The Legal Regime Governing the Operation of Foreign Charter Vessels in New Zealand

• Author: Peter Dawson - Renee Hunt
• Position: Peter Dawson is the managing partner of Dawson & Associates Ltd, Maritime and Commercial lawyers in Nelson, New Zealand. He holds an LLM in Shipping Law from the University of Cape Town. Renée Hunt is a Senior Solicitor at Dawson & Associates Ltd. The views expressed in this paper are those of the authors
• Pages: 195-211

(2011) 25 A&NZ Mar LJ

THE LEGAL REGIME GOVERNING THE OPERATION OF FOREIGN CHARTER

FISHING VESSELS IN NEW ZEALAND

Pete r Da wson a nd Re née Hunt1

1 Introduction

On 18 August 2010, the 92 metre Korean flagged fishing vessel Oyang 70 sunk some 700 kilometres east of

Dunedin, New Zealand, with 51 crew on board. Six crewmen died; three were found dead in the water in their

life-jackets and a further three remain missing, including the Captain. T he surviving crew were re scued

(together with the three dead men) by the crew of the New Zealand flagged fishing vessel Amaltal Atlantis.

The Oyang 70 was owned by Korea’s Sajo Oyang Corporation and, at 38 years old, was one of the oldest

fishing vessels ope rating in New Zeala nd waters. It had recently passed its Maritime New Zealand safety

inspection.

After initial uncertainty as to which entity had j urisdiction to look into the sinking, New Zealand’s T ransport

Accident Investigation Commissio n (‘TAIC’) was appointed to investigate on behalf of the Korean flag state.

The Korean Maritime Safety Tribunal agreed to TAICs ass istance on the basis that any report prepared for it

would remain confidential.2

In the days following the rescue, the Indonesian crew relayed tales of poor working conditions and poor pay to

their rescuers and the media.

More recently, Indonesian crew from two foreign charter vessels (the Shin Ji and the Oyang 75) have refused to

return to their ships c omplaining of abuse, poor conditions, and poor pay. 3 These events, and the associated

media attention (both national and internatio nal) directed at the deepwater fishing i ndustry in New Zealand led

the Seafood Industr y Council to reques t that the Minister o f Fisheries initiate an inquiry into the operation of

foreign charter vessels in New Zealand’s exclusive economic zone.4 The Minister of Fisheries (Hon Phil

Heatley) together wi th the Minster of La bour (Hon Kate Wilki nson) announced, on 14 July 2011, that a

Ministerial Inquiry wo uld be held to consider the issue. The terms of reference for the Inquiry were announced

on 23 August 2011, and the committee is required to report back to the Ministers by 24 February 2012. 5

Stories of this nature are not new. Employment conditio ns on foreign charter vessels (‘FCVs’) have been a

problem for the New Zealand government for a number of years. The detention of the Korean flagged ves sel the

Sky 75 by the Department of Labour in 2005, after 10 Indonesian fishermen walked off in protest at the living

and working conditions, led to the development of a number of legislative and policy reforms designed to

improve employment c onditions for foreign fishers.

Two of the key reforms c ame about in mid-2006, after an in-depth Department o f Labour Report into

employment conditions in the fishing industry.6

1 Peter Dawson is the managing partner of Dawson & Associates Ltd, Maritime and Commercial lawyers in Nelson, New Zealand. He holds

an LLM in Shipping Law from the University of Cap e Town. Renée Hunt is a Senior Solicitor at Dawson & Associates Ltd. The views

expressed in this pap er are those of the authors.

As a consequence of this report, the government sought to

regulate the rates of pay of foreign crew by amending s 103(5) of the Fisheries Act 1996 (NZ) (‘Fisheries Act

1996’) to provide that the protections of the Minimum Wage Act 1983 (NZ) (‘Minimum Wage Act 1983’) and the

2 Letter from Transport Accident Investigation Commission, 14 March 2011, Commission Investigation into Oyang 70 Accident.

3 Seven crew from the vesse l the Shin Ji, berthed in Auckland, left their ship in early June 2011 and, later that month, 32 crew of the Oyang

75 (the vessel that replac ed the Oyang 70), berthed in Chris tchurch, walked off their vessel; In August 2011, The University of Auckland

Business School researchers Dr. Christina Stringer and Glenn Simmons released a report depicting human rights and labour abuses of crew

working on foreign-owned fishing fleets within New Zealand waters

<http://www.auckland.ac.nz/uoa/home/template/news_item.jsp?cid=414934>; this report follows a series of news articles published by

journalist Michael Field <http://www.michaelfield.org/slave%20fishing.htm>.

4 Letter from Peter Bodeker, Seafood Industry Counci l Chief Executive to Hon Phil Heatley, 14 July 2011.

5 The terms of reference are very broad with a particular focus, not on working conditions and labour issues on FCVs, but on assessing the

practice of using of FCV s in the context of international rep utation and trade access and whether th e practice maximises returns from New

Zealand’s fisheries resources. Assessment of labour standards on board FCVs will also be addressed as a secondary matter.

6 Department of Labour Employment Condition s in the Fishing Industry - Final report on foreign crew on New Zealand fishing vessels (2

December 2004).

