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Foreign Affairs, Defence and Trade References Committee - 16/09/2014 - Australia’s future activities and responsibilities in the Southern Ocean and Antarctic waters

EXEL, Mr Martin, General Manager Environment and Policy, Austral Fisheries Pty Ltd

[10:45]

CHAIR: Welcome.

Mr Exel : In addition to my capacity today, I am also the chair of the Coalition of Legal Toothfish Operators, which is an international not-for-profit group that has been chasing IUU fishermen for many years. I am also a board member on IMAS, the Institute for Marine and Antarctic Studies here in Hobart.

CHAIR: Do you wish to make a brief opening statement before we go to questions?

Mr Exel : Perhaps the best thing I should do at the start is declare an interest. Obviously, given all those positions, I am highly interested in any outcomes that come out of the committee and your considerations. From a commercial fishing perspective, we want very much effective, accurate science, and that goes straight to our allowable catches. I have a direct pecuniary interest there. From an illegal fishing perspective, we have clearly been driving very hard over the years to encourage the Australian government to ensure there is no illegal fishing. We see that as being particularly important. Some of our concerns are related to: the funding for surveillance and whether it is being redirected; the longer term operational funds for both the investigator and the Aurora Australis; the process for determining arrangements with France and Australia; and, in particular, we would like to ask for the committee's support for a symposium on Kerguelen Plateau research to be held in 2015. Other than that, you have my submission and I am happy to answer questions.

CHAIR: What is your best assessment of the present state of the Southern Ocean and Antarctic fisheries? Is there cause for alarm?

Mr Exel : If we take whales out of that altogether, because I have no expertise on the whaling side of things, from a fish perspective the Australian fisheries are in particularly good shape. We have had no illegal fishing in our exclusive economic zone since 2007, and that is around Macquarie Island and Heard Island and McDonald Islands. The science being undertaken in Antarctic Division, IMAS and CSIRO is second to none. In fact, there has been a major process of scientific evaluation over the past 12 months to absolutely confirm its primacy. We are very confident that stocks are healthy and things are going right.

CHAIR: Is that a result of the investment to date? Is that under threat if there is a lack of investment into the future?

Mr Exel : It is definitely a result of the investment to date. The Australian government has a right to be very proud. In fact, I should have acknowledged Senator Ian Macdonald who started the whole process with us as Parliamentary Secretary to the Minister for the Environment way back when.

Senator BACK: Since 1788.

Mr Exel : It feels like it, actually. There are a few of us in the room who have been to way too many CCAMLR meetings and have been involved with this for a long time. The investment in research, surveillance and capacity building within Australia has been exceptional. We are very keen to ensure that it continues at a level that is adequate for that sort of operation into the future.

CHAIR: Do you get the sense that it is under threat with less investment?

Mr Exel : I think so. There is no question it is under threat. It is a matter of how we more effectively utilise the resources we have got and the cooperation and collaboration arrangements between CSIRO Antarctic division and ACRC. There are clearly operational and logistic issues that can be combined to either save funds or more adequately expend those funds. There is research operational funding for the boat. Fuel in the boat is critical. As an industry we are very happy to pay for research that is directed towards our direct interests—and we acknowledge private-public partnerships very much—but there needs to be stable government funding that is allocated and set aside for strategic, longer term research in the Antarctic region. Without that the research will get driven by whoever has the most money.

CHAIR: I think we heard yesterday that the fishery was third after prawns and tuna. What is the value of the fishery in this area?

Mr Exel : Sorry, the value where—in the Antarctic?

CHAIR: Yes.

Mr Exel : That is challenging. The toothfish fisheries have only two operators from Australia—ourselves, Austral, and Australian Longline Pty Ltd in Devonport. Obviously things vary, but the value is somewhere around $50 million to $80 million per annum. The fisheries for krill and so forth are not prosecuted at all by Australians, so I am not sure of the value of those. For Australia anyway that is a substantial fishery.

Senator BACK: Mr Exel, thank you very much for the submission you have given us. We were shown some footage yesterday of activities on the sea floor. I understand that the cameras were on commercial equipment. It begs the question: to what extent now, and how much more into the future, would it be possible to have some of the investment take place on commercial fishing vessels—in other words, scientific personnel on board, real-time access to information, data and observation of what is being caught, et cetera? Is that happening now? Would it be a wise investment of diminishing funds to actually extend that? You have three vessels in these waters obviously for the entire time you fish, so to what extent can we actually increase that participation?

