Fisheries Cost Recovery Standing Committee Meeting #9

22 March 2006

Venue: 1 Spring Street, Melbourne

Chair's Summary


  • Mr Ian Cartwright


  • Mr David Lucas (industry)
  • Mr Gerry Geen (industry)
  • Mr Tim Mirabella (Industry)
  • Mr Ross McGowan (SIV Permanent Observer)
  • Mr Jon Presser (DPI)
  • Mr Michael Hodder (DPI)
  • Mr Paul Mainey (DPI - Observer)
  • Mr Stephen Maher (DPI – FACS expertise)
  • Mr Peter Rawlinson (DPI – FACS expertise)
  • Ms Karen Weaver (DPI Permanent Observer)
  • Mr Dallas D'Silva (DPI – Observer)


The FCRSC expressed general satisfaction at the previous 12 months achievements. Only 7 submissions to the 2006 RIS were received, which was a dramatic fall from the 100 or so arising from the first cost recovery RIS.

The Committee noted that in 2006 there is a need to focus attention on refining cost recovery processes to make them more transparent and equitable across fisheries; decide on the role for the Committee with respect to research; and improve communication with industry, including a greater engagement in up-front budgeting and performance reporting in the context of cost recovery.

The eighth meeting of the FCRSC focused on consideration of:

  • the latest quarterly data generated by the FACS system in its new reporting format;
  • options for the refinement of cost recovery processes, including the allocation of composite (global) fisheries costs, including overheads;
  • alignment of licensing and fiscal years;
  • a communications strategy;
  • follow-up of the Acumen audit recommendations;
  • the timetable for the 2007 RIS;
  • the role of FCRSC in respect of research; and
  • arrangements for the review of the FCRSC TORs and MOU.

FACS report

The Committee considered the latest Quarterly FACS Report which was provided in a new, more transparent form. Cost data for each fishery was presented in two ways - by i) activity and ii) cost type. The Committee agreed that the level of transparency provided in the Report was very useful and enabled a much closer scrutiny of major cost categories.

The Committee recalled that one of the key drivers for obtaining greater detail of expenditure was the determination of a base level charge to ensure that small fisheries attract a fair percentage of costs and are not being subsidised by other fisheries as a result of little or no direct attributed hours.

The Committee made a number of suggestions for improvement, including the documentation of decision rules to make it clear how costs were currently calculated and attributed. This summary would be updated as improvements to FACS were made.

Refinement of Cost Recovery

Previous meetings of the Committee have agreed on the need to improve the current system of implementing cost recovery. The  main issues to be addressed in the short term are: i) cross subsidisation of small fisheries,  ii) using direct costs to attribute large amounts of composite costs which was distorting the actual costs applicable to each fishery; and iii) the need to agree on a means of applying a base level of attribution.

In considering the options for refining the cost recovery process as listed in the paper, the Committee agreed that maintaining the status quo was not an option since the process is an evolving one. While the Committee agreed that service level agreements (SLAs) would likely be useful in the long-term, it would not be appropriate to consider them in this round of discussions.

The Committee decided to establish a working group to be led by SIV with appropriate technical input and advice provided by DPI. It was further agreed that the working group should, under its TOR:

  • advise on options for the application of a base level charge;
  • establish the principles of the apportionment of composite fisheries costs; and
  • standardise the format for quarterly reporting in the future.

It was agreed that the move towards forward budgeting and performance monitoring would be best pursued using a stepped approach, with the establishment of service level agreements (SLAs) as a long-term goal. FCRSC discussed means of assessing the performance of DPI against the delivery of output targets, including utilising the performance indicators specified in DPI Annual reports.

It was also noted that there are a number of fisheries-specific performance indicators contained in management plans, and these need to be factored into DPI reporting to allow those paying for the service to assess performance.

