Review of the
Great Barrier Reef Marine Park
Structural Adjustment Package
John Gunn, Greg Fraser, Brian Kimball
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Table of contents
Page
1
Executive summary ................................................................................ 4
2
Establishment of an independent review of the Great Barrier Reef
Marine Park Structural Adjustment Package ......................................... 22
3
4
2.1
Background ..................................................................................................22
2.2
Terms of reference for the review ...................................................................22
2.3
Approach to the review ..................................................................................23
2.4
Structure of this report ..................................................................................25
Part A: The Great Barrier Reef Marine Park Structural Adjustment
Package (the Package) ......................................................................... 26
3.1
Australian Government policy on marine protected areas and displaced fishing .....26
3.2
Great Barrier Reef Representative Areas Program .............................................26
3.3
The nature and scope of the Package ..............................................................27
3.4
Changes to the scope of the Package ..............................................................28
3.5
Assistance provided under the Package ...........................................................29
Part B: Assessment of program management ....................................... 34
4.1
Clarity of program objectives..........................................................................41
4.2
Research into the economic impacts of the Zoning Plan .....................................42
4.3
Increases in program costs ............................................................................44
4.4
The complexity of the Package .......................................................................45
4.5
The timing of assistance ................................................................................47
4.6
Stakeholder communication and engagement ...................................................49
4.7
Stakeholder satisfaction .................................................................................53
4.8
Implementation planning ...............................................................................54
4.9
Governance and administration of the Package .................................................54
4.10 Timeliness of decision making ........................................................................60
4.11 Employee, social and community assistance elements of the Package .................62
4.12 The achievement of equitable outcomes for applicants ......................................62
5
6
Part C: The costs and benefits of the Package ...................................... 68
5.1
Managing displacement of fishing effort ...........................................................68
5.2
Responding to equity and fairness considerations .............................................69
5.3
Economic benefit to regional economies ...........................................................72
5.4
Ecological benefits of the Zoning Plan ..............................................................73
5.5
Stakeholder perspectives on cost-benefits........................................................74
5.6
Cost-benefit summary ...................................................................................74
Part D: Comparison of the GBRMP Structural Adjustment Package with
the Commonwealth South-east Marine Region structural adjustment
process ................................................................................................. 76
6.1
Conservation objectives and the contexts for adjustment ...................................76
6.2
Design and adjustment processes ...................................................................78
6.3
Package components .....................................................................................79
6.5
Outcomes ....................................................................................................83
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
7
Part E: Policy considerations and recommendations for future
structural adjustment packages ........................................................... 84
7.1
Policy considerations .....................................................................................84
7.2
Recommendations relating to marine reserve structural adjustment policy ...........84
7.3
Recommendations relating to structural adjustment program design and
implementation. ...........................................................................................87
7.4
Recommendations relating to program management .........................................88
7.5
Knowledge management ................................................................................89
Appendices ................................................................................................... 90
Appendix A – Terms of reference .............................................................................. 0
Appendix B – Stakeholders interviewed during the review ........................................... 2
Appendix C – Survey instrument used during the review ............................................. 6
Appendix D – Detailed summary of stakeholder comments made in response to the
stakeholder survey........................................................................................11
Appendix E – Best practice assessment model for program management ......................17
Appendix F – Overview of structural adjustment considerations and history in
Australian natural resource management .........................................................24
Appendix G – References – further reading ...............................................................32
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
1
Executive summary
Background
The Great Barrier Reef Marine Park Zoning Plan 2003 (the Zoning Plan) came into effect
on 1 July 2004. The Zoning Plan significantly changed the areas of the Great Barrier Reef
Marine Park (the Marine Park) open to extractive uses, notably fishing.
In May 2004 the Australian Government announced that, in response to the impacts of
the Zoning Plan on fishing and related businesses, a structural adjustment package (the
Package) would be provided with the objectives of:

assisting fishers, fishery-related businesses, employees and communities adversely
affected by the Zoning Plan, and

managing in the most cost effective manner any displaced fishing effort that has
unsustainable ecological or economic impacts.
The Government’s approach to development of the Package was guided by a Marine
Protected Areas and Displaced Fishing: A Policy Statement 1. Under this policy, the
provision of compensation or structural adjustment assistance is considered on a caseby-case basis.
The Department’s interpretation of the policy statement and the “purpose” of the
Program were further articulated in the Package Guidelines (June 2004):
“…the Government is providing a structural adjustment package to
ensure the fair and equitable treatment for those fishers, fishery
related businesses, employees and communities that can
demonstrate they have experienced negative impacts due to the
rezoning.”
Between June 2004 and September 2006, the Government responded to views of
industry stakeholders by making six major changes to the scope and availability of
assistance provided by the Package.
The Package has provided $213.7 million2 for structural adjustment to 1782 fishers,
seafood processors and upstream providers to the fishing industry.
Since 2004, in addition to the impacts of the Marine Park Zoning, the Queensland fishing
industry and associated sectors faced a number of pressures from a range of external
policy (e.g. effort displacement following the Queensland Government’s creation of a
Great Barrier Reef Coastal Marine Park without any adjustment assistance;
Commonwealth fisheries adjustment through the Securing our Fishing Future package)
and market factors (e.g. significant rises in fuel prices, unfavourable foreign exchange
rates in key export markets, competition from cheap imports in key domestic markets,
competition for labour driven by a burgeoning mining sector etc ). In combination, these
pressures had a very significant negative impact on the viability of fisheries and many
businesses associated with the fishing industry along the Great Barrier Reef. Their
1
Marine Protected Areas and Displaced Fishing: A Policy Statement, Australian Government, January 2004,
<http://www.environment.gov.au/coasts/mpa/publications/displaced-fishing.html>, accessed
9 July 2008.
2
Up to 28 June 2010.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
cumulative impact has been described by a number of industry members as being akin to
the “perfect storm”.
In February 2006 the Australian Government agreed that an independent review
(hereafter referred to as ‘the Review’) of the development and implementation of the
Package should be undertaken to guide future policy development. The Review was
initiated by the then Department of Environment and Heritage (DEH) in June 2008 with
broad terms of reference (ToR).
In brief, the key foci of the Review were to:

assess whether the Package met its objectives

review the design, implementation and management of the Package

examine the procedural fairness and equity of the funding allocation processes

undertake a preliminary examination of the benefits accrued from the adjustment
expenditure, and

provide recommendations and examine policy considerations for future marine
structural adjustment packages.
The Review focused principally on those components of the Package where the majority
of expenditure occurred and drew on the findings of two earlier, relevant reviews:

