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New Zealand: Foreign Charter Vessels to be reflagged


On 22 May 2012, the New Zealand Government announced that it would require reflagging of foreign owned fishing vessels working in New Zealand waters, to "address labour, safety and fisheries practice concerns."

Commercial fishing in New Zealand is managed by a quota system, with all fishing quota owned by New Zealand companies. Foreign Charter Vessels (FCVs) are foreign owned and flagged fishing vessels leased by a New Zealand company to fish in New Zealand's Exclusive Economic Zone. As discussed in a Flagpost last year, the then Minister for Fisheries and Aquaculture, the Hon Phil Heatley MP, and the Minister for Labour, the Hon Kate Wilkinson MP, had jointly convened a ministerial inquiry into the use and operation of FCVs. This followed reports of serious abuse and exploitation of crew of commercial fishing fleets operating in New Zealand waters.

The Inquiry took place from August 2011 to February 2012. While it did not investigate specific claims of abuse, the Inquiry Panel concluded it was clear that a small number of operators of foreign flagged FCVs had been mistreating their crews and disregarding New Zealand laws; and that the response of industry and of government agencies had been inadequate (as discussed in this Flagpost). It found that major changes and urgent action were required to improve the way New Zealand regulated the activities of FCVs in its waters.

When releasing the Report in March 2012, the Government "resolved to take a stronger line on the operation of foreign charter vessels (FCVs) in New Zealand waters" . The Primary Industries Minister, David Carter, and the Minister for Labour, Kate Wilkinson, stated that the Government accepted in principle and would act on the first six recommendations and would give further consideration to the remaining recommendations concerning legislative amendments, ratification of two key International Maritime Organisation Conventions and key policy changes.

Currently, New Zealand has only limited jurisdiction over FCVs operating in its waters, with "the health, safety and well being of all those on board" remaining the responsibility of the flag State. This has made it difficult for New Zealand agencies to enforce its Code of Practice on Foreign Fishing Crew. Reflagging the vessels would provide increased protection for crew as they would be subject to New Zealand law, including employment and workplace safety regulations, and enforcement mechanisms.

However, this goes further than the the Inquiry Report, which had recommended that FCVs be required to be placed on a demise charter with the crew employed under a New Zealand employment contract. (Under a demise charter, the vessel is chartered without crew and the New Zealand charter company then employs the crew; under time charter, the ship and crew are chartered as a package.) While noting that reflagging was seen by New Zealand government agencies as the "cleanest and most comprehensive way" of addressing issues of jursdiction, the Inquiry Panel stopped short of recommending that the all FCV's be reflagged as it was: "difficult to predict what the reaction of foreign owners would be or how soon the New Zealand fleet might be in a position to fill the gaps left by any departing FCVs whose owners decided not to reflag." (In 2010-11, FCVs took 44 percent of the country's fish exports by value.)

There will be a four-year transition period. During this time, the Government has stated that crews will be protected by "stronger monitoring and enforcement" of the existing regime. The impact on the industry and for quota owners is not clear, with media reports suggesting that detailed economic modeling had not been completed. The Government has indicated, hopefully, that "the transition period will also enable the fishing industry to adjust to the new regime."

The Government's announcement has been welcomed by New Zealand First, the Maori Party, the Maritime Union, the New Zealand Council of Trade Unions, and the conservation organisation Forest and Bird. The response of one of the largest New Zealand fishing companies, Sanford Limited, has been more cautious. The Sealord group is reported as applauding the decision, while noting significant challenges ahead.  Craig Tuck, a lawyer representing a number of FCV crew and the founder of Slave Free Seas, hailed the announcement as a "a proud day" and a "huge victory for human rights", but also stated that "four years is too long" given the known weaknesses of current enforcement mechanisms.  Labor spokesperson, Darien Fenton, stated that she would seek assurances that a four year transition period was really necessary.