Antons Trawling Company Limited v The Minister of Fisheries and Chief Executive of the Ministry of Fisheries HC WN CIV 2007-485-2199

[2008] NZHC 2168

IN THE HIGH COURT OF NEW ZEALAND

WELLINGTON REGISTRY

CIV 2007-485-2199

UNDER  the Judicature Amendment Act 1972

BETWEEN  ANTONS TRAWLING COMPANY LIMITED

First Applicant

ANDESPERANCE FISHING CO LIMITED AND ORNEAGAN DEVELOPMENTS LIMITED

Second Applicant

ANDTHE MINISTER OF FISHERIES First Respondent

ANDTHE CHIEF EXECUTIVE OF THE MINISTRY OF FISHERIES

Second Respondent

Hearing:         28 January 2008

Counsel:         F M R Cooke QC and M S Sullivan for Applicants

A Ivory, P A McCarthy and S J Ritchie for Respondents

Judgment:      22 February 2008

JUDGMENT OF MILLER J

Introduction

[1]      On 24 September 2007 the Minister of Fisheries, Mr Anderton, announced a decision to cut the total allowable catch in the ORH 1 orange roughy fishery from

1,470 tonnes to 914 tonnes for the fishing year beginning on 1 October. The applicants  for  review,  respectively  the  largest  fisher  and  quota  holders  within  the

fishery, invite the Court to quash the decision, so reinstating the former catch limit.

ANTONS TRAWLING COMPANY LIMITED AND ANOR V THE MINISTER OF FISHERIES HC WN CIV

2007-485-2199  22 February 2008

[2]      The    application    calls    attention    to    important    questions    about    some longstanding  methods  of  setting  total  allowable  catches  in  fisheries  where  stock levels and population dynamics have not been estimated.

The fishery

[3]      Orange roughy, a deepwater species, is susceptible to overfishing.  The fish are believed to live for as long as 120-130 years, and they reproduce slowly. They cluster in large numbers around seamount features, particularly when spawning. These characteristics mean both that overfishing may cause a catastrophic decline in stock numbers that may take many years to reverse and that  catch histories  are  an unreliable  guide  to  the  health  of  the  fishery,  for  they  may  not  reveal  the  fact  and extent of overfishing until the damage has been done.

[4]      The ORH 1 fishery covers vast tracts of water reaching northwards from Waikanae, around Cape Reinga, and southwards to the East Cape.  Orange roughy are known to cluster around some features, but there may be features and populations

in areas of the fishery that have yet to be explored.   Some known populations may not be fishable physically, if they prove to be in difficult terrain, or economically, if they are dispersed.

The Fisheries Act 1996

[5]      The Minister made his decision under s13(2)(b) of the Act.   I should set out the entire section by way of context:

(1)     Subject to this section, the Minister shall, by notice in the Gazette, set

in respect of the quota management area relating to each quota management stock a total allowable catch for  that  stock,  and  that  total  allowable  catch

shall continue to apply in each fishing year for that stock unless varied under this section, or until an alteration  of  the  quota  management  area  for  that

stock takes effect in accordance with sections 25 and 26.

(2)    The Minister shall set a total allowable catch that—

(a)     Maintains the stock at or above a level that can produce the maximum sustainable yield, having regard to the interdependence of stocks; or

(b)     Enables the level of any stock whose current level is below that   which  can   produce   the   maximum   sustainable   yield   to   be altered—

(i)       In a way and at  a  rate that  will result  in the stock being  restored  to  or  above  a  level  that  can  produce  the maximum sustainable yield, having regard to the interdependence of stocks; and

(ii)      Within  a  period  appropriate  to  the  stock,  having regard to the biological characteristics of the stock and any environmental  conditions  affecting  the  stock;  or  [emphasis added]

(c)     Enables the level of any stock whose current level is above that which can produce the maximum sustainable yield to be altered

in a way and at a rate that will result in the stock moving towards or above a level that  can  produce the maximum  sustainable  yield,

having regard to the interdependence of stocks.

(3)     In considering the way in which and rate at which a stock is moved towards or above a level that can produce maximum sustainable yield under paragraph (b) or paragraph (c) of subsection (2) of this section, the Minister shall have regard to such social, cultural, and economic factors as he or she considers relevant.

(4)       The Minister may from time to time, by notice in the Gazette, vary any total allowable catch set for any quota management stock under this section by increasing or reducing the total allowable catch. When considering any variation, the Minister is to have regard to the matters specified in subsections (2) and (3).

(5)    Without  limiting  subsection  (1)  or  subsection  (4)  of  this section,  the

Minister may set or vary any total allowable catch at, or to, zero.

(6)     Except as provided in subsection (7) of this section, every setting or variation of a total allowable catch shall have effect on and from the first day

of the next fishing year for the stock concerned.

(7)     After considering information about the abundance during the current fishing year of any stock listed in the Schedule 2 to this Act, and after having regard to the matters specified in subsections (2) and (3), the Minister may, by notice in the Gazette, increase the total allowable catch for the stock with effect from such date in the fishing year in which the notice is published as may be stated in the notice.

(8)     If a total allowable catch for any stock has been increased during any fishing year under subsection (7) of this section, the total allowable catch for that stock shall, at the close of that fishing year, revert to the total allowable catch that applied to that stock at the beginning of that fishing year; but this subsection does not prevent a variation under subsection (4) of this section

of the total allowable catch that applied at the beginning of that fishing year.

(9)     The Governor-General may from time to time, by Order in Council, omit the name of any stock from  Schedule  2  to  this  Act  or  add  to  that

Schedule the  name  of  any  stock  whose  abundance  is  highly  variable  from year to year.

(10)   Subsection  (1)  does  not  require  the  Minister  to  set  an  initial  total allowable  catch  for  any  quota  management  area  and  stock  unless  the Minister also proposes to set or vary a total allowable commercial catch for that area and stock under section 20.