In the context of the FCRSC, the Committee agreed that to move to a more holistic approach to cost recovery would involve:

  1. ensuring industry involvement in a forward budgeting process by identifying SLA and the recovery of fees and levies from industry for the following year, rather than the retrospective collection of fees;
  2. describing and documenting management, compliance and research services that are to be delivered by DPI; and
  3. agreeing to a method of assessing performance against SLAs.

Assignment of composite fishery costs in the Abalone Fishery Sector

Abcomm proposed that the allocation of composite costs will be done on kilograms rather than units in the future.  The Committee noted that this was in alignment with the Rock Lobster Industry.  The Committee agreed that this was an appropriate mechanism to use.

Alignment of licensing and fiscal years

The Committee examined the costs and benefits of aligning licensing and fiscal years, as recommended in the Acumen report. It was not convinced that the benefits outweighed the costs, and expressed a preference for leaving the fishing years as they currently are, noting that this position had been expressed by industry at the previous meeting of the FCRSC.

Communications with industry

The Committee agreed that there was a clear need to improve communications with industry on cost recovery. There was strong support for the preparation of a document/guide providing a simple explanation of the basic structure of cost recovery, and DPI was tasked with preparing an initial draft.

The guide will form only one part of a communications strategy, which will consist of:

  • a  'Cost Recovery Guide' with Executive Summary
  • a series of Frequently Asked Questions to be placed on both  industry and government websites
  • the current Chairman's Summary distributed by SIV (ensuring prompt circulation to stakeholders)
  • a 'FACS Viewing Day' where an opportunity is afforded to interested industry representatives to overview FACS in operation (SIV will invite industry reps and DPI will organise a live demonstration.

It was further agreed to ensure that the FCRSC agenda is circulated in advance of meetings to enable industry, including EOs of industry associations, time to consider if they wished to observe parts of the meeting.  Efforts were to be made to ensure that observers had every reasonable opportunity to provide input into the process.

FACS audit recommendations

The Committee noted that DPI had prepared detailed responses and timelines for actions in respect of the Acumen audit of cost recovery processes. The Committee agreed that it was important to review progress on these actions to ensure all matters were actioned in a timely manner.

Regulatory Impact Statement 2006

The Committee noted that the wording of the Abalone Royalty provisions in the RIS required review, since it did not currently achieve what was agreed at FCRSC. While the FCRSC had been involved in developing the new royalty regime, the Committee agreed it was not appropriate for it to be involved in this issue, and that the final wording was a matter for agreement between AbComm and FV.

Every effort is to be made to ensure that the timelines for preparation of the 2007 RIS: are such that appropriate consultation is possible between all stakeholders and the process does not become compressed at the end of the year. FCRSC will keep the RIS timetable on the agenda to ensure that progress is being made towards timely production of the 2007 RIS.

Research role

While specific tasks with respect to the consideration of research matters by FCRSC had been included in the TORs and MOU of the Committee, it was noted that little progress had been made on this aspect of the Committee's work over the last two years.

SIV is currently in discussion with DPI on the detail of the research process, particularly in regard to the engagement of industry in identifying research needs and priorities.

In reviewing the future role of FCRSC in respect of research, it was agreed that the Committee only had an advisory role in the research process, focusing on oversight and Governance issues as they applied to the implementation of cost recovery. It was not considered appropriate for the Committee to be involved in the merits or otherwise of individual projects.
It was further agreed that the Committee should, consistent with the TOR above, review, and as necessary, establish criteria for the degree of recoverability against research projects costed against and benefiting the commercial fishing industry.

The Committee discussed the issue of Government-initiated buy-backs and their impact on the cost recovery process, noting with concern that individual licence holders could face substantial increases in individual levies, with the costs of a particular fishery being divided among a reduced number of licence holders. 

Terms of Reference

The FCRSC agreed that a SIV/DPI Working Group be established to review the TOR.  It was agreed that the draft TOR will come back through the FCRSC for endorsement.  The first report of this group will be made to the next FCRSC meeting (15 May 2006).

Next Meetings

Dates for the next two meetings of the FCRSC were set for 15 May 2006 and 7 August 2006