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Maori Commercial Fisheries Conference Speech

Keynote Address
Maori Commercial Fisheries Conference
Ascot Park Hotel, Invercargill
2 May 2001

Craig Ellison
Deputy Chairman
Te Ohu Kai Moana


MIHI

It gives me a great pleasure to be able to address this conference this morning.

I know the chairman, Shane Jones, was looking forward to being here today to make this address to you and to be a part of this 4th Maori Commercial Fisheries Conference, but unfortunately was unable to make it.

Before I begin, I would like to take this opportunity to thank the previous Chairman, Sir Tipene O’Regan, and the previous Commissioners for their contribution to the development by Maori in the commercial fishing industry over the last 10 years.

The previous Commission achieved a great deal in terms of growing the value of the Maori commercial fishing asset base presiding over an increase in the value of the PRESA and POSA fisheries assets to around $900 million. There is an additional but unknown value in the fisheries assets now owned by Iwi/Maori through their own fishing businesses, part of which is based on access to quota through Te Ohu Kai Moana.

The achievements of the previous Commission in enhancing the value of the Maori asset base will not be jeopardised by this Commission. That I can assure you. We will build on these achievements to ensure that Maori become more than simply a component of the commercial fishing industry; Te Ohu Kai Moana wants to ensure that Maori are the dominant force within the industry, growing and expanding, providing vision; providing future leadership.

We view the development of Maori fishing businesses as essential to the overall social, economic and cultural development of Maori. The lease reviews undertaken by TOKM to review the progress of Iwi in developing their fishing businesses show a great deal of progress has been made. However, we cannot be complacent. We have come a long way but we have even further to go.

THE SEAFOOD INDUSTRY AND MAORI PROGRESS – 1986 to 2001

It has taken almost 15 years to get us where we are today in terms of New Zealand’s commercial fishery.

1986 was a watershed moment in the recent history of Maori fishing. In 1986, when the quota management system was introduced, Maori had almost been forced out of the commercial fishing industry. During the Muriwhenua Fisheries Claim only a year on, evidence was presented that showed that Government policies aimed at removing part-timers from the fishing industry had forced out almost all remaining Maori commercial fishers in the north.

We had come to a point where Maori were not a significant presence in the commercial fishing industry.

Maori received little or no quota when it was allocated. The policy of exclusion was almost complete. Although there were many Maori employed on wages in the industry, there were few fishers and there were even fewer identifiable Maori fishing businesses. Iwi-operated fishing companies did not exist; Maori had almost no say in how the resource was managed.

In-depth knowledge of the business and activity of fishing across Maoridom was almost non-existent.

But it needs to be remembered this wasn’t always the case. In fact, the situation in 1986 was a far cry from a little over a century earlier when Maori had a dominant role in the industry. Maori were successful commercial operators on a significant scale. For example, Maori supplied the growing city of Auckland with much of its fishery products.

Few would have anticipated the rapid progress that would be made by Maori in re-establishing themselves as a force since 1986. The Maori Fisheries Act 1989 allowed the limited re-establishment of a Maori presence in the industry. The 1992 Fisheries Settlement provided a further opportunity for Maori to re-establish themselves as a force in the industry.

But the seafood industry is competitive. The seafood industry is full of risks. There are many who would be only too happy to see Maori fall over so they could gain access to those assets.

Therefore, the Te Ohu Kai Moana Group has worked hard, very hard, to ensure the fisheries assets are protected from risk and they have worked hard to ensure the assets are managed in a professional manner.

At the same time, the Commission has taken every opportunity to grow these assets. It has invested in new opportunities where it has been financially prudent to do so.

There are some concerns, I will say that. The progress many Iwi are making in meeting mandate requirements has been slow. The responsibility for stewardship of the Maori fisheries assets cannot be underestimated. The seafood industry has many risks and unknowns. Iwi need to get their act together. Iwi need to make progress now to meet mandate, structure and organisation criteria set by Te Ohu Kai Moana. Those of you in Maori fishing businesses need to emphasise the importance of meeting these requirements to your Iwi owners. This is not negotiable and must happen for allocation to proceed.

This is an internal challenge for Maoridom. Admittedly, it is not the only challenge facing Maori in the industry. There are other external challenges. The seafood industry in 2001 is markedly different to what it was in 1986.

International Fisheries Environment in 2001

There have been numerous changes in the International fisheries environment. In 1986, few of us had even heard of the word ‘globalisation’.