[6]      The  term  “total  allowable  catch”  (TAC)  is  defined  to  mean  the  total allowable catch as set by notice in the  Gazette under  ss13  or  14  of  the  Act.   And “maximum sustainable yield” (MSY):

…  in  relation  to  any  stock,  means  the  greatest  yield  that  can  be  achieved over time while maintaining the stock's productive capacity, having regard to the  population  dynamics  of  the  stock  and  any  environmental  factors  that influence the stock.

[7]      In practice, fisheries scientists customarily define MSY in terms of biomass and that concept is used in the Final Advice Paper on which the Minister relied. The biomass or stock level that can produce MSY is called BMSY. This terminology is uncontroversial. It corresponds to s13(2) and the definition of MSY, which together refer to stock levels and relate them to yield that can be achieved over time while maintaining the stock’s productive capacity. To estimate  MSY the Minister must form a view about both the size of the existing stock and its capacity to sustain itself over time.

[8]      The Act contains a mechanism for setting TAC when it is not possible, because of the biological characteristics  of  the  species,  to  estimate  MSY.  Such species may be added by Order in Council to Schedule 3 of the Act, and the Minister

is then permitted to set a total allowable catch for that stock that he or she thinks appropriate to achieve the purpose of the Act.  Section 14 provides so far as relevant:

(1)     Notwithstanding anything in section 13 of this Act, if satisfied, in the case of any quota management stock listed in Schedule 3 to this Act, that the purpose  of  this  Act  would  be  better  achieved  by  setting  a  total  allowable catch otherwise than in accordance with subsection (2)  of that  section, the Minister may at any time, by notice in the Gazette, set in respect of the quota management area relating to the quota management stock a total allowable catch  for  that  stock  that  he  or  she  considers  appropriate  to  achieve  the purpose of this Act.

(2)     Every total allowable catch set under subsection (1) of this section for any stock shall continue  to  apply in  each  fishing year  for the  stock unless varied under subsection (3) of this section.

(3)    The Minister may from time to time, by notice in the Gazette, vary any total allowable catch set under subsection (1) of this section for any stock by increasing or reducing the total allowable catch.

(4)     Without limiting subsection (1) or subsection (3) of this section, the

Minister may set or vary any total allowable catch at, or to, zero.

(6)     After considering information about the abundance during the current fishing year of any stock listed in the Schedule 3 to this Act, the Minister may, by notice in the Gazette, increase the total allowable catch for the stock with  effect  from  such  date  in  the  fishing  year  in  which  the  notice  is published as may be stated in the notice.

(8)The Governor-General may from time to time, by Order in Council,— (a)     omit the name of any stock from the Schedule 3 to this Act:

(b)    add to that Schedule the name of any stock if—

(i)         it   is   not   possible,   because   of   the   biological characteristics    of    the    species,    to    estimate    maximum sustainable yield; or

(ii)        a  national  allocation  for  New  Zealand  has  been determined as part of an international agreement; or

(iii)       the  stock  is  managed  on  a  rotational  or  enhanced basis; or

(iv)       the  stock  comprises  1  or  more  highly  migratory species.

[9]      The purpose statement of the Act provides, inter alia, that the Act is to recognise New Zealand’s international obligations relating to fishing. Under s5, the Act is to be interpreted, and all those exercising or performing functions, duties, or powers imposed by or under it shall act, in a manner consistent with those international obligations. They include Articles 61 and 62 of the United Nations Convention on the Law of the Sea:

“Article 61

Conservation of the living resources

1. The coastal State shall determine the allowable catch of the living resources in its exclusive economic zone.

2. The coastal State, taking into account the best scientific evidence available to it, shall ensure through proper conservation and management measures that the maintenance of the living resources  in  the  exclusive

economic zone is not endangered by over-exploitation. As appropriate, the coastal        State            and     competent           international   organizations,    whether subregional, regional or global, shall cooperate to this end.

3.  Such  measures  shall  also  be  designed  to  maintain  or  restore populations of harvested species at levels which can produce the maximum sustainable  yield,  as  qualified  by  relevant  environmental  and  economic factors, including the economic needs of coastal fishing communities and the special  requirements  of  developing  States,  and  taking  into  account  fishing patterns,  the  interdependence  of  stocks  and  any  generally  recommended international minimum standards, whether subregional, regional or global.

…”

“Article 62

Utilization of the living resources

1. The coastal State shall promote the objective of optimum utilization

of  the  living resources  in  the exclusive  economic  zone  without  prejudice  to article 61.

2. The coastal State shall determine its capacity to harvest the living resources of the exclusive economic zone. Where the coastal  State  does  not have  the  capacity  to  harvest  the  entire  allowable  catch,  it  shall,  through agreements or other arrangements and pursuant to the terms, conditions, laws and  regulations  referred  to  in  paragraph  4,  give  other  States  access  to  the surplus  of  the  allowable  catch, having particular  regard  to  the  provisions  of articles 69 and 70, especially in relation to the developing States mentioned therein.

…”

[10]     It will be seen that New Zealand has assumed an obligation to promote the objective  of  optimum  utilisation  and  must  allow  other  States  access  to  a  surplus where it lacks the capacity to harvest the entire allowable catch.

[11]     Section 8 of the Act provides that the purpose of the Act is to provide for the utilisation  of  fisheries  resources  while  ensuring  sustainability.  The  concepts  of “ensuring sustainability” and “utilisation” are also defined:

Ensuring sustainability means—

(a)      Maintaining the  potential  of  fisheries  resources  to  meet  the reasonably foreseeable needs of future generations; and

(b)      Avoiding,  remedying,  or  mitigating  any  adverse  effects  of fishing on the aquatic environment:

Utilisation  means  conserving,  using,  enhancing,  and  developing  fisheries resources to enable people to provide for their social, economic, and cultural wellbeing.

