Statement of Evidence of Ian Thomas (George) Clement for the Deepwater Group Limited

Transcription

1 Before the Environmental Protection Authority in the matter of: an application for marine consent under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 between: Chatham Rock Phosphate Applicant and: Deepwater Group Limited Submitter Statement of Evidence of Ian Thomas (George) Clement for the Deepwater Group Limited Dated: 12 September 2014 REFERENCE: JM Appleyard BG Williams

2 1 CONTENTS QUALIFICATIONS AND EXPERIENCE 2 SCOPE OF EVIDENCE 2 SUMMARY OF EVIDENCE 3 THE QUOTA MANAGEMENT SYSTEM 4 How the QMS works 5 QMS incentives 6 BENTHIC PROTECTION AREAS 8 Establishment of the BPAs 8 Attributes of the BPA Network 10 Attributes of the Mid Chatham Rise BPA 12 Value of the BPAs in providing marine biodiversity protection 12 Value of BPAs in fisheries management 14 Value of BPAs for the reputation of New Zealand seafood 15 Value of BPAs for independent third party certification 15 HOW THE PROPOSAL AFFECTS FISHERIES MANAGEMENT REGIMES 20 Disruption of QMS incentives 20 Adverse effects of mining in a BPA 20 Avoiding, remedying or mitigating adverse effects on BPAs 23 IMPLICATIONS FOR DEEPWATER QUOTA OWNERS EXISTING INTERESTS IN THE BPA 26 CONCLUSIONS 27 ATTACHMENT 1 29 ATTACHMENT 2 30

3 2 STATEMENT OF EVIDENCE OF IAN THOMAS (GEORGE) CLEMENT FOR THE DEEPWATER GROUP LIMITED QUALIFICATIONS AND EXPERIENCE 1 My full name is Ian Thomas (George) Clement. 2 I am the Chief Executive for Deepwater Group Limited (DWG) and the Chair for Seafood New Zealand. I graduated from the University of Canterbury with a B.Sc. (Hons) in 1973 and began work as a fisheries scientist for the then Ministry of Agriculture and Fisheries in I was involved in the development and establishment of New Zealand s quota management system and have continued to work extensively in the seafood sector, including as a negotiator for Maori fishing rights and initiator of New Zealand s benthic protection areas. 3 My knowledge and expertise in this field is both domestically and internationally reputable, evident from the positions I currently hold including as Fisheries Advisor to the Prince of Wales Trust s International Sustainability Unit and as a member on the Executive of the Association of Sustainable Fisheries, an international body representing fisheries certified as being managed sustainably under the Marine Stewardship Council programme. 4 My evidence is given in support of DWG s submission on Chatham Rock Phosphate Limited s (CRP s) application for marine consent under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (EEZ Act). CRP has sought consent to mine phosphate from the Chatham Rise (the Proposal). 5 I am familiar with CRP s marine consent application, and the Proposal more generally. SCOPE OF EVIDENCE 6 My evidence will deal with the following: 6.1 The New Zealand quota management system (QMS) and its incentives for sustainability; 6.2 The history, purpose and value of benthic protection areas (BPAs); 6.3 Adverse effects of the Proposal on fisheries management regimes, including how it disrupts the QMS and the integrity of the BPA network and the consequences of this for the fishing industry and the rest of New Zealand; and

4 3 6.4 Implications for deepwater quota owners existing interests in the Mid Chatham Rise BPA. SUMMARY OF EVIDENCE 7 The QMS and the BPA network are implemented under the Fisheries Act The EEZ Act requires the Environmental Protection Authority to take into account the nature and effect of other marine management regimes when considering a marine consent application and submissions on the application. 1 This requires decision-makers to take into account any impacts of CRP s activities on the nature and effect of the QMS, the Mid Chatham Rise BPA, and the BPA network. 8 The Proposal has the potential to disrupt the incentives that underpin the successful operation of the QMS. Incentives for quota owners to safeguard fish stocks and the environment of the Chatham Rise may be weakened as a consequence of the direct environmental effects of the Proposal, the adverse effects on the integrity of the BPA network, and the high level of uncertainty associated with the Proposal. 9 The BPA network was developed by a DWG initiative with government support and implemented under the Fisheries (Benthic Protection Areas) Regulations in The use of bottom trawling and dredging is prohibited in the 17 substantially pristine areas that comprise the BPA network. Together these areas protect around 30% of New Zealand s Exclusive Economic Zone (EEZ). CRP s proposed seabed mining site is located almost entirely within the Mid Chatham Rise BPA. This BPA is a vital component in the network as it protects a representative sample of habitat attributes that are not replicated anywhere else in the network. 10 Seabed mining of the nature and scale envisaged in the Proposal is fundamentally incompatible with the purpose of the Mid Chatham Rise BPA. If seabed mining is allowed to proceed inside the BPA, the integrity of the BPA network will be jeopardised. The main consequences will be that: 10.1 New Zealand s strong commitment to meeting its international obligations for marine biodiversity protection under the Convention on Biological Diversity (CBD) and the United Nations Convention on the Law of the Sea (UNCLOS) will be weakened. This will impact negatively on New Zealand s environmental credentials and compromise New Zealand s ability to exercise international leadership in 1 EEZ Act 2012, section 59(2)(h)

5 4 international environmental and fisheries management negotiations; 10.2 The fishing industry will face considerable cost and uncertainty associated with increased risk of further fisheries closures and cumulative effects of exclusion from valuable deepwater and middle depths fishing grounds; 10.3 New Zealand s fisheries will be less likely to be able to obtain or maintain independent third party sustainability certification such as that provided by the Marine Stewardship Council (MSC) because the BPAs help meet the MSC requirement that fisheries do not cause serious or irreversible harm to habitat structure. In the absence of environmental certification, access to premium seafood markets in the European Union, Australia and the United States will be lost, and the value of New Zealand s seafood exports will be reduced; and 10.4 As a result of the above impacts, deepwater quota owners will face increased costs and quota value may decline. 11 The adverse effects of the Proposal on QMS incentives, the Mid Chatham Rise BPA and the BPA network cannot be avoided, remedied or mitigated through the imposition of conditions. In particular, the mining exclusion areas identified by CRP are not a viable alternative to the Mid Chatham Rise BPA and do not serve to mitigate or offset the damage done to the BPA. 12 The Mid Chatham Rise BPA is an important expression of deepwater quota owners existing interests in the Chatham Rise. There is a significant spatial overlap between the BPA and the Proposal and the two activities are mutually exclusive. The uniqueness of the Mid Chatham Rise BPA within the BPA network and the lack of alternative suitable locations mean that the existing interest cannot be exercised elsewhere. THE QUOTA MANAGEMENT SYSTEM 13 The QMS and the BPA network are implemented under the Fisheries Act The purpose of the Fisheries Act is to provide for the utilisation of fisheries resources while ensuring sustainability. 2 The Act provides the basis for the Ministry for Primary Industries (MPI) and the fishing industry to sustainably manage the fisheries resources of the Chatham Rise so that they will continue to provide economic benefits to New Zealand in perpetuity. 2 Fisheries Act 1996, section 8