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The Le g al Re g ime Go ve rning the Op e ra tio n of FC Vs in Ne w Ze aland

(2011) 25 A&NZ Mar LJ

Wages Protection Act 1983 (NZ) (‘Wages Protection Act 1983’) apply to foreign fishers. T he government then

created a code of practice designed to regulate working conditions on FCV s. The Code of Practice on Foreign

Fishing Crew (‘the Code’)7

to which the Department of Labour, the New Zealand Seafood Industr y Council (on

behalf of New Zealand fishing companies) and the New Zealand Fishing Industry Guild are parties, is a set of

policy guidelines of Immigration New Zealand (under the umbrella of the Department of Labour) that applies to

the charter arrangements between the foreign vessel owner and the New Zealand charterer.

In her 2009 paper ‘Modern Day Slavery: Employment Condit ions for Foreign Fishi ng Crews in New Zeala nd

Waters’, Jennifer Devlin discus sed the development o f the fishing industr y reforms and ident ified legal and

practical difficulties in enforcing the Code. 8 In particular, Devlin argued that by purporting to apply New

Zealand law to foreign flagged vessels in New Zealand’s EEZ, the Code (which is simpl y a set of policy

guidelines of Immigration New Zealand) violates international law and is ultra vires the authority o f the

Immigration Act 2009 (NZ) to make immigration policy. As suc h, the Code is vulnera ble to an administrati ve

law challenge on the gro unds that the execut ive does not have the po wer to make policy guide lines that have

extra-territorial effect.9 F urther, she argues tha t s 103(5) of the Fisheries Act 1996 is in violation of international

law as it imposes New Zealand law on foreign flagged vessels outs ide of New Zealand’s territorial waters.10

In addition to these legal and practical difficulties in enfor cement of the Code, what is clear from reports from

the crews of the Oyang 70, Oyang 75 and Shin Ji, is that the reforms have not improved conditions for foreign

fishers.11

In fact, if these fishermen are to be believed, some foreign charter vessel owners appear to be paying

lip service to the Code, particularly to the requirement to pay the crew the New Zealand minimum wage.

This paper seeks to build on the foundation laid by Devlin and to critic ally examine the legislative framework

within which FCVs operate in New Zealand. The central premise of this paper is that many of the problems

associated with the regulation of FCVs in New Zealand stem from a misapplication of internatio nal law of the

sea, and of the unde rlying New Zealand l egislation and po licy governing the lic ensing and operation of such

vessels. It is the writer s’ view that the legislative foundation for the licensing and operation of these vessels in

New Zealand does not support the commercial structures under which these vessels operate. In particular, s 103

of the Fisheries Act 1996, under which the vessels are licensed to operate, is poorly drafted so that, despite the

intention of the section, FCVs are licensed to operate on the basis of a time charter (where the crew are

employed by the owner) rather than on the basis o f a demise charter arrangement (where the crew are employed

by the charterer). This has led to an environment where unscrupulous operators have been able to take

advantage of the absence of legislative clarity to r elieve them of the responsibility for crew welfare in a bid to

lower operating costs.

2 Foreign Fishing Vessels in New Ze aland – A Brief History

Foreign fishing vesse ls have been fishin g in and around New Zeala nd for many years. During the r ise of the

deepwater fishing industry in the 1960s, few New Zealand vessels were capable of exploiting the deep sea

resources. In contrast, large fishing vessels from Russia, Japan, Korea, and other countries had the necessar y

experience in deepwater fishing around the Pacific and were permitted to fish within New Zealand’s 12 mile

zone on the basis of a foreign licence regime.12

With the coming into effect of the United Nations Convention on the Law of the Sea (‘UNCLOS’), 13

7 Department of Labour Code of Practice on Foreign Fishing Crew (19 October 2006).

New

Zealand gained sovereign rights for t he purposes of ‘exp loring and exploiti ng, conserving and managing the

natural resources i n its Exclusive Econo mic Zone’ (‘EEZ’) (the area of ocean out 200 nautical miles from its

coast). In short, UNC LOS gave New Zealand the r ight to regulate fishing activities within its EEZ, a nd, in

8 (2009) 23(1) Australia and New Zealand Maritime Law Journal 82.

9 Ibid 95.

10 Ibid.

11 Christina Stringer, Glenn Simmons and Daren Coulston, ‘Labour Abuse Aboard Foreign Fishing Vessels in New Zealand’s Wate rs: An

Institutional Territoriality and Governance Approach’ (presentation to the International CRIMT Conference Multinational Companies,

Global Value Chains and Social Regulation , Montreal, Canada, 6-8 June 2011).

12 The Territorial Sea and Fishing Zone Act 1965 extended New Zealand’s jurisdiction from 3 to 12 miles and empowered the Ministry of

Fisheries to regulate f oreign vessels entering the 12 mile zon e.

13 United Nations Convention on the Law of the Sea 1833 UNTS 3 (entered into force 16 November 1994) Art 56 (‘UNCLOS’). UNCLOS

lays down a comprehensive regime of law and order in the world's oceans and seas establishing rules governing all uses of the oceans and

their resources.

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