REGULATORY IMPACT STATEMENT - … · hookah diving equipment was seen as being inequitable and...

REGULATORY IMPACTSTATEMENTPROPOSED NATIONAL PARKS(CAPE HOWE MARINE NATIONAL PARK)REGULATIONS 2006

March 2006

Comments, queries and written submissions regarding thisdocument should be directed to:

Gary NiewandConservation and Recreation DivisionDepartment of Sustainability and Environment3/8 Nicholson StreetEAST MELBOURNE VIC 3002

Telephone: (03) 9637 8658Facsimile: (03) 9637 8577Email: [email protected]

Submissions close 5.00 pm on 10 April 2006

All submissions will be treated as public documents

© Crown (State of Victoria) 2006

A Victorian Government Publication

This publication is copyright.No part may be reproduced by any process exceptin accordance with the provisions of the Copyright Act 1986.

This RIS was prepared by Tim Harding & Associates for theDepartment of Sustainability and Environment.

Published by the Department of Sustainability and EnvironmentConservation and Recreation Division8 Nicholson Street, East Melbourne Victoria 3002.www.dse.vic.gov.au

ISBN 1 74152 427 X

This publication may be of assistance to you but the State ofVictoria and its employees do not guarantee that the publication iswithout flaw of any kind or is wholly appropriate for your particularpurposes and therefore disclaims all liability for any error, loss orother consequence which may arise from you relying on anyinformation in this publication.

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Summary

The proposed regulations are intended to further protect the values of the Cape HoweMarine National Park by improving the ability to deter and detect illegal fishing in thepark. This is to be achieved by prescribing the area of the park in which a person mustnot be in charge of a prescribed class of boat, namely certain commercial fishingvessels.

The effect of the proposed regulations is that they bring into operation, section 45A(4)of the National Parks Act 1975 (‘the Act’ or ‘the National Parks Act’), which providessevere penalties for being in charge of a prescribed class of boats in a prescribed area ofthe park.

Cape Howe Marine National Park is part of a system of 13 marine national parks and 11smaller marine sanctuaries created in 2002 under the Act. These parks and sanctuariespreserve and protect representative samples of Victoria’s distinctive and diverseunderwater environments. They also contribute to the nationally agreed objective ofestablishing a comprehensive system of protected areas representative of Australia’sbiological diversity. Marine protected areas need to be adequately protected againstdamage, especially irreversible damage. Accordingly, the Act prohibits any type offishing in all marine national parks and marine sanctuaries.

Cape Howe Marine National Park (‘the park’) is approximately 550 km east ofMelbourne and 15 km east of Mallacoota, at the far eastern extent of Victoria. The parkhas outstanding ecological, landscape and seascape values, with pristine waters and acoastline undisturbed by human influences.

Illegal commercial harvesting of fish from the park, especially abalone and sea urchins,poses a significant threat to the park’s natural environment in general, and to subtidalreef communities in particular. Illegal commercial fishing is also a major threat to thefishing industry and the interests of the wider community.

Under both the Act and the Fisheries Act 1995 (‘the Fisheries Act’), in the absence ofeffective regulations or a fisheries notice, offenders need to be ‘caught in the act’ oftaking or being in possession of ‘priority species’ such as abalone or being in possessionof commercial abalone equipment. Offenders can ‘hide the evidence’ by simplydumping priority species or commercial abalone equipment overboard as soon as anenforcement vessel is spotted on the horizon. Together with other practical difficultiesassociated with using conventional enforcement strategies, this makes it extremelydifficult to deter and detect the crime of illegal abalone fishing in the park. Theemphasis of enforcement measures needs to be on adequate deterrence of abalone theftby means of severe penalties for breaches of the law. The necessary severe penaltiescan be imposed by means of either a fisheries notice under the Fisheries Act orregulations under the National Parks Act.

Pending the proposed regulations, a fisheries notice has been issued for 12 monthsunder section 114 of the Fisheries Act. The notice prohibits, in the Cape Howe MarineNational Park and the Iron Prince Reef, the possession or use of a boat that is fitted withcommercial abalone equipment, unless the person in possession of or using the boat isoperating under a Victorian abalone fishery access licence that enables the taking of

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abalone in the area (i.e. the waters of the eastern abalone zone, excluding certainspecific areas such as marine national parks and marine sanctuaries). In the absence ofthe proposed regulations or effective alternatives, there is likely to be a significantincrease in the illegal take of abalone from the park after 1 May 2006, when the existingfisheries notice expires.

The following policy objective of the regulatory proposal is identified:

To further protect the natural values of the Cape Howe Marine National Park by meansof better enforcement measures against the illegal taking of abalone and other marinespecies from the park.

Preliminary consultation has taken place with a wide range of stakeholder organisations.The proposed regulations are generally supported by stakeholder organisations, with noknown objections to the current proposal. An earlier proposal to prohibit boats carryinghookah diving equipment was seen as being inequitable and unworkable.

Section 45A(4) of the Act provides that a person must not, in a prescribed area of thepark, be in charge of a boat-

(a) that is of a prescribed class of boats; or

(b) that is carrying equipment that is of a prescribed class of equipment.

Penalty: 100 penalty units or 6 months imprisonment or both, in the case of anatural person. 200 penalty units, in the case of a body corporate.

Accordingly, the proposed regulations prescribe commercial fishing vessels as a class ofboats prohibited in the park. The regulations define a ‘commercial fishing vessel’ in away that allows vessels engaged in lawful commercial fishing in the Iron Prince Reefand areas surrounding the park to continue to do so.

The existing fisheries notice has been working effectively, and the proposed regulationscombined with improved enforcement strategies are likely to be as, if not more,effective. There is no known reason why the proposed regulations should not beworkable or enforceable.

As fishing in the park is already prohibited by the Act, the proposed regulations imposeno additional costs on persons wishing to fish in the park (unlawfully). Apart from thebenefits of enabling better enforcement against illegal fishing in the park, the onlyimpact of the proposed regulations (apart from enforcement costs) is likely to be anunquantifiable but relatively minor increase in travel time and fuel costs for personslawfully using commercial fishing vessels in the area, but who are not authorised underthe proposed regulations to be in the park. Possible examples of such use include themovement of commercial fishing vessels between Victoria and New South Wales forpurposes unrelated to fishing.

The estimated enforcement costs of the proposed regulations are $35,000 per year or$248,000 over the 10-year life of the proposed regulations (discounted to presentvalues).

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The practicable alternatives considered in the cost benefit assessment were:

• Prescribe a class of equipment (e.g. hookah diving equipment) instead of a classof boats.

• Prescribe different area(s) of the park.

• Prescribe different classes of boats (e.g. all boats or boats above or below aspecified size).

Using a weighted criteria decision analysis, Option A (the proposed regulations) resultsin the highest weighted score at +1.4, followed by Option B (prescribe hookah divingequipment) at a weighted score of +0.8 and Option D (prescribe boat sizes) at aweighted score of +0.6. Option C (prescribe part of park) has the lowest weightedscore of +0.0.

The proposed regulations impose no restrictions on competition, in terms of theVictorian Government guidelines on competition because in this case, those affected bythe proposed regulations do not compete in the same markets as other businesses. Inother words, there is no relevant competition to restrict.

In summary, the proposed regulations are considered to be the most appropriate form ofintervention and the best option for achieving the identified policy objective. The costsof the proposed regulations are outweighed by their likely benefits, especially to thenatural values of the Cape Howe Marine National Park.

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Table of ContentsSUMMARY................................................................................................................................................. I

TABLE OF CONTENTS........................................................................................................................ IV

PRELIMINARY........................................................................................................................................V

Figure 1 - RIS flow chart ................................................................................................................... vi

1.0 BACKGROUND...................................................................................................................................1

1.1. INTRODUCTION..................................................................................................................................11.2. SETTING THE SCENE...........................................................................................................................1

1.2.1. Victoria’s marine national parks ..............................................................................................21.2.2. Cape Howe Marine National Park ...........................................................................................5Figure 2 – Cape Howe Marine National Park - location map ...........................................................61.2.3. Relevant fisheries legislation ....................................................................................................9

1.2.4. ABALONE FISHING ........................................................................................................................101.3 THE NATURE AND EXTENT OF THE PROBLEM ....................................................................................121.4 POLICY OBJECTIVES OF REGULATORY PROPOSAL .............................................................................151.5 CONSULTATION TO DATE..................................................................................................................151.6 AUTHORISING LEGISLATION .............................................................................................................16

2.0 CASE FOR INTERVENTION..........................................................................................................18

2.1 NEED FOR REGULATION....................................................................................................................182.2 FEASIBILITY OF REGULATION: COMPLIANCE ISSUES .........................................................................18

3.0 NATURE AND IMPACTS OF PROPOSED REGULATIONS.....................................................21

3.1. EXPLANATION OF PROPOSED REGULATIONS ....................................................................................213.2. IMPACT ON SMALL BUSINESS ...........................................................................................................22

4.0 ALTERNATIVES TO PROPOSED REGULATIONS...................................................................23

5.0 ASSESSMENT OF COSTS AND BENEFITS.................................................................................25

5.1 INTRODUCTION.................................................................................................................................255.2 THE BASE CASE.................................................................................................................................255.3 ASSESSMENT OF OPTIONS .................................................................................................................26

5.3.1 Option A: The proposed regulations ..................................................................................265.3.2 Option B: Prescribe a class of equipment (e.g. hookah diving equipment) instead of aclass of boats.....................................................................................................................................275.3.3 Option C: Prescribe only part of the park..........................................................................285.3.4 Option D: Prescribe boats by size ......................................................................................29

5.4 NET BENEFIT OF THE PROPOSED REGULATIONS.................................................................................29Table 1 – Weighted criteria decision analysis ..................................................................................30

6.0 NATIONAL COMPETITION POLICY TESTS.............................................................................32

6.1 COMPETITION PRINCIPLES AND GUIDELINES .....................................................................................326.2 NCP ASSESSMENT ............................................................................................................................33

7.0 EVALUATION STRATEGY ............................................................................................................35

8.0 CONCLUSIONS AND FINDINGS...................................................................................................36

GLOSSARY OF TERMS AND ACRONYMS ......................................................................................38

REFERENCES .........................................................................................................................................41

ATTACHMENTS.....................................................................................................................................42

ATTACHMENT 1. DRAFT REGULATIONS .................................................................................................42

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Preliminary

This Regulatory Impact Statement (RIS) has been prepared to fulfil the requirements ofthe Subordinate Legislation Act 1994 and to facilitate public comment on theproposed regulations. The RIS contains information on:

• the nature and extent of the problem to be addressed by the proposedregulations, including relevant research and investigations;

• the policy objectives of proposed solutions to the problem;

• public consultation to date;

• the case for Government intervention;

• the authorising legislation, objectives, nature and effects of the proposedregulations;

• alternatives to the proposed regulations;

• a cost-benefit analysis of the proposed regulations and alternative policy options;

• National Competition Policy tests; and

• an evaluation strategy.

The relationship between the above elements of the RIS is depicted in Figure 1.

Public comments and submissions are invited on the proposed regulations, in responseto information provided in this RIS. All submissions will be treated as publicdocuments. Written comments and submissions should be forwarded no later than 5.00pm on 10 April 2006 to:

Gary NiewandConservation and Recreation DivisionDepartment of Sustainability and Environment3/8 Nicholson StreetEAST MELBOURNE VIC 3002

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Figure 1 - RIS flow chart

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1.0 Background

1.1. Introduction

The proposed regulations (see Attachment 1) are intended to further protect the valuesof the Cape Howe Marine National Park by improving the ability to deter and detectfishing offences in the park. This is to be achieved by prescribing the area of the parkin which a person must not be in charge of a prescribed class of boat, namely certaincommercial fishing vessels, for the purposes of section 45A(4) of the National ParksAct 1975 (‘the Act’ or ‘the National Parks Act’), which provides as follows:

(4) A person must not, in a prescribed area of the park described in Part 2 ofSchedule Seven,1 be in charge of a boat-



Penalty: 100 penalty units or 6 months imprisonment or both, in the case of anatural person. 200 penalty units, in the case of a body corporate.