6 5 14 The EIA contains only a cursory summary of the Fisheries Act and concludes that as CRP is mining (not fishing), the Fisheries Act is not of direct relevance. 3 CRP s conclusion overlooks the statutory requirement in the EEZ Act for the Environmental Protection Authority (EPA) to take into account the nature and effect of other marine management regimes when considering a marine consent application and submissions on the application. 4 This requires decision-makers to take into account any impacts of CRP s activities on the nature and effect of the QMS, the Mid Chatham Rise BPA, and the BPA network. 15 The QMS is a rights-based fisheries management regime that contributes to achieving the Fisheries Act s dual purpose of providing for utilisation and ensuring sustainability. The QMS operates through a carefully calibrated set of incentives that arise as a consequence of the attributes of commercial fishing rights. If those incentives are disrupted for example, as a result of an incompatible activity that affects the distribution or abundance of fishstocks the effectiveness of New Zealand s fisheries management regime may be compromised. Taking account of the nature and effect of the QMS therefore requires an understanding of how the QMS works and the incentives that the QMS places on owners of commercial fishing quota. How the QMS works 16 For fisheries management purposes, each species managed under the QMS is divided into a number of fish stocks in defined Quota Management Areas (QMAs) which vary between species. Each stock has a Total Allowable Commercial Catch (TACC) set by the Minister for Primary Industries. TACCs are adjusted, when necessary for either sustainability or utilisation reasons, at the beginning of a fishing year. Most stocks also have a Total Allowable Catch (TAC) which comprises the TACC, together with allowances, if required, for recreational fishing, customary fishing and other sources of fishing related mortality such as incidental fish mortality caused by particular fishing methods. 17 Each of the 633 stocks in the QMS has 100 million quota shares which are referred to formally as Individual Transferable Quota (ITQ). A quota share represents a fixed percentage of the total commercial harvest rights for a fish stock in perpetuity. As well as providing quota owners with a share of commercial harvest rights, ITQ also imposes responsibilities on quota owners, including payment of a share of fisheries research, monitoring, compliance and administration costs. 3 EIA page 16 4 EEZ Act 2012, section 59(2)(h)

7 6 18 Each quota share generates Annual Catch Entitlement (ACE) which is the right to harvest that tonnage of the TACC for the stock during one fishing year. ITQ and ACE are fully and independently tradable, enabling them to change hands throughout a fishing year. 19 For example, if a company owns 10 million quota shares in the hoki stock HOK 1, then that company has rights to 10% of the commercial harvest of HOK 1. The HOK 1 TACC is currently (from 1 October 2014) 160,000 tonnes, providing the company with 16,000 tonnes of ACE at the beginning of the fishing year. The company can then use the ACE to harvest 16,000 tonnes of HOK 1 itself or can sell the ACE to a commercial fisher. If the HOK 1 TACC is adjusted upwards, at the beginning of the next fishing year the company will still own 10 million quota shares but these shares will generate a greater weight of ACE. 20 The clearly defined attributes of commercial fishing rights made ITQ an ideal currency for the full and final settlement of Maori claims to commercial fisheries. Details of the settlement are provided in the evidence of Ms Kirsten Woods for Te Ohu Kai Moana. It is sufficient to record here that, as part of the settlement, Maori acknowledged that the QMS is a lawful and appropriate regime for the sustainable management of commercial fishing in New Zealand. The effective operation of the QMS is therefore part of the fabric of the settlement. As a consequence, Maori now have a reasonable expectation that the Crown will continue to ensure the effective operation of the QMS and will act to maintain the value of the fisheries settlement assets, not least because Maori have given up any future claims to commercial fishing rights. QMS incentives 21 In many jurisdictions around the world, fisheries are managed by regulatory restrictions that are placed on various aspects of fishing activity. Under these management regimes, a race to fish mentality typically develops among fishers as companies compete to catch as much as possible within the constraints of the regulatory controls. In contrast, where secure harvest rights in fishing are allocated such as in the QMS the right to catch fish is equated with a valuable capital asset recorded and measured on the balance sheets of quota owning companies. Ownership of a valuable property right changes the behaviour of fishing companies. 22 ITQ has two important attributes that have driven these changes. First, ITQ is perpetual, providing quota owners with a long term interest in the fish stock. Secondly, ITQ is proportional in the same way that shares in a company provide a shareholder with a proportional interest in the value of the company. Together these attributes mean that the value of ITQ is related at least in part to the current abundance of the fish stock and to its perceived future

8 7 abundance. Quota owners therefore have a clear incentive to operate their businesses not only for profit today, but also for sustainable fishing outcomes as that will maximise the capital value of their ITQ. 23 The incentives on quota owners to safeguard the sustainability of fish stocks are relatively obvious and well understood. Perhaps less obvious are the incentives the QMS provides for quota owners to safeguard the wider marine environment that sustains the fish stocks akin to the way responsible farmers safeguard and enhance soil structure to retain and improve farm productivity. 24 In inshore fisheries the impacts of terrestrial activities, multiple uses of coastal space, and the less well defined rights of non-commercial fishers can obscure QMS incentives for environmental stewardship. However, in deepwater fisheries quota owners can be more certain that their environmental stewardship efforts will not be rendered futile by other resource users, and therefore clear incentives exist for them to protect the marine environment without the need for government intervention. As a result, a strong alignment between public and private objectives for marine environmental protection has evolved in deepwater fisheries. 25 The deepwater fishing industry s initiative to establish a network of marine protected areas in the form of BPAs is a direct expression of the alignment of incentives for environmental protection made possible by the QMS. Other practical examples of quota owners responsibilities towards fish stocks and the marine environment include: 25.1 The management of deepwater fisheries under a collaborative partnership between MPI and DWG on behalf of deepwater quota owners. The partnership is given effect through a Memorandum of Understanding, originally signed by the Chief Executive of the Ministry of Fisheries and the Chair of DWG in 2006, and revised and updated subsequently. As a result of the alignment of incentives, the government and industry have similar objectives and can operate collaboratively; and 25.2 The implementation by the deepwater industry, with government support, of a range of non-regulatory fisheries management measures including catch splitting arrangements for hoki, orange roughy and oreos and the setting aside of areas to protect juvenile hoki. 26 The incentives established by the QMS therefore not only help to achieve the purpose of the Fisheries Act they are also consistent with and contribute to achieving the purpose of the EEZ Act in