[12]     In light of the Convention and ss8 and 13(2)(c), the Minister’s objective when setting a TAC must be utilisation to the extent sustainable;  see also Westhaven Shellfish Ltd v Chief Executive of Ministry of  Fisheries [2002] 2 NZLR 158 at [46].

[13]     Mr Ivory placed much emphasis on s10, which recognises that management decisions may be based on imperfect information.  The section provides:

All persons exercising or performing functions, duties, or powers under this Act, in relation to the utilisation   of   fisheries   resources   or   ensuring sustainability, shall take into account the following information principles:

(a)    Decisions should be based on the best available information:

(b)     Decision   makers   should   consider   any   uncertainty   in   the information available in any case:

(c)    Decision  makers  should  be   cautious   when  information  is uncertain, unreliable, or inadequate:

(d)   The absence of, or any uncertainty in, any information should not be used as a reason for postponing or failing to take any measure

to achieve the purpose of this Act.

[14]     “Best available information” is defined by reference to cost, effort, and time.

It means:

the best information that, in the particular circumstances, is available without unreasonable cost, effort, or time:

and information includes:

(a)     Scientific, customary Maori, social, or economic information;

and

(b)    Any analysis of any such information:

[15]     It  is  also  necessary  to  mention  s11,  which  allows  the  Minister  to  impose sustainability  measures  within  a  fishery,  and  s11A,  which  provides  for  fisheries plans. While TAC is  set  for  the  fishery  as  a  whole,  these  provisions  permit sustainability  measures   within   it,   including   fishing   methods   and   seasons   and restrictions on areas from which fish may be taken.

The history of utilisation in ORH 1

[16]     The total biomass or MSY in ORH 1 has never been estimated. Rather, successive Ministers have tried to gauge MSY over time by permitting and closely monitoring utilisation, a practice that Mr Ivory characterised as extra-statutory. It entails placing the stock under stress so that depletion can be monitored and MSY gauged. It is associated with adaptive management programmes (AMPs), which are agreements between the Ministry of Fisheries and fishers. The practice has apparently worked successfully in other fisheries; indeed, it may be the only practical method of arriving at MSY in some cases. It has not achieved that objective in ORH 1 despite more than a decade of fishing pressure, although the applicants  maintain that it could do so with continued refinement and further research over time.

[17]     The  narrative  begins  in  October  1995. Until then a nominal TAC of 190 tonnes had been set for the fishery.  In October 1995 it was increased to 1190 tonnes,

of which 1,000 tonnes was to be taken in one area known as the Mercury-Colville Box. The increase was associated with a five-year AMP, which adopted a target catch per trawl or catch per unit effort (CPUE) threshold in designated areas or features where known populations were located. This was a risk management measure. If catches fell below the target level at any given feature, the fishers were required to move to another. According to Mr  Starr, a fisheries stock assessment scientist who swore an affidavit for the applicants, the selected CPUE threshold “effectively  became a pragmatic surrogate for BMSY  in the absence of other information about the population”.

[18]     Mr Cooke was at some pains to point out that the 1995 TAC was set under the Fisheries Act 1986, which took a somewhat less prescriptive approach than the

1996  Act.  I  have  not  been  asked  to  determine  whether  the  1995  TAC  was  set lawfully;  in  Antons  Trawling  Co  Limited  v  Smith  [2003] 2 NZLR 23 at [60], the Court of Appeal plainly doubted it.

[19]     Co-operation  between  the  Ministry  and  the  industry  is  not  confined  to  the AMP.   A number of working  groups  have  been  formed,  including the  ‘Deepwater Fishery Assessment Working Group’ and the ‘AMP Working Group’.  They include officials, fisheries scientists, and industry representatives.

[20]     On 6 August 1998  the  Deepwater  Fishery  Assessment  Working  Group considered CPUE data, which revealed a sharp decline.  The Working Group thought

it  likely that  heavier  catches  were  not  the  cause  of  the  decline,  but  the  possibility remains that the 1,000-tonne limit in the Mercury-Colville Box was too high.

[21]     On expiry of the first AMP, the TAC was reduced to 800 tonnes for the 2000-

01 season. It appears that the reason for not reverting to a nominal TAC was that other populations had been discovered within  ORH  1. It was made clear that the 2000-01 TAC had been set on an interim basis only.

[22]     In 2001 the then Minister increased the TAC to 1,470 tonnes and a second five-year  AMP  was  established.  The TAC was derived from an industry AMP proposal,  the  objective  of  which  was  to  determine  stock  size,  geographical  extent, and  long-term  sustainable  yield  of  the  ORH  1  stock.   It  also  involved  placing  the stock  under  what  Mr  Starr  describes  as  “some  additional  stress  through  heavier fishing  pressure”,  and  area  and  feature  limits  formed  a  “key  component”  of  the proposal.

[23]     It remained the position that no estimate had been made of biomass or MSY. The Final Advice Paper of 23 August 2001, on which the Minister based his decision

to increase the TAC, concluded that there was insufficient information to assess the size and status of ORH 1 stock, and advised that there was no reliable estimate of yield available. The proposed area catch limits were set “at arbitrary levels” to allow exploratory fishing, which had already indicated that there were additional fishing grounds: at least 17 seamounts or seamount features had been found to be associated with orange roughy populations. Although the stock size was uncertain, the available information and analysis suggested a reasonable probability that the current biomass was greater than that which would support the MSY. On balance, the new TAC was likely to allow the stock to move towards a size that would support  the

MSY.  It is not clear what limb of s13(2) the Minister relied on when adopting these recommendations.