The Review of the Great Barrier Reef Marine Park Act 1975 that made findings,
among other things, regarding the Zoning Plan, and

An independent review of the licence buyout component of the Package conducted
by FERM Consulting completed in October 2007.
Key findings against each Term of Reference (ToR) are summarized below, along with
key recommendations for improving the development and delivery of future structural
adjustment associated with marine reserves 3.
ToR 1 : The extent to which the Package has met the needs of different sectors,
and in particular, commercial fishing industry sectors, recreational fishing and
charter operators, land-based fish processing and marketing businesses and
land-based service businesses.
Key Findings
 Despite expenditure of $213.7 million, a majority of the stakeholders, across all
sectors, felt strongly that the Package failed to adequately compensate them for
the impacts of the Zoning Plan, and thus failed to meet their needs.
 Many stakeholders found it
impacts of the Zoning Plan
external factors, and most
compensation, rather than
affected industries.
3
difficult to conceptually or financially separate the
from the significant negative impacts of a number of
of those interviewed saw the Package as a form of
as an attempt to support structural adjustment of
Ancillary recommendations are also made in the body of the document.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
 A minority of stakeholders – in the main, from the non-commercial fishing sectors acknowledged that the Package had assisted them to restructure, reduce debt or
remain solvent over a difficult period. A handful viewed it as a significant
contributor to successful restructuring.
 As there was very little or no quantitative assessment of the impacts of the Zoning
Plan on most industry sectors prior to the implementation of the Package, nor has
there been a detailed socio-economic analysis of the impacts of the Package on
businesses, individual industry sectors and regional economies since 2004, it is
difficult to argue on the basis of facts with industry perceptions that the Package
has not adequately met the needs of their industries.
 The scope of the Package was broad, both in the range of businesses and
stakeholders for which assistance was made available, and the forms of that
assistance. While this allowed the Government to respond effectively to emerging
stakeholder needs by amending the scope of the Package, it also meant that the
objectives were open to wide interpretation, and as a consequence the Program
implementation team (and the Government) were constantly faced with an
expectation management challenge.
 Given that the Package had not met stakeholder expectations, this Review
evaluated whether the Package had met Government objectives. On one hand,
given that considerable assistance was provided to more than 1300 businesses
affected by the Rezoning, it would appear to have met Government objectives.
Somewhat surprisingly however, relatively little effort was made to
evaluate/design what the fishing and fishery-related businesses should/would look
like post-restructuring. DEWHA offered to provide funding support to the
Queensland Seafood Marketers Association in engaging a consultant to work with
the processing sector to identify how an orderly adjustment program to downscale
the overall size of the sector could be achieved. However, the offer was not taken
up. Late in the Program a consultant’s report 4 found little prospect for seafood
processor rationalisation due to antagonism between businesses and competition
(rather than collaboration). The combination of business unresponsiveness and
the Departmental approach meant that each individual application for adjustment
assistance was evaluated on its merits, often leaving the same number of
operators competing for less business.
 The fishery buy-back components of the Package, reviewed previously by FERM
(2007), were able to achieve significant reductions in effort in some of the fishery
sectors significantly impacted by the Zoning Plan. A key conclusion of the FERM
review was that ‘unless fisheries management arrangements are capable of
controlling the level of effort in areas remaining open to fishing, a fisheries buyout
of itself will not necessarily prevent displaced effort from having unsustainable
impacts’. This review supports that conclusion.
Recommendations
 Future structural adjustment associated with the development of marine protected
areas should aim to effectively adjust levels of fishing effort and/or catch to
account for reduced access to resources, and to minimize the impacts of displaced
effort. Where available fishery management measures do not prevent activation of
4
Shearwater Consulting Pty Ltd, Report January 2007, delivered February 2007.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
latent effort, structural adjustment should not be attempted until such time that
the latent potential is removed. In this event, autonomous adjustment is
recommended.
 The nature and extent of change to be achieved through structural adjustment
should be explicitly articulated.
 Similarly, the scope, objectives and components of a structural adjustment package
should be defined and all relevant industry and government stakeholders
consulted to test its efficacy before it is announced and implemented.
 The funds to be expended on a structural adjustment package should be capped,
taking into account the scope and nature of the adjustment to be achieved. In all
likelihood this would mean allocation of adjustment funds would be competitive,
as for example it was in the Securing our Fishing Future Package.
 The Commonwealth should seek to harmonise, as far as possible, restructuring of a
Commonwealth fishery with relevant State government fisheries management
policies and programs.
Recommendations on Commonwealth Structural Adjustment Policy with respect
to marine reserves and displaced fishing
First, it is important to emphasise that while the Package had many detractors, and
indeed this review has found significant room for improvement in the design and
implementation of structural adjustment programs for fishing and related industries, the
guiding policy of the Package – the 2004 Marine Protected Areas and Displaced Fishing: A
Policy Statement – provides an excellent foundation on which to build a more
comprehensive marine reserves compensation or structural adjustment policy. Many of
the clear statements of intent and directives within the 2004 policy statement were only
partially implemented due to the very short lead time involved in the GBRMP Package,
with significant negative consequences.
The significant and uncapped cost, changes to and complexity of the package
components and processes, stakeholder dissatisfaction (setting aside the benefits of the
Zoning Plan) and questionable structural adjustment outcomes of the Package suggest
the need for an improved approach to adjustment associated with displaced effort in the
future.
The lessons learned from the GBR experience most relevant to policy amendments are:
1. Without a well-defined set of structural adjustment or compensation package
guidelines and boundary conditions (e.g. which elements of the affected industry
and associated up- and down-stream industries will and won’t be considered;
whether or not compensation will be capped; how individual businesses will be
evaluated), there is increased probability of “gaming”, “special circumstances”
pleading and associated political influence, scope creep, cost overruns and
stakeholder dissatisfaction.
2. Without enough time to adapt a policy or set of guidelines to the specific
circumstances of each marine protected area displacement (including time to
collect and analyse required bio-socio-economic data and consult with
stakeholders), the likelihood of the program meeting its objectives is significantly
decreased.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
3. Fishers, particularly smaller owner-operators, found the complexity of the
Departmental processes difficult – in particular with regard the documentation
requirements, but also because of their inherent lack of familiarity with such
processes. Business advisors were thus required, and a not-insignificant
proportion of the Package benefit went to these advisors rather than those for
whom the Package was developed.
4. The inclusion of up- and down- stream industries within a structural adjustment
process increases complexity. In general terms, one can expect that the further
up- or down- stream a business is from the displaced fishing industry, the smaller
the impact of displacement will be on the viability of that business. As a result,
the ability of the business to autonomously adjust/adapt is greater than those that
are more closely reliant on fishers and fish products. The experience with this
Package was that the further a business was from the fishing industry, the more
difficult it became to quantify the impact and estimate the need/quantum of
compensation.