9 8 promoting the sustainable management of the natural resources of the EEZ. BENTHIC PROTECTION AREAS 27 Around 30% of New Zealand s EEZ is protected by a network of BPAs. The establishment of the BPA network was initiated by the deepwater fishing industry and implemented with the support of government. Regulations made under the Fisheries Act prohibit the use of bottom trawling and dredging as fishing methods in the 17 substantially pristine areas that comprise the BPA network. I have attached a map showing the BPA network and seamount closures throughout the EEZ (Attachment 1). CRP s proposed seabed mining site is located almost entirely within the Mid Chatham Rise BPA. Establishment of the BPAs 28 Deepwater fisheries operate primarily (but not exclusively) using the method of trawling, in which trawl nets routinely come into contact with the seafloor. In spite of the predominance of trawling as a fishing method, more than 90% of New Zealand s waters have never been contacted by bottom trawls, leaving almost all of the benthic environment in a largely pristine state. 5 Nevertheless, in the years leading up to the establishment of the BPAs the impacts of bottom trawling on the benthic environment in the EEZ became a source of contention between the fishing industry, government, and environmental NGOs. Underlying this tension was a lack of knowledge and understanding of the nature and diversity of New Zealand s benthic environment and uncertainties about the impact of bottom trawling on that environment. 29 In 2001, in a move considered premature by the fishing industry, the Government closed 18 areas in the EEZ to all trawling. The industry subsequently lodged judicial proceedings in the High Court challenging the imposition of the so-called seamount closures Against this background, DWG started work on the BPA initiative in The concept was conceived in light of New Zealand s international and domestic obligations for marine biodiversity protection, including obligations under UNCLOS, the CBD, the New Zealand Biodiversity Strategy (NZBS), and the purpose and 5 A recent analysis of bottom trawling for Tier 1 deepwater fisheries covering the period to found that 92.88% of the EEZ and territorial sea had not been trawled. Black, J & R Wood (2014). Analysis of New Zealand s Trawl Grounds for key middle depths and deepwater Tier 1 Fisheries. New Zealand Aquatic Environment and Biodiversity Report No 122. MPI January The proceedings were eventually withdrawn in July 2007 as a consequence of the implementation of the BPAs. (ORMC v Minister of Fisheries and Anor CIV Joint Memorandum of Counsel in relation to telephone conference, 5 July 2007 at 8.45pm.)

10 9 principles of the Fisheries Act. Deepwater quota owners were aware that these obligations would increasingly place pressure on the use of bottom trawling as a fishing method. DWG, on behalf of quota owners, decided to take decisive action to address uncertainties about the environmental impacts of bottom trawling and to enable the ongoing sustainable utilisation of deepwater fisheries. 31 DWG adopted a strategy of closing areas to avoid adverse effects of bottom trawling in preference to the alternative approaches of remedying or mitigating adverse effects. An avoidance strategy was considered to be more suited to the protection of deepwater habitats which have a relatively high prevalence of benthic biota that is fragile, slow growing and has long regeneration times. 32 By avoiding impacts of bottom trawling in the 30% of the EEZ contained in BPAs, quota owners sought to provide certainty as to their future access to deepwater fisheries in the remaining area of the EEZ. Certainty about future access, including the ongoing use of trawling as a fishing method, helps maintain the value of quota and ensures that the incentives for sustainable management provided by the QMS continue to operate as intended. 33 After developing an initial proposal for a network of BPAs, DWG sought input from the Ministry of Fisheries and the Department of Conservation. DWG then amended the proposal in response to a request from the Minister of Fisheries to ensure greater representation of depth and marine classification classes, and to ensure the BPAs encompassed sufficient latitudinal and longitudinal variation. The Ministry of Fisheries consulted the public on the revised proposal. Feedback was incorporated and further amendments made, including the addition to the network of three more BPAs In 2007 DWG and the Minister of Fisheries Hon. Jim Anderton signed an Accord Relating to Benthic Protection Areas within New Zealand s Exclusive Economic Zone. The Minister agreed to implement the BPAs by regulation and acknowledged that in relinquishing the opportunity to extend their bottom trawling activities into the BPAs, quota owners were seeking to achieve a reasonable level of long term certainty on the matters that are provided for in [the] Accord. 35 The Accord was implemented under the Fisheries (Benthic Protection Areas) Regulations 2007, which prohibit bottom trawling and dredging in the BPAs. 8 Additional controls and penalties ensure that there is an extremely low risk of any fishing gear touching the 7 Helson J, S Leslie, G Clement, R Wells and R Wood Private rights, public benefits: Industry-driven seabed protection. Marine Policy (2010) Fisheries (Benthic Protection Areas) Regulations 2007, regulations 7 & 8,

11 10 seabed. Mid-water trawling can occur in a BPA only if two government observers (paid for by industry) are onboard and if a specialised Electronic Net Monitoring System is used. 9 Trawling within 100m of the seabed is subject to a fine of up to $20,000 and trawling within 50m of the seabed is a serious offence attracting a fine of up to $100,000 and automatic forfeiture of the fishing vessel The BPAs were established under the Fisheries Act because no other legal mechanism existed (or exists today) to provide benthic protection in the EEZ. The fishing industry and the Government therefore had no option but to implement EEZ marine biodiversity protection measures under the Fisheries Act. Attributes of the BPA Network 37 The BPAs exhibit the standard attributes of a well-designed Marine Protected Areas (MPA) network and comply with all relevant international and domestic MPA design principles. The design of the network was informed by the NZBS objective to protect 10% of New Zealand s marine environment, and the Government s MPA Policy which aims to establish a network of MPAs that is comprehensive and representative of New Zealand s marine habitats and ecosystems The MPA Policy requires the selection of MPA locations using a Marine Environment Classification (MEC) system developed by the Ministry for the Environment. 12 The MEC provides a spatial framework for marine biodiversity management by subdividing the marine environment into units with similar environmental characteristics. It uses predominantly physical variables to describe eleven coastal and nine oceanic environment classes. The BPAs were designed to protect representative areas of the nine MEC oceanic classes. 39 The main selection criteria for BPAs were that they should: 39.1 Be large: the BPAs are large at an individual level (average size 66,800 km 2 ) and taken together they protect approximately 1.13 million km 2 of seabed. 13 At the time they were established, the BPAs were the largest single marine 9 10 Fisheries (Benthic Protection Areas) Regulations 2007, regulation 9. Fisheries (Benthic Protection Areas) Regulations 2007, regulations 12 and Marine Protected Areas Policy and Implementation Plan. Department of Conservation & Ministry of Fisheries, December Snelder, T, et al The New Zealand Marine Environment Classification. Ministry for the Environment, Wellington, New Zealand. 13 Helson J, S Leslie, G Clement, R Wells and R Wood Private rights, public benefits: Industry-driven seabed protection. Marine Policy (2010)

12 11 conservation initiative ever implemented within any nation s waters and constituted 24% of the global total area under marine protection; 39.2 Be relatively unfished: BPAs were placed in areas that were predominantly untouched and untrawled so as to protect pristine samples of marine biodiversity and to minimise impacts on current fishing activity; 39.3 Have simple boundaries: the BPAs have simple boundaries to promote a straightforward compliance regime for fishers and regulators; 39.4 Be broadly representative of the marine environment: the BPAs: (a) (b) are spread evenly by latitude and longitude around the EEZ; are representative of the MEC classes in that at least 10% of eight of the nine oceanic MEC classes is protected; 14 and (c) protect the benthic habitat in three depth classes m (11% protected); m (20% protected); and >1500m (38% protected) and four BPAs also protect areas shallower than 200m. 40 Although the focus of BPAs was on protecting the benthic environment generally, they also serve to protect Vulnerable Marine Ecosystems (VMEs) that is, ecosystems that are rare or unique, functionally significant, fragile, slow to recover and structurally complex. 15 This additional protection gives an indication of the biological value and significance of the areas within BPAs. Within the EEZ and when combined with the earlier seamount closures, the BPAs protect 28% of known underwater topographical features, 52% of known seamounts, and 88% of known active hydrothermal vents The biological significance of the BPAs is also indicated by the fact that they protect a portion of nine of the 15 biodiversity hotspots 14 The exception is Class 55 where only 3% is protected. However, about one third of class 55 is within the territorial sea and most of the bottom trawling is for coastal, rather than deepwater species. 15 FAO International Guidelines for the Management of Deep-sea Fisheries in the High Seas, FAO Ministry of Fisheries:

