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Thursday, 30 April 1987
Page: 2037

Senator COONEY —Pursuant to standing order 109a I give notice that on the next day of sitting I shall withdraw Business of the Senate, Notice of Motion No. 2, standing in my name for six sitting days after today, for disallowance of the Northern Prawn (Special Provisions) Management Plan No. 12. I seek leave to make a short statement.

Leave granted.

Senator COONEY —The Standing Committee on Regulations and Ordinances has been corresponding with the Minister for Primary Industry (Mr Kerin) about aspects of this plan which were of interest to the Committee under its principles of scrutiny. The Committee was concerned about the following matters: Some confused drafting; the width of a particular administrative discretion; the absence of avenues of appeal against certain decisions; and the consequences to lending institutions of certain fishing certificates becoming void on a future date.

Senator Archer —Go a bit slower.

Senator COONEY —I am sorry; Senator Archer has a special interest in this matter, so I shall. In correspondence with the Committee, the Minister has undertaken to correct the drafting to ensure clarity in the meaning of some provisions; he has agreed to replace the particular administrative discretion to do certain things with an obligation-as distinct from a discretion-to do those things; and he has agreed to amend the plan to ensure that lending institutions are put on notice of certain fishing certificates becoming void.

Having carefully examined the question of the absence of a broad avenue of appeal against decisions to reduce fishing units the Committee after consulting its legal adviser has accepted the Minister's explanation that this reduction scheme is a cornerstone of the Minister's fishery conservation policy. Just diverting for a moment, I point out that, the Minister having given an explanation as to why there is no appeal mechanism from the decision to reduce the fishing units, because, as he says, that is the cornerstone of his policy--

Senator Macklin —A buoy! That's a millstone!

Senator COONEY —What has happened is that the sorts of prawns we are dealing with here are different from those that the honourable senator may have in mind. This has nothing to do with the motion, but I remember attending university with someone who made a film in England on a prawn, and he almost brought down the Government. The Standing Committee on Regulations and Ordinances has made great endeavours to see that the prawns do not bring down anyone.

Senator Macklin —This is fascinating stuff.

Senator COONEY —It is. Prawns are very interesting animals.

Senator Archer —I'm losing track.

Senator COONEY —Senator Archer wants to listen to this, so I ask honourable senators to desist. He has an interest in this. In all seriousness, he has done great work for the prawn fishery fleets in the north, and I want Senator Archer to hear this. When scrutinising legislation the Regulations and Ordinances Committee does not question ministerial policy unless that policy is patently at variance with the Committee's principles of personal rights and liberties and should therefore be considered by Parliament as a whole in a Bill. Having examined the Minister's explanation of how the fishing reduction scheme will operate in practice the Committee considers that the absence of an avenue of merits appeal does not infringe its principles. The Committee thanks the Minister for Primary Industry for the co-operative and helpful way in which he has advised us. In keeping with the Committee's usual practice of informing the Senate and others of its scrutiny, I seek leave to incorporate the Committee's correspondence in Hansard.

Leave granted.

The correspondence read as follows-

24 February 1987

The Hon. John Kerin, M.P.

Minister for Primary Industry

Parliament House

Canberra, A.C.T. 2600

Dear Minister,

At its meeting on 19 February 1987 the Committee considered the Northern Prawn Fishery (Special Provisions) Management Plan (being Plan of Management No. 12) which provides for the conservation of northern prawn fishery stocks and the collection of relevant levy by instalments. The Committee seeks your views on some problematic aspects of the Plan.

Firstly, the committee seeks your advice on some drafting deficiencies. Paragraph 9.1 provides that a Class A unit holder may surrender Class A units which then become reduction units AND transfer Class B and C units to a Class A holder OR surrender Class B and C units.

This form of drafting is ambiguous since it does not make clear what are the permissible combinations of action a unit holder may take-[(a) and (b)] or (c); or (a) and [(b) or (c)].

Secondly, paragraph 32.3 (b) in Schedule 2 produces the same defect. This paragraph is also defective in that it does not identify which of the two sub-paragraphs is being amended and it seems that the word ``and'' will remain after the insertion of ``or'' thus ``. . . replaced boat; or and . . .''.

Thirdly, paragraphs 9.3 to 9.5 provide for the transfer of reduction units of fishing. Paragraph 9.4 provides that a transfer shall not be granted unless the appropriate certificate is submitted to the Department. The Explanatory Statement accompanying the Plan notes on page 4 that ``such applications will be granted''. While that may be the current policy and intention, the effect of the drafting in paragraph 9 appears to be such as to confer an unfettered and unappellable discretion on the Department to transfer reduction units. This would seem to be at variance with your intention and perhaps the drafting of the paragraph could be strengthened to remove these objectionable elements and make a transfer obligatory on submission of the appropriate certificate.