But it is now a major influence shaping the future of the international trade in fisheries products, particularly as fishstocks in the Northern Hemisphere continue to decline. Over 90 percent of New Zealand’s seafood is exported. We cannot afford to ignore international trends or consumer demand for safe and high quality fishery products.

Fisheries Management

There have also been significant changes in the management of fisheries since the Quota Management System was introduced in 1986. Although the QMS remains the cornerstone of the fisheries management system, it has changed considerably and will continue to evolve.

The most significant change to my thinking is the increasing role of commercial stakeholder groups in managing their interests in the fishery. This trend will continue and Maori must ensure they have an active and effective role in these stakeholder organisations if they want to be at the forefront of future management directions.

Maori Fisheries Assets

There have also been changes, as well as growth, in the Maori fisheries assets under our stewardship.

As I reminded everyone earlier, in 1986, Maori received little quota when the QMS was introduced.

The total value of assets – both PRESA and POSA – that Te Ohu Kai Moana received from the Crown under the terms of the fisheries settlement had a cash value of approximately $250 million at the time of handover. This was made up of $100 million of PRESA assets plus POSA cash of $150 million enabling Te Ohu Kai Moana to purchase its interest in Sealord. But even though the cash value of the fisheries settlement was substantial at the time, Maori still had no real presence in the seafood industry.

That has been the challenge for Te Ohu Kai Moana and Maori: to move from the initial starting point to create a dominant Maori presence in the industry. And it had to be done, because the risks from not doing so were that Maori would be subsumed into the industry or remain merely a minor influence. This risk remains today, and will remain a key challenge for Iwi when allocation takes place.

It is common knowledge now how Te Ohu Kai Moana responded to that risk. We improved the size of the asset base. We improved the quality of the asset base. And we improved the diversity of the asset base.

There was a concerted quota acquisition programme. Te Ohu Kai Moana had to make up shortfalls in the delivery of PRESA quota by the Crown. There was the acquisition of a major interest in Moana Pacific Fisheries. This gave Maori a direct interest in a major company involved in some of the most valuable inshore fisheries in this country, including snapper and rock lobster.

The acquisition of Sealord was vital in giving Maori a major influence in the deepwater fishery and entry to related export markets in an increasingly globalised industry.

Similar sentiments can be discussed regarding the purchases of Prepared Foods, Pacific Marine Farms, and Chatham Processing – all are strategic investments resulting in dominant positions within the sector, and have led to significant and worthwhile rationalisation.

This chart summarises the current position of Maori fisheries assets.

The net value of Maori fisheries assets held by Te Ohu Kai Moana and its subsidiaries has more than tripled since the Crown settled with Maori. The values on the overhead do not take into account the full market value of Te Ohu Kai Moana Group’s, and a more realistic estimate of the true value is probably around $1 billion. Te Ohu Kai Moana Group’s operating revenue from trading activities in the year ended 30 June 2000 totaled $405 million.

Maori quota ownership through Te Ohu Kai Moana and its subsidiaries now comes to over 246,000 tonnes, some 33% of all quota. And that’s not forgetting that additional quota is owned by Iwi owned fishing companies.

And when it comes to employment in Te Ohu Kai Moana fishing subsidiaries, there are some 2400 employees, of which over 35% are Maori. The profile of the industry is that 10,000 are directly employed, 22% of which are Maori. There have been hundreds of new employment opportunities for Maori as a result of the Maori Commercial Fisheries Settlement.

Te Ohu Kai Moana has embarked on a programme of improving the Maori position through acquisition of new assets, investing in the industry and participating actively in industry organisations. Maori are well positioned to make a major contribution to the future development of the New Zealand seafood industry. Te Ohu Kai Moana takes its stewardship role very seriously and will not shirk from the large huge amount of work yet to be done.

So, today I put a challenge to Iwi fishing businesses. And that is for you to be able to stand up to your whanaunga a decade after allocation to demonstrate that you have achieved the same sort of growth in your assets.


Current Developments

Naturally, the seafood industry is also currently faced with a host of issues that are changing the environment within which it operates.

The 1996 Fisheries Act is still being implemented including such changes as the introduction of annual catch entitlements in place of leasing of quota.

There are also a host of Government reforms underway – the recently announced Oceans Policy, proposed changes to Marine Reserves, the Government’s review of Recreational Fisheries, and review of Aquaculture.

All of these reviews and resulting legislative changes will impact on the seafood industry.

Te Ohu Kai Moana supports these changes provided they are, above all, necessary, effective and well structured and that Maori have a role in their development and implementation.

FUTURE DIRECTIONS – WHERE TO FROM HERE?