13 12 identified in a WWF assessment, with the result that 87% of WWF s biodiversity hotspots are either protected by BPAs or have never been impacted by trawl gear. 17 Attributes of the Mid Chatham Rise BPA 42 The Mid Chatham Rise BPA is vital in maintaining the representative nature of the BPA network. It covers an area of 8,732 km 2 that represents and protects east coast middle depths on the continental shelf in MEC oceanic class 63 and BOMEC habitat class The mix of habitat attributes in the Mid Chatham Rise BPA is not replicated elsewhere in the BPA network. 43 Although BPAs were selected to be representative of New Zealand s marine biodiversity (rather than to protect rare or special sites), the Mid Chatham Rise BPA is recognised as an area of high biodiversity values, as it includes: 43.1 Three known underwater topographical features; 43.2 Extensive sponge beds; and 43.3 Dispersed and dense thickets of stony corals (e.g., Goniocorella dumosa) and gorgonian corals, including in the areas where phosphorite nodules occur. Cold water coral thickets are: (a) (b) Identified by the FAO as Vulnerable Marine Ecosystems that require protection; 19 and Listed as sensitive environments in Schedule 6 of the Exclusive Economic Zone and Continental Shelf (Environmental Effects Permitted Activities) Regulations Value of the BPAs in providing marine biodiversity protection 44 As a signatory to the CBD, New Zealand is committed to establishing a network of MPAs to contribute to the CBD s target of protecting 10 percent of the global marine environment. In the absence of a comprehensive statutory marine biodiversity protection 17 WWF New Zealand published an independent scientific assessment of New Zealand s marine biodiversity based on the work of 22 marine scientists in an expert workshop (2004). See Helson et al. (2010) 18 In the period since the establishment of the BPAs, a new marine habitat classification regime known as the Benthic Optimised Marine Environment Classification (BOMEC) has been developed. The BOMEC builds on the MEC by including more biological information to correlate particular habitat types with fish and invertebrate species. 19 FAO International Guidelines for the Management of Deep-sea Fisheries in the High Seas, FAO 2009.

14 13 regime, the BPAs or other regulations made under the Fisheries Act remain the only mechanism for protecting benthic marine biodiversity in New Zealand s large EEZ. The New Zealand Government has officially recognised the importance of the BPAs in meeting New Zealand s obligations under the CBD The International Union for the Conservation of Nature (IUCN) and the United Nations Environment Programme (UNEP) both accept New Zealand s BPAs as part of the global network of MPAs. For example, in the 2010 IUCN publication Global Ocean Protection: Present Status and Future Possibilities New Zealand is identified as one of only 12 out of 190 states and territories with a marine component that has met the IUCN s 10% target for marine protection by virtue of the establishment of the BPAs. 21 The BPAs have also been heralded as world best practice for benthic protection The Crown acknowledges that the BPAs are of strategic significance for New Zealand s conservation obligations internationally. 23 The progress that New Zealand has made on protecting its own seabed through the BPAs has helped to enable the New Zealand Government to take a leading role in the negotiation of international agreements and guidelines for managing marine resources, including through participation in regional fisheries management organisations (RFMOs). 47 In New Zealand s domestic MPA planning context, the BPAs have been informally recognised by Conservation Minister Hon Nick Smith as part of our MPA network. 24 Their importance is also now appreciated by parties who originally expressed scepticism about the BPA initiative including, for example, in the blog of Green Party MP Gareth Hughes In recognition of the contribution that BPAs make to marine protection, in 2007 the Government agreed that the MPA Policy 20 New Zealand s Fourth National Report to the United Nations Convention on Biological Diversity. Reporting period May 2005 March Toropova, C., Meliane, I., Laffoley, D., Matthews, E. and Spalding, M. (eds.) (2010). Global Ocean Protection: Present Status and Future Possibilities. IUCN WCPA, UNEP-WCMC, TNC, UNU, WCS. 22 Spear, B. and Cannon, J. (2012). Benthic Protection Areas: Best Practices and Recommendations. Sustainable Fisheries Partnership Report. 23 The Crown submission to the EPA on the CRP proposal, page Refer to the Minister s comments at 2013 EDS conference pdfand to the Local Government and Environment Select Committee 25 There s one thing I agree with the deep sea fishing lobby on. Blog post. 20 May

15 14 would not be rolled out in the EEZ until 2013, while reserving the right to put additional protections in place in the meantime if required. Since that time, no new information has arisen to suggest that additional protection from fishing impacts is required, no additional measures have been put in place to avoid, remedy or mitigate any adverse effects of bottom trawling in the EEZ and, as a consequence, progression of the 2013 review of the BPAs has not been given high priority. 49 There has, however, been significant criticism of the fact that the BPAs protect the benthic environment from fishing, but allow other bottom-disturbing activities that may negate the benefits of the protection. For example, the Parliamentary Commissioner for the Environment in her December 2011 submission to the Local Government and Environment Committee on the EEZ Bill recommended that the scope of the BPAs be extended to control all activities with impacts on the benthic environment. 26 Value of BPAs in fisheries management 50 Part 2 of the Fisheries Act, among other matters, obliges fisheries managers and decision makers to: ensure sustainability by avoiding, remedying, or mitigating any adverse effects of fishing on the aquatic environment; and 50.2 take into account environmental principles relating to the maintenance of biological diversity and the protection of habitat of particular significance to fisheries management. 51 The BPAs play a major role in fulfilling these obligations in respect of the benthic impacts of trawling and dredging. MPI has prepared a National Fisheries Plan for Deepwater and Middle-depths Fisheries which has been formally approved by the Minister of Fisheries under section 11A of the Fisheries Act. The Fisheries Plan recognises that the BPAs, together with other spatial closures, have made significant progress in protecting the seabed from the impacts of deepwater fishing activity and that the spatial management approach will be retained in order to allow fishing to continue while providing appropriate protection to the benthic environment. The statutory approval of the Fisheries Plan provides it with status as an other marine management regime that must be taken into account by the EPA under EEZ Act section 59(2). 26 Dr Jan Wright Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill Submission to the Local Government and Environment Select Committee December 2011, page 14. Available at 27 Fisheries Act section 8 (purpose) and section 9 (environmental principles), both paraphrased