Fourthly, paragraph 14.1 provides that ``as soon as possible'' after 1 March 1990, the Department shall issue certain certificates to unit holders. Paragraph 14.2 provides that a certificate issued on or before 28 February 1990 shall be ``void and of no effect'' after 1 March 1990. The Committee is uncertain whether every single replacement certificate will be issued on 1 March 1990, immediately to fill the gap created by paragraph 14.2 making all prior certificates void and of no effect. The Committee notes that paragraph 14.1 states that new certificates issued after 1 March 1990 shall be adjusted to take account of transactions occurring between 1 March 1990 and the actual date of issue of the certificate. The Committee is concerned however, that the ``void and of no effect'' provision may cause uncertainty and confusion for persons engaged in part- completed transactions or who are genuinely contemplating such transactions. There may be a troublesome and possibly prejudicial hiatus between 1 March 1990 and the day adjusted certificates are issued. The Committee would very much appreciate your comments on this matter.

Fifthly, the Committee has noted that there is no appeal against cancellation of Class A units under para- graph 10.1 of the Plan, nor is there any appeal against refusals to assign Class B units. The accompanying Explanatory Statement at page 4 expressly addresses this issue indicating in both cases that affected unit holders will have sufficient time to arrange their affairs so as to avoid, or minimise the effects of the cancellation rules or pre-empt the effects of the non-assignment rules. The Committee is uncertain whether as a matter of conscious policy you have chosen to adopt a course of action which will result in the special or personal circumstances of individuals being overriden by the mandatory requirements of the Plan. It may be that you have, as a matter of policy, decided that in individual cases the possibility of hardship, which could be overcome by the provision of appeal mechanisms, is the inevitable result of taking far-reaching and important conservation measures. The Committee has noted that where appeal rights have been provided under other fisheries management schemes, the Administrative Appeals Tribunal has regarded apparently open-ended discretions as subject to the special circumstances of the individuals affected. These personal circumstances have had to be weighted against the intended effect of the Plan. (See for example Re Kennedy and Secretary, Department of Primary Industry (8ALN N194), Re Aston and Secretary, Department of Primary Industry (8ALD 366) and Musgrove and Secretary, Department of Primary Industry (unreported No. N86/313).

The Committee recognises the difficulties and competing interests inherent in the conservation scheme and seeks your comments and views on the points noted above.

Finally, the Committee seeks your advice on whether the payment of the levy provided for in paragraph 8.3 of the Plan is in accordance with the Act and the Regulations. Sub-sections 7 (5) and 7 (6) of the Fisheries Levy Act 1984 provide that the amount of levy imposed by the Act on the allocation or renewal of allocation of a unit of fishing capacity is payable by the person to whom the unit is allocated or reallocated at the time of the allocation or reallocation of the unit. Sub-regulations 6 (2) to 6 (5) fix the levy at a flat amount. Paragraph 8.3 (a) of the Plan proposes that Class A units be allocated in respect of two periods. This being an allocation of units, it may be that legally it should attract levy for each allocation. However, it would seem from paragraph 8.3 (b) that the intention is that only one levy is payable, divided between the two fishing periods. The latest Plan and the recently made legislative package on which it rests, are highly complex and intricate and the Committee seeks your expert opinion on the question of the validity of paragraph 8.3.

Following its scrutiny of the Plan the Committee has raised a number of relatively difficult issues on which it would be very grateful to have your comments and views.

Yours sincerely,



31 March 1987

Senator B Cooney


Standing Committee on Regulations and Ordinances

Parliament House


A.C.T. 2600

Dear Senator Cooney

I refer to your letter of 24 February 1987 asking a number of questions on behalf of the Senate Standing Committee on Regulations and Ordinances about Plan of Management No. 12-Northern Prawn Fishery (Special Provisions) Management Plan, under s.7b (1) of the Fisheries Act 1952.

You raise the question of the permissible combinations of the matters in paragraph 9.1. The basic thrust of the paragraph is to set out what unit holders may do with units in relation to the reduction program. If they surrender Class A units during the specified period, those units are converted to reduction units.

