EXPLANATORY STATEMENT

Select Legislative Instrument 2006 No. 90

Issued by the authority of the Minister for Fisheries, Forestry and Conservation

                        Fisheries Management Act 1991

                        Fisheries Management Amendment Regulations 2006 (No. 1)

Subsection 168(1) of the Fisheries Management Act 1991 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, in carrying out or giving effect to the Act.

Section 28 of the Act states that, where a grant of a fishing right is to be made by auction or tender, the regulations must prescribe the procedures to be followed for selecting the person to whom the grant will be made available under section 29. 

The Australian Fisheries Management Authority (AFMA) has reviewed the provisions of the Fisheries Management Regulations 1992 (the Principal Regulations) in relation to the tender for the grant of a fishing right and found them to not represent best practice or reflect current procurement and probity guidelines. The amendment Regulations address AFMA’s concerns.

The current Regulations do not prescribe sufficient detail in relation to managing a tender process for the grant of statutory fishing rights (SFRs). The amendment Regulations detail the various processes involved in managing and administering a tender process, including: opening of tender envelopes; procedures for setting a reserve price; the ranking and recording of tenders; and procedures if a tenderer can acquire less than all the available rights.

The Amendment Regulations are made in line with the requirements of the Act, and will update the arrangements for the grant of statutory fishing rights (SFRs) by tender. AFMA proposes to soon commence a tender process for SFRs in the Macquarie Island Toothfish Fishery (MITF). The Macquarie Island Toothfish Fishery Management Plan 2006 (the Management Plan) provides for the grant of 5000 SFRs (50% of the available SFRs) for Patagonian Toothfish, in each sector of the fishery, by tender. The Management Plan was determined by AFMA on 25 January 2006 and accepted by the Minister for Fisheries, Forestry and Conservation on 9 February 2006.

The Amendment Regulations are generic, and will apply to tender processes which occur in any fishery. The MITF is the first Commonwealth fishery to tender for SFRs, and the amendment Regulations are required to enable the MITF tender process to proceed in accordance with the Act and the MITF management plan.

The Office of Regulation Review advised that a Regulation Impact Statement was not required (ID 7938) as the Amendments are of a minor nature and do not substantially alter existing arrangements.

The fishing industry was not consulted about the Regulations. AFMA considered that the involvement of industry in determining the management of future tender processes would not have been advantageous to these processes. It was considered that industry involvement could potentially influence tender processes to make them more beneficial to some operators and less than fair to operators as a whole. In order to develop fair and transparent tender processes the Regulations were developed in consultation with an independent consultant who was contracted by AFMA to run the MITF tender process.

The Sub-Antarctic Fisheries Management Advisory Committee (SouthMAC), the body consulted on issues relating to the MITF, was aware of the update to the Principal Regulations. 

The costs of the tender process and the consultant’s fees will be covered by Commonwealth appropriation.

Details of the Amendment Regulations are set out in the Attachment.

The Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments.

                                                                                                                                                                                                                                                           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATTACHMENT

      FISHERIES MANAGEMENT AMENDMENT REGULATIONS 2006 (No. 1)

 

Regulation 1 provides for the Regulations to be cited as the Fisheries Management Amendment Regulations 2006 (No. 1).

Regulation 2 provides that the Regulations commence on the day after they are registered.

Regulation 3 provides that Schedule 1 amends the Principal Regulations (Fisheries Management Regulations 1992).

 

Schedule 1 - Amendment

Item [1] reflects the removal of the requirement to appoint a representative of the Minister when granting fishing rights by auction or tender (see item 2 below) by omitting the definition of ‘representative’ in the Principal Regulations. However, the representative of the Minister is retained when fishing rights are granted through a ballot process (see regulation 6 below).

Item [2] replaces regulations 5, 6, 7 and 8 of the Principal Regulations.

Division 1 – Auctions and ballots for fishing rights

Auction for the grant of a fishing right

Existing regulation 5, which provides that the Minister must appoint a representative when fishing rights are granted in any way, is omitted.

New regulation 5 replaces existing regulation 6 of the Principal Regulations. Apart from some minor word amendments, the regulation on the auction for the grant of a fishing right remains the same.