The effect of the proposed regulations is to bring into operation, section 45A(4) of theNational Parks Act, which provides severe penalties for being in charge of aprescribed class of boats in a prescribed area of the park. For this reason, no penaltiesare included in the proposed regulations.

Section 48 of the Act provides, amongst other things, for the making of regulations toprescribe classes of boats and equipment for these purposes.

Under section 9(1)(a) of the Subordinate Legislation Act 1994, a regulatory impactstatement (RIS) is required to be prepared unless:

the proposed statutory rule would not impose an appreciable economic or social burden on asector of the public.

This RIS has been prepared to fulfil this requirement. The cost-benefit analysis inPart 5.0 of the RIS identifies the appreciable economic or social burdens to beimposed by the proposed regulations.

1.2. Setting the scene

To set the scene for this RIS, and to assist in identifying and describing the problem tobe addressed by the proposed regulations, this Part provides some general backgroundinformation about relevant legislation and policies regarding marine national parksand fishing in general, and the Cape Howe Marine National Park in particular.

This information is provided solely to assist interested parties in better understandingthe nature and effects of the proposed regulations within their legislative, policy andsocial context. It is important to emphasise, however, that the RIS is concerned only

1 The Cape Howe Marine National Park.

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with the proposed regulations, and not with the National Parks Act, the Fisheries Act1995 (‘the Fisheries Act’) or with other instruments made under either Act.

1.2.1. Victoria’s marine national parks

Cape Howe Marine National Park is part of a system of 13 marine national parks and11 smaller marine sanctuaries created by the National Parks (Marine NationalParks and Marine Sanctuaries) Act 2002. This Act amended the National ParksAct, the Fisheries Act and other legislation.

This legislation was the culmination of almost 10 years of extensive investigation andconsultation by the Environment Conservation Council (ECC)2 and its predecessors.The ECC recommended and the Government endorsed that marine national parks beused to:

(i) conserve and protect biodiversity and natural processes;

(ii) maintain natural ecosystems as a reference against which other areasmay be compared;

(iii) provide opportunities for recreation and education associated with theenjoyment and understanding of natural environments, whereconsistent with (i) and (ii). 3

The ECC also recommended and the Government endorsed, amongst other things,that the removal or disturbance of marine biota not be permitted in marine nationalparks.

These parks and sanctuaries comprise some 54,000 hectares or 5.3%, of Victoria’smarine waters. They preserve and protect representative samples of Victoria’sdistinctive and diverse underwater environments. They also contribute to thenationally agreed objective of establishing a comprehensive system of protected areasrepresentative of Australia’s biological diversity.4

The Victorian Government’s vision for the system of marine national parks andmarine sanctuaries is detailed in the Marine National Park and Marine SanctuariesManagement Strategy 2003-20105 and summarised in the following extract:

The vision for Victoria’s system of marine national parks and marine sanctuaries is tomaintain marine ecosystems in their natural state, enjoyed by visitors and protected from theeffects of inappropriate activities. The system will safeguard representative examples ofundisturbed natural marine habitats, respect cultural heritage values, and be a place ofinspiration, enjoyment and renewal for all people. The system will complement our world-class national parks system on land.

This vision aims to preserve the diversity of our marine environment, its flora and fauna, itsnatural beauty, and the diversity of activities that may be enjoyed there. It is a vision that

2 Now the Victorian Environment Assessment Council (VEAC).3 Environment Conservation Council, 2000.4 Minister for Environment and Conservation, 2002.5 Parks Victoria, 2003.

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invites all Victorians to become involved, to take pride in our marine national parks andmarine sanctuaries, and to share in their stewardship.

The principal means by which the Government gives effect to its vision for the State’smarine national parks and marine sanctuaries is through the legislative frameworkprovided by the Act and regulations made under the Act.

The primary objects, set out in section 4 of the Act, relate (so far as parks, includingmarine national parks and marine sanctuaries, are concerned) to the protection andpreservation of the natural environment, indigenous flora and fauna and features ofspecial interest. The Act also promotes research and studies relating to the protectionof the natural environment in parks, including marine national parks. The use ofparks by the public for enjoyment, recreation or educational purposes is to beencouraged, provided that such uses do not adversely affect the protection andpreservation of the natural environment.

The National Parks Act is assigned to the portfolio of the Minister for Environment(‘the Minister’). The Act also confers management powers on the Secretary to theDepartment of Sustainability and Environment (‘the Secretary’).

Section 17D(3) of the Act obliges the Secretary to:

(a) ensure that each marine national park and marine sanctuary is controlled and managed inaccordance with the objects of the Act, in a manner that will:

(i) preserve and protect the natural environment and indigenous flora and fauna of the parkand any features of the park which are of geological, geomorphological, ecological,scenic, archaeological, historic or other scientific interest; and

(ii) promote the prevention of the introduction of exotic flora and fauna into the park; and

(iii) provide for the eradication or control of exotic flora and fauna found in the park; and

(b) subject to paragraph (a):

(i) provide for the use, enjoyment and understanding of marine national parks and marinesanctuaries by the public; and

(ii) promote an understanding of the purpose and significance of marine national parks andmarine sanctuaries; and

(c) prepare a plan of management in respect of each marine national park and each marinesanctuary.

A draft management plan has been prepared for the Cape Howe Marine National Park(in accordance with section 17D(3)(c), above).6 Considerable public consultation andstakeholder input is sought during the development of park management plans. Thefinal approved management plan will provide management aims and strategies thatwill ensure the protection and enjoyment of the park.

6 Parks Victoria, 2005.

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The National Parks (Park) Regulations 2003 also apply to marine national parks.

To manage the park system and the various uses within these areas, the Secretary hasentered into a management agreement with Parks Victoria7 under Section 16A of theAct. Under this agreement, Parks Victoria provides the day-to-day operationalmanagement for all parks, including marine national parks and marine sanctuariesmanaged under the Act. The Department of Primary Industries (DPI) also providesenforcement services (i.e. enforces the ‘no-fishing’ provisions of the Act).

The differences and inter-relationships in the marine environment mean thatVictoria’s marine national parks and marine sanctuaries must be managed somewhatdifferently from land environments. Natural, recreational and cultural values may beaffected by the use of both land and marine areas some distance away, over whichpark managers have no direct control. Impacts on one marine habitat can quicklyimpact on another, and human activities and natural events on land and in theatmosphere can have widespread consequences for the marine environment.Boundaries in the ocean can be difficult to define, and the effects of human activitiescan be hidden from view (refer to Part 1.2.2).

Like the atmosphere, but in contrast to land, the marine environment is a commonresource which is rarely in private ownership, and there are few natural or artificialbarriers to movement. Many of the strategies used to concentrate the impacts ofrecreational activities in terrestrial parks (e.g. the creation of walking tracks andpicnic areas) are not feasible in the marine context.8

As with national parks on land, the taking of animals and plants is prohibited inmarine national parks and marine sanctuaries. In particular, section 45A of the Actprohibits all methods of commercial and recreational fishing in these areas, whethershore or sea-based, including netting, diving, spearing, line fishing or the use of traps.The penalties for breaches of this prohibition are severe9 - heavier than those applyingto the taking or damaging of other fauna, plants or objects from these areas, reflectingthe importance of fin fish and shellfish to marine ecosystems.

In introducing the National Parks (Marine National Parks and Marine Sanctuaries)Act Bill (No. 2) in 2002, the Minister for Environment and Conservation noted:

In deciding to establish a system of no-take marine national parks and sanctuaries, and indeveloping the bill, the government has been mindful of the potential impacts on thecommercial fishing industry and associated communities. It recognises the need to providemeasures to assist the industry to adjust to the introduction of the marine national parks.

7 Parks Victoria is a statutory corporation established under the Parks Victoria Act 1998 to, amongstother things, provide services to the State and its agencies for the management of parks, reserves andother land under the control of the State.8 Parks Victoria, 2005.9For example, the penalties for commercial fishing are 200 units or 12 months imprisonment or both, inthe case of a natural person; and 400 penalty units, in the case of a body corporate.

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These measures to assist the industry included:

• a statutory compensation scheme to assist the holders of specified commercialfishery licences and fishing charter boat operators to adjust their fishingoperations to areas outside the marine national parks and marine sanctuaries;

• a variety of government programs, including enterprise improvement, regionalassistance, business assistance and employment assistance to help thoseaffected to adjust to the introduction of the marine national parks, as well asoffer support to affected workers in obtaining alternative employment;

• significantly increased fisheries enforcement and compliance measures,particularly for the abalone sector.

A key characteristic of marine national parks and sanctuaries is that they are, in themain, relatively pristine or undisturbed. These marine protected areas are veryimportant from the perspective of protecting representative natural ecosystems. It isunlikely that these essentially pristine ecosystems could ever be restored if destroyed.

The irreversibility of most forms of damage to these ecosystems points to a need toimplement the Precautionary Principle in the management of marine protected areas.The Precautionary Principle may be summarised as:

When an activity raises threats of harm to human health or the environment, precautionarymeasures should be taken even if some cause and effect relationships are not fully establishedscientifically. In this context the proponent of an activity, rather than the public, should bearthe burden of proof.10

For these reasons, marine protected areas need to be adequately protected againstdamage, especially irreversible damage.

1.2.2. Cape Howe Marine National Park

Cape Howe Marine National Park (‘the park’) is approximately 550 km east ofMelbourne and 15 km east of Mallacoota, at the far eastern extent of Victoria. Thepark adjoins the Cape Howe Wilderness Zone of Croajingolong National Park. Thepark covers a total of 4050 hectares of land and waters reserved under Schedule Sevenof the Act. The eastern boundary of the park is aligned with the Victorian/New SouthWales (NSW) border, 55km south of the nearest port at Eden. The western boundaryis located east of Telegraph Point and Gabo Island. The park extends seawards fromthe high water mark for approximately three nautical miles (refer to Figure 2)11.

10 Wingspread Statement on the Precautionary Principle.<http://www.nwaeg.org/Principles/WingspreadStatement.htm>.11 Source: Parks Victoria, with permission.

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Figure 2 – Cape Howe Marine National Park - location map

An area broadly rectangular in shape, surrounded on three sides by the park andadjoining Croajingolong National Park on its fourth side, is excluded from the park(refer to Figure 2). This area is known as the Iron Prince Reef, and is used bycommercial fishers and possibly a very small number of recreational fishers.Commercial harvesting of abalone and sea urchins by diving occurs on the reef,

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therefore licensed commercial vessels regularly pass through the western and south-western portion of the park to access the reef.

International and domestic shipping utilises a lane that is seawards of the south-eastern extremity of the park (although some have been known to ‘cut the corner’through this portion of the park). However, there is little or no recreational boating orboat-based recreational fishing in the area. Boat access to the park can be difficult asa result of changeable weather and sea conditions, and a lack of launching and landingfacilities. The nearest boat launching facility is at Bastion Point (Mallacoota). Thisfacility requires boats to be launched directly off the beach. The nearest formallaunch or port facility is at Eden (NSW). For safety reasons, recreational boats rarelyventure east of Gabo Island from Mallacoota or south of Cape Howe from Eden (referFigure 2).