[24]     Mr Starr explains that the second AMP was developed with the benefit of observations about fishing in the Mercury-Colville Box. The management approach adopted in the AMP included dividing ORH 1 into four quadrants each having a catch limit assigned, stipulating that within each quadrant catches at any single feature were limited to designated amounts, and providing that these feature-specific catch limits would fall as the CPUE dropped. Under this programme the fishing was dispersed over a larger number of features. He concedes that CPUE limits were set

on an ad hoc basis but argues that they were conservative.

[25]     The second AMP expired on  30 September  2006,  and  was  not  renewed. Fisheries officials have concluded that orange roughy is not suited to using an AMP

to gauge MSY, for it is too easy to deplete the stock by accident. In particular, they now believe that CPUE data is simply not a reliable method of estimating BMSY.  Put another way, a decline in CPUE data can signal that it is time to stop fishing on a given  feature, but the data cannot be used to estimate BMSY  because CPUE levels will remain high until stock levels have already fallen well below BMSY. (It is also common ground that there was some misreporting  of  catches  by  fishers,  although this consideration does not appear to have played a large part  in  the  subsequent decisions to reduce TAC.) Officials have also become concerned that some methods

of setting TACs may not comply with s13.

[26]     In  2006  the  TAC  for  ORH  1  was  reviewed  as  part  of  what  Mr  Barbarich, Antons’ Managing Director, describes as a “sustainability round”.  The second AMP was  about to expire. The  applicants believed that it would be extended, with the TAC being adjusted in light of experience. CPUE levels had not fallen. The Minister decided, however, to reduce TAC to 870 tonnes and to abandon the AMP. That led to an application for a judicial review, in which the Minister capitulated. His reasons for doing so  have  no  material  bearing  on  the  present  dispute,  which arose after he revisited TAC levels in the succeeding year.  A Ministerial proposal to amend the legislation was not pursued for reasons that have not been explained.

[27]     The Deepwater and AMP Working  Groups  met  to  discuss  OHR  1  early in

2007.  Mr Starr and Mr Barbarich were both members.  The resulting plenary report

of the Working Groups, dated May 2007, was later included in the Final Advice Paper to the Minister. The report noted that CPUE was used as a management tool; when it dropped on a feature, fishers should move to another one.  But CPUE data

do not provide any useful measure of abundance in ORH 1 due to the short time series, the nature of the fishery, and the impact of catch limits on features or areas. It was not known whether  the  current  harvest  was  sustainable. The purpose of  the AMP had been to spread effort across the large area of the fishery.   The amount of fishing  in  some  areas  appeared  to  be  low,  but  without  any  indication  of  current abundance, there was no way to determine whether that level was sustainable.   The report acknowledged that in 2001 the Working Group had stated that the stock was likely to be above MSY, but information collected since that time had not improved understanding about the status of the stock.  It was not possible to estimate BMSY  for any  of  the  individual  populations  within  ORH  1,  let  alone  aggregate  them  to  an estimate  for  ORH  1  as  a  whole.   Moreover,  a  better  understanding  would  not  be possible in the near future.

[28]     To some extent  these  conclusions  are  controversial.  Mr Barbarich  and

Mr Starr maintain that estimates of BMSY  are possible and the risks of error are manageable with continued close monitoring and further analysis, possibly involving computer models and topographical surveys. However, there is no dispute that BMSY

for ORH 1 cannot be estimated at present,  with  the  result  that  it  is  not  known

whether the current TAC is sustainable in the long term. Mr Starr maintains that there is nonetheless no short-term sustainability concern, partly because catch histories show no decline and partly because there remain large areas of the fishery that have yet to be developed or have been only lightly fished.  If ORH 1 is treated as a single  population, he  believes that  the  population  likely  still  exceeds  BMSY. He appears to assume that exploration will reveal other populations, or that populations that have been identified will prove to be of sufficient size to sustain the 2001 TAC.

He  also  considers  that  populations  in  marine  protected  areas  should  be  taken  into account in management decisions.

The Final Advice Paper

[29]     The Final Advice Paper on which the Minister based his decision is dated 5

September 2007. The paper reported the Working Group conclusions that it is not possible to determine the sustainability of catches and that a better understanding is not possible in the near future. CPUE data had been used as a management tool to reduce fishing pressure on any one feature, but did not seem to be  a  measure  of abundance. Much of the area of the fishery had not been explored, and there might

be other orange roughy populations.   The Ministry is investigating the viability and utility of a characterisation (topographical) study of known but unfished features to inform future estimates. While that might be informative, “it would still not lead to any conclusive finding about the sustainability of current harvesting or the relationship  of  the  stock  to  BMSY”.  Given  the  best  available  information,  officials considered that it is not possible to assess BMSY for the fishery.

[30]     Nevertheless, officials advised, the Minister must set or vary TAC with reference to where  the stock  is  in  relation  to  BMSY.  The  Minister’s  powers  under s13(2)(a)(b), and (c) were identified.  Officials recommended that he set TAC under s13(2)(a).  They identified a need for caution.  Given uncertainty in the best available information about stock size “and combined with a more cautious assessment of that information”, the Minister might consider that ORH 1 is more likely to be at a level below BMSY.   If so, TAC might also be set under s13(2)(b).

[31]     Officials  recommended  that  associated  with  the  overall  TAC  should  be  a management  and  monitoring  plan  to  spread  effort. Such  a  plan  is  “critical  to managing risk”, but requires industry co-operation since area and feature limits (and reporting on  them) cannot be imposed without  agreement.  Area  limits  and  catch- spreading “are not part of your TAC and TACC [total allowable commercial catch] decisions”. The industry had agreed to continue  to implement AMP measures, including area limits, feature limits, biological  sampling,  observer  coverage,  and regular reporting.   The paper also indicated that the principal parties supported the development of a fisheries plan under s11A, and outlined the stance taken by each of them.   The Ministry intended to  evaluate this option with the stakeholders.   There was no reference to the Minister’s powers under s11.

