Port City Traders Pty Ltd and Australian Fisheries Management Authority [1999] AATA 189 (25 March 1999)

Last Updated: 29 March 1999

DECISION AND REASONS FOR DECISION [1999] AATA 189

ADMINISTRATIVE APPEALS TRIBUNAL )

) No. V98/420

GENERAL ADMINISTRATIVE DIVISION )

Re Port City Traders Pty Ltd

Applicant

And Australian Fisheries Management Authority

Respondent

DECISION

Tribunal Deputy President B.M. Forrest Mr A. Argent, Member Mr C.G. Woodard, Member

Date 25 March 1999

Place Melbourne

Decision The decision under review is affirmed.

..(Sgd. B.M. Forrest)..

Deputy President

CATCHWORDS

FISHERIES - Fishing permit - quota attached to permit - system of quota allocation - management of fishery - statutory management objectives - development of management policy - whether contrary to objectives - application of management policy - whether special circumstances - whether quota correctly allocated - decision affirmed.

Fisheries Management Act 1991 ss. 3, 32, 165

Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634

REASONS FOR DECISION

25 March 1999 Deputy President B.M. Forrest Mr A. Argent, Member Mr C.G. Woodard, Member

1. This application by Port City Traders Pty Ltd ("the applicant") and an application by Robert Dunnachie (V98/319) were heard at the same time as both applications relate to the same issue, the quota allocation attached to the fishing permit of each applicant for the taking of Blue Eye Trevalla, Pink Ling and Blue Warehou fish species in the South East Non-Trawl Fishery ("SENTF").

2. A number of fisheries including the SENTF operate in the South East Fishery which lies in the Australian Fishing Zone, in waters extending southwards from Fraser Island around the Queensland, New South Wales, Victorian, Tasmanian and South Australian coastlines. See t6p35

3. The principal fish species taken in the SENTF are blue eye trevalla, ling and blue warehou. Droplining, demersal (bottom dwelling) longlining and demersal gillnetting, (mesh netting) are the most commonly utilised fishing methods. The principal species taken by droplining is blue eye trevalla although several other species including ling are also taken commercially with this method.

4. The Fisheries Act 1952 was replaced in February 1992 by the Fisheries Management Act 1991 ("Management Act") and the Fisheries Administration Act 1991 ("FA Act") which provided for the establishment of the Australian Fisheries Management Authority ("AFMA") to manage commercial fishing in Commonwealth waters. Before then the SENTF was administered by the Department of Primary Industries and Energy. Commonwealth fishing boat licences were replaced by Fishing Permits issued annually under s. 32 of the Management Act. AFMA is required by s. 6 of the FA Act to pursue objectives in the performance of its functions in the same terms as specified in s. 3 of the Management Act. The functions of AFMA include determining plans of management for a fishery: s. 17 Management Act. Sub-section 3(1) of the Management Act reads:

"3. (1) The following objectives must be pursued by the Minister in the administration of this Act and by AFMA in the performance of its functions:

(a) implementing efficient and cost-effective fisheries management on behalf of the Commonwealth; and

(b) ensuring that the exploitation of fisheries resources and the carrying on of any related activities are conducted in a manner consistent with the principles of ecologically sustainable development and the exercise of the precautionary principle, in particular the need to have regard to the impact of fishing activities on non-target species and the long term sustainability of the marine environment; and

(c) maximising economic efficiency in the exploitation of fisheries resources; and

(d) ensuring accountability to the fishing industry and to the Australian community in AFMA's management of fisheries resources; and

(e) achieving government targets in relation to the recovery of the costs of AFMA."

5. On 22 December 1997 AFMA issued a fishing permit to the applicant authorising the use of the boat "Ocean Eagle" in the SENTF in 1998 by dropline, handline and longline (demersal) methods with species limits of 3,994 kg blue eye trevalla and 26 kg ling.

6. In January 1998 Mr Richard Oakley a director of the applicant, wrote to AFMA objecting to the formula used in the allocation of the applicant's quota.

7. The decision under challenge in this matter was made by a delegate of AFMA, Mr Andrew Kettle, on 18 March 1998 pursuant to s. 165 of the Management Act. Mr Kettle confirmed the primary decision of another delegate (made under s. 32 of the Management Act) to allocate a quota to the applicant of 3,994 kg for blue eye trevalla and 26 kg for ling.

8. In a letter to Mr Oakley (18 March 1998) the delegate explained how the quota was calculated:

"The total allowable catch (TAC) for the South East Non-trawl Fishery was set at:

Blue Eye Trevalla 530,000 kg,

Ling 279,000 kg

Blue Warehou 1,180,000 kg.

