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Heatley: Trans Tasman Rock Lobster Industry Conference

Phil Heatley

30 August, 2011

Speech to the Trans Tasman Rock Lobster Industry Conference

Good afternoon and thank you for the opportunity to speak to you and discuss some of the issues important to you at this time.

Welcome to the Australian visitors who are here to meet with your trans-Tasman counterparts. This is a great opportunity to share ideas for developing your respective fisheries in a secure and profitable manner.

Let me begin by laying out a few economic facts and figures that govern New Zealand’s economic and trade climate at this time. Our Australian friends might be quite interested to know how we view our economic place in the world and it may not be dissimilar to their own.

If average growth over the past 6 years had been the same as during the previous 15 years, per capita incomes would be 11% higher now ($7,000 per household).

Exports today would be around $14 billion higher today if the trend between 1989 and 2004 had continued.

The contraction in the tradable sector mainly reflects a fall in exports of services & manufacturing production.

When it comes to fisheries, the goal is to maximise economic and other benefits within environmental limits. New Zealand’s domestic market is small and therefore many of our industries rely on overseas markets. The seafood sector is no exception. A key focus area of this Government, therefore, is on enhancing overseas market access for our fisheries products.

With ‘wild caught’ we have some natural advantages over our competitors. Also systems that support the wild stock all the way form the seas to the market – the New Zealand seafood industry’s international reputation for excellence is based on quality of products, high food safety standards, and a world-leading fisheries management programme.

Innovation is a pillar of the New Zealand seafood industry, from the development of new harvesting and distribution methods that maximise quality, to the creation of new, added-value products.

Aquaculture has been a significant focus for the Government.

Exports - we are increasing international market access through WTO and FTA negotiations, and by advocating for the removal of unduly trade restrictive measures and trade distorting subsidies.

For example, MAF has recently negotiated and agreed the sanitary and phytosanitary measures (SPS) chapter of the Free Trade Agreement with China– these are the rules governing biosecurity and food safety concerns.

This enables rock lobster to be directly exported to mainland China, rather than through Hong Kong as it has been historically. The agreement is timely as it comes during a period of growth in China’s already massive demand for seafood.

Seafood export values are up and caused by a significant increase in the value of the inshore shellfish species (up 26%). This has been driven by an increase of 24% in export earnings for rock lobster and an increase of 31% in export earnings for paua.

The continuing strength of the Australian and Chinese economies has assisted demand for New Zealand seafood from these markets. Demand elsewhere has been depressed, especially in Europe and the US.

Rock lobster is the highest value seafood export, grossing over $229M in the year ending Dec 2010. Most of this value is from live exports into Hong Kong (78%), with China (17%) and Japan (3%) the other significant markets.

The outlook is for continuing demand growth in the emerging economies in Asia. Demand in other markets is expected to be restrained. This is because of the difficult adjustments being made in the US and European economies.

Asian markets are a key buyer of our seafood products and there has been dramatic growth in this sector over the past four or five years.

It is expected that exports of seafood to Asia will be a real growth segment in the immediate future. There is a growing middle class in Asia that wants high-value products. I believe that there are major opportunities present and developing in this market. The rock lobster industry has already demonstrated its ability to take advantage of these opportunities and I hope will continue to do so.

The value-add area is also important. The Ministry of Foreign Affairs and Trade and New Zealand Trade and Enterprise have produced a quarterly report highlighting trends and issues in key markets.

Looking at, for example, Hong Kong, the most recent update says organic products are in increasing demand, the market seeks fresh, high quality food (over frozen) and high-end restaurants want sustainably produced and certified foods, and are committed to developing menus focused on sustainable sources. Hong Kong is also looking for reliability of supply.

Your industry ticks all these boxes. When it comes to branding – the lobster fisheries have significant opportunities to brand themselves in ways that add value. I know that earlier this month CRAMAC 5 the fishery on the South Island’s east coast and Marlborough achieved certification from Friend of the Sea for example.

Another key market trend is food legality. New Zealand’s Quota Management System provides for a well documented regime – it documents lobsters from the area they were caught, to where they were landed, through to the processor and shipper. The audit trail is very sound and that also plays into food safety and traceability.

These are very important in the large Chinese market which has been rocked in recent years by scandals around food safety and integrity.