[32]     The  Minister was provided with three  options. The first would retain the existing TAC of 1,470 tonnes.  The second would reduce it to 1,208 tonnes. This option was said to place greater weight on the level of uncertainty generally, and the risk that a sustainability problem might not be  detected  until  too  late. The third option would reduce TAC to 914 tonnes. These options were not related to BMSY, although it is unfair to characterise them as entirely arbitrary since officials evidently had the impact on fishers in mind. Neither of the reduction options analysed the way and rate at which stock might be moved to BMSY, inevitably so given that there were

no BMSY  estimates.   The Minister was advised that he might select the third option

under either s13(2)(a) or s13(2)(b), but that a reduction of that magnitude might be more suited to s13(2)(b).  It is implicit in the paper that officials supported options 1

or 2, because they recommended that the Minister deploy s13(2)(a).  That hint aside,

he was given no guidance to which subsection he ought to invoke.

[33]         The paper summarised the views of industry participants, who generally supported continued adaptive management and argued that there was nothing to suggest that the current catch rates are unsustainable. The Ministry agreed that there was no evidence of an immediate sustainability risk. The officials drew attention to the  impact of  a  TAC  reduction  on  industry  participants,  noting  that  the  possible reductions would impose significant economic hardship on the largest firm (Antons).

[34]     The Minister met officials on 18 September 2007.   He  noted  the  degree  of uncertainty surrounding the stock and the impact that fishing may be having on it.

He asked officials to confirm that there was no other information available, and was told that they had assessed all relevant information and that no new information was expected at any time.

The Minister’s decision

[35]     The Minister selected option 3 by endorsing it and signing the Final Advice Paper. He  explained in a letter of 24 September 2007 to stakeholders that he had decided to set TAC  under  s13(2)(b) to enable the stock to rebuild to a level at or above that which can produce MSY. To effect that rebuild, he had next determined the appropriate way and rate of the rebuild, having regard to social,  cultural,

economic  and  other  factors.   He  had  concluded  that  a  “substantial  and  immediate reduction” in TAC was “required to effect the rebuild.”

[36]     It will be obvious from the above summary of the Final Advice Paper that the Minister reached this decision without benefit of any data or estimates on which he might assess current biomass, BMSY, or the way and rate at which the stock should be “rebuilt”  under option 3. He did not assess biomass at all. Rather, the Minister opted for a precautionary approach, founded not on any estimate of yield but on the high level of uncertainty about BMSY and the vulnerability of the stock to overfishing.

He said:

Some submissions argued that the current TAC and TACC are appropriate, given   that   there   is   no   sign   of   immediate   sustainability   concern,   the geographic extent over which orange roughy is fished within ORH1, and the potential existence of orange roughy in unexplored or unexploited areas of ORH1.    Their  preference  is  to  maintain  the  current  catch  limits,  and  to instead focus on the development of a well-designed and structured fishing programme  to  ensure  the  careful  development  and  management  of  the fishery.

I do not find these  arguments  convincing. While I understand that  there appears to be no imminent  threat, I am alarmed  by  the  possibility  that  a serious and irreversible sustainability problem may not be detected before it

is too late. The low productivity of orange roughy, its aggregating behaviour, and the litany of orange roughy management failures around the world have convinced me that caution in favour of sustainability is the responsible course of action.

I believe that in this instance, the lack of information on stock levels requires me to take firm action. I have balanced my desire to  reduce  the sustainability risk with the very real and immediate economic consequences. My preference is to be as certain as I can that I have looked after the long- term  interests  of  the  fish  and  the  fishery.     I  am  not  willing  to  wait  for evidence  of  decline  before  I  take  action  –  if  I  did,  it  may  be  too  late  to ensure the sustainability of this orange roughy stock.

[37]     The Minister added that he agreed that fine-scale management provided the best  opportunity  to  detect  and  respond  to  a  sustainability  risk,  and  that  catch spreading  is  critical  to  appropriate  management. He requested  that  the  general management approach that had been in place for the past several years continue;  in particular, there should be area and feature limits.

The application for judicial review

[38]     There is a single cause of action. Mr Cooke developed his submissions under three heads, which he expressed as alternatives. The first was that the Minister essentially abandoned the approach mandated by s13(2) by making no attempt to estimate biomass or MSY, still less the rate of alteration necessary to move the stock

to MSY.

[39]     Second, it is said that the Minister did not  base  his  decision  on  the  best available information, for a topographical survey could be undertaken to indicate the likely order of magnitude of orange roughy stocks. Instead, the Minister assumed that no new information was expected at any time. A topographical survey would take some time, but it is not necessary to reduce TAC in the meantime, for there is

no evidence that the fishery is under immediate threat.

[40]     The applicants thirdly contend that the Minister was not supplied with advice and information about sustainability measures developed in ORH 1 to mitigate the risk of collapse. This error is said to have resulted from officials’ views that because they required industry agreement the AMP management tools were irrelevant.

[41]     The Minister generally denies these allegations. He pleads  that  it  is  not reasonably possible to estimate biomass or MSY, and admits that the Final Advice Paper did not calculate rates and alteration of the level of the stock for that reason.

He says that the paper did alert him to his obligation to consider the way and rate of moving to sustainable biomass.

[42]     The  respondents  have  filed  a  counterclaim  in  which  they  allege  that  the biological characteristics of orange roughy do not make it impossible to estimate the MSY of the ORH 1 stock.  They seek a declaration that the ORH 1 stock cannot be added to the third schedule of the Fisheries Act as the orange roughy species does not comply with s14(8)(b)(i).

[43]     On 25 October I refused interim relief, finding no adequate evidence that it was needed to preserve the applicants’ position pending the January fixture, which had been assigned to me. Ideclined to venture a preliminary view of the merits. Interim  relief  was  granted  on  appeal,  the  Court of Appeal observing that  the

applicants had a cogent case. That warning the respondents chose to ignore. I gained the impression at a pretrial conference and during the hearing that there is a sense in which a decision on the first ground of challenge is not wholly unwelcome to the Ministry.