Ballot for the grant of a fishing right

New regulation 6 replaces regulation 8 of the Principal Regulations. Subregulation 6(1) has been added to allow a representative of the Minister to be appointed specifically for the ballot process. Apart from some minor word amendments, the regulation on the ballot for the grant of a fishing right remains the same.

 

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Division 2 – Tenders

Subdivision A - Preliminary

Purpose of Division

New regulation 7 outlines the purpose of the division in setting the procedures for a tender process. A note states the conditions of tender may stipulate that fishing rights may be available in ‘bundles’ of more than one fishing right.

The former regulation 7 prescribed the procedures to be followed if a fishing right was to be granted by tender. It has been replaced by Division 2 (regulations 7 and 8) which provide a more comprehensive prescription of procedures to be followed when granting fishing rights by tender.

 

Definitions for Division

New regulation 8 states the definitions used in Division 2, which are definitions of ‘precedence list’, ‘reserve price’ and ’tender manager’. The tender manager can either be an independent tender manager appointed by AFMA or AFMA itself.

 

New regulation 8A - Administration of the tender process

Paragraph 8A(a) allows for AFMA to appoint an independent tender manager to manage the tender process.

Paragraph 8A(b) allows for AFMA to appoint a probity auditor to oversee the tender process.

 

Subdivision B - Applications under subsection 26(1) and the tender process

New Regulation 8B -Applications under subsection 26(1) of the Act

Paragraph 8B(a) requires the person’s tender registration application to be sealed in an opaque envelope on which is written the word ‘registration’ (registration envelope).

Paragraph 8B(b) requires the person’s registration envelope and tender envelope to be submitted together in a sealed opaque envelope (outer envelope).

 

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New regulation 8C - Opening outer envelopes

Subregulation 8C(1) requires, as soon as practicable after the close of tenders, the tender manager to open each outer envelope.

Subregulation 8C(2) requires that the tender manager and, if appropriate, a probity auditor are present at the opening of the outer envelopes.

Subparagraph 8C(3)(a) requires for each outer envelope the tender manager is to open the registration envelope inside it and record the name of the person who submitted the enclosed registration application, whether a sealed tender envelope was submitted with the application and whether any other conditions in relation to the contents of, or markings on, the outer envelope have been complied with.

Subparagraph 8C(3)(b) requires the tender manager not to open any tender envelope, but to nominate a place where the sealed envelopes will be kept, until opened in accordance with regulation 8F.

Subparagraph 8C(3)(c) requires the tender manager to keep copies of the registration applications and give the originals to AFMA.

Subparagraph 8C(3)(d) provides for AFMA to assess each applicant’s eligibility for the grant of fishing rights in accordance with conditions for registration in the Act and the Management Plan for the fishery concerned, and then to give the tender manager a list of persons who are found to be eligible.

 

Subdivision C - Ranking and recording of tenders

New regulation 8D - Application procedures if fishery is divided into sectors

Regulation 8D provides that if fishing rights are to be allocated in sectors and the allocation is by the one tender process, the tender manager is to carry out the ranking procedure as set out in subdivision C (Ranking and recording of tenders) for each of those sectors. This will allow for a precedence list to be prepared for each sector.

 

New regulation 8E - Procedures for reserve price

Regulation 8E requires that if AFMA sets a reserve price, AFMA must before the closing time for tenders give a written statement as to what the reserve price is to the

                                                                                                                       

 

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tender manager in a sealed envelope (reserve price envelope). The reserve price is the minimum bid amount that will be accepted as a tender. A reserve price can be set for fishing rights for each sector.

 

New regulation 8F - Tenders – recording and ranking

Paragraph 8F(a) requires the tender manager to open the tender envelope for each registered person.

Paragraph 8F(b) requires the tender manager to record for each registered person, the person’s name, the amount bid per fishing right, if the person’s bid is invalid the reason why it is invalid and any other information required by conditions of the tender. An invalid bid would include situations where the request for tender form is not correctly completed, and there is insufficient information to determine whether a person can be placed on a precedence list.

Paragraph 8F(c) requires the tender manager to rank the tenders submitted by registered persons according to the amount bid per fishing right.