5. There was a fundamental mismatch between stakeholder desires and expectations
for adequate (and timely) financial compensation for impacts of the rezoning,
and the Department’s approach to implementation of the Displaced Fishing Policy
which for some components required complex evaluation of structural adjustment
entitlements of individual businesses. The mismatch and associated dissatisfaction
created an adversarial environment for development and implementation of the
Package. This could have been avoided by simplifying the process.
6. The lack of due and timely consideration of the requirement for, and design of, an
adjustment program associated with the GBRMP Rezoning provides a salutary
lesson around the need for integration of processes involved in marine park
design and implementation and those of adjustment planning and
implementation. Assuming that adjustment will remain a tenant of Commonwealth
Marine Protected Area implementation, these should be considered components of
one process.
7. Despite the Department’s best efforts to run the Package on a least-cost basis, the
very significant expenditure suggests that future adjustments should not be
conducted without adequate estimation of the economic impacts of fishing
displacement, or be offered on an uncapped basis.
Given these lessons, we recommended consideration of the following amendments to the
Displaced Fishing Effort Policy:
1.
To avoid the necessity for each package to be designed from the bottom-up, and
the risks associated with special circumstances cases driving repeated amendment
(and growth) in adjustment package, we recommend that a displaced fishing policy
should be supported by delegated legislation. This would allow core/higher level
components of adjustment packages to be set. The legislation would preferably set
out a “tool box” of secondary adjustment measures that could be implemented as
required. A useful example of this approach can be seen in Commonwealth Fishery
Management Plans. We accept that this will take significant effort (including wide
consultation), and open the Department to the potential for challenges in the
Administrative Appeals Tribunal. However, we see significant benefit in broad
stakeholder engagement in setting up the delegated legislation, and in providing a
strong design framework for this critical component of the Commonwealth’s
National Representative System of Marine Protected Areas.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
2.
The amount of money and assistance set aside for compensation and/or adjustment
should be capped. The cap should be commensurate with the projected impact of
conservation measures on the fishing and related downstream industries.
3.
Adjustment should primarily focus on impacts on the fishing industry.
4.
With certain provisos regarding pre-existing fishery management arrangements
(see section 7.3 below), the most cost-effective adjustment approach for the fishing
industry is reduction of fishing through vessel/effort unit/quota buyout. A two-stage
tender process is recommended.
5.
There should also be some consideration of compensation of first-order downstream
industries (e.g. processors/fish wholesalers), as these are commonly local
businesses solely or heavily reliant on the product of local fishers. We recognize
that these businesses will not satisfy the requirements for dispossession under just
terms compensation. However, there likelihood of significant impact provides an
argument for consideration.
6.
For first-order down-stream businesses, where economic analysis at the local
and/or regional scale suggests fishing sector downsizing will have very significant
impacts on viability, consideration of one, or a combination, of the following two
approaches is recommended:
a.
Tendered buyout proportional to the assessed impact
b.
A formula-based, single compensation payment to all operators in those
sectors, based on proportional assessed impact. The compensation should
take into account a reasonable period for business adjustment, but certainly
not account for ‘lifetime’ impact.
7.
For land-based businesses (second- and third-order up- and down-stream and
all upstream) operating where fishing is a minor component of the regional
economy., autonomous adjustment is recommended. This is in part recognition of
the likely positive impacts of marine reserves on increased conservation-based
tourism, and in part the inherent autonomous adjustment potential of these
businesses.
8.
For land-based businesses where fishing is a more significant component of
the regional economy, funding directed towards regional assistance programs
targeting affected towns/communities is recommended. The lessons learned from
this Package and SOFF regarding community/regional assistance should be taken
into account in the design of any future program.
ToR 2 : Review the level of funds provided for adjustment assistance and why
the cost of the Program increased to the extent that it did over the life of the
Package.
Was the Package cost effective and could alternative approaches
have achieved similar or improved results?
Background
The Great Barrier Reef Marine Park Authority (GBRMPA) estimated in 2003 that the
rezoning would result in an economic impact of $2.8 million per annum, this being the
estimated value of fish production in the closed areas. Before the release of the
Package, additional estimates of the rezoning impact, solely on fishers and excluding
9
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
upstream and downstream processors, ranged from $14 million (Bureau of Rural
Sciences) to $26 million (Independent Panel).
The original budget allocation to the Package of $10 million included a qualification that
the costs were an estimate and that the actual cost of structural adjustment would unfold
with consideration of the individual applications for restructuring assistance.
Over the life of the Package the Government made significant changes in the Package
that broadened its scope and nature and the amounts of assistance which could be
provided. As a result, this Review concludes that it is not meaningful to compare the
earlier estimates of cost with the final expenditure.
Key findings
This Review supports the conclusions of GBRMPA Act Review 5: that the economic studies
conducted prior to the rezoning were insufficient to support an assessment of the needs
for financial assistance and that an estimation of the costs of adjustment assistance
requires a different form of analysis to that which was conducted. This is because
requirements for financial adjustment assistance can vary depending on the nature of the
impacts and the type and level of support required.
 The principal driver for increases in the cost of the Program was Government
agreement, in response to issues and concerns raised by industry stakeholders, to
change the scope of the Package and thereby significantly increase the number
and size of adjustment payments.
 The Review considers that the need for the Government to make substantial
amendments to the scope of the Package (and any future structural adjustment
following marine reserve development) may have been obviated if:
o
Prior to developing the structural adjustment package there had been a
more thorough assessment of the economic and social impacts of closures
on the relevant industries and regions, including consideration of potential
displaced fishing effort on particular regions; and
o
the Program objectives were more tightly constructed.
 The very short time period available for the Department to develop the Package,
combined with the paucity of economic and social baseline data and socioeconomic assessments of the impacts of the Zoning Plan, prevented quantitative
cost-benefit analysis of alternative adjustment approaches prior to announcement
of the Package. Thus, the Package had no detailed plan for how sectors could or
should be adjusted to maximise economic benefit.
 Restructuring without a structural adjustment plan appears to have eroded longterm adjustment benefits, a shortcoming compounded by investment into
marginal or (based on industry responses to questionnaires and submissions to
port visits) even unviable businesses. The Department’s view – that they were
quite stringent in not providing assistance to unviable businesses under the FBRA
component of the Program (noting that a business was still assessed as viable if it
showed good prospects of being viable even if current finances showed a loss)
was at odds with the views of many stakeholders. If, as stakeholders contended,
structural adjustment assistance was provided to unviable businesses, these
5
Dept. of the Environment and Heritage. 2006, Review of the Great Barrier Reef Marine Park Act 1975 :
review panel report Dept. of the Environment and Heritage, Canberra, A.C.T. :
<http://www.deh.gov.au/coasts/publications/pubs/gbr-marine-park-act.pdf>
10
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
adjustment payments/cases would be inconsistent with the objectives and
outcomes of the assessment process.