For each individual non-trawl permit holder, AFMA calculated the total of the permit holder's best three years of verified catch history selected from a qualifying period of approximately five and a half years. For each species, quota was then allocated on the basis of each permit holder's total divided by the sum of all totals multiplied by the TAC. The qualifying period used for the great majority of permit holders was 1 January 1988 to 27 May 1993.

A verified catch history report was signed by your client on 18 June 1996. Your client's quota allocation was calculated from this report as follows:

Best 3 Years Blue Eye Trevalla (kg) Ling (kg)

1988 10,846 49

1989 8,470 5

1990 n/a 0

1991 818 n/a

1992 n/a n/a

1993 n/a n/a

TOTAL 20,134 54

Your client's total for blue eye trevalla of 20,134 kg represents 0.754% of the sum of all totals. Hence your client was allocated a quota of 0.00754 x the total allowable catch of 530,000 kg = 3,994 kg. Your client's total for ling of 54 kg represents 0.009% of the sum of all totals. Hence your client was allocated a quota of 0.00009 x the total allowable catch of 279,000 kg = 26 kg." tdocs 168&169

9. The jurisdiction of the Tribunal to review the delegate's decision is to be found in s. 165(7) of the Management Act.

10. For present purposes the issue is with the quota allocation for the taking of blue eye trevalla fish species. The quota allocation for ling species of fish is not of concern in this matter.

11. It is necessary to refer to some of the background to the establishment of quota restrictions in the SENTF. Broadly speaking policy for the management of the SENTF evolved over a number of years. The significant change in management control occurred on 1 January 1998 with the introduction of a quota allocation attached to each fishing permit. Prior to that date, some controls were in place on who could enter and operate in the SENTF. At the beginning of 1993, the SENTF was managed by AFMA through controls on entry to the fishery by restricted issue of fishing permits under s. 32 of the Management Act. At that time no limits were placed on the quantity of fish that could be taken by a permit holder but a catch history was required to obtain a permit to fish. The trawl sector of the South East Fishery had a quota system of management in operation since 1 January 1992 based on catch histories from 1984 to 1989.

12. In an affidavit filed in these proceedings, Mr Geoffrey Richardson, Senior Manager in AFMA, Southern Fisheries who has management responsibility for several Commonwealth fisheries including the SENTF outlined the history and development of management policy for the SENTF.

13. A media release issued by the Managing Director of AFMA jointly with the State Fisheries Director in New South Wales, Victoria, Tasmania and South Australia on 27 May 1993

* expressed concern about the non-trawl sector increasing fishing effort while trawl operations were constrained and about over exploitation of the resource.

* warned against increased investment in the fishery and stated that "non-trawl access criteria would be based on fishing history prior to 31 December 1990".

14. This announcement was sent to all operators in the SENTF.

15. In February 1994, the AFMA board decided to establish a Non-Trawl Consultative Committee ("NTCC") to advise AFTA Management on matters relevant to the SENTF.

16. On 28 July 1994 NTCC recommended that access criteria to the non-trawl sector of the fishery for blue eye trevalla, blue warehou and ling a fish species should be based on each operator's involvement in the five years prior to the 27 May 1993 media release. According to Mr Richardson, who was a member of the NTCC, "The NTCC considered that this was a long enough time period to take into account variables such as seasonal fluctuation of species abundance, equipment breakdowns, operator illness, and other personal factors which may have affected fishing practices."para24

17. The AFMA board accepted the recommendation that the cut off date be extended from 31 December 1990 to 27 May 1993 to allow for the interests of persons who had invested in the fishery in the intervening period to be taken into account.

18. A further media release was issued on 5 September 1994, to publicise the recommendations of the inaugural meeting on 28 July 1994 of the SENTF consultative committee which had agreed that future access to blue eye trevalla, blue warehou and ling species should be limited to an operator's involvement in the fishery prior to 27 May 1993 and warning that operators should not increase their fishing effort or investment in the non-trawl sector of the South East Fishery. The announcement went on to say that the board of AFMA would be seeking to make early progress on developing and implementing management arrangements in conjunction with industry and state agencies.

19. In April 1995, AFMA released throughout the industry a report of the SENTF consultative committee in the form of a Discussion paper entitled "The South East Fishery Non-Trawl Sector Draft Criteria for Future Access" and invited comment. The Discussion paper proposed that:

* only persons holding or entitled to hold a Commonwealth Fishing Permit, relevantly a non-trawl permit in the South East Fishery "at the time the access criteria are applied" will be considered for future access.

