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GUEST EDITORIAL COMPROMISE over bill T BY JUSTINE INNS he reform of the law governing aquaculture came another step closer when the Minister of Fisheries and Aquaculture, Hon Phil Heatley, took the unusual step on August 8 of publically releasing supplementary order papers, or SOPs, proposing a number of changes to the Aquaculture Legislation Amendment Bill (No.3). As well as setting out new measures in respect of the Maori Commercial Aquaculture Settlement and the undue adverse effects or UAE test, and establishing a fi nfi sh farming zone in the Hauraki Gulf, the release of the papers provides a clear signal that the bill can't be far from completing its passage through parliament. The bill was introduced into parliament in early November last year and was referred to the Primary Production Select Committee. The committee received 120 submissions on the bill, few of which seem to have challenged the bill's fundamentals. As a result, the committee reported back to parliament in May, recommending a number of changes of a fairly technical nature. Interesting work was occurring in parallel to the Select Committee's consideration, however. Late in 2010, the minister established an advisory panel - of which I was privileged to be a member - alongside Hon Sir Doug Kidd and Mark Farnsworth to investigate a proposal for a 300ha fi nfi sh farming zone in the Hauraki Gulf. After receiving more than 70 submissions and hearing from many submitters in person, we advised Heatley that the proposal should proceed. The zone will allow commercial validation of fi nfi sh farming, but should, in the view of the panel, occur only within an adaptive management framework, and subject, of course, to rigorous testing and monitoring of individual proposals through the Resource Management Act processes. The SOPs released by the minister will amend Environment Waikato's regional coastal plan to establish the zone and allow the council to receive applications for resource consents in relation to it, once the Maori Commercial Aquaculture Settlement has been provided for. When the bill was introduced, the minister stressed that the government intended to uphold the principles of the 2004 Maori Commercial Aquaculture Settlement, and that it would be talking to iwi over the coming months about how best to do that, with a view to making the necessary changes to the bill later in the parliamentary process. It must be recalled that the Crown's obligation to deliver iwi 20 percent of all new aquaculture space was established in 2004. That obligation was an "easy fi t" with the 2004 regime based on aquaculture management areas, but is more diffi cult to implement in the new regime, where aquaculture will be developed through private applications for resource consents. The government was adamant it would not be "taxing" such applications for 20 percent of their space, and iwi were less than enthusiastic about the "confetti-ised" form their entitlements would have taken if it had done so. The result is a compromise that empowers the minister to temporarily set aside space for use in settlement and encourages iwi and the Crown to reach agreement over tailored solutions to the settlement, region-by-region. The settlement might be old news that just needed a new delivery mechanism, but proposed changes to the undue adverse effects regime is most defi nitely new news, and represents the fi rst signifi cant recalibration of the relationship between aquaculture and wild fi sheries since the 1971 Marine Farming Act. The SOPs will introduce an arbitrated compensation regime, allowing an objective quantifi cation of the impact a new aquaculture activity will have on affected quota owners. If the aquaculture proponent is prepared to pay that level of compensation, they can proceed with their plans, despite any objections from quota owners. But the changes do not do quite the level of violence to quota rights that that short summary implies. Firstly, MFish has to conduct the UAE test in the same way as it does presently, the government having pulled back from initial proposals to lift the threshold of "undue-ness" to 10 percent. Secondly, where a UAE is found to exist (or even before that test is conducted), would-be marine farmers and quota owners are free to negotiate any agreement that meets their needs, with arbitration only available after efforts at negotiation have been exhausted. Thirdly, the arbitration option is only available where, as a preliminary matter, it is established that the proposed aquaculture activities would be of "materially greater economic value to New Zealand" than the wild fi sheries it would impact on. In reality, the hope seems to be that the spectre of the arbitration process will incentivise reasonable compromises to be reached much earlier in the process, rather than needing to be called on often. Justine Inns is a partner at OceanLaw. 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