On-shore and off-shore markers, significant easily identifiable landforms and pre-visitmaterials can all be used to help identify the boundaries of marine national parks andmarine sanctuaries. However, the physical environment of Cape Howe MarineNational Park is such that the prevailing weather and sea conditions, shifting sanddunes and wave action make it difficult to identify boundaries using markers andlandforms. Off-shore boundary markers are not feasible because of their limitedeffectiveness at being sighted while at sea, the risk of becoming a hazard to vesselsand the high costs of installation and maintenance. A system of yellow on-shoremarkers does delineate some of the park’s principal boundaries, but these are only ofvalue to craft operating relatively close to shore. However, it is noteworthy that most,if not all, commercial fishing vessels (and enforcement boats) carry global positioning(GPS) equipment, enabling their location to be determined fairly accurately.Commercial fishers regularly operating in the area have the park boundariesprogrammed into their GPS equipment.

There are currently no tour operators licensed to operate in Cape Howe MarineNational Park.12 Opportunities for licensed tour operators are available (other than forfishing purposes e.g. sea kayaking), although remoteness and weather and seaconditions are likely to limit potential operators.

The park has outstanding landscape and seascape values, with pristine waters and acoastline undisturbed by human influences. There is no public vehicular access intothe park. Public access is generally by boat from Mallacoota or Eden, or by footalong a section of the Wilderness Coast Walk.

There are a variety of marine ecological communities in Cape Howe Marine NationalPark, including sandy beaches, intertidal and subtidal rocky reefs, subtidal softsediments and pelagic communities, providing habitat for a range of species. Thesehabitats provide important substrate, food, shelter, and spawning and nursery areas fora variety of marine flora and fauna.13

12 Under section 43 of the Act, trades and businesses are not permitted to be carried on in parks unlessauthorised under the Act.13 Plummer et al, 2003.

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The warmer eastern waters mix with cooler southern waters, creating an environmentrich in nutrients and high in diversity. Many species in these waters reach theirsouthern limits in Far East Gippsland.

These unique attributes make the park of significant interest to researchers. The Actalso promotes research and studies relating to the conservation of the naturalenvironment in marine national parks, such as the Cape Howe Marine NationalPark.14 Several teams of researchers have conducted studies and investigations in thepark and surrounding waters over the past couple of years.

According to the draft management plan for the Cape Howe Marine National Park,the park will be managed as a world-class marine protected area for conservation andappropriate recreation, in accordance with its status. It will contribute to the overallmaintenance of marine biodiversity in the Twofold Shelf marine bioregion, protectinga range of marine ecological communities, threatened marine mammals andshorebirds.

Protecting natural processes within the park will be an important management goal.Significant management directions for the park include the following:

• Natural processes, including competition, predation, recruitment anddisturbance, will be protected to ensure an overall benefit to the biodiversityand variety of marine ecological communities in Cape Howe Marine NationalPark.

• Identified threats to the park will be minimised through addressing theoutcomes of ongoing monitoring, risk assessment and, where feasible,complementary adjacent, coastal and catchment management.

• Impacts of illegal harvesting will be minimised through information,education, interpretation and improved surveillance and enforcement.15

Former commercial fishing activities in the area that now constitutes the parkincluded seining and mesh netting for a variety of species, but the most commonfishing activity was abalone harvesting which occurred in the area for more than 40years. Whilst not as valuable or rare as abalone, there were developing fisheries16 forsea urchins17 and Banded Morwong in the area. Recreational harvesting of a range ofspecies including rock lobster and abalone also occurred, but to a vastly lesser extentdue to previously mentioned difficulties in recreational access.18

Illegal harvesting of fish from the park, especially shellfish such as abalone and seaurchins, poses a significant threat to the abovementioned park values, particularly tosubtidal reef communities. Although harvesting methods have little impact on the

14 Refer to sections 4, 17D, 20 and 21A of the Act.15 Parks Victoria, 2005.16 Refer to Part 1.2.3 of this RIS.17 There is a growing export demand for sea urchins (particularly in Japan) as stocks in other countriesdecline.18As a result of the proclamation of Cape Howe Marine National Park, all forms of extraction,including commercial and recreational fishing, are prohibited.

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environment, removal of abalone can affect the ecological balance between abaloneand species associated with abalone.19 Anecdotally, it can open up reef systems tohigh energy currents and wave action and can even lead to denuding of reef biota.

For this reason, the proposed management strategies for the park include:

• managing visitor activities to minimise impacts on flora, fauna andcommunities, particularly in relation to compliance with no-fishing provisions;

• in conjunction with Fisheries Victoria, continuing to provide information,interpretation and education material through a variety of means to achievevoluntary compliance with fisheries regulations, and where necessary,enforcement;

• Fisheries Victoria implementing the fishing prohibition and the East RegionMarine Compliance Plan (refer to Part 2.2 of this RIS).

The Victorian Government has initiated discussions with New South Wales overcomplementary enforcement measures which could be put in place on the Stateborder.20 These measures, together with the strong enforcement provision included inthe Act in relation to Cape Howe Marine National Park,21 supported by the proposedregulations, will help to reduce illegal abalone fishing (the main threatening activity)in the park and adjoining waters.

1.2.3. Relevant fisheries legislation

Amongst other things, the Fisheries Act 1995 (‘the Fisheries Act’) provides for thelicensing of both commercial and recreational fishing.

Under the Fisheries Act, commercial fisheries are generally managed under ‘limitedentry’ whereby the right to take fish for sale is held by a limited number of currentlicence holders. Most licences are transferable subject to the approval of theSecretary to the Department of Primary Industries (DPI), and because of their limitedsupply, transfer prices are quite high, depending upon the fishery. However,developing fishery permits are not renewable or transferable.22

The penalty for commercial fishing (that is, taking fish for sale) without the requiredlicence is 200 penalty units or 12 months imprisonment or both if the offenceinvolved a priority species (that is, abalone or rock lobster). In any other case, thepenalty is 100 penalty units or 6 months imprisonment or both. These penalties applyfor illegal commercial fishing in Victorian waters outside marine national parks, suchas the Iron Prince Reef (refer to Figure 2). As discussed in Part 1.2.1 of this RIS, allfishing is prohibited within marine national parks and marine sanctuaries.

19 Fisheries Victoria, 2002.20 Minister for Environment and Conservation, 2002.21 Refer to section 45A(4) of the National Parks Act.22 A developing fishery is one where fish stocks and biology are not yet sufficiently understood tomanage like commercial fisheries.

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The Fisheries Act also specifies that licences are required for all recreational fishing,including in marine waters. However, there are no limits on the numbers ofrecreational fishing licences and they are not transferable. Recreational fishinglicences are inexpensive and entitle the holder to take fish for personal use, rather thanfor sale.

Under section 10 of the Fisheries Act, all wild fish and other fauna and flora found inVictorian waters are the property of the Crown. This makes it clear that theunauthorised taking of fish is theft, and is not merely the sharing of ‘commonproperty resources’ like air or water.

For both commercial and recreational fishing, regulations and other instrumentsspecify management controls such as closed seasons, minimum sizes, catch limits orfishing methods. However, the maximum penalty for a breach of the regulations isgenerally only 20 penalty units23, with some specific exceptions24.

The Minister administering the Fisheries Act may also, after consulting specifiedorganisations, issue a fisheries notice in relation to additional management controls.However, the maximum duration of a fisheries notice is only 12 months and themaximum penalty for a breach of a fisheries notice (other than a fisheries notice madeunder sections 67, 68A or 114 of the Fisheries Act) is 50 penalty units.25 No RIS orother process of general public consultation is required before a fisheries notice isissued. Fisheries notices are intended as temporary measures, often to implementurgently needed fishery management controls pending the preparation of regulations.

Under section 114 of the Fisheries Act, a regulation or fisheries notice may prohibitthe possession, sale or use of any specified boats or equipment. The maximumpenalty for a breach of a regulation or fisheries notice made under this section of theAct is 100 penalty units or imprisonment for 6 months or both. The reason for thehigher penalty is that this section of the Fisheries Act is needed to protect priorityspecies such as abalone. Pending the proposed regulations, a fisheries notice has beenissued under section 114 of the Fisheries Act prohibiting, in the Cape Howe MarineNational Park and the Iron Prince Reef, the possession or use of fishing boats that arefitted with commercial abalone equipment (excluding aqualung and snorkelequipment),26 unless the person holds a Victorian abalone fishery access licence totake abalone in that area (i.e. the waters of the eastern abalone zone, excluding certainspecific areas such as marine national parks and marine sanctuaries). This fisheriesnotice expires on 1 May 2006.

1.2.4. Abalone fishing

Abalone is a species of single-shelled marine mollusc (like a large marine snail) foundon rocky reefs in temperate waters off Australia’s southern coasts, from the intertidalzone to about 40-50 metres of water.27 They feed on large marine algae such as kelp,

23 For the financial year commencing 1 July 2005, the value of a penalty unit is $104.81 (VictoriaGovernment Gazette, G15, p722).24 Refer to sections 37, 67, 68A and 114 of the Fisheries Act.25 Refer to section 152 of the Fisheries Act.26 In other words, hookah diving equipment (refer to Part 1.2.4).27 Department of Agriculture, Fisheries and Forestry, 2005.

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and are often found in association with sea urchins,28 which have similar habitatrequirements.

The abalone fishery is Victoria’s most valuable commercial fishery with a currentannual landed catch value of around $70 million, an established processing industryand an emerging aquaculture sector.29 Australia produces approximately 50% of theworld’s reported wild catch harvest, and Victoria is the second-largest abalone-producing state, behind Tasmania, with around 10% of the annual world harvest.30

The Victorian abalone fishery is sustainably managed by the setting of TotalAllowable Catches (TACs). Each licensed abalone fisher is allocated a portion of theTAC, known as a quota. TACs and quotas are calculated to ensure that the abaloneresource is not overfished.

The Iron Prince Reef is an important resource for licensed abalone fishers, and 23licensed abalone fishers and one licensed rock lobster fisher traverse the Cape HoweMarine National Park to access the Iron Prince Reef system.

Abalone fishers normally use a blunt metal lever, known as an ‘abalone iron’, to priseabalone from rocks without cutting or damaging the fish. In the remote waters thatnow constitute the Cape Howe Marine National Park, they also normally useunderwater breathing equipment known as ‘hookah diving equipment’ (refer toglossary), consisting of a compressor, air reservoir and hose, often mountedpermanently in their boats.31 Hookah diving equipment provides fishers with theability to operate underwater for longer periods than SCUBA (a common alternativeto hookah diving equipment). Hookah diving equipment also provides advantages inremote areas including the Iron Prince Reef/Cape Howe area where there is a paucityof refill facilities for SCUBA tanks. Depending on the diver’s experience, aprofessional diver using hookah diving equipment can harvest between 500-600kilograms of live fish a day.32 (Three to four abalone weigh one kilogram in thisarea.)33

Recreational divers rarely use hookah diving equipment, and they also rarely utilisethe park (because of the access problems alluded to earlier in this RIS).

Given this reliance on hookah diving equipment by both legal and illegal commercialabalone fishers, an initial regulatory proposal was developed based on prohibitingboats carrying this equipment in the eastern portion of the park, but after consultationwith stakeholders, this proposal was rejected as inequitable and unworkable.