* operators who had taken any of the three species, blue warehou, blue eye trevalla and ling during the qualifying period (1 January 1988 to 27 May 1993) would continue to operate in the fishery and be involved in discussions on a method of allocating quotas for the non-trawl sector. Catch history during the qualifying period will be a major factor in determining the future level of access to the fishery "at least for blue eye trevalla, blue warehou and ling".

* access would be based solely on verified catch history for relevant species taken using non-trawl methods. It detailed a range of documents considered relevant to establish the catch history.

20. AFMA on the recommendation of the consultative committee adopted a policy of not accepting logbooks without other independent documentation to verify catches.

21. During May 1995 AFMA officers visited ports in the fishery, including Portland, to discuss issues raised in the Discussion paper and gauge industry reaction to the access proposals. The paper, "Criteria for Access to the Non-Trawl Sector of the South East Fishery" contains the recommendations of the consultative committee on access criteria. These were accepted by the AFMA Board.

22. In August 1995 AFMA distributed to all permit holders in the SENTF (including the applicant) the criteria for access to the SENTF. Each permit holder was invited to submit a catch history. Mr Oakley did this on behalf of the applicant in October 1995.

23. In June 1996, AFMA forwarded to the applicant a verified catch history report and requested that the details be checked and, if in agreement, signed and returned.

24. On 18 June 1996, Mr Oakley on behalf of the applicant, signed and returned the verified catch history report subject to the addition of a further 414.5 kg blue eye trevalla for which he provided brief written detail.

25. In September 1997 an independent Allocation Advisory Panel ("Panel") was established by AFMA, to provide advice to the Board on:

"· the apportionment of the Total Allowable Catch (TAC) for Blue-eye Trevalla, Blue Warehou and Pink Ling between the Non-Trawl and Trawl sectors of the South East Fishery; and

· appropriate formula(e) for allocating Individual Transferable Quotas (ITQs) for those species in the South East Non-Trawl Fishery (the Fishery).

In so doing, the AAP is to advise the AFMA Board on:

(1) the most appropriate basis for allocation of fishing concessions in the Fishery in accordance with Fisheries Management Paper No. 8 - Allocation of Fishing Concessions Where Management Arrangements Have Changed;

and is :

(2) to identify and include in that allocation system any exceptional circumstance which the AAP considers should be taken into account." t130

26. The Panel comprised three persons, a retired Federal Court judge (presiding), a New Zealand fisherman and an economist.

27. The Panel (as it was required to do) undertook a comprehensive consultative process. It notified all permit holders of its terms of reference, invited submissions and held public meetings at various ports, including Mt Gambier (the nearest to Portland). Submissions were invited on the most appropriate system of firstly the apportionment of total allowable catches for blue eye trevalla, blue warehou and ling between the non-trawl and trawl sectors and secondly the appropriate formulae for allocating individual transferable quotas for those species in the SENTF.

28. The Panel recommended that an apportionment of total allowable catch between the trawl and non-trawl sectors of the fishery should be made on the basis of the average catch histories over the four year period from 1 January 1988 to 31 December 1991. This period was selected as the most appropriate basis for apportionment as it was considered as being the most likely to minimise the effects of abnormal circumstances. The recommended apportionment was as follows:

" Blue eye trevalla Blue warehou Ling ""

Trawl 15.8% 41.0% 87.3%

Non-trawl 84.2% 59.0% 12.7%

p143

29. Further, the Panel recommended that the share of the total allowable catch allocated to the non-trawl sector should be allocated as individual transferable quotas to permit holders by reference to their respective catch histories in the period between 1 January 1988 to 27 May 1993. To go beyond 27 May 1993, the Panel said would risk conferring a benefit on permit holders who ignored a warning at the expense of those who complied with a warning and, unless there were "quite extraordinarily compelling circumstances", would fail to pursue the statutorily prescribed objectives in pursuit of which the warning was given. (p144)

30. The Panel concluded that allocation of quota among non-trawlers be on the basis of each non-trawl permit holder's best three catches in the qualifying period as a proportion of the sum of all individuals best three catches in the same period, was the preferable means of obviating apprehended disadvantage from particular circumstances.

31. The recommendations of the Panel were accepted by the Board of AFMA. The Board decided to impose a limit on the total allowable catch for blue eye trevalla, ling and blue warehou, the three principal species. The catch limit was to be allocated by a system of individual transferable quotas introduced on 1 January 1998.