In most cases, Class A units and a Class B unit or a Class C unit are linked in a package related to a boat. In addition, a small number of persons hold Class A and Class B units that have never been assigned to a boat. Should a unit holder surrender, under the Voluntary Adjustment Scheme in Part 8 of the principal plan (the Scheme), a number of Class A units that leaves the number of such units assigned to a boat less than the applicable number in relation to that boat, the unit holder has the options of either transferring or surrendering the Class B or Class C unit assigned to the boat. (Whether the unit holder transferred, surrendered or did nothing about the Class B or Class C unit, the boat would no longer be eligible to operate in the fishery in such a case by virtue of having fewer than the applic- able number of Class A units assigned to it.)

Sub-paragraphs 9.1 (b) and (c) make these options clear. The unit holder may do any of (a), (b) or (c). It is manifestly not possible to do (b) and (c) with the same units. I consider that paragraph 9.1 clearly expresses the intention underlying it. A unit holder who transfers or surrenders a Class B or Class C unit would receive either the current market price, in the case of a transfer, or the tender or offer price, in the case of surrender.

Your comments about the amendment of sub-paragraph 32.3 (b) appear not to have taken account of paragraph 7 of Plan of Management No. 10.

Paragraphs 9.3 and 9.4 confer a conditional but unappellable discretion to the Department to grant applications to transfer reduction units. If the certificate is submitted, the application will be granted. Otherwise, it will not. This is part of a scheme to encourage unit holders to maximise the number of Class A units that they surrender for conversion to reduction units. Knowing that there is a free market for reduction units, they will be more likely to tender lower prices for surrender of Class A units to the Scheme with the expectation of obtaining further receipts on later sale of reduction units.

As well, the full package of provisions in relation to reduction units takes account of the needs of holders of Class A units who might wish to surrender all of them. Such persons, who are clearly intending to leave the fishery, should be on equal footing with those who remain in the fishery by having an equal facility to dispose of reduction units by transferring them at a price to another unit holder who will have the benefit of the reduction units on 28 February 1990 when the formula in Schedule 1 is applied to the latter's holdings.

For these reasons, I consider that paragraphs 9.1 to 9.4 in their present form provide all the necessary protection to unit holders. All applications under paragraph 9.3 that do not run contrary to paragraph 9.4 will be granted.

Whether or not every replacement certificate will be issued on 1 March 1990, after application of the formula in Schedule 1, or on a later day, is irrelevant. Unit holders are frequently not in possession of their certificates. They may have given them to lending institutions as security. They may have sent them to my Department in connection with transactions under the plan. Should there by any delay after 1 March 1990 in sending out the replacement certificates, no person will suffer any disadvantage. Indeed it can be said with some confidence that a person contemplating acquisition of units by transfer at that time will be protected by paragraph 14 from fraudulent practices by a transferor who represented his holdings of Class A units on the basis of what was registered before 1 March 1990.

I expect that on 1 March 1990, the calculation of the number of units to be cancelled, the production of statements of cancelled units under paragraph 10.2 and the production of replacement certificates for purposes of paragraph 14.1, will all be undertaken in a single pass of the relevant data through the computer on which the unit register is maintained. It is not anticipated there will be serious delays in getting the notifications of units cancelled and the replacement certificates into the hands of unit holders.

It is not intended that decisions under paragraph 10.1 or 11 should be reviewable. These paragraphs are the cornerstone of the objectives of the plan which are to reduce the number of units in the fishery. It is acknowledged that they confront every unit holder with difficult decisions and may cause hardship to some individuals. However, the time frame for making those decisions and the operation of the Scheme will alleviate those hardships to the maximum possible extent. If review mechanisms were available, they might well encourage some operators to do nothing and then appeal on hardship grounds after 1 March 1990. This would bring down the structure of the reduction program to the detriment of those operators who did participate in it. I can not perceive that your committee would wish for that kind of outcome, in its effects both on the future of the fishery and on participating unit holders, as well as in relation to the perceptions that industry would form of the process of Government regulation of the fisheries and of the resolve of the fishery managers who are drawn from both Government and industry.

As to your final point, I draw your attention to paragraph 8.4 of Plan of Management No. 12, which declares how the measures in paragraphs 8.1 and 8.3 are to be implemented. Paragraphs 8.1 to 8.3 were provided in the plan as statements of the intention and the reasons for the measures in Part 3 and Part 4 of the plan, not as the specifications for giving effect to those measures as the means of achieving the objectives of the plan.

I hope that the foregoing explanations have clarified the concerns of your committee. My Department assures me that Plan of Management No. 12 was drafted with the utmost care and with deep concern for all of the points you have raised.

