Govt ignored foreign fishing boats - report

The Government knew of the slave-like conditions on foreign fishing boats here for eight years but was unwilling to do anything, an official investigator says.

And now that it is forcing an end to the use of foreign charter vessels (FCVs) a government agency has warned that the state may have to pay Maori iwi upwards of $300 million in compensation for losing their access to ‘'slave' fishing boats.

Government action began after after media and the University of Auckland Business School last year began publishing findings over FCVs using low paid, or non-paid, mainly Indonesian, Vietnamese and Filipino labour.

In June this year, Department of Labour (DoL) fraud branch manager Terry Pawson reviewed the evidence and said it could have been stopped long ago.

“The DoL appears to have been aware of at least some allegations of mistreatment of crews on FCVs since 2004, but have been unwilling or unable to fully resolve the problems in the industry,” Pawson says in a paper obtained by the Green Party under the Official Information Act.

He demanded “urgent consideration” of prosecutions for breaches of minimum wage provisions but little has been done.

Pawson’s memo is highly critical of DoL, saying it was difficult to investigate fraud on FCVs because of the unavailability and tardiness of documents including those collected when foreign boats were audited.

“The statements previously obtained from affected crew members by DoL staff and other interested parties were not to the legal standard required for evidential purposes," Pawson said.

He found that Indonesian crews were being paid according to contracts signed in Indonesia with manning agents – rather than the contracts purporting to show minimum wage payments presented to New Zealand authorities.

He was critical of the investigation into the Korean fishing boat Oyang 77, managed by Lyttelton’s Southern Storm (2007) Ltd which is currently in court facing fish dumping charges.

Pawson said DoL’s questions and statements “were of a very poor standard with the questions being too general and non-specific in content.”

The government last month tabled legislation that will require all fishing boats to be New Zealand flagged by 2016. A background paper with the Bill from the Ministry of Primary Industries (MPI) shows Maori tribes may be entitled to up to $300m in compensation for losing access to the mainly Korean owned FCVs.

MPI confirmed that the foreign boats were being used to fish the mainly Treaty of Waitangi fisheries quota allocated to iwi. It said “reflagging of all FCVs may disproportionately impact on Maori and iwi quota holders, particularly if vessels are unavailable.”

Under the treaty, iwi are entitled to compensation for changes in government policy, such as reflagging. MPI said that a “worst case scenario could result in a loss in export revenues of around $300 million annually”.

Additionally iwi would have to be compensated for loss in value of some fisheries that were unviable without cheap crews, including some squid, jack mackerel, southern blue whiting and hake stocks caught by FCVs.

MPI warned that without the change, New Zealand risks losing access to European Union and United States markets with retailer in the UK and US watching sustainability and ethical issues with seafood products.

It said New Zealand-caught fish is already being blocked in some markets because of the FCV issue. The public version of the report blanks out specifics but in another part it said Spain had blocked fish from Korean and Japanese FCVs.

“Loss of access to markets further impacts New Zealand's reputation for security of supply and there is a risk that reputational damage could spread to other sectors.”

MPI said it had been told anecdotally Ukrainian FCVs used by Nelson’s Sealord Fisheries will not be reflagged meaning they will have to leave New Zealand waters. It did point out that many FCVs operating here have in the past been reflagged.

MPI said reflagging would mean the Crimes Act could be fully enforceable from now on.

“This would provide confidence to the US that fishing crews are treated well, and facilitate US businesses to prove that product from New Zealand meets supply chain standards for the wellbeing of the crew.”