Mr Exel : That is a very good question actually. We already run a number of programs. There are the benthic impacts, which was the cameras. We carry two full-time observers every trip. They are scientifically trained and we can use them. We already provide data directly back to the Bureau of Meteorology. In fact, we had our vessels tracked for a while. The Bureau of Meteorology used to put a thing on the television on the Good Morning Australia program that showed exactly where we were reporting our weather forecasts from, which was not too clever from our perspective—we are very shy about where we fish.

The operations and the work that we do with researchers we can always extend as long as it is done in a way that does not directly impede or cost too much. I will give you an idea. Currently in cash as an industry we are providing about $1¼ million per annum for research and in kind it is probably double that. Every year we do 20 days surveying as part of the requirement for our licence and on top of that we do other work. We are happy to consider any offers.

Senator BACK: The prospect would be there, wouldn't it, to extend that and for the Commonwealth government to make a greater allocation of funds? You have the capacity on board for extra scientists. You have made reference to collaboration with the French. When I was at your company's operations in Perth, WA, last year, we were talking about the same thing—a concern that it has become disproportionate, that the French are shouldering more of the burden. Can you give us some understanding of what that situation is about and, perhaps more to the point, in the event that we cannot correct that imbalance, what might be the outcome?

Mr Exel : The issue is that of Southern Ocean patrols. There is a treaty between Australia and France, which I think Senator Macdonald signed in the first instance, which goes to both science and surveillance. We have an exchange arrangement which could be explained much better by Antarctic Division personnel. Basically, it involves Australians going onto French vessels or French onto Australian patrol vessels and looking after the entire Kerguelen Plateau and checking out for illegal fishers. Unfortunately, for whatever reasons, the Southern Supporter has not been down there in the last nearly two years now, which means that the treaty obligations of Australia are certainly challenged, if not being unmet. Instead of putting people down on vessels, they have been using people on shore to do a different level of compliance activity and surveillance, which, interestingly enough, has been very effective, but we would just like to make very sure that everyone is watching and making certain that the French are comfortable with what Australia is doing and that, if there needs to be a patrol from Australia, then look very seriously at how we can best do that and when in supporting the French arrangements. It is also part of the reason I asked for the support for the Kerguelen symposium—to bring the French and the Australian researchers together, with industry and conservation groups, to talk about what is going on down there.

Senator BACK: What is the fishing season? When does it go from?

Mr Exel : It varies on method, but at the moment with longlining we can fish from 15 April through until 14 November, which is winter. Unfortunately for us, that is the worst period of weather, but for the seabirds it is the time when we least impact on them. It is basically why that season is set.

Senator BACK: I have just noticed in your table 1 the gradual increase of catch limits from 2,500 in 2008 climbing up to 2,550 and now 2,730. I am interested in knowing where the capacity is for you to increase your fishing activity. Has it reached a plateau? And what determines those catch limits?

Mr Exel : They are scientifically based. It is a very extensive process within Australia of stock assessment; it is annual. Every second year the Australian science is then taken to CCAMLR, where it is peer reviewed by the 25 other nations and then it goes through a process there to determine the allowable catch. As to the reason for the recent years of increase, you will notice in the early years it started at 3,800 tonnes and dramatically reduced as a result of the illegal fishing. What you are seeing now is that, since the cessation of that illegal fishing, the stock is recovering and therefore the scientifically allowable catch levels are coming back, which is a great thing and it is why we have such a vested enlightened self-interest, if you like, as a fishing company in ensuring the science is second to none.

Senator BACK: What are the species? Patagonian Toothfish? What else?

Mr Exel : Mackerel icefish is the only other one.

Senator BACK: Who competes with Australia, or do we alone fish in our economic zone?

Mr Exel : We alone fish in our economic zone. Mackerel icefish is only caught in three places in the world—our zone, the French zone next door and around South Georgia and South Sandwich Islands.

Senator WHISH-WILSON: When did your company go fishing, I suppose?

Mr Exel : 1994 was the first year down to Macquarie Island.

Senator WHISH-WILSON: I know that you did not want to go near whales, but I understand you had a bit direct action with your own boats when you first got out there and encountered some illegal fishing.