 The relatively small expenditure on buying out fishing licences did reduce impacts
of displaced effort, particularly in the coral trout/reef line fishery and some parts
of the trawl fishery.
 The responsiveness of Government to the claims and needs of businesses led to
many changes in the scope of, and approaches to, adjustment. In lieu of either an
adjustment plan or a quantitative basis for evaluation of the claims of impact, the
Department was left with the difficult task of developing least-cost approaches to
adjusting a diverse range of businesses.
 Notwithstanding the prior experience within the Department in forestry industry
adjustment, the lack of experience within the Department in the delivery of
adjustment programs in fishing and fishery-related industries compounded the
difficulty in delivering what rapidly became a very complex adjustment Package.
The Package was the first adjustment made under the 2004 Displaced Fishing
Policy statement and was up to that time Australia’s largest investment in
structural adjustment of marine industries.
 The adoption within the Full business restructuring adjustment (FBRA) component
of uncapped support for restructuring of individual business, rather than the
alternative of capped compensation for impacts, was at best a risky approach to
maximising benefit-to-cost outcomes. The diverse range of shore-based
businesses seeking support, and the complexity of the approaches used, opened
the system up to gaming, and in the end the move towards payments in multiples
provided little guarantee of value for money.
 The lack of accountability for adjustment expenditure against these multiples is also
cause for concern. Five years after the announcement of the Package, there is
little in the way of quantitative assessment of socioeconomic benefits, for any
sector.
 The majority of stakeholders interviewed believe the structural adjustment funds
could have been used to greater effect for local and regional economies. Many
factors outside the control of the Department contributed to dissatisfaction of
stakeholders with the Package, and it is important to recognise this in evaluating
the comments received during this review. However, the consistency of
stakeholder commentary regarding unrealised benefits is persuasive. Seeking the
views of businesses on the best ways to maximise benefits flowing from
adjustment packages to local and regional economies – as distinct from individual
businesses – is recommended in future reserve planning.
 In many respects, the Package represented a transaction cost against the expected
ecological and financial (to the tourism industry) benefits of the 2004 Great
Barrier Reef Marine Park Zoning Plan. Having invested $214 million in structural
adjustment, there is as yet relatively little data regarding the impacts of the
rezoning on the GBR. However, early indicators appear to be positive.
Recommendations6
6
Note that recommendations on Structural Adjustment Policy above also relate to this ToR.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
 Given the Package’s considerable investment in GBR fisheries and related industries
over the last six years, a thorough analysis of the economic and social benefits
accrued from these funds should be undertaken. Such a study would guide
assessment of the costs and benefits of structural adjustment across different
sectors, and inform the Department of the effectiveness of the various forms of
adjustment assistance provided.
 Ensure that a comprehensive assessment of the economic and social impacts of
marine reserve closures on industries and regions is undertaken before
considering structural adjustment/compensation packages associated with
displaced fishing effort or commercial activities. This should explicitly consider the
impact of displaced fishing effort within regions and communities (rather than
assume that the ability to adapt is homogenous). The impact assessment should
be done on a consultative basis with industry and other affected stakeholders.
 Define the scope, objectives and components of future package in detail and
consult with all relevant industry and government stakeholders to test its efficacy
before it is announced.
ToR 3 : Whether regional restructure requirements and fishing displacement
caused by rezoning were adequately addressed.
Background
The Zoning Plan introduced a spatial heterogeneity in the extent of increases in green
zones and decreases in general use zones. This, and significant differences in the nature
and extent of commercial fishing along the 2000+ nautical miles of the GBRMP, meant
that the impact of rezoning on the fishing industry varied among regions, towns and
communities.
Findings
 At a regional level, commercial fishing accounted for less than one per cent of the
gross value of production of industries in the broader GBRMP catchment in 20027.
Thus, the financial benefits of the Package are unlikely to have had a significant
economic impact at a regional level. There are, however, major concentrations of
fishing and fishery-related businesses at a number of ports along the GBR coast.
 The $214 million in structural adjustment assistance provided between 2004-2010
– an average of $50 million per annum – is substantial compared to the value of
fish production - $65 million per annum - from the GBRMP region8 affected by the
Zoning Plan. In lieu of quantitative analysis, it seems likely that the injection of
significant adjustment funding will have had a significant positive financial impact
on the fishing and related sectors, flow-on effects through fishing industry and
benefits to the communities most closely associated with fishing. Offsetting this,
however, were a number of significant externalities that severely and negatively
impacted the viability of many Australian fisheries, including those affected by the
Zoning Plan.
 These, combined with the impacts of the rezoning drove profitability down to the
point of where many operators and fishery-related businesses were unviable.
Thus, while the Package may have seemed generous from a perspective that it
7
Productivity Commission 2002 reported in BRS 2003.
8
BRS 2003
12
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
provided a major injection of funds into the fishing and related industries, it was
not sufficient to stave off financial losses. Indeed, a consistent comment across a
wide range of stakeholders was that the Government’s $214 million adjustment
investment would have best been used to conduct a more complete buyout of the
GBR fishing fleets.
 When designing the Package, the Department was advised that the Zoning Plan
was likely to have significantly heterogeneous impacts along the GBR coast, and
that this should be taken into account as the Package was delivered. However,
with the exception of some regional focusing of license buyouts, there was no
explicit regional weighting in consideration of Simplified Business Restructuring
Assistance (SBRA) and Full Business Restructuring Assistance (FBRA) applications.
The Department’s approach was consistent with the Displaced Fishing Policy, and
if there were in fact greater impacts / adjustment needs in one area this should
be reflected in the adjustment packages for businesses in that area.
 The Review found that strict adherence to the case-by-case evaluation had
unintended consequences at local/regional scales, and that these undermined the
overall effectiveness of the Package.
 For example, in Bundaberg, the Zoning Plan and a number of external factors have
had a very significant negative impact on the prawn trawl fleet that has operated
out of the town for decades. A 50–75 per cent reduction in numbers of operators
and landings has had a major negative impact on the Bundaberg-based fish
processing sector (and other up- and down-stream businesses). Yet FBRA
assistance was provided to all fish processors in Bundaberg, to diversify,
modernise and increase efficiency of their operations. While each of the
processors interviewed for this review emphasised that it made no sense to have
all of them supported to stay in business, Departmental officers argue that there
was no preparedness within this sector to exit the industry, despite their efforts to
rationalize. Despite a business exit option being available within the Package,
processors considered the amount of money available for exiting made that an
unviable option. Thus, they requested and were granted funds to diversify or even
completely change their operations where this was considered the most costeffective means for them to restructure. This review finds that greater benefit
would have accrued to both individuals and the local economy if the Package had
supported adjustment of a reduced number of operators and provided a
mechanism for the remainder to exit.
 Unfortunately, disaggregated adjustment payment data were not available to this
review with which to analyse regional payment patterns.
 The Department has undertaken no analysis of regional distribution of adjustment
