CEO Direct Channel podcast to industry #11

Hi there – apologies that I haven’t kept the podcasts going over recent times, I’ve been somewhat immersed in things – not that it’s any excuse it’s just that it’s interrupted my free flow of thinking.

But I’m back – and I’m going to introduce a new segment today where you can also send me questions – any questions – and I’ll answer them as best as I can.  The first one will come at the very end of this podcast and it’s on the subject of fee relief.

But quickly, before we start on other things – I noticed earlier this week in a media report that a shed-builder in Esperance was sentenced to over two years jail following the tragic death of an employee some time back.  His company was fined a further $600,000.  This is another reminder of the critical importance of safety in our workplaces – as employers we have a responsibility to make sure that our crew members get home every night in one piece.

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And we shouldn’t need the overhanging threat of punitive measures to stimulate some action, some advance thought of the potential impact on affected families should be sufficient.  I’ve seen the photo of the poor guy – the employee who died – with his wife and three beautiful young children – and that image won’t go away in a hurry.

So there’s no getting away from the fact that the laws are a reality and this particular employer received a prison sentence of two years and two months – and that’s under the OLD laws – the newer ones regarding industrial manslaughter will be even stricter – with up to 20 years jail and $10m in fines.

Meanwhile, what I generally want to talk about today is marine parks – it’s not so much about the technicalities but instead it’s more about how sometimes well-meaning environmental public policy has the capacity to skew their desired environmental outcomes and impact on our broader fishing industry.

So let’s first place ourselves inside the heads of government decision-makers or the broader general public.

Why do we want a marine park?  Well because it sounds good, that’s why – we’ve seen David Attenborough documentaries and loved them – and through them, we’ve almost first-hand seen gorillas and white rhinos teetering on the very brink of extinction.

People would like to think that there are some places on earth that remain completely untouched forever – so that they can sleep comfortably at night.

However the reality of course is that no area on earth is untouched and has escaped the influences of humans or climate change or whatever.  But their feeling nevertheless is that we should lock up some places forever – so that we know that if something ever goes wrong somewhere else, we can always come back to gaze at pristine nature in perfection.

While on the surface that’s an understandable aspiration – and that’s the narrative that underpins marine parks – it’s not necessarily so when you probe the logic.

Firstly, here’s an interesting statistic: each year, 22,000 tonnes of seafood are imported from overseas into WA.

So from now onwards, every kilogram of fish that is locked up in a local marine park exclusion area is another kilogram that will have to be imported into WA to meet market demand.  And where did that imported fish come from?  Was it caught using acceptable methods?  Was the marine environment damaged?  Was the crew working under acceptable workplace health and safety conditions and were they paid award rates – or was it slave labour?

We simply don’t know the answers to these questions, but if the environmental activists who peddle all of the film vision showing northern hemisphere over-fishing believe what they’re saying,  then surely they should be kicking up a storm and defending WAs fishing industry – because they’re rewarding overseas fishermen for doing the wrong thing while at the same time penalising WAs fishermen for doing the right thing – and this is all done under the supposed cover of environmental protection.

Right here we already have strictly managed fisheries, we are subject to rigorous sustainability restrictions (well, that’s if you’re a commercial fisherman), we have some of the best fishery scientists in the world, and there is nobody – nobody – who wants cleaner waters, healthier habitats and sustainable fisheries management than us – the commercial fishermen – because we don’t have a future unless the marine environment is amazingly healthy.

By definition, our fishery is a truly renewable resource if it is managed sustainably.  In fact, if we only place a light touch across the aquatic estate – as we do – it can help to maintain a healthier balance.

I’ll give you an example:  let’s say we have a vegetable garden with a wide diversity of perennial plants and we regularly carefully harvest a sustainable amount.  We get a nutritious feed, the garden is kept in good condition, and nothing is ever placed at threat.

But then we introduce a new rule where we can’t touch half the area and must leave it to ‘return to nature’, and then to get the same yield as before we start over-harvesting the rest.  We end up with one half which goes jungle and becomes over-run with weeds and pests – while the sustainability of the other half comes under threat.

It’s certainly not the perfect example, but it does illuminate the concept that once you start introducing certain controls in one place, you can actually cause undesirable unintended knock-on consequences elsewhere.

For instance, we’ve already seen some clear examples of the changes in the balance of nature in WA.

Sharks are everywhere.  I mean everywhere, they’re out of control in many places, especially north of Geraldton.  As a recreational you’re lucky to get a demersal to the surface without it getting chomped off.  And if you do get it to the boat and then throw it back (because you like to upsize), it will swim away awkwardly after suffering its barotrauma and get gobbled up anyway.

This is a sign that the environment is out of balance – trying to keep the well-meaning greenies happy has led to all sorts of imbalances – and the proliferation of sharks is but one indication of this.  Why are the sharks out of control?  Because of an accumulation of protective management decisions made in the past that didn’t look at the bigger picture.

Look at the humpback whales – personally I love them and the general public also feels the same way – but did you know that right now, scientists have estimated there have never been more whales in WA waters than there are right now – that is for hundreds of years at least.  This is a sign of already pristine waters I would have thought, not of a marine environment screaming out for more fishing exclusion zones.