Non-compliance with s13(2)

[44]     The first question is whether, as Mr  Cooke  would  have  it,  the  Minister abandoned s13 by selecting an arbitrary TAC that was not based on any assessment

of BMSY.   If the section insists on such an assessment, the Minister erred in law by concluding that he could set TAC without it.

[45]     Mr Ivory’s argument began with the proposition that ss8 and 10 are the “main drivers” of the Act. The former requires sustainable utilisation while the latter recognises in subsection (d) that the absence of, or uncertainty in, information should not be used as a reason for postponing or failing to take any measure to achieve the Act’s purpose. The 1995 and 2001 decisions were not intended to settle a permanent TAC, and the AMPs  conspicuously  failed  to  produce  estimates  of  BMSY. TAC- setting is  always  an  exercise  in  weighing  risk.   In  the  circumstances,  the  Minister reasonably reduced the TAC substantially while, having regard to the position of the applicants, setting it at a more than nominal level.

[46]     Faced with the suggestion that each of the three limbs of s13(2) appears to envisage that MSY will be estimated, however imperfectly, Mr Ivory acknowledged that  BMSY   underpins  the  subsection. He submitted that s13, “read literally, just doesn’t work.” There are many species for which a TAC has been established although it is not possible to estimate BMSY.   In such cases, the sort of analysis that the Court of Appeal outlined in New Zealand Fishing Industry Association v Minister of Fisheries CA82/97 22 July 1997 is “not possible”. The snapper fishery in issue in that case, SNA 1, is one of the few for which very full information is available. He pointed to the evidence of Mr Leslie, the Ministry’s Deepwater Manager. Mr Leslie explains that MSY cannot practically be calculated for most stocks, saying:

12.A literal interpretation of BMSY  cannot practically be calculated for most stocks, so other methods are used as a matter of routine.   Risk assessments, and the subsequent management of that risk, are based on  the  available  information  and  what  is  most  appropriate  for  the particular stock.  ORH 1 is no different in that regard.

13.Estimating a particular stock’s relationship to ‘biomass that can support maximum sustainable  yield’ requires an estimate of  BMSY (which typically ranges from 30 to 40%  of  the  unfished  biomass

[B0]) and an absolute estimate of current biomass of  the  stock (Bcurrent). An absolute estimate is how much fish there is, whereas a relative abundance estimate is how much more or less there is now

in comparison to a point in history. Assessing Bcurrent  is technically difficult, usually expensive, and  has to be modelled (i.e. derived from a model rather than directly observed).  For some high value stocks, for which it is both feasible and cost-effect [sic] to derive the information (and there is the capacity to do so), this can be done and

a   stock’s   Bcurrent     can   be compared  to BMSY     and appropriate management action taken as required. This literal approach to BMSY

is applied to about 2% to 5% of the 629 QMS stocks.

[47]     For   these   reasons,   Mr   Leslie   explains,   the   Ministry  uses   MSY-related reference points or analytical or conceptual proxies:

14.Because of the difficulties of estimating BMSY  itself for many stocks, the  interpretation  of  section  13  has  always  included  using  MSY- related reference points, depending on the type and amount of data available, the characteristics of the fisheries and   international practice. This approach is common around the world.   A common non-BMSY  reference point is FMSY, which is the fishing mortality rate (e.g. harvesting a portion of available fish)  that,  if   applied constantly, would result in an average catch corresponding to MSY and an average biomass corresponding to BMSY.

15.In  the  absence  of  adequate  information  to  estimate  BMSY,  FMSY   or MSY itself, analytical  proxies  can  be used.  These are  often  more appropriate  (i.e. would more likely lead to  sustainable  fisheries) where  estimates of MSY-related  reference  points  are  not  reliable. One  BMSY   proxy is percentage of  B0  (unfished  biomass),  and  an MSY proxy is the Constant Annual Yield (CAY) that is considered sustainable through all probable future  biomass   levels. An analytical proxy approach is applied to about 15% to 20% of the 629 QMS stocks.

16.Where  such  proxies  are  themselves  inappropriate  or  unavailable, then conceptual proxies have been used.   For example, where catch per unit of effort (CPUE) and abundance are assumed more or less proportional, an historical period when both CPUE and catches were relatively high can be used to define a reference period, setting this CPUE  level  as  a  target.   In  cases  where  an  estimate  of  relative biomass  exists  (size  of  stock  relative  to  another  point  in  time),  a catch limit could be set to manage to the identified historical period when both catches and biomass were high.   In other cases, the only

useable information is the catch history and fishing effort. Here, a catch limit can be set at a proportion of the average landings, taking into consideration natural variability.  A conceptual proxy approach

is applied to about 30% of QMS stocks.

[48]     In the result, TACs for about 50% of total fish stocks by number, representing 10% of total stocks by value, are set without any form of assessment or are nominal.  Many of those stocks are small. TAC is set on a “literal interpretation” of BMSY for only two to five percent of stocks by number, representing 30% of total stocks by value.

[49]     But as a matter of construction s13(2)(b), under which the decision was made, does require an assessment of both the current stock level and the stock level required to produce MSY. Having concluded that the current level is below BMSY,

the Minister must further decide how to restore it.   With respect to the last of these

points, the Court of Appeal in New Zealand Fishing Industry Association v Minister

of  Fisheries  (above)  held  that  the  Minister  must  consider  the  way  in  and  rate  at which  stock  will  be  moved  to  BMSY  and  would  be  wise  to  examine  the  costs  and benefits of choosing different rates and periods.