payments. Officers informed the Review that this would be very difficult to do
given the vagaries of the company structures, third-party handling of adjustment
claims and in many cases the seasonal movements of vessels/fishers.
 Many trawl fishers from the northern sector of the GBR coast commented on the
negative impacts of displaced effort from the southern sectors on catch rates and
the economic viability of their fishery. Analysis of catch and effort data is required
to determine whether this is factual. If so, then it would appear that the
adjustment of displaced effort from green zones in the south of the state has not
been adequately managed.
 It is difficult to define the extent (if any) to which Package buy-backs and structural
adjustment have contributed to recent growth in other fisheries, such as the
offshore shark sector within the Queensland East Coast Inshore Finfish Fishery
13
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
(ECIFF). In cases such as this, the viability of the industry rests heavily on the
returns that can be made, and the extent to which existing state regulations allow
for expansion of effort/catch. Recent reviews of the ECIFF suggest that growth in
targeting and catch of shark over the last 5 years may pose a conservation risk.
Similar concerns surround a number of other species targeted by this fishery.
Recommendations
 Analyses of the potential impacts of displaced effort on the economy of
regions/regional centres, and on other Commonwealth and State fisheries should
be a prerequisite for future structural adjustment programs associated with
displaced effort. Investment in this analysis before a process is designed is likely
to provide significant dividends, both in terms of efficiencies and stakeholder
acceptance.
 In cases where significant impacts are predicted on a regional scale, the
development of regional assistance plans to guide adjustment approach and the
investment quantum (as distinct from case-by-case assessment of impact and
adjustment) is suggested.
ToR 4 : Whether the Package was adequately communicated to those impacted,
and whether those who warranted assistance were provided with sufficient
information and support to pursue their entitlements.
Findings:
 Prior to the announcement of the Package, public consultation was carried out by
the independent panel commissioned by the Government to advise on the design
and scope of the Package. These consultations included six port meetings and a
series of one-on-one meetings with key industry groups, Commonwealth and
state government agencies and conservation groups. The panel reported to the
Australian Government Ministers in May 2004; however, the panel’s report was
not released publicly.
 The desire to finalise and announce the Package (31 June 2004) to coincide with
commencement of the Zoning Plan (1 July 2004) left little time for Departmental
officers to undertake additional consultation following the report of the
independent panel, and no such consultation was undertaken.
 Over the period of the package delivery (2004-10) DEWHA and QRAA undertook
two series of port meetings. A greater level of stakeholder engagement in
Package design may have improved their ‘buy-in’, helped to ensure a common
understanding of Package objectives, and resulted in improved Package design. A
key factor restricting the capacity of the Department to take a more proactive
approach to consultation was the limited funding provided for administration of
the Program.
 The Department actively engaged the Queensland Seafood Industry Association
(QSIA) throughout implementation, and QSIA was provided with financial
assistance which supported its engagement. Similarly, EcoFish in Cairns was
funded to assist engagement. Financial assistance was also offered to the
Queensland Seafood Marketers Association, but was not taken up until very late in
the Package when a consultant was engaged to review the potential for
rationalization. The consultants review found little prospect for rationalization due
to antagonism between businesses and competition rather than collaboration.
14
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
 Notwithstanding these efforts, many stakeholders viewed the Department’s
approach to engagement to be reactive rather than proactive. The majority of
respondents to this Review’s stakeholder survey regarded the availability,
readability, accuracy and reliability of information regarding the Package to be
inadequate, and that it was unhelpful in developing applications.
 Stakeholder engagement was compromised by the multiple changes to the Package
over time, the complexity of the Package design (see section 4.4), the clear and
considerable gap in expectations between industry stakeholders and the
Department regarding the objectives of Package (see section 4.1), and the
considerable stakeholder dissatisfaction and antagonism over the Zoning Plan at
the time.
 Stakeholder satisfaction was not monitored formally during delivery of the Package.
As with any major change program, the Package demanded significant investment in
communication, clarification and/or negotiation of scope and objectives, consultation (at
all levels) regarding program design and implementation, and investment in keeping
dialogue and communication lines open for the duration of the Program. Although it is
never possible to satisfy all stakeholders, particularly when, as was the case here, many
were in serious financial difficulty, the Review concludes that the Department fell short of
what was required in stakeholder engagement and communication, particularly in terms
of proactive consultation and communication, and the maintenance of this essential
element of the Program in the third and fourth years. A number of factors appear to have
contributed to this:
 the late involvement of Departmental leadership in working through the structural
adjustment implications of the Zoning Plan,
 the resultant constraints on the time available for program design, communication
and consultation,
 program resourcing (staffing, budget, communication etc) - initially based on the
assumption of a relatively small number of applications and limited outgoing funds
– was inadequate as the significant expansion of the number of applicants and the
amount of outgoing funds stretched available resources. It seems that this meant
that Departmental and QRAA officers were often in catch-up mode.
 a lack of experience in working with multifaceted marine industries.
It is clear from the Department’s approach to structural adjustment associated with the
declaration of marine protected areas in south-eastern Australia in 2006 that a number of
these issues had been recognised and that improved approaches had been implemented.
Recommendations:
 To facilitate stakeholder engagement and communication, the Department should
engage independent facilitator(s), with credibility in the fishing industry (and
other affected industries) and with government agencies. This enables both
industry and government agencies to work through sensitive and complex issues
related to package design and implementation, and to negotiate and agree
effective outcomes for all parties.
 Ensure that adequate resources are available for Departmental engagement with
stakeholders throughout the development and implementation of a structural
adjustment process.
15
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
 Case managers should be assigned to all applications, allowing direct line of contact
for applicants.
ToR 5 : Whether the Package was equitable in terms of the assistance provided
to recipients under different components and also to different recipients within
the same component. Did recipients in similar circumstances receive similar
levels of adjustment assistance?
Background:
As the Package progressively evolved to meet a range of stakeholder concerns and
issues, a complex set of guidelines evolved to provide the basis for assistance to
stakeholders. Stakeholders ranged from fishing equipment suppliers to commercial
fishers; fish processors to fish shop owners; boat builders to boat sales agents; and
recreational fishing equipment retailers to charter boat operators. The guidelines required
each claim/application to be assessed on the unique situation of individual businesses
with respect to zoning impact, debt, profitability, business planning etc.
Under these circumstances, an assessment of financial equity between cases would
require a full reanalysis across a wide range of differing circumstances and business
sectors – a task considered beyond the scope of the Review. Thus, an alternative
approach was taken to evaluating whether assistance was provided equitably. First, the
procedural fairness of the Package was reviewed in respect to the way individuals and
their applications were considered by the Department and/or their agents. This was
followed by a broad review of the potential differential impacts on individuals of
progressive changes in the Package and the overall complexity of the process.
