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1 Introduction

The need for this work was driven by regional councils and unitary authorities (hereafter referred to as councils) wanting to put bonds on marine farming consents to cover the costs of clean-up in the event that farms become derelict, abandoned or break free from their moorings. Industry has considered the risk to be minimal and bonds to be an unnecessary financial burden. Councils have remained open to other methods of protecting against the risk, but neither councils nor industry have been able to suggest workable alternatives.

The across-government aquaculture implementation team sought to assist by commissioning independent expert advice from Stimpson & Co on options for risk assessment and risk management relevant to aquaculture activities in the coastal marine area.

1.1 Purpose of the project

The defined purpose of this project was to:

  • identify risk management issues that may arise from aquaculture activities in the coastal marine area
  • explore risk management options available to both local government and the aquaculture industry.

Councils requested this work to address the gaps in knowledge of risk assessment and management (listed in section 1.4 below), in order to inform the review process of existing marine farms and to be prepared for future decision-making. The aquaculture industry is developing operating standards and other self-regulating tools to manage their own activities. This work will add value to the investigation of bonds and may help formulate of a range of industry management policies which the industry can adopt and apply. This report should help inform current industry projects.

Accurate information, sound resource management, and inclusive planning processes are all vital to successfully managing the coastal marine area.

1.2 Background

The definition of aquaculture that has been adopted in this report is that used in the Resource Management Amendment Act (No 2) 2004:

Aquaculture activities –

  1. means the breeding, hatching, cultivating, rearing, or ongrowing of fish, aquatic life, or seaweed for harvest if the breeding, hatching, cultivating, rearing, or ongrowing involves the occupation of a coastal marine area; and
  2. includes the taking of harvestable spat if the taking involves the occupation of a coastal marine area; but
  3. does not include an activity specified in paragraph (a) if the fish, aquatic life, or seaweed –
    1. are not in the exclusive and continuous possession or control of the person undertaking the activity; or
    2. cannot be distinguished or kept separate from naturally occurring fish, aquatic life, or seaweed.

Note that the above definition does not include aquaculture activities located entirely on shore. Although such activity does form part of aquaculture in New Zealand, the focus of this report is solely on the activities that take place below the mean high water springs and out to 12 nautical miles around the entire New Zealand coastline, this being the consentable region within which marine farming may take place.

The New Zealand aquaculture sector is a NZ$390 million per annum industry2 currently focused on three species – New Zealand GreenshellTM mussels, Pacific oysters and salmon – with established operations centred on a limited number of coastal regions. Global market growth, pressure on capture and wild fisheries and the opportunities presented by New Zealand’s extensive coastline and clean, green image have encouraged the industry to set a target of $1 billion in sales by 2025.

The recent development of an underpinning sector strategy supported by a whole-of-government initiative, and the resulting establishment of a nation- and sector-wide industry body, Aquaculture New Zealand Limited, exemplify the concerted public and private efforts to better prepare the sector to grow and develop sustainably. The achievement of long-term growth targets will require an increase of water space supporting aquaculture, and will involve broadening the range of species, culture methods, geographic locations, and value-adding processing technologies used in aquaculture in New Zealand.

Aquaculture provides an opportunity for environmentally sustainable economic growth and relies on the responsible use of the shared water resource for its existence. Underpinning the industry sector strategy is a commitment to environmental sustainability and stakeholder partnerships. Central and local government and communities are seeking to maximise the economic development benefits of a thriving aquaculture industry while minimising the possible negative impacts.

Councils regularly use mechanisms in the Resource Management Act (RMA) to recover the costs of consent processing and compliance monitoring, thereby reducing ratepayer costs and implementing user-pays principles. Otherwise the site costs of mitigation and clean-up of any adverse effects are left to the relevant local authority. To reduce the potential risk, a number of councils are placing or are considering placing bonds, or a requirement to provide a copy of an insurance policy, on both deemed coastal permits they have inherited responsibility for and all future marine farms. The industry is concerned about the generalised application of bonds, noting that amounts have been suggested in excess of the actual residual risk and that bond imposition may impose an undue financial burden on aquaculture businesses. All stakeholders are open to considering alternatives.

In order to achieve stakeholder goals, the resource management framework has to apply a consistent and equitable assessment of risks that accurately reflect the conditions in which aquaculture is managed in New Zealand, and that will facilitate the sustainable growth of the sector.

1.3 The approach

Stakeholder engagement has been critical to ensuring a successful outcome from this project. Information and insight were sought from a broad range of aquaculture stakeholders, including industry participants, industry bodies, research entities, councils, and government departments and agencies. Stakeholders have been consistently eager to achieve greater consensus on aquaculture risk management and residual risk treatment.

1.4 The report’s scope and aims

This report:

  • informs councils that are developing policy on risk assessment and management, and considering bonds and other alternatives to address any residual risks, and details the context within which these risks may arise in relation to aquaculture
  • provides an independent source of information for councils, industry and coastal communities
  • evaluates a range of risk management tools that can be used by councils
  • recognises industry best practice and reviews its contribution to the issue of risk management.

The report aims to provide a reliable point of reference for councils, industry and others dealing with the broad range of aquaculture risk management issues. To achieve this, it:

  • establishes risks and risk contexts with industry, regulators and community stakeholders
  • reviews risk assessment methodologies relevant to the New Zealand aquaculture setting
  • recommends a risk assessment technique applicable to aquaculture activities
  • conducts a preliminary assessment of the risks that may lead to farm abandonment
  • identifies, describes and evaluates a range of risk mitigation instruments, including those available under the RMA framework and risk treatment approaches for councils, with a particular focus on farm abandonment.

Key to the report is an understanding of the current set of aquaculture practices, economic conditions and regulatory framework relevant to New Zealand aquaculture, and the effect these have on the risks of farm abandonment and risk mitigation. Overall, the report delivers a framework for all sectors and stakeholders in the aquaculture industry in New Zealand that is sufficiently dynamic to be integrated into future aquaculture environments and future uses of the coastal marine area.

2 New Zealand Aquaculture Council, Annual Report 2006/07.