You have done a lot of good work – and I believe you need to be capitalising on that now with your marketing effort and people on the ground.

Use the expertise already available in your markets – organisations like Trade and Enterprise can help with positioning your industries and product. And use our embassies – it can be difficult getting access to the right people and negotiating cultural differences. These facilities are there and I recommend using them.

Commitment to sustainable fishery

Maintaining a strong international reputation is also critical to securing good access to markets.

Ensuring, defending and promoting the credibility of our management regime is important. The foundations of this are, of course, our quota management system and also our transparent and science-based management processes.

Looking at the New Zealand rock lobster industry and its council... which is obviously what I’m most familiar with... I’d like to acknowledge their steadfast commitment to the effective and sustainable management of its fishery. Rock lobster is our most valuable inshore fishery – and we have a very proactive industry group at the helm.

Rock lobster was the first, and remains one of the few, inshore fisheries to use management procedures so that catch limits are responsive to changes in the environment. Industry, working with Government and other fishery stakeholders, has played a big part in making that happen.

Management procedures certainly make my TAC setting decisions, if not straightforward, then certainly a lot easier, particularly when all sectors have been involved in their development and support their use.

What I like most about the rock lobster management procedures is that they provide for the TAC to be altered annually (or every second year in some cases) in response to abundance fluctuations that occur with changes in the natural environment. This approach provides a responsive management regime and helps to ensure stocks are managed in healthy way.

Now I just have to convince the environmentalists out there that TAC cuts driven by management procedures are just good management – they do not mean that the fishery is in trouble or about to collapse!

Management procedures represent just one among many commitments the New Zealand rock lobster industry has made in relation to securing rock lobster fisheries that can deliver benefits over the long term. Some of these developments use cutting edge technology and demonstrate industry’s future focussed outlook. For example:

• The first ever industry-funded grid mapping survey of commercial rock lobster fishing vessels;

• The CRA2 Rock Lobster Management Company extending its investment in an electronic data collection system which is tracking pot by pot fishing activity at an extremely fine scale;

• CRAMAC 5 also investing in new electronic logbook technology – using a different technology to CRA2; and

• The Rock Lobster Industry Council collaborating with the Paua Industry Council to commission and implement a satellite reporting system for electronic logbook data. This system’s designed to enhance the utility of paua data loggers and the electronic vessel logbooks used by the CRA2 Rock Lobster Management Company and CRAMAC5.

Policing the fishery

In my view, one area we might need to do better is in managing the issue of illegal catch of rock lobster as this is eroding their value to everyone – commercial and recreational fishers alike.

Some in the wider fishing community have views on specific means of reducing illegal catch. I refer here to ideas like telson clipping and accumulation limits.

While I do believe these tactics are worthy of consideration… I see the benefit of further investigation - looking at the whole picture. I have asked the multi-sector National Rock Lobster Management Group to work on this and provide me with recommendations on options to further reduce illegal catch in the rock lobster fisheries.

In terms of a frontline response to illegal fishing… this Government is committed to strengthening its presence in key rock lobster fisheries and has boosted Fishery Officer and Honorary Fishery Officer numbers where it’s been clear they’re needed.

In 2009 the Government announced a Budget boost to Fishery Officer numbers.

Regionally, a new office was established in Kaikoura where monitoring showed increased poaching activity. Protecting the rock lobster fishery is also a major focus in the Poverty Bay District where there is an increasing effort to be more visible and moves to boost the numbers of Honorary Fisheries Officers.

More than 150 warranted Fishery Officers are employed nationally in a variety of roles including surveillance, investigation, compliance management, intelligence analysis and forensic accounting.

There are also over 200 Honorary Fishery Officers throughout New Zealand. Their voluntary contribution is very important.

I acknowledge the work of all Field Operations staff. Their presence around our coastline leads directly to more effective surveillance and deterrence of would-be lobster thieves.

Fishery Officers can’t do it all on their own though. I encourage industry members to remain vigilant and don’t hesitate to call 0800 4 POACHER if you suspect illegal activity in your area.

Overall, we will be most successful in combating this threat when we work collaboratively.

Conclusion

I wish you all the best with your meeting – it is an opportunity to collaborate and explore better ways of working together, develop your partnerships and share knowledge and management measures.

Thank you.


ENDS

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