Mr Exel : We certainly did. In fact in 1996 when we went to heard island for the very first time, we came across 13 illegal boats fishing in one area. We had an Australian government observer on board and we radioed the boats and suggested that perhaps they should move in very polite terms as fishermen are wont. When they did not move, we show them that we were a bigger boat and they moved, which was really nice of them.

Senator DASTYARI: Where were they from?

Mr Exel : Those ones were from Argentina. In fact, as a result, our boat went back to where those boats were and we found big aggregations of fish. Our crew, having an innate sense of humour, named that fishing spot 'Evita's' and that is one of our prime fishing spots still to this day. There was a silver lining in chasing away illegal fishermen.

Senator WHISH-WILSON: In relation to the treaty with France and the two areas, the toothfish are migratory in the sense that they go between both jurisdictions. You have tagged them and they travel.

Mr Exel : Some do. Something like five per cent of them move between the Australian and the French side of the plateau.

Senator WHISH-WILSON: How do you come to agreements on sustainable catches with the French? Does it rely on cooperation? If they took more than you would be pleased with, would that impact on your fishery?

Mr Exel : It is the $64 million question, definitely. If we do not work together, each of us will impact negatively on the other, so the cooperation and collaboration required is extensive. Currently, the way it is being undertaken is that we set two separate stock assessments: one for the French side and one for the Australian. As things stand in the geopolitical sense, that is what France prefers. It has proven to be beneficial to date, and I can see no reason why it should necessarily stop.

Senator WHISH-WILSON: Why are you so confident that there has been no illegal fishing in the EEZ? I know you are there at a certain time of the year to lower your impact on the ecosystem. Is it patrolled extensively enough; and is there enough surveillance to prove that there has been no illegal fishing?

Mr Exel : As I mentioned at the start, I am chairman of the Coalition of Legal Toothfish Operators. We separately track illegal boats and work with various national governments and authorities. There were seven known IEU boats as at last year. Of those seven, one sank, the Tiantai—the search and rescue that was mentioned; two were arrested by Malaysia, the Thunder and the Chang Bai.

Senator WHISH-WILSON: Were the boats impounded?

Mr Exel : They were, and we are still trying to track down exactly what happened to the fish. We know the boats are there. The fourth is on the slip, up on the hard and has been for several months, and no vessel has travelled south at all in the past seven months through the monitoring that we all know about and cannot talk about.

As a consequence, we are very confident from a boat movement perspective on the numbers. Equally, through the marketplace, we have been tracking where illegal product ends up and we believe at the moment there is fewer than a thousand tonnes of illegal toothfish on the marketsplace, which represents approximately two IEU boats catch for about six months.

Though different, the illegal fishing now is not within exclusive economic zones; it is on the high seas. There are much lower catch rates. They are fishing with gillnets, so it is a different method of fishing. They are using very old boats, almost slave-labour crew, and we are keen to work with whoever to tighten up and make sure those last few boats are unable to continue IEU fishing.

CHAIR: Just on this point, we took some evidence earlier that increased vigilance would identify more illegal boats. Are you suggesting that is not the case? Are you suggesting the vigilance we have got at the moment is proving your case?

Mr Exel : There is a problem, and it comes back to what you were talking about earlier, which is that all a boat can do finding an illegal on the high seas is note it, go back to the flag state and chase it up; or try and get the flag state to reflag or drop the flag of the boat. In that sense, the port state measures agreement, which is blocking the trade of product, is actually a much more powerful tool. The surveillance is obviously always beneficial. If you have unlimited funds, let's have lots and lots of boats, let's have aeroplanes et cetera—not a problem. But the reality is that you need to balance up those objectives. We could definitely do with some spot surveillance in some of those areas. I think the Antarctic continent particularly is one area where people are down there for research cruises, for tourist operations, and maybe we could make better use of those vessels. But it is a difficult question.

Senator WHISH-WILSON: It is my understanding that some of the illegal trade is going through Cape Town at the moment. Is that the suggested port of call for fish smugglers?

Mr Exel : I do not want to create too many international diplomatic incidents, but Cape Town has actually slid off the agenda. They do move around. There are known incidents of landings at Indonesia, Singapore, Malaysia. They are monitored at various times and in various ways to ensure that we have got a good handle on how much product is moving through.

Senator WHISH-WILSON: Just to be clear, Thunder's fishing and its bounty were, you suspect, within the EEZ or outside it?

Mr Exel : Definitely outside—absolutely unquestionably.

Senator WHISH-WILSON: It had a lot of fish, didn't it?