The humpies are swimming north and south each year in the warm currents off the WA west coast and they are thriving.  Not only that, but on current settings their population will double every 6-7 years.  So now there are about 35,000 – in 2027 there will be 70,000 – in 2034 there will be 140,000 – and on it goes.

But right here and right now, being a bit more assertive than others, they are already displacing other whale species like blue whales from these waters – pushing them further out to sea – and keeping them away from the food sources in the warmer current.

But what happens when the krill numbers get low?  Are we going to have whale watching of sick and emaciated creatures who can’t get enough nutrients to survive?

Who knows, maybe one day we will see the issue of the explosion in shark numbers and the explosion in whale numbers meeting head on.  That’d be an interesting thing to see.

My point is that there’s got to be a balance.

Nature will eventually find a balance but it won’t go back to the past – it will always find some sort of new equilibrium.

And this is my point – locking up areas in marine parks will not protect things in their original condition – new dynamics will be generated in the system because of the changes made elsewhere.

I went to Ningaloo before it was a marine park and it was sensational – but if you go there now and it’s not a shadow of its former self – the influx of marine park tourism has seriously diminished the environmental and ecological values.

Marine parks are supposed to be about protection, but instead they can draw the wrong crowds and therefore the wrong outcomes.

Look I’m going to do another podcast shortly on the south coast marine park and wade into the lessons learned from Buccaneer and Ngari Capes – so we can go into plenty more detail then – but the initial point that I’m currently arguing with government is that under current settings on the south coast we have amazing pristine waters – so why would you want to change this?

OK I said earlier that from now on I’m going to take questions and I will and and I’ll always answer them as soon as I can – if there’s too many to slip in at the end of a podcast then I’ll do a special Q&A podcast of its own.  All questions will be answered, but please be gentle with me!

So the first one today is from Craig, he asks:  what’s going on with fee waivers and deferrals – we’re struggling and need a bit of relief for the coming year?

OK that’s a fair question and firstly I do apologise – while we have been wrestling this issue with government for a while, we haven’t yet got the desired outcomes – so ideally I should have communicated before now as to where we are and where we aren’t.

Let’s go back to the start of COVID.  WAFIC negotiated with DPIRD to get a waiver of licence and pen fees – well it wasn’t a complete waiver, the price dropped to a dollar.

Then there was a 12 month deferral of access fees – that is you didn’t pay them then but the liability would come up later – which is now.

Both of those actions – a waiver and a deferral – were specifically to address the impacts of the COVID outbreak – they were for one year only and not related to the later impacts of the China market.  That DPIRD says is a different issue to be addressed separately.

Along the way, some people got a bit confused as to what’s a waiver and what’s not – and whether a deferral should have been a waiver – and that’s fair enough.

Firstly I think it’s worth conceding that the arrangements at the time were actually pretty helpful. I can’t take any credit for this, it was before my time – but under the rushed circumstances they were positive.   Firstly DPIRD made some quick decisions, relief came to fishermen at a time of great uncertainty, and boats stayed on the water.  However the process to get things back to normal was never clearly defined – and that’s what is confusing things now.

Instead of a deferral, some fisheries have now asked for a complete waiver of past access fees.  We have represented this to DPIRD and they have gone to Treasury and got a complete knockback.

Their view is that if a fishery is suffering dire financial circumstances, then they will consider them on a zone by zone basis – but we will need to provide full evidence of this in dollar terms, that is, impacts on GVP.   But we don’t get those numbers until mid-year.

I’d like to think that the Roe abalone divers who have been on JobKeeper for the past year and haven’t even dived at all would pass this test – how can they pay an access fee for a resource that they didn’t even access?    I’d hope that they can be treated as a special case.

But this hasn’t even yet been resolved – the Treasury view is that some friendly pay back arrangements can be negotiated to repay the deferred fees and that a further deferral of new fees is even potentially possible in exceptional circumstances – but they certainly don’t want to consider waivers.

The position of government was reinforced when the rock lobster industry proposed a new fee instalment schedule for future seasons – from July 2021 onwards – so this made it harder for us to be arguing for a full waiver of new season licences and fees when the biggest part of our industry (which is suffering some major trade impacts that other sectors aren’t) had already agreed to a different structured arrangement.

DPIRD did originally agree to set up a working group in July to review all of the fees, deferrals and waivers.  We strongly argued that this was too late and wanted it brought forward to March-April.  But they are insistent – and won’t change – they say that they will only talk once the GVP figures become available – and the earliest this will happen is in July.

So that’s the situation.  The access fees were deferred for one year and government says they have to be paid back – but there is flexibility in payback arrangements, it can be done by instalments.  The licence and pen fees were waived for one year but are now being reintroduced for the new year.  If a fishery isn’t in the position to pay because of COVID or China, then we can mount a case for a waiver but the reality is we can’t get our opportunity until July – and claims of hardship for a particular fishery will have to be supported by GVP numbers.

And the further reality is that Treasury is a hard nut to crack, so while I can assure you that we’ll be trying our very best I certainly don’t expect that it will be easy to win any concessions – it’s going to be tough.

So that’s about it for now.

I’ll be in touch soon.