32. The Board also determined that the global (trawl and non-trawl) total allowable catch limit for blue eye trevalla in 1988 to be 630 tonnes with a 20% carryover/under, which was allocated 530 tonnes (84.2%) to the non-trawl sector and 100 tonnes (15.8%) to the trawl sector. The non-trawl total allowable catch was subsequently allocated as quota to individual non-trawl permit holders in the manner recommended by the Panel.

33. In December 1997 the applicant was notified of its verified catch history and provisional quota entitlement (blue eye trevalla - 3,994 kg and ling - 26kg) which ultimately became the subject of the decision under review.

34. Mr Oakley told the Tribunal that through his company, Port City Traders Pty Ltd, he has been engaged in commercial fishing operations in the South East Fishery for about 20 years. He has a background in journalism and, in addition to his involvement in commercial fishing, he conducts a ship broking and marine consultancy based in Portland.

35. Mr Oakley made a number of submissions. He submitted that the decision of Commonwealth Fisheries in the late 1980s to restrict future access to trawl fisheries caused a dramatic increase in the number of trawlers operating out of Portland. These were able to exploit the known dropline grounds because of their capacity to remain at sea longer and in harsher conditions with the result that the catches of dropline operators like the applicant were impeded and fell to the extent that it became no longer viable to continue an activity that had been the applicant's main income source for about five years. These were special circumstances, he said, which had not been taken into account. To take account of these circumstances, he submitted, the best two catch history qualifying years instead of the best three years should be considered. The applicant's quota allocation, he submitted, was grossly inadequate, making it difficult to survive.

36. Mr Richardson who is also manager of the South East Trawl Fishery acknowledged in his evidence that there is "a lot of conflict between the trawl and non-trawl operators.". However the information contained in Mr Richardson's affidavit (see paras 79 to 85 and annexures) does not support the applicant's contention of a diminishing catch by non-trawl operators during the qualifying period.

37. The annual effort summary by zone and depth compiled from logbooks for Zone 50 (the waters off south western Victoria) by the Fisheries Resources branch of the Bureau of Resource Sciences, reveal that catches of blue eye trevalla by trawlers did not vary greatly in the SENTF catch history qualifying years. This, as pointed out, was not surprising given that in 1990, controls were placed on trawl catches of blue eye trevalla.

38. At the same time, a report "The Fishery for Blue Eye Trevalla in Victoria" by Carter and Morrison, Victorian Fisheries Research Institute in June 1995, indicated an increasing non-trawl catch of blue eye trevalla in Victoria throughout the SENTF catch history qualifying years. While Mr Oakley was somewhat sceptical as to the accuracy of the data, and particularly as to its relevance to the areas off Portland, there was no other comparable information before the Tribunal.

39. Mr Oakley also submitted that trawl fishing methods have received "unparalleled support" from AFMA as against the conservation-friendly methods of line fishing. "They [dropline operators] were never given the chance." he said. Part of this submission was a complaint that Portland fishermen did not have a voice on consultative committees (in fact claiming that representation was refused) despite having developed a substantial dropline fishery prior to the emergence of the trawl fishery. He added that the political process has operated to their disadvantage and political lobbying "has continued to influence decision making".

40. We understand this submission poses the question whether AFMA has lawfully pursued its statutory objectives, that is, whether its actions were unlawful and contrary to its objectives in (as submitted) capitulating to one sector of the industry to the detriment of another.

41. The apportionment of the global total allowable catch of blue eye trevalla between the trawl (15.8%) and non-trawl (84.2%) sectors appears to weaken the force of Mr Oakley's submission that the trawl sector received favourable treatment. More importantly, the basis of the apportionment is the catch history (of both trawlers and non-trawlers) which was selected from a period when neither sector was subject to aggregate catch limitation of blue eye trevalla, blue warehou and ling. We do not accept that AFMA has developed a policy, contrary to its objectives, to the detriment of the non-trawl sector.

42. In Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 Brennan J. said at 645 that the Tribunal should apply a lawful policy "unless there are cogent reasons to the contrary". In the present matter we are satisfied the policy development was guided by the objectives required to be pursued in the management of the SENTF. We are also satisfied that no cogent reasons have been advanced which would support a departure from the policy.

43. The history of the development of the management policy, key features of which were outlined earlier, reveal that the policy under which the reviewable decision was made, was developed by a transparent process which included press releases, discussion papers, port meetings, the establishment of consultative committees, appointment of an advisory panel, the taking of scientific advice for assessment and sustainability of fish stocks, and consultation with the industry in relation to management proposals.