16 15 52 The seafood industry endorses and supports the approach taken in the Fisheries Plan. From the industry s perspective, the primary intent behind the establishment of the BPA network was to provide the certainty necessary for ongoing fishing industry operations. Certainty is vital for future fishing industry investment in deepwater fisheries, including investment in fisheries management. The BPAs have reduced tension with other fisheries stakeholders and enabled the industry to focus on positive initiatives to create value from deepwater fisheries. 53 Furthermore, the BPAs are an obvious and successful example of the operation of the incentives created by the QMS, as discussed earlier in this evidence. The recognition and maintenance of the integrity of the BPA network by successive governments sends positive signals to the seafood industry that industry initiatives to manage the environmental impacts of fishing activity are a valued and essential component of New Zealand s fisheries management regime. Value of BPAs for the reputation of New Zealand seafood 54 The environmental impact of fishing has increasingly become one of the critical determinants of trade access for the New Zealand seafood sector. The European Union, Australia and the USA have particularly high levels of regulation aimed at preventing environmentally unsustainable or illegally caught products entering their markets. Together, these markets make up about 38 percent of New Zealand s seafood exports New Zealand is a very small player in world fisheries markets, accounting for just 0.5 percent of world wild capture production in It is therefore vital that New Zealand seafood exporters are able to differentiate their product on the basis of quality and environmental sustainability. New Zealand s fisheries are consistently ranked among the world s most sustainable and this has become a point of difference in the marketing strategies of New Zealand seafood companies. 29 The QMS and the BPAs are an important part of these strategies as they help demonstrate environmental commitment and performance. Specific examples of company marketing initiatives based around the BPAs are provided in the evidence of Douglas Paulin of Sealord Group. Value of BPAs for independent third party certification 56 DWG s involvement in independent third party certification programmes such as that provided by the Marine Stewardship 28 Situation and Outlook for Primary Industries MPI 29 For example, Worm et al (2009). Rebuilding Global Fisheries Science 31 July 2009: Vol. 325 no pp and Alder et al (2010). Aggregate performance in managing marine ecosystems of 53 maritime countries. Marine Policy 34 (3):

17 16 Council (MSC) is driven primarily by our vision to be the bestmanaged deepwater fisheries in the world. In addition to providing a benchmark for sustainable fisheries management, programmes such as the MSC also ensure New Zealand s deepwater fisheries can reach high value markets. 57 Supermarket chains in the USA and Europe are publicly committing themselves to responsible sourcing policies for seafood products and are increasingly requesting or requiring independent third-party certification to confirm that fish are sourced legally from wellmanaged and sustainable fisheries. At present the MSC dominates the independent certification market although other sustainability programmes are also gaining ground. For example, the world s largest retailer Walmart (US) had a goal of procuring only MSC certified fish by More recently Walmart shifted this goal to 2015 and indicated it may accept seafood from other programmes that meet the Principles of Credible Sustainability developed by the Sustainability Consortium. 30 In Australia, the Coles supermarket chain is working with the MSC to provide more Coles Brand seafood from certified sustainable fisheries. 31 As part of its sustainable seafood policy, Coles has sought assurances that New Zealand squid, oreos and ling are sustainably managed. Some New Zealand marketers anticipate that ling will require MSC certification to secure ongoing acceptability in Australian supermarkets The strength of the MSC brand in markets targeted by New Zealand seafood exporters is demonstrated by the fact that over 10 percent of the annual global harvest of wild capture fisheries now comes from fisheries that are MSC certified or are in the full assessment process. 33 In 2012, across all countries surveyed by MSC, on average 34 percent of seafood consumers were purchasing MSC labelled products and 63 percent were intending to purchase more MSC products in the future, 34 demonstrating that a growing number of consumers worldwide are choosing to purchase seafood products from fisheries that are independently certified as being sustainably managed. 59 Although there are no published statistics, we have anecdotal evidence that the combination of New Zealand origin and MSC branding provides measurable market advantages. New Zealand hoki, which received MSC certification in 2001, was the first major Ross Tocker (Sealord), pers com. 24 March Marine Stewardship Council. Global Impacts Report 2013.

18 17 whitefish fishery in the world to be certified. This market advantage provides a premium of US$ 200 per tonne for hoki block. Once other major whitefish fisheries (especially Alaskan Pollock) gained certification, the financial premium became less important, although the reputational benefits ensured New Zealand s certified seafood products were always saleable. For example, during the global financial crisis in 2008, the Sealord-produced Argentinean hoki block did not sell for almost twelve months. In contrast, Sealord s MSC certified New Zealand hoki continued to sell at good prices right through this period. 35 Other examples of the market advantages of MSC certification, including the supply of New Zealand hoki to McDonalds, are provided in the evidence of Aleksandr Sundakov. 60 New Zealand s southern blue whiting, albacore troll, and Ross Sea toothfish fisheries have also been certified as sustainable by MSC. The hake and ling fisheries received MSC certification in September 2014 and the certification process is currently underway for our orange roughy and oreo fisheries. 61 The importance of habitat protection under the MSC standard is described in a recent letter from MSC Standards Director Dr. David Agnew (Attachment 2). Dr Agnew notes that: 36 Many fisheries approach the problem of avoiding serious and irreversible harm to habitats by restricting their activity to only one part of a habitat s distribution, and preserving other areas unfished. This may meet the MSC requirements for avoidance of serious and irreversible harm, because even though the areas impacted by the fishery may recover only slowly, other areas are preserved intact. It is important for such fisheries that the integrity of the protected area is maintained. If the habitats in that area are damaged for any reason (including through accidental fishing, illegal fishing, and other human activities such as mining) then the effective area of habitat not impacted will be smaller, and the test of serious and irreversible harm may no longer be met. [An independent Conformance Assessment Body] would then have to reassess the contribution of a protected area to the overall objective of maintenance of structure and function of the habitat type. In the situation you describe [i.e., CRP s Proposal], it seems unlikely that the habitat would recover (at least not within 1-2 decades) and therefore its value to the 35 Ross Tocker (Sealord), pers com. 24 March Dr David Agnew, letter to Tara Ross-Watt Managing Director OSC-NZ Limited, 1 August 2014 (emphasis added)

19 18 fishery as a buffer for its activities, and to preserve habitat structure and function, would be negated. [Emphasis added] 62 Although Dr Agnew s comments are generic, the history of MSC certification of the hoki fishery demonstrates the significance of BPAs and the protection of benthic habitat in the certification process. In the initial hoki certification in 2001, the assessors identified interactions between trawling and seabed habitats as an area needing further management consideration. 37 The establishment of the BPAs helped to address this concern and maintain the certification. 63 As a consequence of the evolving nature of the MSC standard, when the hoki fishery was recertified in 2012, the re-certification was subject to a condition. A condition is placed on a certification if a Performance Indicator (PI) fails to attain a score of at least 80. The assessors scored the hoki fishery at 75 against PI 2.4.1: The fishery does not cause serious or irreversible harm to habitat structure, considered on a regional or bioregional basis and function. The score was based on an Environmental Risk Assessment that considered that the risks of hoki fishery activity on BOMEC habitat classes 7, 8 and 9 could be major. 38 The resulting condition required the DWG to demonstrate that the fishery is highly unlikely to reduce habitat structure and function to a point where there would be serious or irreversible harm. 64 In order to address the condition, DWG undertook to define the nature and extent of the impacts of the hoki fishery on habitats focusing especially on BOMEC categories 7, 8 and 9. The Mid Chatham Rise BPA is the only formal protection of benthic habitats in BOMEC category 8 and is therefore directly relevant to the assessment. 65 In the first annual surveillance report following the recertification, the assessors considered the extent of habitats remaining outside the areas in which hoki is bottom trawled (including the Mid Chatham Rise BPA), the ongoing contraction of the bottom trawl footprint and the ecosystem function apparent from Chatham Rise trawl surveys, and concluded that the hoki fishery is highly unlikely to reduce habitat structure and function to a point where there would be serious or irreversible harm. The condition was therefore 37 Zealand-hoki.pdf 38 Ackroyd, J, J Pierre & A Punt. NZ Hoki Fisheries: 2nd Reassessment. Public Certification Report v5. Intertek Moody Marine. September 2012, page 7