28 Sea urchins are members of a large group of marine invertebrates in the phylum Echinodermata(spiny skinned animals), that also include starfish, sea cucumbers, sea lilies, and brittle stars.29 As the market for Australian sea urchins is still developing, sea urchins are of much lower value andsea urchin theft is not as big a problem as abalone theft.30 Minister for Agriculture, 2005.31 Hookah diving equipment is considerably more cost efficient than SCUBA in the mid to long term,and snorkelling does not allow diving for long enough periods per dive.32 Department of Agriculture, Fisheries and Forestry, 2005.33 Source: Abalone Fishermen's Co-Operative.

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According to the Victorian Abalone Fishery Management Plan,34 major threats to thefishery include the level of abalone theft and the increasing sophistication of thethieves. A challenge for future management arises when these growing threats arecombined with the current level of resources available for enforcement.

The value of abalone is high (the current beach price is around $41/kg)35 and ittherefore creates a financial incentive for large scale theft,36 and in some cases,sophisticated illegal activities in both catching and processing. Although firmquantitative estimates are not available,37 there is consensus amongst all stakeholdersthat abalone theft is at an unacceptably high level and that resource theft is a majorproblem affecting the sound management of the resource.38 As a result of the above(and Part 1.2.2), Cape Howe Marine National Park is at a particularly high risk fromillegal abalone fishing.

1.3 The nature and extent of the problem

In accordance with Government guidelines,39 the RIS is required to identify anddescribe the problem to be addressed by the proposed regulations. In other words,why are the regulations being proposed?

The problem addressed by the proposed regulations is essentially one of enforcement.The nature and extent of the problem is best identified by considering the likelyconsequences if there were no relevant regulations or effective alternatives in place.

As discussed in Part 1.2.2 of this RIS, illegal harvesting of fish from the park,especially abalone and sea urchins, poses a significant threat to park values,particularly to subtidal reef communities. Although harvesting methods have littleimpact on the environment, removal of abalone can affect the ecological balancebetween abalone and species associated with abalone.40 Anecdotally, it can open upreef systems to high energy currents and wave action and can even lead to denudationof reef biota.

Illegal commercial fishing is also a major threat to the fishing industry and the widercommunity, as explained to the Victorian Parliament by the Minister for Agriculture:

The illegal take of fish resources, or theft of a public resource, is the biggest known threat tothe sustainable use of Victoria's most valuable fishery resources, the 'priority species' ofabalone and rock lobster. Not only does this illegal take of resources threaten thesustainability or survival of the fishery, but it also threatens the jobs of people in the industry.Broader implications for the wider community include the unfair competition withlegitimately sourced product in the market place, the compromising of food safety and also therevenue loss for the government, and therefore the community as a whole.

34 Fisheries Victoria, 2002.35 The beach price has varied between $30/kg and $41/kg over the last two years.36 If an abalone thief collects 600kg abalone per day, this would yield almost $25, 000 per day.37 Tailby, R. and Gant, F., April 2002.38 Fisheries Victoria, 2002.39Government of Victoria, 2005.40 Fisheries Victoria, 2002.

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Countries around the world have seen the collapse of their fisheries due to high levels ofillegal take. As a result of these collapsed abalone fisheries, Victoria and Tasmania are now inthe unique position of providing approximately half the world's supply of wild-catch abalone.

Along with the benefit of premium prices for wild-catch abalone comes the detriment of anincreased vulnerability to being targeted by opportunistic and organised crime.

Illegal fishing activity has parallels with the illegal drug trade and at times intersects with it.Organised crime uses increasingly sophisticated measures to harvest and launder profits fromthe illegal fishing trade. For instance, an Australian Institute of Criminology report suggeststhat illegally taken abalone, or its proceeds, have been used to fund drug imports. Further, thecommon transit networks operated by organised crime syndicates have been identified asbeing utilised to traffick a range of illicit goods, including priority fish species. 41

A study of the illegal market in abalone by the Australian Institute of Criminologyfound that:

• strategies aimed at disrupting the illegal market in abalone would be mostbeneficial, as they would reduce the offender’s ability to access abalonestocks;

• prevention of illegal harvesting is also the best outcome in terms of protectingthe fishery and maintaining fish stocks; and

• the difficulties inherent in policing illegal activity in connection with theabalone industry are numerous and stem from the fact that illegal harvestingtakes place offshore and can occur at any number of sites along Australia’sextensive southern coastline.42

In the absence of the proposed regulations or effective alternatives, there is likely tobe a significant increase in the illegal take of abalone from the Cape Howe MarineNational Park, for the following reasons:

1. The close proximity of two legal abalone fisheries (Iron Prince Reef andsouthern NSW coast) provides geographical opportunities for illegal abalonefishing in the park. For example, it is quite easy for commercial fishingvessels from NSW to illegally fish in the park and return to their port in NSWthe same day.

2. Abalone catch statistics indicate that the adjacent abalone fishery in southernNSW has a lower yield per unit of fishing effort than the eastern Victorianabalone fishery. This creates a financial incentive to fish illegally in Victoriarather than legally in NSW.

3. The existence of nearby legal abalone fisheries at the Iron Prince Reef and insouthern NSW provides a convenient ‘cover’ for using commercial fishingvessels in the park, and provides opportunities for ‘laundering’ illegally takenabalone by pretending it was taken from one of the nearby legal abalonefisheries.

41 Minister for Agriculture, 2003.42 Tailby, R. and Gant, F., April 2002.

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4. The area is very remote and is relatively inaccessible to enforcement officers.There is no vehicular access, and no boat ramp or jetty. Enforcement vesselstherefore need to travel considerable distances to access the park, oftenthrough rough seas. With modern communications systems, illegal abalonefishers in the park usually have ample warning of enforcement vessels leavingport. There is little or no vegetative cover on the wide coastal dunes adjacentto the park for shore-based surveillance by enforcement officers. Thecombination of these factors renders the enforcement of illegal fishing in thearea very difficult.

5. Similarly, the area is equally inaccessible to recreational boats and othervessels that could report illegal fishing or suspicious behaviour.

6. Under the National Parks Act43 and the Fisheries Act, there is, practicallyspeaking, a requirement to catch offenders in the act of taking or being inpossession of priority species or being in possession of commercial abaloneequipment44 or other evidence such as abalone catch bags. Offenders can‘hide the evidence’ by simply dumping priority species, commercial abaloneequipment, catch bags or other equipment overboard as soon as anenforcement vessel is spotted on the horizon. However, hookah divingequipment is unlikely to be dumped overboard as it is usually fixed to the boatand is relatively expensive to replace.

As a result of the above factors, existing laws are an insufficient deterrent to illegalabalone fishing in the Cape Howe Marine National Park, apart from the fisheriesnotice referred to in Part 1.2.3 of this RIS. However, fisheries notices last for amaximum period of 12 months. (The current fisheries notice expires on 1 May 2006.)Although fisheries notices can be reissued they are intended as temporary ‘stop gap’measures, often pending the preparation of regulations. Fisheries notices are notappropriate as a substitute for regulations in the longer term. In order to furtherprotect the natural values of the Cape Howe Marine National Park, there is a need forbetter enforcement measures against the illegal taking of abalone and other marinespecies from the park. The emphasis of these enforcement measures needs to be onadequate deterrence of abalone theft by means of severe penalties for breaches of thelaw.

Thus, the identified problem for the purposes of this RIS is:

The unacceptable risk to the natural values of the park from illegal abalone fishing,and the practical difficulties associated with conventional enforcement activities.

43 Under section 45C of the National Parks Act, key enforcement provisions of the Fisheries Act alsoapply to fishing offences in marine national parks.44 Under the Fisheries Act, ‘commercial abalone equipment’ means any device or mechanical thing thatis designed for use, or that is capable of being used, for or in connection with the taking of abalone, andincludes any underwater breathing apparatus, knife, probe, lever, iron or bar.

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1.4 Policy objectives of regulatory proposal

Having regard to the purposes of the Act and the above discussion, to solve theproblem described in Part 1.3, the following policy objective of the regulatoryproposal is identified:

To further protect the natural values of the Cape Howe Marine National Park bymeans of better enforcement measures against the illegal taking of abalone and othermarine species from the park.

1.5 Consultation to date

The primary process of consultation regarding the proposed regulations is thepublication of a RIS for public comment during a statutory minimum 28-dayconsultation period. (Because of the extensive consultation that has already takenplace with affected stakeholders, 28 days is considered to be a sufficient period forpublic comment in response to this RIS.)

The preparation and publication of a RIS provides for an informed process ofconsultation with the public regarding the regulatory proposal, the policy alternativesand the costs and benefits associated with each policy option. It is intended that acopy of this RIS and the proposed regulations will be forwarded to relevantgovernment agencies, industry associations and other identified stakeholders at thecommencement of the statutory consultation period.

Preliminary consultation has already taken place with the following stakeholderorganisations:

• Abalone Fisherman's Co-operative • Lakes Entrance Fishermans Co-op• Abalone Industry Association of NSW • Marine and Coastal Community

Network• Australian Marine Conservation Society

- Melbourne Branch• Methodist Ladies College (Marshmead

School Camp)• Australian Marine Sciences Association

- Victorian Branch• Monero/Ngarigo People

• Bairnsdale Dive Club • Moogli Aboriginal Council• Bidwell Clan Elders • Museum of Victoria• Boating Industry Association of

Victoria• NSW Fisheries

• Department of Environment andConservation, Parks and WildlifeDivision (NSW)

• Primary Industries Research Victoria

• Department of Primary Industries • Sale SCUBA Club• Dive Industry of Victoria Association

(DIVA)• Scuba Divers Federation of Victoria

(SDFV)• Dive Victoria • Seafood Industry Victoria (SIV)• East Victoria Sea Urchin Divers

Association• Tourism Victoria

• Eastern Zone Abalone IndustryAssociation

• Victorian National Parks Association

• Eden Fishermans Co-op • Victorian Tourism OperatorsAssociation (VTOA)

• Far East Gippsland AboriginalCorporation

• VR Fish

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• Friends of Mallacoota • Wilderness Coast Charters• Heritage Victoria

The regulatory proposal was originally to prohibit the carrying of hookah divingequipment in boats within the eastern area of the park (refer to Part 1.2.4 of this RIS).Whilst there was general agreement on the need to effectively protect the park fromillegal abalone fishing, there was concern about the impact of this regulatory proposalon persons lawfully carrying hookah diving equipment, such as licensed abalonefishers, researchers, marine archaeologists and even large ships traversing the park.The number of exclusions that would be required became too complex and difficult todefine (refer to Part 5.3 of this RIS).

As a result of this preliminary consultation, the regulatory proposal was altered to theproposed regulations, that is, regulations that prohibit unauthorised commercialfishing vessels within the park. The proposed regulations are generally supported bystakeholder organisations, with no known objections to the current proposal.

However, during the public comment period for the proposed regulations, DSEparticularly invites comments and feedback from any person who may be adverselyaffected by the proposed regulations, with details of the nature and extent of any suchadverse effects.

1.6 Authorising legislation

The primary authorising power for the proposed regulations is the regulation-makingprovision in section 48 of the National Parks Act 1975 (‘the Act’ or ‘the NationalParks Act’), which includes a long list of the specific matters for which regulationsmay be made, such as:

(a) preserving and protecting national parks, wilderness parks, State parks, marine nationalparks and marine sanctuaries or any matter or thing in any such park or a feature of any suchpark;

In particular, sub-section 48(1)(s) provides that the Governor in Council may makeregulations for or with respect to-

(s) generally prescribing any matters or things authorized or required to be prescribed underthis Act.

This sub-section thus provides a head of power to make regulations wherever theword ‘prescribed’ is used in other sections of the Act, such as section 45A(4), whichprovides as follows:

(4) A person must not, in a prescribed area of the park described in Part 2 of Schedule Seven,45 be in charge of a boat-



Penalty: 100 penalty units or 6 months imprisonment or both, in the case of a

45 The Cape Howe Marine National Park.

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natural person. 200 penalty units, in the case of a body corporate.