44. According to Mr Richardson, 127 permit holders received blue eye trevalla quota in the SENTF in 1998, the majority receiving an allocation of less than 1 tonne. In terms of effect, the introduction of the quota system had a dramatic impact as the allocation made to each permit holder amounted to approximately 60% of the average catch for their best three years. For the 1998 calendar year, the actual catch of blue eye trevalla was 70% of the total allowable catch.

45. Relying on trawl sector experience, the under utilisation of quota is probably a phenomenon of the early years of operation of a quota system with a large amount of quota changing hands to currently active operators in the fishery. There is also a degree of flexibility in the utilisation of quota allocation with a 20% plus or minus tolerance which may be carried forward into a subsequent year.

46. The Panel, in accordance with its terms of reference, was required to formulate a policy and tender advice on the most appropriate basis for apportionment of the total allowable catch between permit holders in the trawl and non-trawl sectors, and on the most appropriate basis for allocation of individual transferable quotas among permit holders in the non-trawl fishery, the allocation among permit holders in the trawl fishery having been previously determined by the authority.

47. A perusal of the report indicates that, in considering the most appropriate method of sharing resources, the Panel had before it a number of submissions from interested parties. Mr Oakley was aware of the Panel task. He choose not to make a submission or attend any of the Panel meetings for participants in the fishery.

48. That aside, a reading of the Panel report indicates that it was alive to considerations of equity and fairness and unusual circumstances. On the evidence available to it, the Panel recommended that the best three catches be the most appropriate basis for determining the allocation of quota among non-trawl permit holders. Obviously a change to the best two years catch requested by Mr Oakley to be the basis for determining quota allocation, would disturb the quota allocation now in place, to the applicant's advantage but conversely disadvantage others. This is so because the global total allowable catch for blue eye trevalla in 1998 had been fixed at 630 tonnes before quotas were allocated. The same global total allowable catch applies in 1999.

49. Whether the global total allowable catch is sustainable or too low is not within the province of the Tribunal to decide. The evidence before the Tribunal is that in 1997 landings of blue eye trevalla by SENTF operators (1,038 tonnes) and South East Trawl Fishery operators combined was 1151 tonnes. This represented more than a 30% increase on the combined catch of 855 tonnes (of which 774 tonnes was taken by the SENTF fleet) in 1996 while the 1996 SENTF catch represented a 24% increase on 1995 catches. According to the 1997 South East Fishery Assessment Group Report, the current levels of fishing effort and catch do not appear to be sustainable. The report concluded that it is not known whether current catch levels are sustainable and the recent increase in catches could be threatening the sustainability of the stock although it should be noted that the increase to which it was referring was a 45% increase in Tasmanian dropline catches in 1996.

50. The respondent acknowledged that proportionally more resources were committed to the South East Trawl Fishery from the mid 1980s to the early 1990s. This, said Mr Richardson was the result of a deliberate focus on the trawl fishery due to the relatively larger (in terms of tonnage of fish landed) impact of the trawl method and the greater threat it posed to the sustainability of fish stocks. Blue eye trevalla was one of the fish species subject to quota restrictions when introduced into the trawl fishery from 1 January 1992.

51. There was no evidence to support the contention that Portland based fisherman were refused representation on the consultative committee or relevantly that their lack of representation (also raised by the Portland Professional Fishermens' Association in a letter to Victorian Fisheries 25 June 1996) has resulted in the development of a policy that was misconceived or flawed.

52. Mr Oakley also made submissions in regard to environmental issues - specifically the absence of research on the ecological effects of trawlers operating from Portland. We are in no position to determine these issues. We are only able to say that from the material before us the environmental objective contained in s. 3(1)(b) of the Management Act has been taken into account in the formulation of policy and the limits imposed as a result of the quota regime upon the quantity of fish specifically blue eye trevalla permitted to be taken from the SENTF.

53. In our opinion, the policy has been correctly applied to the applicant. There are no special circumstances in favour of the applicant as would justify departing from a policy that has been applied to other permit holders and who are entitled to be treated on an equal footing to the applicant.

54. Finally we are satisfied that the applicant's quota has been correctly allocated. That is to say, the 414 kgs of the applicant's catch history which was in dispute has been taken into account.

55. For these reasons the decision under review is affirmed.

I certify that the 55 preceding paragraphs are a true copy of the reasons for the decision herein of

Deputy President B.M. Forrest

Mr A. Argent, Member

Mr C.G. Woodard, Member

Signed: .....................................................................................

Personal Assistant

Date/s of Hearing 9 February 1999

Date of Decision 25 March 1999

For the Applicant Mr R. Oakley, Director

Counsel for the Respondent Mr P. Hanks

Solicitor for the Respondent Ladbray Consortium