Mr Exel : It is relative—approximately 150 tonnes. Again, we do not know exactly, but, for a commercial vessel, if it were us, that would be a non-paying trip. That would cover your fuel. For a vessel where they have no safety requirements and they are paying slave labour et cetera, that is reasonable money.

Senator DASTYARI: I do not have the fishing expertise that Senator Macdonald and others here have. Would 150 tonnes not be commercially viable? Obviously it varies with prices and this and that. What are we talking about for you to hit the point of viability? I appreciate that would change.

Mr Exel : Just to give you an idea, that 150 tonnes was after approximately 140 days at sea for that boat—so a four-month campaign. For us, something like that would take in excess of 300 tonnes—maybe 350 tonnes—of product just to pay the bills. So the fuel alone would be well in excess of $1 million. It would be 700,000 litres for that sort of period of time.

Senator DASTYARI: For a vessel of that size, how big is the crew?

Mr Exel : The largest of our vessels is 87 metres; the smallest is 50 metres. We carry between 28 and 32 crew, with two government observers and scientists. The IUU boats are carrying between 40 and 60 crew.

Senator WHISH-WILSON: Mr Exel, not only do you have extensive experience in running a successful fishing company; you have a lot of experience within the broader stakeholder group that we are meeting today. Your submission makes a lot of interesting points about the scientific community in general. I was interested in this statement:

Consider re-alignment in what is often perceived as a ‘high moral ground’ approach towards Australian actions and other nations in the Southern Ocean and Antarctic region, and recognise particularly the new international political framework for resources access

Could you expand on that a bit for the committee?

Mr Exel : We find it very difficult, as Austral Fisheries, often sitting in international negotiations where Australia will take the highest possible stance on everything to create a vacuum, if you like, that sucks others into the process. Where I see it being particularly problematic at the moment is where you have issues with aspirations from China, Russia, perhaps even Korea. At times Australia can end up imposing rules and regulations on our operations that nobody else is applying simply because we feel that is really important to do. While there is no question you have to have that basis of the science and the ecology underneath it, after that everything becomes cost. If we are applying those sorts of rules indiscriminately to Australians and not to others, it becomes a problem.

CHAIR: Is there a specific example of that you could give the committee?

Mr Exel : I think at the time I wrote that it was high seas fishing access. To fish on the high seas as Australia we have to carry a full-time observer, whereas other countries do not apply the same rule. That costs us approximately $1,400 each day that person is on board our boat. That is before we catch a fish. We do not have a problem carrying a scientific student or somebody else. Maybe you could carry one observer every second trip. That is the sort of thing I am talking about.

Senator WHISH-WILSON: In your submission you stated:

As examples, the increasing interest from China, Korea and recent renewed interest from Russia to access fish and krill resources requires development of appropriate policy positions and sensitive dealings.

Can you give us an idea of what you meant about access to krill. Presumably we are not talking about giving them access to your fish in the EEZ, but are there are other examples where you think there are tensions?

Mr Exel : I think there is no question that the krill fishery is a growing fishery. That question would definitely be better directed to the Antarctic division later on today, but from a commercial viewpoint krill presents quite an opportunity. There are huge allowable catches for krill. It is completely underutilised as a resource and, as a consequence, eventually there will be a commercial driver to increase the catches. Currently, most krill is caught by either Norwegian or Japanese operators, but other countries are starting to move towards that. So that is the sort of area that needs good policy consideration by the Australian government.

Senator WHISH-WILSON: Would the CCAMLR negotiations around marine protected areas be part of that issue though you are referring to?

Mr Exel : Yes, in a way. Obviously they are negotiating to implement marine protected areas on the Australian claim, as we have heard this morning. In fact, it is not a claim; it is the Australian EEZ off the Antarctic Territory. But clearly it creates an impediment for those who wish to fish in that area, which is regarded as the high seas by CCAMLR. It gets up their nose if you are saying, 'We are going to set this site away.' It does worry me. If you set aside too big an area as a marine protected area, unless you have the adequate monitoring and surveillance, it will simply become a red target for illegal fishermen. So when you are setting marine protected areas you need to make sure that there is adequate resourcing and funds so that you can have the science, monitor what is going on and actually create surveillance to prevent anyone doing what you do not want them to do there.

Senator WHISH-WILSON: That make sense.

CHAIR: Why would people catch krill? What do they do with that?