Findings:
Procedural Fairness
 The Department followed a rigorous governance model for evaluation of
applications and subsequent appeals against initial decisions. Initial decisions and
appeals were managed by independent teams, overseen by different senior
executive service delegates of the Department.
 Detailed analysis by this Review of a random subset of applications and appeals
confirmed that thorough records of all decisions were maintained, as were review
comments and questions from delegates. The appeals team were provided access
to all files and information provided for the initial application, but worked
independently in reviewing the original decision.
 Despite a high percentage of successful appeals, the interpretation of the guidelines
by the two sections appears to have been consistent, based on interviews and
review of the documentation.
 Thus, the Review concludes that the Department conducted its evaluation of
applications and appeals following good governance and procedural fairness
guidelines, and that these procedures neither advantaged nor disadvantaged
individuals.
Achievement of equitable outcomes:
 Notwithstanding the procedural fairness of the Department, there was considerable
concern amongst applicants interviewed by the Review that they were not treated
consistently or equitably under the Package. Almost 80 per cent of stakeholders
disagreed that the Package was provided on an equitable basis.
16
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
 Many of the stakeholder accusations regarding inequity in the Package related to
the incremental development of provisions, which necessitated evolution of
guidelines. Stakeholder expectations were/are that within any component of the
Package, all applicants should have been judged under one set of guidelines. The
Review agrees with this.
 The post hoc expectation from stakeholders that the Package as a whole should
have been reopened for review of all previous decisions in light of sequential
changes to the Package is unrealistic. The Departmental guidelines on the rights
of applicants following acceptance of offers were clear, and thus post hoc reviews
of decisions were not required.
 All decisions within a component of the Package were reviewed when amendments
were made, to ensure earlier recipients had not been unfairly treated. According
to the Department, a review of all early FBRA decisions was undertaken later in
the process to see whether applicants might have fared better under the revised
guidelines. The Department found that all those who had already received
payments would have received the same or less under the conditions introduced
later in the Package. Despite this, none of the earlier decisions were amended.
 The inherent complexity and evolution of the FBRA component of the Package was
a major design flaw in terms of delivery of equitable outcomes. The Department’s
view is that one driver for evolution in the package was that it became apparent
that despite the onus being on the applicant to demonstrate an impact, this was
beyond the capabilities of many of them; in response to this incapacity, the
Department developed a range of tools to assist applicant with the task (post
license buy-out impact data).
 There were Package options that provided to some, but not all, the benefits of
higher payments and freedom to chose how funds were expended.
 It is reasonable that stakeholders hold the view that many ‘features’ of the Package
demanded technical expertise to maximise benefits, and that those who invested
in professional advice were more likely to benefit than those who did not
(although some advisors did much better than others). The ability of advisors to
cross-reference Departmental responses to the clients’ applications and appeals
undoubtedly challenged the system and allowed these clients to benefit from
incremental learning. Improved performance through ‘gaming’ is common in grant
schemes, adjustment packages etc, particularly where guidelines are open to
interpretation and the range of plausible interpretations is broad. Although not
inherently inequitable – everyone had the option of engaging advisors and the
Package provided financial support to do this – the ongoing gaming and
continuous challenging of the system militated against efficient delivery of the
Package, and once again left the Government open to criticism regarding equity.
 The governance of the Package was well conceived and the Department ensured
through a system of checks and balances that the Package was delivered
according to the principles of procedural fairness. Thus, decisions at any point in
the delivery of the Package were based-on and well-aligned with the guidelines in
place at that time.
Recommendations:
 The Government should avoid open-ended and complex structural adjustment
programs (see Recommendations against ToR 1 for alternative approaches).
 In providing assistance for those impacted by conservation measures associated
with introduction of marine reserves, Government policy should be unambiguous
17
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
on whether it aims to compensate (e.g. through one-off payments), or structurally
adjust (e.g. through downsizing; reshaping) affected businesses and sectors.
ToR 6 : Whether the time provided for applications to be lodged and the time to
deliver adjustment assistance was appropriate. Were there better ways to
deliver the package? Were applicants adversely affected by modifications to the
Package over time?
Findings:
 The compounding impacts of Package complexity, multiple changes to guidelines,
and capability shortfalls in QRAA (and the Department at times of high demand),
impacted on the ability of the Department and its agents to deliver adjustment
decisions and payments to those that required assistance. Lengthy delays to
decisions and payments had a significant negative impact on businesses affected
by the Zoning Plan.
Recommendations:
To avoid the timing issues noted above, it is recommended that in future
structural adjustment programs, two alternative (complimentary) approaches be
considered:
1. Adjustment should be completed before a reserve system is declared and
begins to have impacts.
2. Adjustment should be run as a two-stage process, where some immediate
assistance is provided to particular classes of applicants ahead of a second round,
say 12 months later, where there would be greater knowledge and understanding
of impacts.
Detailed recommendations for improved program implementation of a Structural
Adjustment Package are provided in Section 7.3 of this Review.
ToR 7 : Whether the information and data bases available at the time were
sufficient for delivery of the Package. To what extent did the availability,
reliability and accuracy of information affect the ability to deliver the Package?
Findings:
 As noted above, the lack of detailed socio-economic analysis of the likely impacts of
the Zoning Plan on fishing and related businesses along the GBR coast was a
significant impediment to design and implementation of the Package.
Recommendations:
 See above for a series of recommendations regarding the criticality of thorough
socio-economic analyses prior to investment in structural adjustment.
 Over the next two years a detailed bio-economic analysis should be conducted of
the impacts of structural adjustment on the six Queensland fisheries assisted by
the Package. Of particular interest would be the impact of adjustment assistance
on the efficiency and profitability of individual operators; the extent to which
Package funds have been reinvested in the fishing and related industries of the
region; and the extent to which this investment has impacted on the levels of
effort, catch and sustainability of state and Commonwealth fisheries in the region.
18
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
ToR 8 : Whether the employee assistance, community assistance and Regional
Partnerships components of the Package were appropriate and well targeted.
Findings:
 These components of the Package accounted for less than 1% of total expenditure.
 Benefits paid to employees were generally small - 118 recipients received a total of
$454,000.
 Three small social assistance grants were awarded, two of these to assist education
and outreach regarding the Package.
 Three community assistance projects were funded.
 The Review supports development of targeted employee, social and community
assistance within future packages, particularly where these can be linked to
existing regional initiatives that are likely to have significant local knowledge.
ToR 9 : Lessons for the design of other Australian Government structural
adjustment packages, and in particular those relating to Marine Protected
Areas. Have other adjustment packages learned from the GBRMP experience?
Findings:
The Department took the following key lessons from this Package into the development
and implementation of the 2005 Securing our Fishing Future/ South-east Marine Reserve
(SOFF/SEMR) structural adjustment package:

