Independent Commissioners Set Marine Farm Bonds

Independent Commissioners have ruled Northland marine farmers should provide surety of $9000 a hectare or $6.95 per lineal metre of rack to cover the cost of cleaning up their oyster farms if they’re abandoned.

Independent Commissioners Doug Arcus and Alan Watson have been considering the issue of bonds for such clean-ups as part of a wider Northland Regional Council review of coastal permits that were formerly leases and licences under the Marine Farming Act.

In their recently-released final decision, Mr Arcus, a Hamilton barrister and Mr Watson, an Auckland planner, ruled marine farmers should provide “a bank or other surety acceptable to the Regional Council”.

However, the Commissioners specifically ruled out the provision of cash bonds, meaning no actual cash will need to change hands unless a clean-up is actually required.

The Commissioners ruled that the risk of an oyster farm being abandoned was equivalent to 0.5 percent per hectare per year and that some surety was required to cover this possibility.

“Our assessment of an appropriate figure to include in a surety to cover the cost of clean-up is:

• $9000 per hectare; or
• $6.95 per lineal metre of rack.”

Allan Richards, the NRC’s Consents Programme Manager – Coastal, says the Commissioners’ ruling is subject to a 15 working day period during which it can be appealed to the Environment Court.

Mr Richards says any appeal/s notwithstanding, the ruling as it currently stands would ultimately affect about 150 Northland oyster farms, mainly in the Far North.

However, in their findings, the two Commissioners also indicated the possibility of as-yet undeveloped alternatives to a bond, such as an industry fidelity fund or insurance scheme.

The Commissioners understood the NZ Oyster Industry Association Inc (NZOIA) was having ongoing serious discussions with third parties “with a view to formulating such an option”.

“We cannot anticipate the outcome of such discussions but at this stage we cannot exclude the possibility that NZOIA (or some other entity in the industry) could be successful in developing a proposal for an alterative to a bond.”

“If it did so then we consider that the permit conditions should be drafted in such a way that any alternative could then be considered by NRC.”

ENDS

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