As a final comment, you will no doubt be aware that on 23 March 1987, Senator Boswell tabled a notice of motion that the Senate disallow Plan of Management No. 12.

Yours fraternally

John Kerin




The Hon. John Kerin, M.P.

Minister for Primary Industry

Parliament House


Dear Minister,

At its meeting on 2 April 1987 the Committee considered your letter of 31 March 1987 concerning the Northern Prawn Fishery (Special Provisions) Management Plan (Plan of Management No. 12).

The Committee thanks you for this initial response to the issues raised by the Committee in connection with what is an important but somewhat sophisticated area of regulation. Indeed it is because the legislation is innovative and legally complex that the Committee decided it would pay special regard not only to any important issues of principle raised by its professorial legal adviser, but also to any technical or drafting flaws which could adversely affect the clarity and precision of such a far-reaching legislative initiative.

Thus, the Committee would respectfully reiterate its concern about the form of paragraph 9.1 and sub-paragraph 32.3 (b). Of course, your careful exposition of the mechanisms of these provisions leaves the Committee in no doubt that you and your advisers know precisely what the structure of these paragraphs entails. It may be that in all predictable and unforeseeable contingencies a court could be persuaded to the same view. Nevertheless, the structure of the paragraphs is confusing, there is an inherent ambiguity in this form of ``and/or'' drafting and parliamentary counsel would never use it. As you know concern is occasionally expressed that, in contrast to the drafting of Bills, the drafting of delegated legislation is split between professional drafters and departmental officials. Whatever the administrative arrangements, the Committee's consistent view has been that the quality of drafting of all subordinate legislative instruments should be of the highest calibre since, in interpretation and enforcement the courts and authorities make virtually no distinction between primary and secondary law. Your reconsideration of this drafting point would be appreciated.

Secondly, your comments to the Committee about paragraphs 9.3 to 9.5 were very helpful in explaining the administrative and operational background to these matters. However, they do leave unanswered the Committee's technical legal point that the paragraphs impose no legal obligation on the Department to grant applications to transfer reduction units. Undoubtedly it is your policy and intention that proper applications will automatically be granted. Undoubtedly your officials, in all of the foreseeable and unpredictable circumstances with which they will be confronted, will consider themselves bound by the obligation of implementing your policy. However, you will appreciate that the Committee is concerned with issues of principles concerning the rights of individuals. Such issues must, of necessity, transcend administrative practices which cannot be underwritten into the future. Issues of principle find their security in the fixity of law. In this case it may be preferable if the law were expressly to impose an obligation on your Department to transfer registration when the certificate is submitted.

Thirdly, your letter very helpfully answers the Committee's points concerning the possible administrative delay which might have arisen when, on the operation of paragraph 14.1, all certificates issued on or before 28 February 1990 became void and of no effect. However, it unfortunately raises a further matter of concern. If, prior to 28 February 1990, certificates had been lodged with lending institutions as security, these will become void on 1 March 1990. In the absence of an obligation on the certificate holder to lodge the new certificate, the voiding of the old certificate in these circumstances may prejudice the lending institutions if, for example, the temporary nature of its value as a document of title is not disclosed on its face. The Committee would appreciate your advice on this problem and any means of overcoming it.

Fourthly, the Committee thanks you for your explanation of paragraphs 8.1 and 8.3, the operation of which is declared by paragraph 8.4 to be subject to the Regulations. The Committee however, remains somewhat confused as to how two allocations of units can be made without subsections 7 (5) and (6) of the Fisheries Levy Act 1984 requiring payment of levy for each allocation. There remains an inconsistency here on which the Committee would appreciate your further comments.

Fifthly, the Committee has given very careful consideration to your comments about the reviewability of decisions under paragraphs 10.1 and 11 of the Plan. In doing so the Committee has been concerned to balance its right to object to undue trespass on personal rights (including property rights), against the combined effects of the limitations of the Committee's role and the requirements of Government policy vis a vis fisheries conservation. The Committee recognises that paragraphs 10 and 11 are the legislative cornerstones which support your policy of unit reduction in the interests of fishery management. These are measures which are regulatory and reductionary. The Committee notes that hardship may be caused to individuals by the mandatory nature of the unit cancellation provisions, the lack of any avenues of merits review and the absence of any provision for compensation. The Committee also notes that the Plan is intended to apply uniformly across the fishery, that there is a long led time to implementation of mandatory cancellations of units which may enable an orderly and possibly competitive disposition of units, and that the existence of review rights could be an incentive to some operators deliberately to create potential hardship circumstances by delaying to take action under paragraph 9.1.