So as you can see, it is extremely important for us to map out the future direction of the industry. Although Maori have achieved an enormous amount in becoming involved in commercial fishing over the past 15 years, we cannot afford to be complacent. The industry is evolving extremely rapidly. Maori are catching up with the rest of the participants in the seafood industry. But the entire industry must look to improve its performance in achieving greater real values for our resources.

Maori must also accept that globalisation must be incorporated into our future plans if we want to be successful.

The harsh reality is that while Maori have a much greater presence in the industry than 15 years ago, that watershed year 1986, we are still not up to full speed.

Many claim that Iwi developments in the fishing industry have not progressed to the stage that they want because allocation has not yet occurred.

The priority for Maori is to make allocation happen so you can better shape the development of the industry. However, before this will occur Te Ohu Kai Moana has a responsibility to see that Iwi are well prepared. In addition to meeting Te Ohu Kai Moana’s allocation requirements that I have already spoken of, a vital part of this preparation involves having a plan and a vision for the future.

What is this vision for the future to be? Will we see small Iwi fishing companies each vying to find a niche for themselves in the industry and competing with each other, or will it be Maori moving forward as a few large globally competitive fishing businesses? Both approaches have their place. The market for Bluff Oysters is different to the market for hoki.

The answer lies in your hands. The progress made by Te Ohu Kai Moana to date shows that the careful and planned approach to utilisation and growing the fisheries assets has worked very well indeed. In fact, I believe that the words of the previous chairman of Te Ohu Kai Moana, Sir Tipene O’Regan, in 1992 were both apt and timely when he urged caution in the development process for Maori in the industry.

In terms of the development of Maori in the commercial fishing industry, I regard the next 10 years as more critical than the past 10. It will be essential to have a strong vision to progress the development of Maori in the industry.

The way in which we utilise the fishing assets held by Te Ohu Kai Moana over the next 10 years will have a major bearing on our success in the long term. We have to be imaginative. We have to be creative. These will be necessary for promoting the further development of Maori in this industry.

What is my vision for Maori in the commercial fishing industry in 2010 and how do I think we can achieve this?

I would like to think that in 2010 Maori will be more than simply just a component of the fishing industry, holding quota and being owners or part-owners in a number of predominantly smaller Iwi fishing businesses. Critical mass in the appropriate markets is essential.


If Maori want to be the key force within the fishing industry in 2010 we must look at where the international seafood industry is heading. And we must head in the same direction.

And how can it be achieved given the increasing globalisation of the high volume markets when we are seeing a small number of large seafood companies supplying the requirements of a small number of large seafood buyers.

There are a number of possible strategies that we could consider.

One potential strategy could be for Te Ohu Kai Moana to use some of its resources to strengthen the operations of the network of companies that it already owns as well as looking for opportunities to build up that network strategically. The Commission’s recent purchase of Brierley’s half-share in Sealord in a joint-venture with Nissui will strengthen Sealord’s operations, give it access to new markets and enable it to compete more effectively in international seafood trade.

Another potential strategy could be for the Commission to promote and encourage Iwi to form larger tribally-based commercial operations that are able to take advantage of ‘critical mass’ to secure higher fishing premiums. You will recall that in earlier lease distributions, the Commission offered incentives for Iwi organisations to work collectively and to avoid wasteful competition with each other for scarce commercial fisheries resources. We need to consider whether and in what way we can promote and encourage the growth of larger Iwi-based fishing operations with ‘critical mass’ and with the capacity to compete effectively in international seafood markets.

Another possible strategy could be for the Commission to place greater emphasis on the provision of business advice to Iwi that utilises the collective Maori experience to date in the seafood industry. For example, it may be possible to provide assistance to Iwi for the development of Iwi strategic and business plans. If we all agree and share in the vision that we want Maori to be the dominant force in the fishing industry in 2010, and we jointly plan the continued growth of Maori fishing operations, then we will achieve this vision.

Finally, we need to be constantly monitoring and reviewing the progress being made by Maori in the industry to ensure that the strategies are working. We need to set performance targets that are rigorous and are benchmarked to the very best in the industry and review our performance against these.

Maori are capable of becoming the dominant force within the commercial fishing industry if we adopt the right strategies.

In conclusion I wish to say this. I consider that over the last ten years, the Commission and Iwi have worked in what has essentially been a partnership approach, albeit with some disagreements from time to time. We have achieved results that very few of us believed were possible. I know that if we continue to work in this way, then we can expect similar levels of success in the future.

Thank you

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