[50]     I accept that BMSY  cannot be calculated accurately for many species.  But s10 undoubtedly applies to TAC-setting under s13, so that the Minister may act, cautiously, when information is uncertain, unreliable, or inadequate, and should not postpone a measure to achieve the Act’s purpose only because of the absence of or uncertainty in any information.  The section accordingly admits estimates of stock levels, and ‘way and rate’ evaluations, although the quantity and quality of the best available information is poor. Risks must be weighed, and there is room for a precautionary approach where information is inadequate: cf Squid Fishery Management Co v Minister of Fisheries CA39/04 5 April 2004 at [75]-[80].  But s10 does  not  allow  the  Minister  to  set  TAC  under  s13(2)(b)  without  assessing  stock levels  at  all.  Only  when  such  an  assessment  has  been  made  can  he  determine whether s13(2)(b) is available to him on the facts.

[51]     One sympathises with the Minister, confronted as he was with a Final Advice Paper that correctly advised him that he must set TAC with reference to where the stock is in relation to BMSY  yet supplied him with no estimate whatever of current

stock levels or BMSY, nor even an opinion that, although the stock levels are unknown, they are likely to be below (or above) MSY. (In making the latter observation, I do not mean to suggest that this approach, which was relied on in setting the 2001 TAC, is compatible with the scheme of s13 and purpose of the Act.)

He was not referred to s14. In  circumstances where  he was also warned in clear terms of the risk of overfishing, it is unsurprising that he took the most risk-averse of the  three  options  offered  and  that  there  was  no  real  evaluation  of  alternative  time periods for the “rebuild”.

[52]     I have already noted that the legislation contemplates in s14 that there will be species in respect of which no estimate of BMSY  is possible. Mr Ivory’s response was that s14 is unavailable in this case, for the inability to estimate MSY is not due to the biological characteristics of the stock. He referred to the affidavit of Mr Sullivan, Science Manager, Stock Assessment, with the Ministry. Mr Sullivan says there are no biological characteristics of orange roughy that would preclude a MSY estimate, although the information required to estimate MSY for ORH 1 is deficient. He accepts that the species is characterised by long life, late sexual maturity and low reproductive productivity, and a tendency to form large spawning aggregations, but says these characteristics are common to other deepwater species.

By contrast there are species, such as squid, for which the life history can make it difficult  or  impossible  to  estimate  the  maximum  yield  that  can  be  taken  without reducing the biomass;  it is for such species, he says, that s14 was designed.

[53]     Mr  Cooke  did  not  accept  that  biological  characteristics  of  the  species comprising  the  relevant  fish  stock  preclude  an  estimate  of  MSY  in  ORH  1.   The applicants’ position is that s14 is unavailable for that reason, although Mr Starr does concede that it is difficult to apply s13 in this fishery.  Thus the parties agree that the Minister could not deploy s14, but for very different reasons.  Mr Cooke urged me to avoid reaching a conclusion about it, pointing out that before a species is added to Schedule   3   by   Order   in   Council   a   consultation   process   must   be   followed. Presumably  other  orange  roughy  fisheries  would  be  affected  by  such  a  decision, albeit  indirectly  since  they  comprise  different  fish  stocks  for  purposes  of  the legislation.

[54]     I need not determine whether impossibility of estimating BMSY is attributable

to biological characteristics such that s14 is unavailable, and it is unwise to do so, not only for the reason given by Mr Cooke but also and more importantly for reasons given in the next section of this judgment.  For present purposes, the short answer to Mr Ivory’s submission is that the legislature foresaw the problem of impossibility of estimating MSY and established a separate mechanism, s14, to deal with it.

[55]     It is true that, in light of Mr Sullivan’s evidence, any attempt to invoke s14 would likely encounter resistance on the dual grounds that estimates are possible, given time and more expense, and that any difficulty in estimating MSY is attributable to causes other than biological characteristics. Section 14(8)(b)(i) sets a high standard, that of impossibility.  And because an existing TAC continues until changed, any attempt under s13 to reduce a TAC that has been set without benefit of

a stock estimate may summon a challenge on the ground that there is no stock estimate. The lay observer might think that perverse, but it aptly summarises this case. Mr Ivory sought guidance. It is not for the Court to say whether policy dictates that s14 should be available when present ignorance of stock levels is attributable not to impossibility resulting from biological characteristics but to insufficient exploration or research into the relevant fish stock. If it does, the legislation wants amending.

[56]     Mr Cooke accepted that the Minister might rely on s13(2)(a) in a case, such

as the present, where there is an existing TAC. I agree. Subsection (a) allows the Minister to set TAC at a level at “or above” that needed to produce MSY and Mr Cooke acknowledged that this language admits a precautionary approach. He argued, however, that the language of s13(2)(a) nonetheless requires an assessment of stock levels needed to produce MSY. Again, I agree. He also argued that in light of the Act’s purpose the TAC could not be far above MSY.  That question cannot be answered in the abstract, for the  extent  to which the Minister may set TAC above MSY without departing from the purpose of the Act may depend, for example, on the nature of a sustainability risk to any given fish stock.

Failure to act on best available information

[57]     Mr  Cooke  submitted  that  the  Minister  was  not  supplied  with  the  best available  information,  contrary  to  s10(a).           In  particular,  he  was  not  told  that  a topographical  survey  could  be  undertaken.           He  emphasised  that  under  the  Act “information” includes analysis of information.

[58]     The parties agree that the costs of carrying out an acoustic survey to find the fish are prohibitive.  Under the legislation the fishers bear such costs.  But Mr Ivory accepted  that  a  topographical  study  is  feasible.  It  is  common  ground  that  in conjunction  with  trial  fishing  on  such  features,  such  a  survey  might  indicate  the likely order of magnitude of orange roughy stocks.   Something is already known of orange  roughy  spawning  patterns  in  large  areas  of  ORH  1,  based  on  20  years  of research.

