Business compliance cost statement

There are two key sources of business compliance costs in the proposals for the Bill:

• Rules excluding various activities and uses from reserves, in particular extraction; and
• The establishment of a concessions system for non-extractive commercial operators (e.g. tourism operators) in order to manage their environmental effects.

The proposed rules excluding various activities maintain the approaches in the current MRA in the Territorial Sea. Commercial fishing is excluded from marine reserves under both the current and proposed new Act. It is proposed that prospecting, exploration or mining in marine reserves be restricted to low impact activities, which maintains the current interface between marine reserves and the Crown Minerals Act 1991 (section 61 (1A)).

Extending the jurisdictional scope of the MRA to include the EEZ would affect different individuals within the commercial fishing and minerals sectors. However, it is likely that a limited number of reserves will be established each year, whether in the EEZ or Territorial Sea or both. In either case, similar sectors are affected so the proposed rules excluding various activities in a reserve would be neutral as to their business compliance costs.

The Bill will not affect shipping, as it will explicitly preserve rights of transit passage in international straits, innocent passage in the Territorial Sea and freedom of navigation in the EEZ

Parties likely to be affected

Commercial fishers and petroleum and minerals interests in the Territorial Sea and EEZ, and non-extractive commercial operators in the Territorial Sea.

Estimated compliance costs of the proposal

The real administrative costs of a concession system are recovered from the operator—these include the administrative costs of processing an application (one-off, likely to be $600–1500), annual administration costs (approximately $350), and annual administrative costs of monitoring and enforcing standards. In addition, the concession system charges a concession fee. For other concessions administered by DOC, these fees can be 7.5% of the concessionaire’s gross operating costs related to the activity in the area, or a charge per person of $3 per half day. However, the fees are negotiated between DOC and the operator, and depend on the market value of the opportunity granted to the concessionaire and the environmental impacts of the activity. They may be reduced or waived in situations that involve public good, core educational or non-commercial activities, or clear benefits to management.

The effects on fishers and mining interests of establishing a marine reserve will depend on the facts of each reserve. For example, possible costs to individual fishers would be different in each case, and might include costs related to identifying reserve boundaries (reducing), costs of travelling to new sites (variable), and effects on take (variable).

Longer term implications of the compliance costs

Long term effects on fishers will depend on whether any long-term benefits to local fishing arise from the reserve, and the overall management of that fishery in the quota management area.

Level of confidence of compliance costs estimates

The costs to operators for concessions are based on DOC’s experience with concessions elsewhere. They may vary between operators.

Compliance costs for fishers and mining interests are unclear as they can only be calculated on a case-by-case basis.

Key compliance cost issues identified in consultation

There were few submissions from non-extractive commercial operators. However the Tourism Industry Association of NZ supported concessions and did not raise any compliance cost issues.

Commercial fishers’ submissions (e.g. from SeaFIC) identified the potential compliance costs noted under the estimated compliance costs above. SeaFIC also identified compensation as a major concern of commercial fishers.

Overlapping compliance requirements

Discharging contaminants or erecting structures in a marine reserve would require a resource consent from the local authority under the Resource Management Act (unless already permitted through a plan), as well as authorisation from DOC under the MRA. Structures may also require a building consent under the Building Act 1991. The Bill does not change these requirements.

Steps taken to minimise compliance costs

For concessions, a two-year phase-in is proposed to give time for existing operators to establish contracts. It is proposed that DOC administer all concessions (rather than committees or administering bodies), to provide a consistent process and minimises costs to operators that require concessions for more than one type of DOC administered area or activity.

The process of establishing reserves includes an open public consultation process. The Minister’s decision-making process would prevent a reserve being established where it would have an undue adverse effect (that is, when its benefits to the public interest are outweighed by an adverse effect on various uses including, among others, commercial fishing, interests in land, and economic use and development). These processes will allow the interests of property right holders to be fully identified and considered, and provides a safeguard against applications causing unwarranted interference.

The review considered a system that would allow limited fishing in zones within a marine reserve. However it was estimated that this had a high risk of not meeting the biodiversity conservation purpose of the Act, would cost approximately 50% more to mark, monitor and enforce than no-take reserves, and would potentially increase the difficulty and cost of enforcing no-take reserves.

Mining, exploration and prospecting in a reserve for minerals (including petroleum) in the territorial sea, and petroleum in the EEZ, will be managed through the Crown Minerals Act 1991, and will not require additional authorisation under the Marine Reserves Act.

Consultation

DOC produced a discussion document and held 16 hui and 16 public meetings as part of the Marine Reserves Act review. A total of 259 public submissions were received on the discussion document from: the Maritime Safety Authority of NZ and the Historic Places Trust; Local Government NZ and 15 local authorities; the NZ Conservation Authority and 12 Conservation Boards; 21 Iwi, hapu, runanga, and marae committees (through 14 submissions), and seven other Maori organisations; three marine reserve committees; 51 environmental, advocacy and other NGOs; 19 commercial and recreational fishing and aquaculture groups; three research groups; and 127 individual submissions.

The Ministry for Economic Development (including the Business Compliance Cost Unit), Treasury, Ministry of Fisheries, Ministry for the Environment, and Te Puni Kokiri were consulted on this regulatory impact and compliance cost statement.

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