20 19 closed out and the recertification of the hoki fishery became unconditional Independent reports on New Zealand fisheries more recently certified or currently in assessment for certification reinforce the importance of the BPAs in meeting MSC performance indicators for protection of endangered, threatened and protected (ETP) species such as corals (PIs 2.3.1, and 2.3.4) and for habitat protection (PIs 2.4.1, and 2.4.3). The pre-assessment report for orange roughy and the public comment draft assessments for hake and ling explicitly recognise the role of BPAs in providing protection for ETP species, benthic habitats, and the environment generally. 40 For example, in relation to PI 2.4.2, which requires that there is a strategy in place that is designed to ensure the fishery does not pose a risk of serious or irreversible harm to habitat types, the draft assessment for ling trawl and longline fisheries states that: 41 Spatial management is the most effective measure currently deployed for mitigating habitat impacts due to demersal trawling and the closure of areas such as seamounts and the Benthic Protection Areas, combined with their location, the use of VMS and the analysis of trawl tracks relative to BOMEC areas provides an objective basis that the partial strategy will work. [Emphasis added] 67 Over time, habitat protection requirements have assumed increasing importance in achieving the MSC standard and scoring guidelines have become far more prescriptive and detailed. This trend can be expected to continue. The submission to the EPA of MSC Board of Trustees member Eric Barratt on the Proposal notes that: 42 The latest version of the Guidance, which the MSC Board anticipates will be available in September 2014, is based on a revised standard. It requires the identification and protection of Vulnerable Marine Ecosystems (VMEs) which include cold water coral habitats in the Mid Chatham Rise BPA taking account of the concept of reversibility or recoverability. The MSC intends that impacted ecosystems, in the absence of fishing, should be able to recover 80-90% of their original structure, biodiversity and ecological function within 5 to 20 years. 39 Ackroyd, J & J Pierre. NZ Hoki Fishery Annual Surveillance Report. Intertek Moody Marine. February MRAG Americas Inc. 20 December MSC Pre-assessment New Zealand orange roughy and Intertek Fisheries Certification. May New Zealand Hake Fishery. Public comment draft report 41 Intertek Fisheries Certification. June New Zealand ling trawl and longline fishery. Public comment draft report (emphasis added) 42 Eric Barrett, Ryca Investments Ltd. Submission to the EPA on Chatham Rock Phosphate Ltd Proposed Mining Operation, 10 July 2014.

21 20 The MSC recognises that Marine Protected Areas and other spatial management approaches such as the BPAs are potentially valuable management tools to achieve this outcome. HOW THE PROPOSAL AFFECTS FISHERIES MANAGEMENT REGIMES Disruption of QMS incentives 68 Other evidence presented for DWG outlines how the proposed mining activity will have adverse effects on commercially-important fish species and on commercial fishing. The value of deepwater quota is entirely dependent on fisheries abundance, access to fishing grounds, and high environmental quality. Any activity that disrupts these factors has the potential to interfere with the successful operation of the QMS in ensuring sustainability. For example: 68.1 If quota owners initiatives to protect the marine environment by establishing BPAs are rendered ineffective by allowing seabed mining in a BPA, the incentive for quota owners to initiate further marine protection measures will be reduced; and 68.2 If quota owners non-regulatory measures to protect juvenile hoki on the Chatham Rise (including closed areas) are less effective as a result of the impacts of seabed mining, quota owners will be less confident of the value of implementing similar non-regulatory measures in future. 69 Importantly, QMS incentives may be disrupted not just by direct effects on fish stocks, the environment or spatial access, but also in relation to the perceived risk of future effects. For example, if the proposed mining activity has highly uncertain impacts on the future distribution and abundance of a fishstock, quota owners may be more inclined to harvest that stock to maximum allowable levels today (while they can be certain of obtaining benefit) and less inclined to invest in the future sustainability of the stock or of the wider marine environment as they may never reap the benefits of that investment. 70 The high level of uncertainty with respect to impacts of the proposed mining activity on the environment of the Chatham Rise and on commercially significant fish species means that there is a high probability that mining will interfere with the incentives at the heart of the QMS. Adverse effects of mining in a BPA 71 CRP does not dispute the fact that the environmental effects of their proposed mining activities on the benthic habitat within the BPA are

22 21 so extensive and so significant that they are unable to be avoided, remedied or mitigated. 43 Allowing mining to proceed in the Mid Chatham Rise BPA would therefore authorise a new activity that is fundamentally incompatible with the protection provided by the BPA. Although the Mid Chatham Rise BPA is just one of 17 BPAs in the network, it occupies a unique and irreplaceable position and is critical in ensuring the representativeness of the network. This means that if the Mid Chatham Rise BPA is damaged, the integrity of the entire BPA network will be put at risk with a number of consequences for the fishing industry and for New Zealand. 72 First, allowing seabed mining in the Mid Chatham Rise BPA will jeopardise the status of the Mid Chatham Rise BPA as an internationally-recognised MPA which, in turn, may negatively influence international opinion about the effectiveness of the BPA network as a marine biodiversity protection measure. 73 The IUCN currently categorises the BPAs as Category VI Protected Areas (i.e. protected area with sustainable use of natural resource). IUCN Guidelines provide that mining should only be permitted in MPAs when it is compatible with the primary objectives of the MPA, and for Category VI MPAs: 44 careful consideration needs to be given as to whether activities such as seabed mining and some types of commercial fishing practices (e.g. dredge trawling) should be permitted in regard to their inherent unsustainability, and their consistence with the objectives of this category. 74 DWG considers that BPAs could be eligible for IUCN Category IV Habitat Management Area (conservation through management intervention). If this categorisation were applied, IUCN s World Commission on Protected Areas (WCPA) advises that mining should never be permitted Irrespective of whether the BPAs are considered to be Category VI or IV MPAs, they were established specifically to protect the benthic environment. Allowing extensive seabed mining with irreversible impacts on the benthic environment in the BPA is clearly incompatible with that objective. As a consequence, New Zealand s strong commitment to meeting its international obligations under UNCLOS and the CBD are weakened. This will impact negatively on New Zealand s international environmental credentials and 43 EIA page IUCN Guidelines for applying the IUCN protected area management categories to marine protected areas. Best practice protected area guidelines series No WCPA. Guidelines for MPAs. Best practice protected area guidelines series No 3.

