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New rules for foreign charter fishing crews

Hon David Cunliffe
Minister of Immigration

The government has approved a substantial range of measures to improve conditions for foreign crew on foreign charter fishing vessels in New Zealand waters, says Immigration Minister David Cunliffe.

The new measures include a mandatory code of practice with improved minimum working and living conditions, a requirement that a New Zealand party acts as guarantor to ensure crew are paid what they are owed, and an expectation that crew employment disputes will be settled in New Zealand.

"I acknowledge the work of the fishing industry with the government on the new code of practice and guarantee," Mr Cunliffe said.

"We look forward to working with the industry to implement the code of conduct."

Mr Cunliffe says a new framework covering foreign crew working for foreign charter partners in New Zealand waters is needed to ensure the industry operates according to established immigration policy and law.

"The review aims to stop unsustainable practices such as foreign crew being taken advantage of or underpaid, and to ensure jobs for New Zealand crews where available," Mr Cunliffe said.

"While the government remains committed to a role for a well-regulated, sustainable charter fleet, it is important to avoid New Zealand fishing capacity being eroded by unfair, underpaid competitors."

"These new conditions will have to be met before the government will issue new approvals to fishing companies wanting to engage foreign charter partners who employ foreign staff. These approvals are only granted when no New Zealand crew are available to do the work," Mr Cunliffe said.

The government has also approved new minimum pay rates for fishing crew working on foreign charter fishing vessels in New Zealand.

"From 1 January next year, the pay for foreign crew will gradually increase - in three annual increments - to a rate more comparable with New Zealand fishing crews."


Backgrounder

Foreign charter vessel fishing industry review

The current situation

Foreign charter vessels play an important part in the New Zealand fishing industry, particularly in harvesting species such as squid, hoki and jack mackerel. Their crew are almost invariably foreign, generally from Asia or Eastern Europe.

In order to allow foreign crew to work for a specified period of time on the foreign charter vessels in New Zealand waters, a New Zealand party applies to the Department of Labour for an Approval in Principle (AIP).

The Minister of Immigration or his delegate grants AIPs on a case by case basis, when there is a proven skill or labour shortage. A party will be considered for an AIP if there is proof insufficient numbers of New Zealanders are available for the work. Once an AIP has been granted, employees or their agents lodge individual work permit applications with the department.

Note: The AIP holder in the foreign charter vessel fishing industry is always a New Zealand party. It is usually a fishing company but can also be the New Zealand-based agent of a foreign company. But the AIP holder is not the employer, which is usually the foreign operator of the vessel.

Why a review of the foreign charter vessel fishing industry was needed

Over the past few years, there have been some instances of foreign charter vessel fishing crew not being paid their full entitlements, and experiencing poor living and working conditions.

In seeking to enforce the conditions of AIPs and subsequent work permits, the government encountered some instances of difficulty as the crew are usually employees of a foreign party.

New Zealand's immigration policy requires all temporary migrant workers to be paid the industry standard rate (the market rate) to ensure New Zealanders are not displaced from job opportunities, and that domestic wages are not artificially depressed. In general, however, foreign charter vessel crew have been paid at the low end of the range applicable in the New Zealand fishing industry.

The Ministers of Immigration, Labour and Fisheries directed officials to seek remedies.

Government's objectives

The government asked officials to review the foreign charter vessel fishing industry. The aims were to facilitate a legitimate, high quality foreign charter vessel fleet to complement the New Zealand fishing industry, including ensuring that:

· foreign crew receive the same terms and conditions as New Zealand crew doing comparable work
· foreign crew have the same protections from mistreatment and exploitation as New Zealand crew
· immigration risks are managed
· use of foreign crew does not provide a competitive advantage over use of New Zealand crew due to lower labour costs

The review process

At the request of the ministers, Department of Labour and Ministry of Fisheries officials began talks with fishing industry representatives in 2005 to improve the foreign charter vessel industry.

The government has progressively tightened conditions for fishing crew working on foreign vessels. From April 2005, the government required that crew be paid the minimum wage (with no deductions to take net pay below the minimum wage). In November 2005, conditions were further strengthened by requiring that foreign crew were paid for a minimum of 42 hours a week calculated over the course of the engagement.

>From November 2005, discussions with industry have focussed on improving pay rates, working and living conditions, treatment, accountability, monitoring and enforcement. The government worked with industry and decided the comprehensive package outlined here:

Improvements developed with industry

Following the discussions, government and the industry's representative body Seafic (the Seafood Industry Council) have agreed the following matters relating to foreign charter vessel crew, which have been endorsed by Cabinet:

· The form of crew employment agreements will align with New Zealand standards and there will be an expectation that crew employment disputes will be settled in New Zealand.

· A new accountability framework will apply, in which a suitable New Zealand party will act as guarantor for all obligations relating to specified minimum levels of crew remuneration, repatriation and support. Crew will have access to appropriate dispute resolution mechanisms in quantifying a claim on the guarantee if necessary.

· Revised minimum working and living conditions contained in a mandatory Code of Practice on Foreign Fishing Crew will apply, covering areas such as health and safety, hygiene, meals, and provision of amenities.

· There will be much stronger regular reporting requirements for the foreign vessels, and the government will be able to undertake onboard inspections regarding immigration, employment and health and safety conditions on demand.


Pay and deductions

The current pay for foreign charter vessel crew is the minimum wage (currently $10.25 an hour) for actual hours worked but in no case less than 42 hours a week over the course of the engagement. Deductions may not take wages below this.

Cabinet has decided to require foreign charter fishing companies to pay crew at a level more comparable with New Zealand crew and other comparable occupations in New Zealand such as the horticulture industry, after 31 December 2006.

The new minimum pay for crew on foreign charter vessels agreed by
Cabinet will be:

· from 1 January 2007, the minimum wage (currently $10.25 an hour) plus $1.25 an hour,
· from 1 January 2008, the minimum wage plus $1.75 an hour,
· from 1 January 2009, the minimum wage plus $2 an hour.

The payments above will be for actual hours worked but in no case less than 42 hours a week over the course of the engagement. Deductions, which are strictly limited, may not take wages below the minimum wage.
Increases in the minimum wage would become effective immediately (the minimum wage generally increases in late March each year). Therefore wage rates increase at the beginning of the calendar year, and will do so again in late March if the minimum wage increases.
Lodging, entertainment (videos), health insurance and protective equipment would not be permissible deductions. All other deductions would be prohibited. Deductions by other means, such as invoicing and agency fees would also be prohibited.

Future review

Cabinet has asked the Department of Labour to monitor the implementation of the revised pay requirements and other agreements reached, and will report back to the Minister of Immigration by 28 February 2008.

A further, comprehensive review of minimum requirements and compliance will take place by 28 February 2010.


ENDS

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