Note: The proposed regulations have the effect of bringing section 45A(4) of theNational Parks Act into operation.

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2.0 Case for intervention

2.1 Need for regulation

Having identified the nature and extent of the problem and the suggested policysolution, the ‘threshold’ or preliminary question to be addressed in a RIS is: Is there asufficient case for further government intervention to assist in solving the problem?

This RIS outlines the nature and extent of the problem (refer to Part 1.3) that is likelyto be encountered if the proposed regulations or suitable alternatives are not in placefollowing the expiry of the existing fisheries notice on 1 May 2006.

Generally speaking, the economic rationale for government intervention in marketsarises from the concept of market failure, that is, the existence of externalities and/orpublic goods, including a lack of information. In other words, market forces alonewould not solve the problem identified in this RIS and a regulatory solution isnecessary.

Externalities arise where private decision makers do not incur all the costs or receiveall the benefits of their decisions. Negative externalities arise where there isunacceptable detriment to third parties, for example, damage to the ecology of thepark and to the abalone fishing industry from illegal abalone fishing in the park.

In relation to public goods it is argued that the market of its own accord cannotprovide adequate protection of the natural values of the park (refer to Part 1.3).

In this case, it is also clear that because of the specific provisions of the Act, in someareas markets cannot deal with matters that the Act specifies can only be prescribedby regulations, such as prescribing boats or equipment for the purposes of section 45Aof the Act (refer to Part 1.1 and 1.6 of this RIS).

When considering alternative forms of intervention, the level of risk of, and impactfrom, non-compliance is highly relevant. The higher risks of non-compliance, andhigher impacts from non-compliance, generally justify stronger regulatoryinstruments. Conversely, where there are low risks of non-compliance with codes orstandards and low impacts of non-compliance, less interventionist forms of regulation,including self-regulation, are warranted. The enforcement problem outlined in Part1.3 of this RIS indicates a need for further government intervention in the form ofregulations to protect the natural values of the park.

2.2 Feasibility of regulation: compliance issues

The next preliminary question to be addressed is whether government intervention isfeasible. That is, are regulations likely to be enforceable?

The Act and Regulations (in the case of marine national parks and marine sanctuaries)are enforced by Parks Victoria and DPI (Fisheries Victoria) staff who have beenappointed as authorised officers within the meaning of section 3(1) of theConservation, Forests and Lands Act 1987. Where offences against the Act, theFisheries Act or the regulations are detected, authorised officers are empowered to

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issue warnings or penalty infringement notices (PINs), or to issue proceedings bysummons, depending upon the circumstances and evidence in each case.

Prior to the issuing of the fisheries notice, the only way to prevent the illegal harvestof abalone by divers licensed to fish only in NSW waters was to have a heavyphysical presence at the State border with NSW. An average of 140 ‘boat days’ peryear was spent on this activity, at an estimated annual cost to DPI of approximately$140,00046, which was a severe burden on DPI (Fisheries Victoria) time and resourcesand was still insufficient to completely deter illegal abalone fishing.

Despite this relatively high enforcement effort, there was not one successfulprosecution in the thirty years prior to commencement of the fisheries notice,47

despite several interceptions of suspected illegal abalone fishers, because of theenforcement problems alluded to in Part 1.2.1 and outlined in Part 1.3 of this RIS.The allocation of such a high level of departmental resources for such little return hasbeen regarded in the past by DPI as ineffective and inefficient.

However, since the issuing of the fisheries notice, observations of unauthorisedfishing boats in the park have decreased dramatically,48 and the required enforcementeffort has dropped by about 75%. This reduction of enforcement effort is based uponthe abovementioned field observations together with a risk assessment by DPI of thesignificant deterrent value of the high penalties for breaches of the fisheries notice, theseverity of which is well known to both legal and illegal abalone fishers. This hasreduced the estimated annual DPI enforcement cost to approximately $35,000.However, if the proposed regulations are not made, estimated annual enforcementcosts are expected to increase by $105,000 to approximately $140,000 per year(which is equal to the estimated annual enforcement cost prior to the first issuing ofthe fisheries notice).

Because of the abovementioned enforcement problems (alluded to in Part 1.2.1 andoutlined in Part 1.3 of this RIS), new enforcement provisions were inserted into theNational Parks Act by the National Parks (Marine National Parks and MarineSanctuaries) Act 2002. These provisions ensure that there are appropriate offences,penalties and powers to deal with illegal fishing activity and encourage a high level ofcompliance, particularly in connection with the high-value commercial species,abalone and rock lobster, that require a significant level of enforcement to preventtheir illegal take.

46 Fisheries Victoria, DPI, routinely uses the cost estimate of $1000 per ‘boat day’ which is calculatedon the basis of an 8-metre Kevlar Cat crewed by 2-3 authorised officers, with twin 225HP outboardmotors running an average 6 hours per day, including wages, fuel, wear and tear and other operatingexpenses.47 Although, since the commencement of the fisheries notice, one investigation has recently beencompleted, and a prosecution is under consideration for breach of the fisheries notice. Otherinvestigations are in progress.48 For example, a special operation involving field observations conducted by DPI over five days soonafter commencement of the fisheries notice, found that commercial fishing vessels approached theeastern boundary of the park but would not enter the park during daylight hours; whereas prior to thecommencement of the fisheries notice, commercial fishing vessels would frequently cross the easternboundary of the park during daylight hours.

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These new offence provisions in the National Parks Act are in addition to variousoffence provisions under the Fisheries Act that might also apply in marine nationalparks and marine sanctuaries. The insertion of section 45C in the National Parks Act,which applies various enforcement and evidentiary powers in the Fisheries Act tofisheries offences under the National Parks Act, ensures that there is a commonenforcement regime applying to fisheries offences across all marine waters, regardlessof which Act under which the offences are committed.

A Statewide Compliance Strategy and East Region Marine Compliance Plan haverecently been developed by Parks Victoria in partnership with Fisheries Victoria,Department of Primary Industries to manage compliance with the ‘no-fishingprovisions’ within the park. Under this Plan, Fisheries Victoria has primaryresponsibility for enforcing fishing prohibitions under the National Parks Act, withsupport from Parks Victoria.49

In accordance with the Abalone Fishery Management Plan (refer to Part 1.2.4),Fisheries Victoria will seek to protect abalone stocks from illegal harvesting throughattaining optimum compliance levels, focusing enforcement resources on keyenforcement priorities and integration with other abalone fishery managementstrategies. The focus of enforcement, to be reflected in a formal strategy document,will be on combating the large-scale individual operators and shore based gangs andon disrupting illicit processing and markets. The major elements of this strategy willbe:

• strategic intelligence gathering and operational planning, investigations andmaintenance of strategic alliances;

• large planned operations in concert with the Victoria Police and enforcementofficers in other states with a balance between land and water basedoperations;

• an adequate field presence and patrolling by officers; and

• community education and fostering guardianship.50

The existing fisheries notice has been working effectively, and the proposedregulations combined with higher penalties and the above enforcement strategies(some of which have been put in place only recently) are likely to be even moreeffective. The proposed regulations are also likely to be more efficient than thefisheries notice, as commercial fishing vessels can usually be identified from adistance, whereas under the fisheries notice, vessels would need to be boarded orinspected at close quarters to identify the presence of commercial abalone equipment.There is no known reason why the proposed regulations should not be workable orenforceable.

49 Parks Victoria, 2005.50 Fisheries Victoria, 2002.

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3.0 Nature and impacts of proposed regulations

This Part of the RIS describes the nature and likely effects of the proposedregulations. It also identifies any cost impacts and stakeholders affected by theproposed regulations. Many affected stakeholders are small businesses. The extent ofsuch cost impacts is estimated, where possible, alongside the expected benefits of theproposed regulations in Part 5.0 of this RIS).

3.1. Explanation of proposed regulations

The proposed regulations are included in Attachment 1.

Regulation 1 states the formal objectives of the proposed regulations, namely toprescribe for the purposes of section 45A(4) of the National Parks Act 1975 (‘theAct’ or ‘the National Parks Act’)—

(a) the area of Cape Howe Marine National Park in which a person must not be in charge of a certain class of boats; and

(b) the class of boats that a person must not be in charge of in a certain area of the Cape Howe Marine National Park.

Regulation 2 cites the provision of the Act that authorises the making of the proposedregulations, namely the regulation-making section 48 (see section 1.6 of this RIS).

Regulation 3 brings the proposed regulations into operation on 1 May 2006, which isthe date of expiry of the current fisheries notice (see Part 1.2.3 of this RIS).

Regulation 4 defines various technical terms used in the proposed regulations.51 Inparticular, this Regulation defines the boundaries of Cape Howe Marine National Park(‘the park’) by reference to the relevant schedule to the Act. It also defines a‘commercial fishing vessel’ with various exclusions designed to allow lawfulcommercial fishing and the authorised taking of fish from developing fisheries in theIron Prince Reef and areas surrounding the park to continue. (The only access byboats to the Iron Prince Reef is via the park, and boats traversing the park will bemonitored to ensure that no fishing takes place in the park.) The definition of‘commercial fishing vessel’ also excludes such vessels engaged in authorised researchwithin the park. Regulation 4 also defines an ‘Ocean Fishery Access Licence’, a‘Rock Lobster Fishery (Eastern Zone) Access Licence’ and a ‘CommonwealthStatutory Fishing Right’ for the purposes of Regulation 5.

For reasons explained in Part 1.2 of this RIS, Regulation 5 prescribes the area of thepark to which the proposed regulations apply, namely the whole of the park. Onereason for prescribing the whole of the park is the difficulty in marking out (and inturn, discerning) the sea boundaries of zones within the park, as discussed in Part1.2.2. Therefore, for the benefit of both enforcers and commercial fishers, it is betterthat they operate within a relatively simple regime of boundaries. It also prescribes

51 Definitions specified in the Act also apply to the Regulations

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the class of boats that a person must not be in charge of within the park (i.e.commercial fishing vessels, as defined in Regulation 4).The proposed regulations bring into operation section 45A(4) of the National ParksAct, which provides for severe penalties for being in charge of a prescribed class ofboat in a prescribed area of the park. These penalties are 100 penalty units (currently$10,481) or 6 months imprisonment or both, in the case of a natural person; or 200penalty units (currently $20,962), in the case of a body corporate. It is thereforeunnecessary for the proposed regulations to specify any penalty.

As fishing in the park is already prohibited by the Act, the proposed regulationsimpose no additional costs on persons wishing to fish in the park (unlawfully).

Apart from the benefits of enabling better enforcement against illegal fishing in thepark, the only impact of the proposed regulations (apart from the enforcement costsdiscussed in Part 2.2) is likely to be a relatively minor increase in travel time and fuelcosts (refer to Part 5.3.1 of this RIS) for persons lawfully using commercial fishingvessels in the area, but who are not authorised under the proposed regulations to usecommercial fishing vessels in the park. Possible examples of such use include themovement of commercial fishing vessels between Victoria and New South Wales forpurposes unrelated to fishing.

As stated in Part 1.5, during the public comment period for the proposed regulations,DSE particularly invites comments and feedback from any person who may beadversely affected by the proposed regulations, with details of the nature and extent ofany such adverse effects.

3.2. Impact on small business

Where the costs of compliance with regulations comprise a significant proportion ofbusiness costs, small businesses may be affected disproportionately by such costscompared to large businesses.