23 22 perceived commitment to marine biodiversity protection. It may also weaken the New Zealand government s standing when negotiating international agreements and guidelines relevant to management of marine resources. 76 Secondly, if the integrity of the BPA network is damaged by nonfishing activities, the BPAs contribution to meeting the industry s and government s obligations under the Fisheries Act to avoid adverse effects of fishing on the environment will be weakened. This risk is acknowledged in the Crown s submission to the EPA: 46 Large scale mining within the BPAs has the potential to undermine their purpose of mitigating impacts on the benthic environment from deepwater bottom fishing activities and would be inconsistent with the fishing industry and decision-makers intent in establishing the BPA network. 77 Although DWG considers that the BPA network goes well beyond what is required under the Fisheries Act in order to successfully avoid adverse effects on the benthic environment, public and political perception about the integrity of the protection provided by BPAs remains a real issue. Deepwater quota owners rely on the ongoing use of trawling as an environmentally and socially viable fishing method and are therefore keen to ensure that the BPAs not only are effective in avoiding adverse effects of fishing, but are also seen to be effective. If not, the industry and government will inevitably face demands for additional areas of the EEZ to be set aside as no-fishing areas, with consequent uncertainty for access to fishing grounds and further cumulative displacement of existing commercial fishing activity. 78 The third and most significant impact is the risk that consumer perceptions of the sustainability of New Zealand seafood will be adversely affected by the existence of seabed mining in the BPA, with consequences for international market access and premium pricing for New Zealand s seafood exports. As discussed above, the BPA network is instrumental in deepwater fisheries obtaining independent third party certification which is increasingly essential for access to valuable international markets. If the MSC s independent assessors lose confidence in the ability of the BPA network to protect the benthic environment, New Zealand s deepwater fisheries will struggle to achieve and maintain environmental certification. 79 CRP dismisses the fishing industry s concerns that access to international markets will be damaged as a result of mining in the BPAs on the basis that the Economic Assessment considers that 46 Crown submission page 14

24 23 there is little likelihood of significant adverse impacts in terms of ongoing demand for New Zealand fish. 47 However, CRP s Economic Assessment failed to consider the market requirement for third party certification and the significance of the BPAs in obtaining such certification. This matter is considered further in the evidence of Aleksandr Sundakov. 80 Together, these impacts will result in additional costs for deepwater quota owners, including as a result of: 80.1 uncertainty as regards to future spatial access to fisheries; 80.2 increased effort spent defending bottom trawling domestically and internationally; 80.3 additional effort and cost of obtaining and retaining third party certification; 80.4 loss of market access and value if third party certification is lost; 80.5 increased marketing costs to redress consumer perceptions regarding New Zealand s environmental credentials; and 80.6 loss of quota value as a consequence of above costs. Avoiding, remedying or mitigating adverse effects on BPAs 81 In my opinion the adverse effects of the proposed seabed mining on both the Mid Chatham Rise BPA and the integrity of the BPA network cannot be avoided, remedied or mitigated through the imposition of conditions or through the adoption of an adaptive management approach. As noted already in this evidence, it is undisputed that the physical and biological impact on the benthic environment of the BPA cannot be avoided, remedied or mitigated. 82 CRP s EIA proposes that permanent damage to the Mid Chatham Rise BPA is acceptable because alternative protection regimes (such as CRP s marine spatial planning exercise ) could provide more effective protection than the BPA network. For example, Raymond Wood s evidence for CRP states that, in his opinion, the BPAs: successfully achieved the simplistic goals set at the time they were created [but] that does not mean they are an optimum spatial planning solution for maximising the environmental, economic and social values of New Zealand s maritime territory 48 and the EIA 47 EIA page Statement of Evidence of Raymond Allen Wood for Chatham Rock Phosphate Ltd, 28 August Paragraph 111.

25 24 claims that alternative reserve management schemes or spatial planning approaches can deliver substantially greater conservation benefits than the BPAs have. 83 I agree that refinements can continue to be made to the BPA network. However, given the available statutory tools and the level of information about benthic biodiversity in the EEZ, the BPA network still represents the best (and indeed the only) protection of marine biodiversity in New Zealand s EEZ at the present time. Furthermore, the BPA network is a direct expression of quota owners existing interests in the EEZ. The fact that enhanced or alternative regimes may be available in future is not a relevant consideration when assessing the current impacts of CRP s proposal on other marine management regimes or on the existing interests of deepwater quota owners. 84 From the earliest stages in the development of CRP s plans, DWG advised CRP of the need to identify equivalent areas in the EEZ that could be used to compensate for or offset the impacts of mining in the Mid Chatham Rise BPA. CRP has not identified or protected any equivalent areas that would meet the fishing industry s needs. 85 I also doubt that CRP s marine spatial planning exercise provides a more robust basis for identification of protected areas than the current BPAs because: 85.1 I dispute the statement in Mr Wood s evidence that the mining exclusion zones in the proposed marine consent area are products of the application of spatial planning tools to high quality data. 49 Nearly all of the inputs to the Zonation tool are derived from models, not field data, and the models have not been ground-truthed; 85.2 As a result, there is no certainty that the identified mining exclusion areas do actually contain sensitive marine habitats or are fully representative of Chatham Rise benthic biodiversity. The authors of the report on spatial management options for the central crest of the Chatham Rise recommend caution, noting that: Wherever management decisions are dependent upon the validity of these models, it will be important to gain further confidence in their outputs by ground-truthing areas where there may be doubts about the reliability of the predictions (e.g., the habitat suitability maps for the communities/ sensitive 49 Statement of Evidence of Raymond Allen Wood for Chatham Rock Phosphate Ltd, 28 August Paragraph 114 and paragraph 150.

26 25 environments dominated by the protected deepwater coral Goniocorella dumosa). 50 The relative lack of detailed data on the benthic environment at the fine spatial scale of CRP s proposed mining exclusion areas is one reason why the BPAs were designed as simple, large areas; 85.3 The planning exercise is partial in scope as the Zonation tool has been applied to balance predicted benthic protection benefits against the economic benefits of mining, while ignoring all costs to fishing Contrary to Mr Wood s evidence, the identified areas therefore cannot possibly minimise the impact on predicted economic value or reflect multidimensional values and costs. 51 Spatial planning scenarios that take account of the cost to fishing were rejected by CRP because they resulted in the location of mining exclusion areas in areas that CRP intends to mine, as indicated in the report on spatial management options: 52 [The] result of including both resource use costs [i.e., mining and fishing] effectively returned the model solution to one based on biodiversity alone and reflects a scenario solution based more on accommodating a fishing cost than a mining cost when identifying priority areas for biodiversity protection. Such a solution does not satisfy the project objective (i.e., to identify priority areas for biodiversity protection while primarily minimising the cost to mining) and it was rejected from further consideration. [Emphasis added] 86 The value of the proposed mining exclusion areas is further compromised by: 86.1 The late withdrawal of PP55967 from CRP s application area, as six of the proposed 15 mining exclusion areas were in PP55967 and these sites can therefore no longer be considered as part of CRP s mitigation package; and 86.2 The design of the exclusion areas as multiple, small, dispersed sites, which means that edge effects will 50 EIA, Appendix 32. Rowden et al (2014). Developing spatial management options for the central crest of the Chatham Rise, page Statement of Evidence of Raymond Allen Wood for Chatham Rock Phosphate Ltd, 28 August Paragraph EIA, Appendix 32. Rowden et al (2014). Developing spatial management options for the central crest of the Chatham Rise. Page 30. Emphasis added.

