleanest and most comprehensive way of addressing the issue of flag and coastal State jurisdiction," by government officials, but held "uncertainties and risks" for the future of the foreign-owned fleet and the fishing industry in general.

"A number of firms and regional economies that depend heavily on the business generated by the FCV fleet could be adversely affected by the requirement to reflag," the report said. "Reflagging could also reduce the value of quota and the price of ACE (annual catch entitlement) if it resulted in a significant downsizing of the FCV fleet."

The inquiry was launched after 32 Indonesian crew aboard the Oyang 75 walked off the vessel, alleging abuse by the ship's Korean crew.

Carter said the reflagging will "further strengthen compliance with New Zealand laws" and improve transparency of foreign-owned vessels.

"The government continues to welcome foreign charter fishing vessels operating in New Zealand waters, but they must meet our requirements and our standards," he said.

Local fishing company Sanford said it was too early to assess the impact of the government's decision, which will also have to be considered by "current vessel owners to determine the effect and their willingness to allow the vessels to be reflagged."

The Swain-led panel's report said it would be difficult to predict the response to reflagging by foreign owners, or how quickly the local fleet would be able to fill any gap left by those who quit New Zealand.

"Many companies would regard a requirement to reflag to New Zealand as a disproportionate response to the problems and would clearly prefer that any decision to reflag be made by them on commercial grounds," the report said.

(BusinessDesk)

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