The pitfalls of short timelines for design and implementation.

The largely uncontrolled scope and budget creep.

Inadequate focus
stakeholder buy-in.
on
consultation,
expectation
management
and
getting
Tthe drawbacks of third-party contractors in the delivery of such a complex
Commonwealth program.

The advantages
businesses.
of
a
capped,
competition-based
program
for
land-based
Thus, the SOFF/SEMR reserve network and associated adjustment package were
developed through extensive consultation with stakeholders and with close industry
involvement. A consultant with credibility in the south-east Australian fishing industry
was hired to facilitate discussions between the Department and industry. Sufficient time
was allowed for consultation during key phases of the process and this time was factored
into schedules. This ensured that a fully formed package was released and there was no
requirement for major revisions or additions.
Recommendations:
Drawing on the lessons from the GBRMP Package, and those conducted in the South East
Region Marine Reserves development, in the context of the future development of
structural adjustment programs, through the relevant agencies, the Government should:
19
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Before adjustment is considered and announced
 Ensure that a comprehensive assessment of economic and social impacts of
closures on the relevant industries and regions is undertaken before developing
the structural adjustment/compensation package. This must include consideration
of potential displaced fishing effort on particular regions. The impact assessment
should be done on a consultative basis with industry and other affected
stakeholders.
 Integrating the desired conservation goals with the impact assessment, define the
extent of change to be achieved in the fishery and design the buyout and/or
restructuring packages in a way which will achieve the change objectives for the
fishery.

Determine the adjustment requirements to ensure that these adequately take into
account the extent and productivity of marine reserve areas and the likely impacts
of any displaced fishing.