27 26 compromise the protection provided in the areas and hinder effective monitoring and enforcement. In particular, I understand it is likely that sediment from mining in blocks adjacent to the exclusion areas will adversely affect the benthic environment within the exclusion areas. 87 There is also a fundamental flaw in the logic of CRP s proposed approach to the mining exclusion areas. CRP s stated rationale for applying for a marine consent area that is significantly larger than mining permit MP55549 is related to the need to set aside mining exclusion areas outside of the initial five-year mining area. But in applying for a significantly larger area, CRP has significantly increased the potential benthic footprint of its proposed mining activities rather than reducing it. 88 Finally, I dispute the statement in Mr Wood s evidence that in opposing mining in the BPA, DWG is [shifting] the cost of mitigation of adverse effects of fishing to the mining industry and other potential users. 53 DWG does not oppose extractive uses of the BPA that are compatible with the intent and purpose of the BPAs in protecting representative benthic areas. For this reason long-lining and mid-water trawling are able to occur in BPAs, and DWG would be open to considering the acceptability of more sophisticated mining technologies that are able to cleanly extract valuable mineral resources without impacting on the benthic environment. IMPLICATIONS FOR DEEPWATER QUOTA OWNERS EXISTING INTERESTS IN THE BPA 89 The Mid Chatham Rise BPA is an important expression of deepwater quota owners existing interests in the Chatham Rise. When considering effects on existing interests, decision makers are required to have regard to a number of matters set out in EEZ Act section With respect to the first of these matters, the area that the activity would have in common with an existing interest, the consent application area occupies 59% of the Mid Chatham Rise BPA (according to CRP) or 64% of the BPA (according to the Crown submission). Following the withdrawal of PP55967 from the application area, the consent application area now lies almost entirely within the Mid Chatham Rise BPA. 91 Approximately 96% of CRP s mining permit area lies within the BPA. 54 Therefore, for the first five years of the proposed activity, 53 Statement of Evidence of Raymond Allen Wood for Chatham Rock Phosphate Ltd, 28 August Paragraph EIA page 16

28 27 the mining blocks and surrounding impacted areas will overlap entirely with the BPA. Beyond the first five years, assuming that annual production targets and consent duration remain the same, the removal of PP55967 from the application area has the effect of increasing both the benthic footprint and the intensity of mining impacts within the BPA. Instead of the 1,050 km 2 that would be mined over 35 years being spread across an area of over 10,000 km 2, under the revised proposal almost the entire 1,050 km 2 of mined seabed would be located within the BPA. 92 Decision makers must also have regard to the degree of exclusion that each activity requires. The evidence presented above demonstrates that the BPA and the proposed mining activity are mutually exclusive: if the proposed mining activity proceeds, the purpose and effect of the BPA will be undermined and invalidated. 93 Finally, decision makers must consider whether the existing interest can be carried out elsewhere. The Mid Chatham Rise BPA protects MEC oceanic class 63 and BOMEC class 8. Only 11% of MEC class 63 and 6.1% of BOMEC class 8 is protected in BPAs. 55 These levels of protection are low in comparison with other habitat classes. The comparatively low level of representation of the habitat types in the BPA network reflects the relative scarcity of areas within these classes that are substantially unmodified. MEC class 63 is represented in the Mid Chatham Rise, East Chatham Rise, Challenger North and part of Challenger South BPAs, but of these, the Mid Chatham Rise BPA has a unique position because of its depth range and longitudinal location off the eastern coast of New Zealand. 94 In summary, the Mid Chatham Rise BPA is not directly replicated elsewhere in the BPA network and there are no obvious replacement locations should the integrity of the BPA be damaged. CONCLUSIONS 95 The Proposal has the potential to disrupt the incentives that underpin the successful operation of the QMS. Incentives for quota owners to safeguard fish stocks and the environment of the Chatham Rise may be weakened as a consequence of the direct environmental effects of the Proposal, the adverse effects on the integrity of the BPA network, and the high level of uncertainty associated with the Proposal. 96 Seabed mining of the nature and scale envisaged in the Proposal is fundamentally incompatible with the purpose of the Mid Chatham Rise BPA. If seabed mining is allowed to proceed inside the BPA, 55 Helson et al (2010) and Black, J & R Wood (2014).

29 28 the integrity of the BPA network will be jeopardised. The main consequences will be that: 96.1 New Zealand s strong commitment to meeting its international obligations for marine biodiversity protection under the CBD and UNCLOS will be weakened. This will impact negatively on New Zealand s environmental credentials and compromise New Zealand s ability to exercise international leadership in international environmental and fisheries management negotiations; 96.2 The fishing industry will face considerable cost and uncertainty associated with increased risk of further fisheries closures and cumulative effects of exclusion from valuable deepwater and middle depths fishing grounds; 96.3 New Zealand s fisheries will be less likely to be able to obtain or maintain independent third party sustainability certification such as that provided by the MSC. In the absence of environmental certification, access to premium seafood markets in the EU, Australia and the USA will be lost, and the value of New Zealand s seafood exports will be reduced; and 96.4 As a result of the above impacts, deepwater quota owners will face increased costs and quota value may decline. 97 The adverse effects of the Proposal on QMS incentives, the Mid Chatham Rise BPA and the BPA network cannot be avoided, remedied or mitigated through the imposition of conditions. In particular, the mining exclusion areas identified by CRP are not a viable alternative to the Mid Chatham Rise BPA and do not serve to mitigate or offset the damage done to the BPA. 98 The Mid Chatham Rise BPA is an important expression of deepwater quota owners existing interests in the Chatham Rise. There is a significant spatial overlap between the BPA and the Proposal and the two activities are mutually exclusive. The uniqueness of the Mid Chatham Rise BPA within the BPA network and the lack of alternative suitable locations mean that the existing interest cannot be exercised elsewhere. Dated: 12 September 2014 Ian Thomas (George) Clement

30 29 ATTACHMENT 1 Map of New Zealand EEZ showing BPAs and seamount closures.

31 30 ATTACHMENT 2 Letter from Marine Stewardship Council

32 Marine Stewardship Council Marine House 1 Snow Hill London EC1A 2DH United Kingdom Tel: +44 (0) Fax: +44 (0) Tara Ross-Watt Managing Director OSC-NZ Limited 2A Murchison Street Island Bay Wellington 6023 New Zealand Sent by Date: Subject: MSC statement on Principle 2 requirements on habitat impacts Dear Tara, Thank you for your queries about the MSC Fisheries Standard and how habitat impacts are considered in Principle 2 of the Standard. The Marine Stewardship Council is an independent, international non-governmental charity that has developed and maintains a standard for the certification of sustainable fisheries. Currently some 240 fisheries are certified by third party, independent Conformance Assessment Bodies (CABs) to have satisfied the requirements of the Standard, and products from these fisheries are eligible to carry the MSC logo. The activity and performance of CABs is itself scrutinised and accredited by an independent accreditation body, Accreditation Services International (ASI). In addition to conforming to the MSC standard and Certification Requirements, CAB operations must conform to ISO 17065, and ASI operations must conform to ISO MSC standards and operations are set in conformance with the guidelines for international best practice in standard setting and marine and freshwater fisheries ecolabelling published by the ISEAL Alliance and FAO respectively. MSC the best environmental choice In seafood Company Reg Limited by guarantee. Registered Office: 1-3 Snow Hill, London, EC1A 2DH Registered Charity No