Papers allege top-level fraud within Ministry of Fisheries

By JAMES GARDINER

Corruption, illegal fishing and fraud at the top levels of the Ministry of Fisheries and at least one major fishing company are alleged in affidavits that Fisheries Minister Pete Hodgson wants referred to the Serious Fraud Office.

But Mr Hodgson cannot get his hands on the documents.

The people who prepared the files with the help of lawyers and private investigators say they offered them to the minister and the SFO months ago but were turned away.

The allegations arise from longstanding grievances over the allocation of catching rights for the high-value species scampi, a developing fishery worth more than $30 million a year.

Scampi are prawn-like crustaceans, closely related to crayfish.

Most of the catch, about 1000 tonnes a year, is exported to Japan, the United States, Singapore and Hong Kong, where it fetches up to $55 a kilogram.

The Herald has learned that former fisheries investigators have accused key people in the ministry of colluding with members of the industry.

Former fishing boat skippers have said they were instructed to fish illegally and lie about what they caught by either falsely increasing catches of scampi or, in later years, understating the size of the catch.

Inflating catches produced a record for the allocation of quota, which could then be fished or traded. Understating was used to hide overfishing.

They allege that one or more fishing companies had apparent protection from state prosecution and that files disappeared after former ministry investigators, on the verge of laying charges, were blocked by their superiors.

Offences under New Zealand's fisheries law carry fines of up to $250,000, and fisheries officers wield powers of search and seizure.

Convictions can devastate fishing companies because quota and boats worth millions of dollars are automatically forfeited.

Without evidence, it is impossible to name the companies involved or the officials - although the Herald has this week spoken to many of the key people.

Some of them may be protected by a two-year statute of limitations for fisheries offences.

The ministry has been knocked back three times in the courts over its attempts to allocate quotas - private tradeable catching rights - and its handling of the industry over the past 12 years has been slated by a series of judges as unfair, misleading and illegal.

The most recent case ended in the Court of Appeal last October with an outright win to the five companies that challenged the allocation.

The ministry and its minister were told to re-do the allocation and pay large costs to the appellants.

But the case has taken a new twist this year, after some of the aggrieved fishers feared the ministry would attempt to ignore the courts for a third time and divvy up the quota on the same basis again.

New Zealand First leader Winston Peters is likely to use the defamation protection of parliamentary privilege to name people and table the affidavits.

Two weeks ago, he told a public meeting in Auckland that the ministry had been involved in corruption.

Last week in Parliament, he gave more detailed allegations of illegal activity and cover-ups.

He called for Mr Hodgson's removal, saying he was an apologist for a corrupt ministry.

Mr Hodgson responded this week by inviting Mr Peters to supply copies of all allegations to himself, the police, the SFO or the State Services Commission.

Mr Peters replied that he would not give the material to the minister because his ministry was corrupt.

He said yesterday that the SFO was not equipped to investigate. An independent inquiry was needed, "and I'm going to get one".

Two officials and a fishing company boss thought to be named in the affidavits confirmed they were aware of at least some of the allegations.

Both officials said they had done nothing wrong and would welcome a public inquiry.

The company chief said he doubted Mr Peters would repeat many details outside Parliament.

According to a Herald source, the company chief once told a senior compliance officer that he knew what was going on in the ministry before the officer did.

The fiercely competitive fishing industry is a hotbed of such claims.

Suspicions within the ministry were at one point so inflamed that a team of Wellington investigators conducted an operation in Auckland without telling the Auckland staff.

Mr Hodgson said he took Mr Peters' allegations very seriously because they reflected upon his integrity and that of all ministry staff.

* james_gardiner@nzherald.co.nz

APOLOGY
During 2002 and 2003 the New Zealand Herald published a number of articles regarding allegations made in Parliament and in certain affidavits of corruption within the Ministry of Fisheries and illegal fishing in the scampi fishery. The Herald retracts any suggestion in those articles that Simunovich Fisheries Ltd, Peter Simunovich or Vaughan Wilkinson were guilty of corrupt or illegal activities in relation to their involvement in scampi fishing. The Herald greatly regrets any damage to their reputations and any embarrassment it caused to them and their families and unreservedly apologises to them.