Mr Exel : It gets used in fish food in aquaculture. In Japan and America it is used as bait. And it is also eaten. It is incredibly good protein. There is no question about that. It is much bigger than most people imagine.

CHAIR: Yes, we saw some yesterday.

Mr Exel : Oh, you did see some? Yes, they are almost like school prawns.

Senator IAN MACDONALD: Before I ask my questions I should first of all declare an interest. Those of you who have been passed my office would have seen a facsimile of the Patagonian toothfish which Austral Fisheries gave to AFMA but which I confiscated. It is mine until I go! So I have a connection with Austral through that fish. Where do your vessels operate? You have three vessels.

Mr Exel : That is correct.

Senator IAN MACDONALD: Where do they broadly operate?

Mr Exel : Broadly, they operate in the Indian Ocean sector. We are based mainly out of Mauritius these days with those three boats. We are only talking about southern operations, obviously. We operate in the Indian Ocean high seas, which is out where the tuna fleets operate, but we are bottom fisheries, and off Heard Island and McDonald Island, just down to the bottom of Cape Town, and Macquarie Island, which is off the bottom of Tasmania and a little bit to the right.

Senator IAN MACDONALD: Without going into any details, do you fish in areas of the high seas that are not someone's EEZ?

Mr Exel : Not at the moment. We used to, but we stopped because the rules and requirements to fish the high seas were so high. As soon as you found fish, any other nation could also fish alongside you. It became absurd.

Senator IAN MACDONALD: You said that CCAMLR does not recognise the Australian EEZ claim around the Antarctic continent.

Mr Exel : It is not a claim. CCAMLR is simply a subset of the international community, as I understand it. Somebody else will know the exact technical wording, but it is not pushed or pursued, I believe, by Australia.

Senator IAN MACDONALD: Tell me the world quota for toothfish.

Mr Exel : It is approximately 25,000 tonnes this year.

Senator IAN MACDONALD: Of which Australia has—

Mr Exel : Near enough to 3,000 tonnes all up.

Senator IAN MACDONALD: That world quota is set by who?

Mr Exel : CCAMLR sets approximately 60 per cent of it. The rest is set by national governments. Chile have a quote. Argentina and Uruguay have a quota. I am struggling to think of anyone else outside the CCAMLR system. Those are probably the main ones.

Senator IAN MACDONALD: I want to recognise Alastair Graham, who is sitting in the audience. He is not giving evidence today. Back in the early days there was a group called ISOFISH who, in conjunction with COLTO, were doing a lot of investigatory surveillance and intelligence work around the ports of the world. Does that still happen, do you know? Is that the way you get information on what tonnage is going into the markets that is not part of the world quota?

Mr Exel : ISOFISH was set up from 1997 to 2000 and was the first coalition between conservation and industry. Alastair Graham, as you rightly said, headed it up for us. We did reports on Norway, Mauritius, Spain and Chile. We basically named and shamed. We then figured the job was done because the illegal fishing had contracted so much and was clearly disappearing and so we shut ISOFISH down. Then came COLTO in 2003 after we found another threat from illegal fishing. That is an industry based group only. We work with the Antarctic and Southern Ocean Coalition, which is 220 conservation groups that are part of the CCAMLR machine. With our industry information and the conservation groups' information, we are able to work together to best track and provide information to national governments, who can then use that information to hopefully apprehend and arrest illegal fishers.

Senator IAN MACDONALD: Finally, apart from France, are there any nations that take the same sort of interest in the Southern Ocean that Australia does? France do because of Kerguelen and Mauritius. But is there anyone else who takes that sort of interest?

Mr Exel : There certainly are—the fishing nations of CCAMLR. That is South Africa, the UK, Chile and Argentina. They are all part of the CCAMLR machine. The United States are very active. China is about to become a substantive fishing nation, I suspect. There is also Korea. CCAMLR is the focal point for all of the people interested.

Senator IAN MACDONALD: But does anyone, apart from Australia and France, send patrols down there specifically to address illegal fishing?

Mr Exel : New Zealand use aerial patrols in the Ross Sea, and I believe they may have used a ship last season. The UK certainly do patrols around South Georgia and the Falklands. You could say there are political sensitivities there. But Australia certainly spearheads a lot of the Southern Ocean compliance program and provides advice to CCAMLR. It has always been a recognised leader, which is a good thing.

CHAIR: Thank you for your evidence.