The Australian Bureau of Statistics (ABS) definition of a small business is one thathas less than 20 full-time employees. The businesses likely to be affected by theproposed regulations are those using commercial fishing vessels in the area who arenot authorised under the proposed regulations to be in the park. These are most likelyto be small businesses within the ABS definition.

The impact of the proposed regulations is expected to be similar for each smallbusiness. The cost of compliance with the proposed regulations is unlikely tocomprise a significant proportion of business costs. Small businesses are unlikely tobe disadvantaged by the proposed regulations in comparison with larger businesses.

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4.0 Alternatives to proposed regulations

In accordance with government guidelines,52 a RIS is required to identify practicablealternatives to the proposed regulations and their relative costs and benefits comparedto the proposed regulations (as quantitatively as possible, otherwise qualitatively).

Conversely, a RIS is not required to consider in any detail alternatives which are notpracticable, or which are beyond the scope of the existing Act. Also, alternatives arenot required to be identified, and costs and benefits are not required to be assessed,where there is no appreciable cost burden imposed on any sector of the public.

Public education campaigns using television, radio and newspapers are sometimes afeasible alternative to regulations or codes of practice where the behaviour of a widesection of the community can be influenced by simple clear messages such as ‘Don’tsmoke’. However in the case of the proposed regulations, which enable betterenforcement against activities that are already illegal and conducted with criminalintent, such public education campaigns are unlikely to be effective and therefore nota practicable option.

Similarly, self-regulation by industry associations through voluntary codes of practiceis unlikely to be effective against activities that are already illegal, and where suchactivities can result in enormous financial gains. A regulatory solution is thereforenecessary in this case.

Regulations under the Fisheries Act are not a practicable alternative because therelevant maximum penalty of 20 penalty units (currently $2096.20) is an insufficientdeterrent compared to the high beach price of abalone (currently around $41/kg).53

As discussed in Part 1.3 of this RIS, under the Fisheries Act, there is a requirement tocatch offenders in the act of taking or being in possession of priority species or beingin possession of commercial abalone equipment. Offenders can ‘hide the evidence’by simply dumping priority species, commercial abalone equipment, catch bags orother equipment overboard as soon as an enforcement vessel is spotted on the horizon.Also, the primary focus of regulations under the Fisheries Act is to manage fisheries,rather than to protect the natural values of marine national parks.

Fisheries notices are not a practicable alternative to the proposed regulations for thefollowing reasons:

1. Fisheries notices last for a maximum period of 12 months. Although they canbe reissued, they are intended as temporary ‘stop gap’ measures, often pendingthe preparation of regulations. The annual remaking of fisheries notices is notappropriate as a substitute for regulations in the longer term.

2. The primary focus of fisheries notices is to manage fisheries, rather than toprotect the natural values of marine national parks.

52 Government of Victoria, 200553 If an abalone thief collects 600kg abalone per day, this would yield almost $25, 000 per day, over 13times the value of the maximum penalty under the Fisheries Act regulations.

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3. Fisheries notices are not subject to regulatory impact statements or otherpublic consultation processes.54

4. The penalties for breaches of fisheries notices made under section 114 of theFisheries Act are not as high as the penalties under the National Parks Act as aresult of the proposed regulations (i.e. Section 45A(4) of the National ParksAct provides a penalty of 200 penalty units for a body corporate).55

The ‘base case’ (i.e. no regulations or other effective alternatives in place) is not apracticable alternative because it would not contribute towards achievement of thepolicy objective identified in Part 1.4 of this RIS.

For these reasons, the practical alternatives are limited to alternative forms ofregulations under the National Parks Act.

On legal advice, prescribing combinations of boats and equipment is not possibleunder the National Parks Act. Section 45A(4) of the Act enables only the prescriptionof a class of boats or a class of equipment, not both a class of boats and a class ofequipment.

The practicable alternatives to be considered in the cost benefit assessment are:

1. Prescribe a class of equipment (e.g. hookah diving equipment) instead of aclass of boats.

2. Prescribe different area(s) of the park.

3. Prescribe different classes of boats (e.g. all boats or boats above or below aspecified size).

54 However, ‘relevant consultative bodies’ must be consulted.55 100 penalty units or 6 months imprisonment or both for a natural person. 200 penalty units in thecase of a body corporate.

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5.0 Assessment of Costs and Benefits

5.1 Introduction

The purpose of this Part of the RIS is to:

• identify the types, incidence and distribution of costs and benefits associatedwith the regulatory proposal;

• assess the relative costs and benefits of the proposed regulations for theVictorian community; and

• compare and contrast the costs and benefits of the proposed regulations withthe ‘base case’ or the status quo, and with the practicable alternatives (refer toPart 4.0).

The following assessment of the relative benefits and costs has been conducted inrelation to the extent to which the underlying policy objective (refer to Part 1.4) islikely to be achieved, namely:

To further protect the natural values of the Cape Howe Marine National Park bymeans of better enforcement measures against the illegal taking of abalone and othermarine species from the park.

The assessment of the costs and benefits of the proposed regulations and the policyalternatives (collectively termed ‘options’), will be conducted by discussing eachoption in terms of its expected distribution of costs and benefits, relative to the ‘basecase’ (refer Part 5.2 ). Part 5.4 of the cost benefit assessment will compare therelative merits of the various options with each other. The options to be consideredare:

Option A: The proposed regulations.

Option B: Prescribe a class of equipment (e.g. hookah diving equipment) instead of a class of boats.

Option C: Prescribe different area(s) of the park.

Option D: Prescribe different classes of boats (e.g. all boats or boats above or below a specified size).

Where data exists, quantitative estimates of costs have been made. However, wherecost and benefit data is not available, qualitative judgements have been maderegarding the likelihood of achieving the above policy objective.

5.2 The base case

The ‘base case’ is that the existing fisheries notice would be allowed to expire on 1May 2006 without being replaced by new regulations or effective alternatives.

_____________________________________________________________________26

The likely consequences of the ‘base case’56 are that the problem identified in Part 1.3of this RIS would not be addressed; namely there would be inadequate enforcementagainst illegal fishing in the park, especially abalone fishing. The likely enforcementcosts to DPI under the ‘base case’ are up to $140,000 per year (refer to Part 2.2).

5.3 Assessment of options

The four options have been assessed in terms of costs and benefits as follows:

5.3.1 Option A: The proposed regulations

Option A is the proposed regulations (refer to Attachment 1).

Expected costs

The total maximum estimated quantifiable costs of the proposed regulations isenforcement costs of up to $35,000 per year57 (refer to Part 2.2) or up to $248,000over the 10-year life of the proposed regulations (discounted to present values).58

These estimates are based on the annual cost of enforcing the fisheries notice, but arelikely to be lower than these figures because of the ability to identify commercialfishing vessels at a distance under the proposed regulations, rather than having todetermine the presence of commercial abalone equipment on board such vessels,under the fisheries notice.

The only other cost impact of the proposed regulations is likely to be a relativelyminor increase in travel time and fuel costs (up to six additional nautical miles pertrip) for persons lawfully using commercial fishing vessels in the area, that are notexcluded from the definition of ‘commercial fishing vessels’ under the proposedregulations. Possible examples of such use include transporting commercial fishingvessels between Victoria and New South Wales for purposes unrelated to fishing.These minor costs are not quantifiable due to uncertainties such as the number andtypes of commercial fishing vessels affected, their fuel costs and employee costs.However, the number of such vessels is thought to be very small.

Expected benefits

Apart from a likely reduction in DPI enforcement costs of up to $105,000 per year,the benefits of the proposed regulations, relative to the ‘base case’, are notquantifiable, but are expected as a result of a considerable improvement in the abilityof DPI (Fisheries Victoria) to enforce the laws against illegal fishing in the park. Thisenforcement improvement is derived from the significant deterrent effect of the severepenalties under the National Parks Act for being in charge of a prescribed class of 56 The ‘base case’ is not an option in this RIS because it would contribute nothing towards theachievement of the abovementioned policy objective.57 Relative to the ‘base case’, this is a saving of up to $105,000 per year as discussed under theexpected benefits of this Option.58 Discounted using a discount rate of 3.5%. This is a real rate of discount which is made up of a 10-year government bond yield rate (5.5%), an inflation rate of (3.0%) and a risk component (1%), basedupon the September 2005 quarter. The discount factor would therefore be 5.5% - 3.0% + 1% = approx3.5%.

_____________________________________________________________________27

boats in a prescribed part of the park (refer to Part 2.2). It is likely to provide benefitsin the following areas, as discussed in Part 1.2 of this RIS:

• avoidance of damage to reef communities and the loss natural values of thepark;

• a reduction in the threat to the sustainable use of Victoria's abalone fishery;

• a reduction in the threat to the jobs of people in the abalone industry;

• a reduction of unfair competition with legitimately sourced product in themarket place;

• improved food safety from a reduction in the amount illegally taken enteringthe marketplace;59

• a reduction in the revenue loss for the government,60 and therefore thecommunity as a whole, as a result of illegal fishing;

• helping to fight organised crime.61

5.3.2 Option B: Prescribe a class of equipment (e.g. hookah diving equipment) instead of a class of boats

This Option would involve prohibiting the carrying of equipment such as hookahdiving equipment in boats within the park (refer to Part 1.2.4 of this RIS). A similarproposal was canvassed during the preliminary consultation.

Expected costs

The total maximum estimated quantifiable costs of this, relative to the ‘base case’, isenforcement costs of approximately $35,000 per year (refer to Part 2.2) or $248,000over the 10-year life of the proposed regulations (discounted to present values).62

These estimates are based on the annual cost of enforcing the fisheries notice, and arelikely to be higher than the enforcement costs for the proposed regulations because ofthe requirement to determine the presence of commercial abalone equipment on boardvessels, compared with the ability to identify commercial fishing vessels at a distanceunder the proposed regulations.

In relation to unquantifiable costs, DSE has estimated that there are about 600 hookahunits in Victoria at any given time. About half of these are used for commercial

59 Legally caught fish are subject to strict food safety controls.60 Under the Fisheries Act, royalties are payable for legally caught abalone.61 Minister for Agriculture, 2003.62 Discounted using a discount rate of 3.5%. This is a real rate of discount which is made up of a 10-year government bond yield rate (5.5%), an inflation rate of (3.0%) and a risk component (1%), basedupon the September 2005 quarter. The discount factor would therefore be 5.5% - 3.0% + 1% = approx3.5%.

_____________________________________________________________________28

purposes such as licensed abalone fishing, salvage, boat repair and research.(Twenty-three Victorian licensed commercial abalone fishing vessels carrying hookahdiving equipment operate in the Victorian Eastern Abalone Zone adjacent to thepark.) The other half are used for recreational purposes such as diving, recreationalfishing, and underwater photography. There are also about 43 licensed abalonefishers with hookah diving equipment in southern NSW, but these are not authorisedto fish in Victoria.

Concern was expressed by some stakeholders about the potential costs imposed onpersons legitimately carrying hookah diving equipment within the park, such aslicensed abalone fishers, researchers, marine archaeologists and even large shipstraversing the park. The number of exclusions that would be required would becomplex and difficult to define, otherwise significant but unquantifiable costs couldbe inequitably imposed on persons carrying hookah diving equipment within the parkfor purposes quite unrelated to fishing. There would also possibly be a perceivedinequity in prohibiting the carrying of hookah diving equipment in waters that are toodeep for such equipment to be used (a significant proportion of park waters are toodeep for the safe/practical use of hookah diving equipment).

Expected benefits

This proposal would be likely to confer similar benefits to the proposed regulations(refer to Part 5.3.1 of this RIS) but at a cost which is higher to both the Governmentand the community and less equitable to the community.