Paragraph 8F(d) provides that if two or more tenderers bid the same amount per fishing right those tenderers are to be ranked equally.

Paragraph 8F(e) requires that if AFMA has set a reserve price the tender manager the tender manager is to open the reserve price envelope and record for each tender whether the amount bid is less than, equal to, or higher than the reserve price.

Paragraph 8F(f) requires that if the conditions of tender set a minimum number of fishing rights that a tenderer may acquire, the tender manager is to record whether the minimum number that the tenderer will accept is equal to or more than the minimum set by the conditions.

Paragraph 8F(g) requires that if the conditions of tender set a maximum number of fishing rights that a tenderer may acquire, the tender manager is to record whether the maximum number that the tenderer will accept is equal to or less than the maximum set by the conditions.

Paragraph 8F(h) subject to regulation 8G requires the tender manager to prepare a precedence list setting out for each registered person who tendered:

–        the person’s name and contact details;

–        the amount bid per fishing right; and

 

 

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–        if the conditions of tender allow a person to specify a maximum number of fishing rights that a persons seeks to acquire or a minimum number a person will accept - those maximum and minimum numbers.

 

Paragraph 8F(i) requires that if the conditions of tender allow a tenderer to acquire less than all the available fishing rights the precedence list must also set out the matters provided for in regulation 8G (Procedures if tenderer can acquire less than all available rights).

Paragraph 8F(j) requires the tender manager to provide AFMA a report incorporating the precedence list.

 

New regulation 8G - Certain persons not to be placed on precedence list

Subregulation 8G(1) provides that where a person has a bid less than the reserve price or has submitted an invalid bid then that person will not be recorded on the precedence list.

Subregulation 8G(2) requires the tender manager to record the person’s name and reason why the person is not recorded on the precedence list.

 

New regulation 8H - Procedures if tenderer can acquire less than all available rights

Subregulation 8H(1) requires that, in relation to paragraph 8F(i), the precedence list must also set out the number of fishing rights to which each tenderer is entitled as set out in subregulations 8H(3), (4), (5), (6) and (7).

Subregulation 8H(2) states that subregulation 8H(1) applies whether or not the conditions of tender allow a tenderer to specify, at the amount tendered per fishing right, the maximum number of fishing rights that the tenderer is prepared to acquire or the minimum number of fishing rights the tenderer will accept.

Subregulation 8H(3) provides for each tender if the highest-ranked tenderer has tendered for less than all the available fishing rights, the next highest-ranked tenderer is entitled to the lesser of the remaining number of fishing rights and the number of fishing rights that the tenderer has tendered for – and so on.

Subregulation 8H(4) provides that if a tenderer nominates a minimum number of fishing rights that the tenderer will accept for an amount bid and that number is greater than the number of fishing rights available after deducting entitlements of all higher-ranked

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tenderers from the total number of fishing rights offered, that tenderer is not entitled to fishing rights even if the bid amount is higher than the next highest-ranked tenderer.

Subregulation 8H(5) provides that if a tenderer has not specified a minimum number of fishing rights sought, the person is taken to have nominated one fishing right as a minimum, or if AFMA has set a minimum number of fishing rights a person may accept – that number.

Subregulation 8H(6) provides that if two or more tenderers are equally ranked, their respective entitlements to fishing rights are to be proportional to the maximum number of fishing rights that each is prepared to accept at the amount bid.

Subregulation 8H(7) provides that a tender will be disregarded if the granting of entitlements in accordance with subregulation 8H(6) would lead to the tenderer being granted less than any minimum number of fishing rights that the tenderer would accept or the conditions of the tender specify as a minimum that a tenderer may acquire.

 

Division 3 – Miscellaneous

Division 3 Miscellaneous has been inserted as a heading for regulation 9. Regulation 9 concerns periods of payment in relation to fishing concessions, whereas the new regulation 8 concerns the procedure for tendering for SFRs. Regulation 9 deals with different subject matter from regulation 8, and as a result a clear demarcation between the regulations was required. The new regulations 5, 6, 7 and 8 are now organised in divisions, so regulation 9 has been allocated its own Division.