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New concerns over Tasmania's salmon farming industry -

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LEIGH SALES, PRESENTER: Tasmania's $700 million salmon farming industry is facing fresh concerns over its impact on the environment. A scientific report into the health of Macquarie Harbour on the state's west coast finds that low oxygen levels have created a so-called dead zone under several of the massive salmon pens right next to a World Heritage area.

Now, one of the salmon-farming companies says it's found the first evidence of environmental damage inside the protected wilderness area. Natalie Whiting reports.

NATALIE WHITING, REPORTER: It's early morning at Macquarie Harbour on Tasmania's west coast. This team from Huon Aquaculture is 1km inside the World Heritage area, trying to gather evidence that overstocking of salmon is damaging the protected waters.

UNIDENTIFIED MAN: So, it's basically a little submersible, like a submarine, with a camera on it.

NATALIE WHITING: It's not long before they find what they're looking for.

UNIDENTIFIED MAN: So, this white material up here on the seafloor, that looks like beggiatoa to me. So, that's bacterial matting that we can get on the sea floor.

NATALIE WHITING: The bacteria beggiatoa can occur naturally, but it is used as an early warning sign that the salmon farms are having an impact on the environment. It occurs in the presence of low-dissolved oxygen in the water and excess nutrients, which can come from the salmon's faeces and feed. The salmon pens sit just outside the World Heritage area.

FRANCES BENDER, HUON AQUACULTURE: We wanted to see for ourselves what the situation was out there. The vision has shown us that there's beggiatoa more than a kilometre into the World Heritage area, which means that there's a severe problem with the sediments in that end of Macquarie Harbour, particularly.

NATALIE WHITING: Huon will use this evidence as part of the legal proceedings it's taking against the state and federal governments, and the regulator, the Environment Protection Authority. The other two companies who farm in the harbour, Tassal and Petuna, have sided with the governments and regulator.

Has there been any commercial rivalry underpinning any of the steps you've taken?

FRANCES BENDER: Absolutely not. Our concerns are based on valid evidence and science. This has got nothing to do with commercial issues. This is to do with doing what's right.

NATALIE WHITING: Huon is heading to court to try to force the regulator to drastically reduce the amount of fish allowed to be farmed in the harbour. In January, the EPA did drop the cap, but Huon wants it to go further. An independent report commissioned by the regulator has found worryingly low levels of dissolved oxygen, which is how the salmon, and other marine life, breathe. The report also found a significant decline in the number of creatures living in the sediment under the pens.

The recent scientific report found that the amount of fauna on the bottom of the harbour here had dropped by 97 per cent. About a kilometre and a half behind me is the Tassal lease that has been ordered to be destocked. The report, prepared by scientists from the Institute of Marine and Antarctic Studies, referred to this monitoring site as "the closest to the World Heritage area", but independent surveying work commissioned by Huon claims it's actually more than 450m inside the World Heritage area. Last month, the CEO of Tassal, Mark Ryan, was questioned about whether the dead zone from its lease extended into the protected waters.

MARK RYAN, TASSAL: Look, there is some of it in the World Heritage area and, for that, again, by us destocking and fallowing the lease, that will recharge.

NATALIE WHITING: But a short time later, the company issued a retraction.

ACTOR: (Reads statement) "Tassal's monitoring has not recorded any impacts in the World Heritage area from its operations. Mark Ryan's comments were in error, as he misunderstood the questions being asked, and he apologises for any confusion this may have caused.

NATALIE WHITING: The condition of the World Heritage area is of particular concern because the salmon companies signed an agreement with the Federal Government to protect it. A range of conditions were put in place to ensure there was no significant impact on the World Heritage area or the endangered maugean skate. Breaching the conditions carries heavy penalties.

PROFESSOR ANDREW MACINTOSH, AUSTRALIAN NATIONAL UNIVERSITY: They can be prosecuted civilly for those breaches, in which case the maximum penalty is around $1.8 million for each breach. They can also be prosecuted under a separate section of the legislation, and that carries very heavy penalties - up to $9 million if it's under civil, and they can also be jailed for up to 7 years.

FRANCES BENDER: There's a commercial risk to us as a company as well, because when we signed those documents, we signed up to say that we wouldn't damage the World Heritage area. We actually have, but we're not the person in charge of setting the biomass and setting the regulation.

NATALIE WHITING: Huon's legal action claims the state regulators have failed to comply with the federal conditions. Neither the state or federal ministers, the other companies, or the Environment Protection Authority, would speak to 7.30, citing the legal action. But the EPA is standing by its management decisions, and will be handing down a new biomass cap - the amount of fish allowed to be farmed in the harbour - in coming weeks.

If that decision is to reduce the biomass, will you continue with your legal action?

FRANCES BENDER: We'll consider our position.

NATALIE WHITING: Tassal isn't the only one having issues in the harbour. One of Huon's leases also recently recorded non-compliances because of beggiatoa. Tassal is on record saying the bacteria around its problem lease could be caused, in part, by nutrients from natural debris like fallen leaves and branches being washed downstream. But Francis Bender says, even if other factors are contributing, the result is the same.

FRANCES BENDER: We do know now there's enough science to show that we are having a huge effect on the environment ourselves as salmon farmers. So, whose fault it is, it's partly ours, significantly ours, it doesn't really matter.