5.3.3 Option C: Prescribe different area(s) of the park

This Option would involve prescribing only a part of the Cape Howe Marine NationalPark, such as the eastern end of the park between the NSW border and the Iron PrinceReef, extending three nautical miles out from the coast to the limit of Victorianterritorial waters. The regulations would prohibit unauthorised commercial fishingvessels from being in this part of the park.

Expected costs

Relative to the ‘base case’, this Option would be likely to impose similar costs oncommercial fishing vessels being transported between Victoria and New South Walesto the proposed regulations, as the increases in fuel costs and travel time would be thesame.

The enforcement costs for this option, although unquantifiable, are expected to belower than the enforcement costs in the ‘base case’. However, these enforcementcosts would be likely to be higher than for the proposed regulations (Option A) due tothe increased resources involved in proving for prosecution purposes that boats werewithin the prescribed zone of the park. Although enforcement vessels can determinetheir own position using GPS equipment, it is much more difficult to prove forprosecution purposes the position of the defendant’s vessel in relation to a zone withinthe park. There would be likely to be some increased costs arising from marking theboundaries of the relevant zone of the park (refer to Part 1.2.2 of this RIS), but shore-based markers are not easily seen from as far away as three nautical miles.

_____________________________________________________________________29

Enforcement costs are also likely to be higher than for Option A, because commercialfishing vessels could ‘loiter’ in the non-prescribed zone of the park, possibly near theIron Prince Reef, and when it was established that enforcement vessels were not closeby, make a relatively quick foray to reefs inside the prescribed zone of the park or theIron Prince Reef to conduct illegal abalone fishing. This would be much easier forabalone thieves than having to travel the greater distances to reefs (which are inshallower waters) from outside the park. These increased opportunities for illegalactivities would require more frequent monitoring of the park with a correspondinghigher commitment of enforcement resources. It would also require increasedresources for public education regarding the prescribed zone of the park, compared tothe park boundaries which are relatively well known.

Expected benefits

Relative to the ‘base case’, this Option would be likely to be less effective inachieving the policy objective (refer to Part 1.4) than the proposed regulationsbecause of the abovementioned opportunities for ‘loitering’ in the non-prescribedzone of the park.

More importantly, this Option would not adequately protect the non-prescribed zoneof the park from illegal abalone fishing.

5.3.4 Option D: Prescribe different classes of boats (e.g. all boats or boats aboveor below a specified size)

For the purposes of this RIS, this Option would involve prescribing boats of the sizerange (by reference to length or engine horsepower) normally used by abalonethieves, instead of by the type of vessel (i.e. a commercial fishing vessel).

Expected costs

Relative to the ‘base case’, this Option would be likely to impose a similar order ofcosts to the proposed regulations, but could create risks to public safety byencouraging the use of undersized or underpowered boats for abalone theft inrelatively dangerous waters (refer to Part 1.2.2).

However, this Option could also create some inequities in imposing costs on ownersof boats within the relevant size range but which are used for purposes unrelated tofishing.

Expected benefits

Relative to the ‘base case’, this Option would be likely to confer similar benefits tothe proposed regulations (refer to Part 5.3.1 of this RIS) but at an unacceptable risk topublic safety.

5.4 Net benefit of the proposed regulations

Comparing the costs and benefits of the various options with the base case is hinderedby the inability to quantify expected benefits and some expected costs. Table 1

_____________________________________________________________________30

endeavours to rank the various options in terms of both costs and benefits using aweighted decision criteria analysis.

The three evaluation criteria used in this analysis are:

1. benefits to park values from improved enforcement;2. costs of compliance and administration; and3. equitable distribution of costs and benefits.

Criterion 1 reflects the policy objective of the regulatory proposal (Part 1.4).Criterion 2 reflects the cost impacts on stakeholders, including public safety.Criterion 3 relates to the equity or ‘fairness’ of the distribution of costs and benefitsamongst the various stakeholders.

Table 1 – Weighted criteria decision analysis

Criteria

Type ofscore

Benefits topark valuesfrom improvedenforcement

Costs ofcomplianceandadministration

Equitabledistribution ofcosts andbenefits

Total score

Weighting % 60 20 20 100Option A(proposedregulations)

Assignedscore(-3 to +3)

+3 -1 -1 +1

Weightedscore

1.8 -0.2 -0.2 +1.4

Option B(prescribehookah divingequipment)


+3 -2 -3 0

Weightedscore

1.8 -0.4 -0.6 +0.8

Option C(prescribe partof park)


+1 -2 -1 -1

Weightedscore

+0.6 -0.4 -0.2 +0.0

Option D(prescribe boatsizes)


+3 -3 -3 -2

Weightedscore

+1.8 -0.6 -0.6 +0.6

Having regard to the purposes of the Act in protecting marine national parks,Criterion 1 must be given a high priority. For this reason the relative weightings ofthese criteria are determined to be 60%, 20% and 20% respectively.

Using this technique, Option A (the proposed regulations) results in the highestweighted score at +1.4, followed by Option B (prescribe hookah diving equipment) at

_____________________________________________________________________31

a weighted score of +0.8 and Option D (prescribe boat sizes) at a weighted score of+0.6. Option C (prescribe part of park) has the lowest weighted score of +0.0.

In summary, the proposed regulations are considered to be the most appropriate formof intervention and the best option for achieving the identified policy objective, inwhich the costs of the proposed regulations are outweighed by their likely benefits,especially to the natural values of the Cape Howe Marine National Park.

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6.0 National Competition Policy tests

6.1 Competition principles and guidelines

At the Council of Australian Governments (COAG) meeting in April 1995, allAustralian governments agreed to implement the National Competition Policy (NCP).As part of the Competition Principles Agreement, all governments, including Victoria,agreed to review all legislation containing restrictions on competition under thefollowing principle:

Legislation should not restrict competition unless it can be demonstrated that:

• the benefits of the restriction to the community as a whole outweigh the costs;and

• the objectives of the legislation can only be achieved by restrictingcompetition.63

To successfully pass the competition and cost-benefit tests, for each proposedregulation it is necessary to:

• Step 1: Identify the restriction on competition, if any;

• Step 2: Show that the restriction, if any exists, is necessary to achieve theobjective;

• Step 3: Assess the costs to the community caused by the restriction;

• Step 4: Assess the community benefits; and

• Step 5: Assess whether benefits outweigh the costs.

If no restriction on competition is found in the course of Step 1, it is not necessary tocomplete the remaining steps (i.e. Steps 2 to 5). Issues to be discussed in the NCPassessment relate to whether or not the proposed regulations restrict competition inthe relevant market by one or more of various means such as:

• allowing only one company or person to supply a good or service (monopoly);

• requiring producers to sell to a single company or person (monopsony);

• limiting the number of producers of goods and services to less than four(duopoly or oligopoly );

• limiting the output of an industry or individual producers; or

63 State Government of Victoria, 2005.

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• limiting the number of persons engaged in an occupation.64

6.2 NCP assessment

A market is defined as:

The organisation in which the co-ordination of specialised economic units occurs as aconsequence of individual agents interacting as buyers and sellers for the purpose offacilitating exchange.65

A market is deemed to be perfectly competitive if it exhibits the followingcharacteristics:

• many buyers and sellers;

• all businesses sell an identical product or service;

• there is ease of entry into and exit from the industry for businesses; and

• buyers are perfectly informed about alternative choices.

While few markets are perfectly competitive, a key characteristic of competitivemarkets is mobility between buyers and sellers.66 Mobility between buyers andsellers within a market entails that buyers may choose between alternative sellers andsellers may choose between alternative buyers (i.e. a system which emulates aperfectly competitive auction market). The desire to obtain a competitive outcome formarkets is based on the efficiency implications arising from such a market structure.

The markets affected by the proposed regulations are businesses which usecommercial fishing vessels in the area, but which are not authorised by the proposedregulations to be in the park (refer to Part 3.0 of this RIS).

Having identified the relevant markets, the next step in the NCP assessment process isto consider how the proposed regulations will impact on these markets in contrast tohow the markets would function in the absence of the proposed regulations. Forexample, if entry to a market would be limited, made more costly or the number offirms would be reduced, then the proposed regulations contain a restriction oncompetition.

Some restrictions on competition are imposed by the National Parks Act and theFisheries Act, but such restrictions are outside the scope of this RIS. The question tobe considered in this RIS is whether the proposed regulations impose any restrictionsof competition?

As discussed in Parts 3.0 and 5.0 of this RIS, the proposed regulations may imposesome relatively minor costs on businesses which use commercial fishing vessels in thearea, but which are not authorised by the proposed regulations to be in the park. 64 Ibid.65 Rivers, G. and Ward, I., 2002.66 Tim Harding & Associates, 2001.

_____________________________________________________________________34

However, the imposition of costs on some businesses does not in itself restrictcompetition. The issue is whether the proposed regulations advantage ordisadvantage some businesses in comparison with their competitors.

In this case, the users of commercial fishing vessels which are not authorised by theproposed regulations to be in the park are not engaged in competition with those whoare so authorised. If they were engaged in such competition, they would need to holdthe relevant commercial fishing licences, developing fishery permits or researchpermits. If they did hold such permits, they would be authorised by the proposedregulations.

In summary, the proposed regulations impose no restrictions on competition, in termsof the Victorian Government guidelines on competition67 because in this case, there isno relevant competition to restrict. In other words, the proposed regulations do notcreate monopolies, require producers to sell to a single company or person or limit thenumber of producers of goods and services. Nor do they limit the output of anindustry or individual producers or the number of persons engaged in an occupation,discourage innovation, or impose barriers to entry. As the impact of the proposedregulations is not uniform, and varies with the individual circumstances of eachbusiness, there are no proportionately higher costs consistently imposed on aparticular class of business, such as small business.

67 State Government of Victoria, 2005.

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7.0 Evaluation strategy

The effectiveness of the proposed regulations in meeting the policy objective (refer toPart 1.4) will be evaluated over time by using the following indicators:

• Scientific studies of the health of and changes in reef ecology.

• Numbers of unauthorised boats detected.

• Enforcement effort necessary to be used.

• Prosecutions, PINs and warnings.68

• Total Allowable Catch (TAC) of abalone in southern NSW and eastern Vic.

• Overall improvement in biodiversity.

• Compliance with no-fishing provisions and park regulations.

• Timely management intervention to minimise damaging activities and threats.

• Minimal impact of permitted uses of the park.

It is expected that these indicators will be assessed when the regulations are nextreviewed, or when they sunset in 10 years time.

68 Care needs to be taken with interpretation of such data, as low level of enforcement action can meanthat the regulations are acting as a successful deterrent.

_____________________________________________________________________36

8.0 Conclusions and findings

1. The proposed regulations have the effect of bringing section 45A(4) of theNational Parks Act into operation.

2. The proposed regulations are needed to further protect the values of the CapeHowe Marine National Park by improving the ability to deter and detectfishing offences in the park. The proposed regulations will also help to protectthe Victorian abalone fishing industry.

3. There is a sufficient case for government intervention to assist in solving theidentified problem.

4. Adequate consultation has taken place with stakeholder organisationsregarding the proposed regulations. The proposed regulations are generallysupported by stakeholder organisations, with no known objections to thecurrent proposal.

5. The proposed regulations are authorised by the regulation-making provisionsin section 48 of the Act.

6. There is no known reason why the proposed regulations should not beworkable or enforceable.

7. The estimated enforcement costs of the proposed regulations are $35,000 peryear or $248,000 over the 10-year life of the proposed regulations discountedto present values. The only other cost impact of the proposed regulations islikely to be a relatively minor increase in travel time and fuel costs (up to sixadditional nautical miles per trip) for persons lawfully using commercialfishing vessels in the area, but who are not authorised under the proposedregulations to be in the park.