[59]     It remains true that as at September 2007 BMSY  could not be estimated.  And topographical work would take some time, for the fishery covers a very large area. The evidence does not disclose how long it would take, and neither side has taken the initiative to set it in train.   It may have been reasonable to suppose that nothing more would be known in the near future.  Mr Cooke’s response was that the Minister was under no duty to review TAC, so he could have waited until the work had been done.

[60]     I do not want to endorse a submission that there is no duty to review TACs. All TACs carry risks, of sustainability on the one hand and underutilisation on the other. Those risks are likely to be asymmetric, at least in orange roughy fisheries. The Minister alone is in a position to control them. I accept, however, that the Minister is not required to review TACs at regular intervals. In this instance he might have acted at once to address a risk posed by continued fishing pressure when stock levels are unknown. But he might also have delayed until further work was done, setting an interim TAC in the meantime in conjunction with continued area and feature limits to spread the catch and manage risk. The future availability of information that might allow stock estimates was a relevant consideration in his decision to set a new TAC at that time. The Final Advice Paper invited the Minister

to discount it completely. When he inquired, the Minister was told unequivocally that  no  further  information  was  expected  at  any time. That  justifies  the  inference

that  he  did  not  take  the  availability  of  a  topographical  survey  into  account  in  his decision.

[61]     Underlying   this   omission   was   a   decision   by   officials   to   discount   a topographical survey because it would not produce “conclusive” information.   That overlooked  s10.           A  TAC-setting  decision  should  begin  by  identifying  the  best available information, being information that is available without unreasonable cost, effort,  or  time,  and  decisions  may  be  based  on  such  information  although  it  is incomplete or inadequate or unreliable.  To overlook this was an error of law that has apparently led officials to conclude too readily that it will not be possible to estimate BMSY in the near future.

Failure to consider risk management measures

[62]     The third ground of challenge is that the Minister failed to address “sustainability measures” or risk management tools developed in ORH 1 to guard against the risk of collapse, and failed to appreciate that because they could be imposed under s11 such measures were relevant to TAC-setting. Mr Cooke focused

on area and feature limits and CPUE thresholds.   He argued that the Minister must have overlooked these management tools, for they mitigate the risk of collapse that

so concerned him.

[63]     The argument was skilfully presented but loses its appeal on closer analysis.

To begin with, the applicants argue that officials advised the Minister that voluntary feature and area limits were irrelevant.  I accept Mr Ivory’s submission that this rests

on a misreading of the Final Advice Paper, which explained that the Minister did not

set such limits as part of his TAC decision.  It may have been an error to say that such limits required agreement, but the paper did not treat them as irrelevant. On the contrary, it made it plain that such limits would continue, because industry participants had agreed to them.  No question of compulsion arose, so nothing turns on the failure to point to the Minister’s powers under s11.

[64]     Further, the Minister did take feature  and  area  limits  into  account,  as  risk management tools to guard against a collapse in the fishery while subject to the new

914-tonne  TAC.   The  Final  Advice  Paper  described  them  as  critical  to  managing risk.   He also referred to them in his letter to stakeholders, plainly concluding that they were necessary in circumstances where he had set the TAC at a level that was more than nominal.

[65]     The applicants’ real complaint, on closer examination, is not that the Minister failed to take risk management tools into account for risk management purposes, but that he did not base the TAC upon them.   Mr Cooke argued that these tools, rather than “the traditional approach to TAC setting” undertaken in the Final Advice Paper, best provide for sustainable utilisation.  The argument must fail once it is established that the Minister must comply with s13 by assessing BMSY  when setting the TAC. The gist of the Minister’s advice, reflecting the views of the Working Groups, was that these risk management tools did not allow an estimate of BMSY.   That was so notwithstanding more than  a decade’s  experience with them in  this  fishery.   Their relevance  to  TAC-setting  was  accordingly  indirect,  in  that  they  might  reduce  the need for caution to the extent that they reliably manage the sustainability risk.  So the Minister did not err by taking feature   and   area   limits   into   account   as   risk management tools when setting a new TAC while discounting them as a measure of biomass  or  MSY.    Nor  did  he  err  by  discounting  CPUE  data  as  a  measure  of abundance.

The counterclaim

[66]     For reasons given above, it is neither necessary nor appropriate to make the declaration sought by the respondents.  The counterclaim is dismissed.

Decision

[67]     The application for  review  succeeds. The Minister’s  decision  to  set  a  new

TAC  of  914 tonnes  for  ORH  1  is quashed, and the notice in the Gazette  of  27

September 2007 giving effect to his decision  is  set  aside. The rationale for these orders is twofold. First, the Minister set the TAC under s13(2)(b) although his advice was that BMSY  could not be estimated and he had no information from which

he might estimate BMSY  or the current biomass, still less the way and rate at which

the  stock  should  be  moved  to  BMSY.    Second,  a  topographical  survey  appeared feasible  and  in  conjunction  with  trial  fishing  might  indicate  the  likely  order  of magnitude of orange roughy stocks, but this consideration was overlooked.

[68]     The immediate consequence of this decision is  that  the  2001  TAC  will govern  the  fishery  until  the  Minister  decides  to  change  it. I  recognise  that  my conclusions  on  the  first  ground  of  challenge  invite  questions  about  the  bases  on which the 2001 and 1995 TACs were set.   But neither party has asked me whether the 2001 TAC is lawful, so I express no view about it.

Costs

[69]     The applicants will have costs, which I am minded to set on a 3B basis with provision for two counsel.   Memoranda may be filed if counsel cannot settle costs between them.

Miller J

In accordance with r540(4) I direct the Registrar to endorse this judgment with the delivery time of 11.00am on the 22nd day of February 2008.

Solicitors:

Oceanlaw New Zealand, P O Box 921, Nelson for Applicants

Crown Law, Wellington for Respondents