Although the Committee under its Principles has regularly sought advice from Ministers on legal issues such as the constitutionality, or the validity of various instruments of delegated legislation, it is not an ultimate adjudicator of issues of legality. Except perhaps where questions of invalidity are manifest, or where mounting a legal challenge to clearly questionable legislation would be onerous to an individual who was prejudiced, the Committee would generally eschew such a role. The question of the ultimate legality of complex subordinate legislation is a matter for the courts. That does not mean, of course, that the Senate may not, for policy reasons, consider whether a measure is so inappropriate and legally uncertain that it should be disallowed. However, the Committee's role cannot encompass any evaluation of the merits of a Minister's policy unless that policy is so manifestly at variance with the Committee's Principles that it should be enacted, if at all, only by the Parliament passing a Bill.

In these circumstances therefore, the Committee had decided that it would be inappropriate for it to seek the inclusion of review rights. As the responsible Minister however, you may wish to consider what role if any the Administrative Review Council could play in addressing any hardship question.

The Committee hopes that some common view, protective of the rights of individuals, can be reached between us on the matters raised by the Committee's continued scrutiny.

Yours sincerely,




Senator B. Cooney


Standing Committee on

Regulations and Ordinances

Parliament House

Canberra, A.C.T. 2600

Dear Senator Cooney

Thank you for your letter of 6 April 1987 setting down five aspects of the Northern Prawn Fishery (Special Provisions) Management Plan under s. 7b (1) of the Fisheries Act 1952 (``the special plan'').

I appreciate the close attention that your Committee has given to the plan and the useful comments the Committee has made about it.

With respect to the first point your comments on the use of ``and/or'' are noted and action will be taken to amend paragraph 9.1 and sub-paragraph 32.3 (b) to rectify the problem you identified.

Your second point with respect to non-specification of the legal obligation to grant a properly made application to transfer reduction units has been noted. Action will be taken to amend the plan to require these applications to be granted.

With regard to your third point the issue of certificates has in fact been restricted to the certification of the details of units on which levy has been paid. Consequently these have been annual certificates terminating on the last day in February each year. The termination date is shown on the certificates and lending institutions are aware of the limited time of such certificates (for the 1987 levy year where levy is paid in two parts two certificates will be issued, one for each ``fishing period'').

Your comments have however been noted and action will be taken to amend the plan to require that where certificates are issued for a finite period that this be recorded on the certificate.

The issues raised in your fourth point refer to the collection of levy. Unit holders have agreed to a substantial (four-fold) increase in levies in the 1987 licensing year (this is to help fund the Voluntary Adjustment Scheme). They have requested that this be collected in two instalments. The purpose of having an initial allocation of units under sub-section 7 (5) of the Fisheries Levy Act 1984 for the period 1 March 1987 to 22 June 1987 (the first fishing period) and a renewal of this allocation under section 7 (6) for the period 23 June 1987 to 29 February 1988 is to allow collection of levy to be made in two instalments. Your Committee's interpretation is correct i.e. levy is payable on each of the two allocations of units.

In your fifth point you argue that the surrender provisions represent a loss of property rights, and imply a loss in value of assets. This is unlikely. The value of units in the fishery is determined by the future stream of profits the fishery is expected to generate. The surrender provisions have the effect of proportionately reducing all unit holdings in the fishery. The proportion of total units held by each holder on 1 March 1990 will, apart from transfers, remain unchanged. If total profits generated by the fishery remain unchanged the total value of units can also be expected to remain unchanged. As the proportionate share of units held by each holder remains unchanged so should the total value of his units. In other words the reduction in the number of units held will be balanced by the increased value of each of the remaining units. Indeed there is a high expectation that the total value of the smaller number of units held after March 1990 should exceed the total value of the larger number of units held prior to the restructuring.

``Compensation'' paid to those who decided to leave the fishery, through selling units to those who remain can be expected to be substantial. The minimum allocation of Class A units to each holder was originally 375. The average Class A units held per boat is about 420. The current market value for these units is between about $500 and $600. Conscensus within industry is that this could rise to $1000 or $1500 over the next three years. This is additional to the value of the fishing boat itself. It is difficult to equate the availability of this level of ``compensation'' with the idea that the provisions will create hardship.

I trust the above explanations and proposed amendments to the plan will satisfy the concerns of your Committee.

Yours fraternally,