8. The practicable alternatives to the proposed regulations are as follows:

• Prescribe a class of equipment (e.g. hookah diving equipment) insteadof a class of boats.

• Prescribe different area(s) of the park.

• Prescribe different classes of boats (e.g. all boats or boats above orbelow a specified size).

9. Using a weighted criteria decision analysis, Option A (the proposedregulations) results in the highest weighted score at +1.4, followed by OptionB (prescribe hookah diving equipment) at a weighted score of +0.8 andOption D (prescribe boat sizes) at a weighted score of +0.6. Option C(prescribe part of park) has the lowest weighted score of +0.0.

_____________________________________________________________________37

10. The proposed regulations impose no restrictions on competition, in terms ofthe Victorian Government guidelines on competition because in this case,there is no relevant competition to restrict.

11. In summary, the proposed regulations are considered to be the mostappropriate form of intervention and the best option for achieving theidentified policy objective. The costs of the proposed regulations areoutweighed by their likely benefits, especially to the natural values of theCape Howe Marine National Park.

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Glossary of terms and acronyms

Act, the: means the National Parks Act 1975.

allocativeefficiency:

means a level of output produced such that resources are allocated to theirhighest uses and the marginal benefits of production for society are equal tothe marginal costs imposed on society.

authorisedofficer:

means a person appointed as an authorised officer under the Conservation,Forests and Lands Act 1987 for the purposes of the Act.

biodiversity: the natural diversity of all life: the sum of all our native species of flora andfauna, the genetic variation within them, their habitats and the ecosystemsof which they are an integral part.

bioregion: an area with particular underlying environmental and ecological features.

bivalve: type of mollusc possessing two shells.

commercialabaloneequipment:

means any device or mechanical thing that is designed for use, or that iscapable of being used, for or in connection with the taking of abalone, andincludes any underwater breathing apparatus, knife, probe, lever, iron orbar.

competition: means the process of rivalry between independent firms or individuals inbusiness. Competition occurs within a market.

DPI: Department of Primary Industries (Victoria).

DSE: Department of Sustainability and Environment (Victoria).

economicefficiency:

means the circumstance when an output of goods and services is producedmaking the most efficient use of resources and when that output best meetsthe needs and wants and consumers and is priced at a price that fairlyreflects the value of resources used up in production.

ecosystem: a dynamic complex of interacting organisms and their associated non-livingenvironment.

externality: means the cost or benefit related to a good or service that accrues topersons other than the buyer or the seller of that good or service.

habitat: the preferred location or ‘home’ of an organism.

high watermark:

the landward boundary of the average of the highest and lowest tides(spring and neap).

hookah divingequipment:

means underwater breathing apparatus or equipment that includes an aircompressor or length of hose or other surface to diver equipment or otheritems associated with underwater diving but does not include self containedunderwater breathing apparatus (SCUBA) or snorkelling equipment.

intertidal zone: the area between low and high tide levels, which is subject to daily changesin physical and biological conditions from tide movements.

invertebrate: an animal without a backbone at any stage of development (e.g. molluscs,crustaceans, worms, sponges).

_____________________________________________________________________39

marine nationalpark:

in Victoria, a highly protected area of marine environment designatedunder the National Parks Act, in which no fishing, extractive or damagingactivities are allowed.

marineprotected area:

term used internationally to describe a marine area that has some form ofprotection and is managed for conservation objectives.

marinesanctuary:

in Victoria, a smaller, highly protected area designated under the NationalParks Act which protects special values, in which no fishing, extractive ordamaging activities are allowed. These areas complement marine nationalparks.

market: means an area of close competition between firms, or the field of rivalry inwhich firms operate.

market failure: means the situation which occurs when freely functioning markets,operating without government intervention, fail to deliver an efficient oroptimal allocation of resources. Therefore economic and social welfaremay not be maximised, leading to a loss of allocative and productiveefficiency.

mollusc: broad group of invertebrates including snails, sea slugs, squid, octopus,cuttlefish and mussels.

monopoly: means a market structure such that only one firm supplies the entire market.

national park: (for the purposes of this RIS) an extensive area of public land ofnationwide significance because of its outstanding natural features anddiverse land types, set aside to protect natural environments and providepublic enjoyment, education, and inspiration in natural environments. InVictoria, national parks are designated under the National Parks Act.

NCP: National Competition Policy.

negativeexternality:

means the situation that occurs when production and/or consumptionimpose external costs on third parties outside of the market for which noappropriate compensation is paid.

Order inCouncil:

means an order made by the Governor in Council under an Act.

stakeholder: an individual or group that has a vested interest in, or may be affected by, aproject or process.

prescribed: means prescribed by an Act or Regulations.

productiveefficiency:

means the situation where the average cost (or cost per unit of output) isminimised for any given amount of product or service produced.

public good: means a good or service that will not be produced in private marketsbecause there is no way for the producer to keep those who do not pay forthe good or service from using it.

restriction ofcompetition:

means something that prevents firms in a market or potential entrants to amarket from undertaking the process of economic rivalry.

RIS: Regulatory Impact Statement.

Secretary: means the Secretary to the Department of Sustainability and Environment.

_____________________________________________________________________40

SCUBA: self-contained underwater breathing apparatus.

statutory rules: means the Regulations made by the Governor in Council and otherinstruments of a legislative character deemed by an Act, prescribed to bestatutory rules.

subtidal zone: the area of the coast immediately seaward of the intertidal zone i.e. that isalways submerged.

take: means to gain possession or control of by any means.

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References

Environment Conservation Council (2000) Marine, Coastal & EstuarineInvestigation: Final Report, Environment Conservation Council, Melbourne.

Department of Agriculture, Fisheries and Forestry (2005) Effective export controls forillegally harvested abalone: Discussion Paper, Australian Government, Canberra.

Fisheries Victoria (2002) Victorian Abalone Fishery Management Plan, Departmentof Natural Resources and Environment, Melbourne.

National Competition Council (2001) Assessment of Governments’ Progress inImplementing the National Competition Policy and Related Reforms: Victoria, June2001, AusInfo, Canberra.

Minister for Agriculture (2003) Second Reading Speech – Fisheries (FurtherAmendment) Bill, Parliament of Victoria, Melbourne.

Minister for Agriculture (2005) Second Reading Speech – Fisheries (Abalone) Bill,Parliament of Victoria, Melbourne.

Minister for Environment and Conservation (2002) Second Reading Speech –National Parks (Marine National Parks and Marine Sanctuaries) Bill (No. 2),Parliament of Victoria, Melbourne.

Parks Victoria (2003) Management Strategy for Victoria’s System of Marine NationalParks and Marine Sanctuaries, Parks Victoria, Melbourne.

Parks Victoria (2005) Cape Howe Marine National Park - Draft Management Plan,Parks Victoria, Melbourne.

Plummer, A. et al (2003) Marine Natural Values Study, Parks Victoria, Melbourne.

State Government of Victoria (2005) Victorian Guide to Regulation, Department ofTreasury and Finance, Melbourne.

Tailby R. & Gant F. (April 2002) Trends and Issues – No. 225 – The Illegal Market inAustralian Abalone, Australian Institute of Criminology, Canberra.

Tim Harding & Associates and Mardaker Pty. Ltd. (2003) Regulatory ImpactStatement - National Parks (Park) Regulations 2003, Department of Sustainabilityand Environment, Melbourne.

Victorian Coastal Council (2002) Victorian Coastal Strategy, State of Victoria,Melbourne.

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Attachments

Attachment 1. Draft Regulations

i

National Parks (Cape Howe Marine National Park) Regulations

Exposure Draft

TABLE OF PROPOSALS

Proposal Page

1. Objective 1 2. Authorising provision 1 3. Commencement 2 4. Definitions 2 5. Prescribed area and prohibition on being in charge of certain

boats 3 __________________

SCHEDULE—Prescribed Area of Cape Howe Marine National Park 4 ═══════════════

1

Victoria


Exposure Draft 1. Objective

The objective of these Regulations is to prescribe for the purpose of section 45A(4) of the National Parks Act 1975—

(a) the area of Cape Howe Marine National Park in which a person must not be in charge of a certain class of boat; and

(b) the class of boats that a person must not be in charge of in the prescribed area of the Cape Howe Marine National Park.

2. Authorising provision These Regulations are made under section 48 of the National Parks Act 1975.

Exposure Draft


2

3. Commencement These Regulations come into operation on 1 May 2006.

4. Definitions In these Regulations—

"Abalone Fishery (Eastern Zone) Access Licence" has the same meaning as in the Fisheries Regulations 1998;

"Cape Howe Marine National Park" means the park described in Part 2 of Schedule Seven to the Act;

"commercial fishing vessel" means a vessel used or intended to be used for catching fish, whales, seals or other living resources of the sea or seabed for profit or reward, other than a vessel used or intended to be used—

(a) to take fish in accordance with—

(i) an Abalone Fishery (Eastern Zone) Access Licence; or

(ii) a Rock Lobster Fishery (Eastern Zone) Access Licence; or

(iii) an Ocean Fishery Access Licence; or

(iv) a Commonwealth Statutory Fishing Right; or

(b) to take fish from a developing fishery in accordance with a general permit issued under section 49 of the Fisheries Act 1995; or

Exposure Draft


3

(c) to conduct research study or an investigation of matters that relate to the objects of the Act, being research study or an investigation that has been promoted by the Secretary under section 20 of the Act and is being carried out in accordance with any terms and conditions determined by the Secretary under that section; or

(d) in accordance with a permit granted under section 21A of the Act;

"Commonwealth Statutory Fishing Right" means a statutory fishing right within the meaning of the Fisheries Management Act 1991 of the Commonwealth;

"Ocean Fishery Access Licence" has the same meaning as in the Fisheries Regulations 1998;

"Rock Lobster Fishery (Eastern Zone) Access Licence" has the same meaning as in the Fisheries Regulations 1998;

"the Act" means the National Parks Act 1975.

5. Prescribed area and prohibition on being in charge of certain boats

For the purposes of section 45A(4) of the Act—

(a) the prescribed area of Cape Howe Marine National Park is that part of the park that is shown by hatching in the Schedule; and

(b) the prescribed class of boats is commercial fishing vessels.

__________________

Exposure Draft


4

SCHEDULE

Regulation 5

PRESCRIBED AREA OF CAPE HOWE MARINE NATIONAL PARK

═══════════════

Gabo Island

Cape Howe

coastal waters of NSW*

seaward limit o

f Victo

ria's c

oastal

wate

rs

Bass StraitN

*coastal waters are defined in the Coastal Waters (State Powers) Act 1990 of the Commonwealth

Victoria

NSW

Cape Howe Marine National Park

Iron Prince

Mallacoota (approx. 14.5 km)

Eden (approx. 55 km)

coastal waters of Victoria762,620 E5,843,027 N

130 o

759,965 E5,843,278 N

761,800 E5,843,947 N

759,205 E5,841,587 N

A

B

C

E

D

AMG Zone 55 (GDA 94)

0.5 0 0.5 1 1.5 kilometres

This corner is the pointwhere HWM is intersectedby the line extending from Aon a bearing of 130 degrees

This corner is the pointwhere HWM is intersectedby the line BC

This corner is the pointwhere HWM is intersectedby the line DE

Telegraph Point#

#

#

#

#

high wate

r mark (HWM)

761,472 E5,841,568 N

* coastal waters are described in the Coastal Waters (State Powers) Act 1980 of the Commonwealth

REGULATORY IMPACT STATEMENT - … · hookah diving equipment was seen as being inequitable and...

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