Gareth Morgan

Gareth Morgan on the economy

Gareth Morgan and Geoff Simmons: Outrage at foreign fishing fleet hypocritical

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Protests over labour standards don't cast a wide enough net to be credible, write Gareth Morgan and Geoff Simmons.

Some within the local fishing industry who own fishing vessels have been protesting loudly at the unfair competition that foreign charter vessels pose.

Of late, they have been joined by environmentalists, trade unionists and local human rights activists deeply concerned about the on-board abuses.

It's an intriguing partnership, but one with confused objectives, mixed motives and as a result some quite false inferences.

These same folk buy a multitude of products from China, India and other economies where workers endure the same conditions they find offensive on their competitors' vessels.

Apple has been in the news about the work conditions in its factories in China. I'm not aware of many Kiwis shunning their products because of the "slave-like" conditions for workers.

The only factor used to justify the double standard is that because the foreign charter vessel activity actually occurs within our exclusive economic zone, that apparently makes it unacceptable by comparison.

Selective hypocrisy though, is not a convincing basis for credible argument. Credibility should be a prerequisite of any success in lobbying government. To be consistent the protest needs to be against all product that arises from sweatshop-type practices, no matter where it occurs.

To suggest that New Zealand could only take action within our exclusive economic zone and this is somehow more worthy than imposing sanctions on all imports from sources that adopt such practices is simply hypocritical.

If New Zealand wishes to close itself from trade with those parts of the world where such practices are de rigueur then that's a conscious choice to make, with clear costs (economic) and benefits (moral), but to selectively discriminate on some arbitrary delineation such as geography simply is not a sustainable logic. You do it properly or you don't.

The 12-mile limit is where most New Zealand tax and labour laws, as they apply to foreigners, end (except for minimum wage laws, thanks to the Fisheries Act). The 200-mile zone is not a full sovereign territory so the objectors' argument that foreign charter vessels should comply with New Zealand domestic laws is hardly relevant.

The cold hard truth is that in a globalised world many economies do not have the same tax laws or labour costs as New Zealand does. Surprise, surprise; we are therefore not as competitive in many industries, including offshore fishing.

Arguments that hold New Zealanders should be catching all the fish, processing it and trading it, simply ignore the reality of international competitiveness. We can assemble cars and make fridges too - it's just that nobody could afford to buy them.

The opponents are an unholy alliance of activists naive about the realities of global competition and commercial vested interests. Little wonder their output is logical soup.

Surely we should catch and process our own product? Well, we don't with timber, or wool, for that matter, so what makes fish different? Part of the reason behind this state of affairs is the realities of international trade policies - we can often get around tariffs by exporting raw or just semi-processed logs or using foreign charter vessels.

Another factor is that we don't have the willing labour or investment in capital to do the processing competitively ourselves.

In fact, the situation with fish is better than it is with logs and wool, as generally foreign charter vessels are working on behalf of New Zealand fishing companies, so at least the additional profit resulting from the low wages stays in New Zealand.

Indeed, cheaper fishing costs mean we can afford to catch more fish than we would if all ships were crewed by reluctant and expensive Kiwi workers (we don't pick our own fruit and veges for the same reason).

On the other hand, we forgo the returns from the processing of the fish, so it's an equation and no doubt the New Zealand companies employing foreign charter vessels work that out. It is worth noting at this point that some who object to foreign charter vessels still process some product overseas.

What is the difference? Tariffs are a matter for the World Trade Organisation to resolve. You don't solve them by raising your costs by using New Zealand-only fishing vessels.

The other complaint about foreign charter vessels is that they don't care about our ocean, so they cause more environmental damage.

For most foreign charter vessels there is no evidence that this is an issue; in fact, foreign charter vessels help overcome the global fishing industry's No 1 problem - the world has three times the fishing capacity we actually need so at least we're using some of it.

Where there is a problem is where quota is rented to fishers under difficult terms that push the fishers to cut corners with how the fish is caught.

But this problem is not just happening in the deep water, it is even more prevalent in New Zealand's inshore fishery, which is fished by Kiwis. Arguably the issue is worse inshore; at least the offshore foreign charter vessels carry observers who scrutinise for transgressions.

Our inshore fleet is too small to police with observers, and New Zealand has been slow off the blocks with video surveillance.

This issue cuts to the heart of the rationale for our quota management system - the idea was to give the people doing the fishing an incentive to look after the fish in the long term.

Instead we have absentee quota owners who were in effect gifted this property right and nowadays don't bother doing the fishing, but sit back and squeeze all the profit from the people who actually do the work.

Rather than foreign charter vessels, it is this practice of monopolistic behaviour of quota owners renting quota under onerous terms that push foreign and local fishers to unsustainable practices. One solution might be to make quota owners responsible for any breaches made while their quota is being fished.

There is certainly an issue here - but it is well beyond the sectoral spat in the offshore fishing industry that parades as a human rights crusade.

It is about the extent to which we are prepared to forgo economic benefits in order to achieve other objectives in harmony with our values, such as environmental sustainability and protection of human rights.

It's bemusing that the opponents to foreign charter vessels include advocates of some of the hardest right-wing policies that exist in democratic capitalist societies.

Yet when it comes to their own patch the logic is to champion less competition and propose a world where their competitors who do use foreign charter vessels are saddled with higher costs. Given that duplicity there is more than a dose of salt to be taken with the objections to foreign charter vessels in our offshore waters.

This whole campaign about foreign charter vessels originated within the fishing industry and has been funded by those in the industry who have not taken advantage of the foreign charter vessel factor in reducing their costs.

Parading self-interest as national interest is one of the age-old methods that corporate lobbyists employ to steer politicians and policy in their favour. It does not necessarily follow that national interest in its widest sense is to be served. Wolves posing as Red Riding Hood's grandmother are still wolves.

Insofar as the idealists protecting human rights are concerned, absolutely they are right to enter this dispute. And of course we should combat organised crime and slavery if it is proven to exist. But be careful of not just who you side with, but also the depth of your argument. Unless you're prepared to advocate the prohibition of imports from and exports to all economies where human abuses - defined by our standards - are committed, it looks very like you're being swept along by the manipulative fervour of an industry lobbyist.

The figures tell us 200,000 New Zealand children live in abject poverty, Unicef ranks us very lowly in terms of the humane treatment of our children. Against this backdrop, just how credible is a selective campaign against human abuses by foreigners on foreigners?

Of course we should be concerned about all abuse but the industry objectors to foreign charter vessels are using this particular instance of abuse as a Trojan horse for another agenda, while their naive human rights companions are along for the ride.

Gareth Morgan and Geoff Simmons are authors of Hook, Line and Blinkers - a book that looks at the depletion of world fishing stocks and the real effectiveness of New Zealand's Quota Management regime.

- NZ Herald

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