Seek to harmonise, as far as possible, restructuring of a fishery with relevant
state government fisheries management policies and programs. In this regard,
buyouts and adjustment of fishing fleet size and potential effective effort where
there are not adequate fishery management measures to prevent activation of
latent effort and increased competition for decreased resource access, should be
avoided.
Once agreement is reached that an adjustment package is required

Define the scope, objectives and components of the structural adjustment
(including buyout) package in detail and consult with all relevant industry and
government stakeholders to test its efficacy before it is introduced.

Ensure that a comprehensive stakeholder engagement and management strategy
is developed which identifies the key stakeholders and their interests, the
Government’s objectives for stakeholder management in respect of each of the
key stakeholders and the approaches to be followed in dealing with each of the
key stakeholders during both the design and implementation phases, including
how expectations are to be managed by the Government.

Consider the engagement of a skilled and experienced independent facilitator,
with credibility with industry and government, to work within industry and
government agencies in the design and implementation of structural adjustment
packages.

Ensure that adequate resources, commensurate with the size of the Program, are
provided for stakeholder engagement and management during the design and
development of the Program and in the implementation of the Program.

Ensure that adequate time and resources to consult and engage with stakeholders
is factored into program planning and design.

Seek to optimise accessibility and minimise the application costs for applicants
and facilitate the provision of timely assistance to applicants.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package

Ensure that information about the package is written and presented in a way that
will be understood by industry participants. Information should be thoroughly
tested with industry representatives and operators before it is used.

Provide adequate levels of advice and assistance to industry participants to enable
them to understand the implications of the package and facilitate their making
appropriate decisions about the package for themselves.

Consider establishing a panel of qualified business advisers to assist affected
individuals or businesses with the preparation of applications for structural
adjustment assistance.

Consult and involve the Program implementers in the development of the design
of the package as soon as possible and well before the Government makes and
announces decisions about the design and scope of the package.

Consult with other agencies which have experience in the development and
management of structural adjustment packages and feed this knowledge into the
design of the package being developed.
Once an adjustment package has begun

Once a package has been developed and announced, minimise, as far as possible,
changes to the scope, contents or assessment criteria of the package. Where
changes are necessary, consideration should be given to retrospectively applying
the new conditions to finalised claims.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
2
Establishment of an independent review of the Great
Barrier Reef Marine Park Structural Adjustment Package
2.1
Background
The Great Barrier Reef Marine Park Zoning Plan 2003 (the Zoning Plan) came into effect
on 1 July 2004. The Zoning Plan significantly changed the areas of the Great Barrier Reef
Marine Park (the Marine Park) open to extractive uses, notably fishing.
In May 2004 the Australian Government announced that, in response to the impacts of
the Zoning Plan on fishing and related businesses, a structural adjustment package (the
Package) would be provided with the objectives of:

assisting fishers, fishery-related businesses, employees and communities adversely
affected by the Zoning Plan, and

managing in the most cost effective manner any displaced fishing effort that has
unsustainable ecological or economic impacts.
On 30 June 2004 details of the Package were announced. The scope of the Package was
subsequently revised on a number of occasions.
In February 2006 the Australian Government agreed that an independent review
(hereafter referred to as ‘the Review’) of the development and implementation of the
Package should be undertaken to guide future policy development. The Review was
initiated by the then Department of Environment and Heritage (DEH) in June 2008 with
broad terms of reference (ToR) (see Attachment A for full ToR).
In brief, the key foci of the Review were to:

assess whether the Package met its objectives

review the design, implementation and management of the Package

examine the procedural fairness and equity of the funding allocation processes

undertake a preliminary examination of the benefits accrued from the adjustment
expenditure, and

provide recommendations and examine policy considerations for future marine
structural adjustment Packages.
The Review focused principally on those components of the Package where the majority
of expenditure occurred and draw on the findings of two earlier, relevant reviews:

The Review of the Great Barrier Reef Marine Park Act 1975 that made findings,
among other things, regarding the Zoning Plan, and

An independent review of the licence buyout component of the Package conducted
by FERM Consulting completed in October 2007.
2.2
Terms of reference for the Review
The full terms of reference for the Review are outlined in Appendix A.
Under the terms of reference the Review was required to consider:
22
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
The extent to which the Package has met the needs of different sectors and, in
particular, commercial fishing industry sectors, recreational fishing and charter
operators, land-based fish processing and marketing businesses, and land-based
service businesses.
The level of funds provided for adjustment assistance and why the cost of the
Program increased to the extent that it did over the life of the Package. Was the
Package cost effective and could alternative approaches have achieved similar or
improved results?
Whether regional restructure requirements and fishing displacement caused by
rezoning were adequately addressed.
Whether the Package was adequately communicated to those impacted and
whether those who warranted assistance were provided with sufficient information
and support to pursue their entitlements under the Program.
Whether the Package was equitable in terms of the assistance provided to
recipients under different components and also to different recipients within the
same component. Did recipients in similar circumstances receive similar levels of
adjustment assistance?
Whether the time provided for applications to be lodged and the time to deliver
adjustment assistance was appropriate. Were there better ways to administer and
deliver the Package? Were applicants adversely affected by modifications to the
Package over time?
Whether the information and data bases available at the time were sufficient for
delivery of the Package. To what extent did the availability, reliability and accuracy
of information affect the ability to deliver the Package?
Whether the employee assistance, community assistance and regional partnerships
components of the Package were appropriate and well targeted.
Lessons for the design of other Australian Government structural adjustment
packages, and particularly those relating to marine protected areas. What can be
learned from other adjustment-package programs?
2.3
Approach to the Review
The Review involved extensive consultation with key agency officials, stakeholders and
industry representatives; analysis of program data; and comparisons with other
structural-adjustment programs.
Explicit activities included:

Review of key documentation related to the development and management of
Package.

Discussions with officers of the Department of Environment, Water, Heritage and
the Arts (DEWHA) responsible for the development and management of the
Package (listed at Appendix B).
23
Review of the Great Barrier Reef Marine Park Structural Adjustment Package

Discussions with officers from other Commonwealth and Queensland Government
agencies involved with the development and management of the Package (listed at
Appendix B).

Discussions with the representatives of key industry associations involved with the
Package ( listed at Appendix B).

Interviews with individuals and public meetings in the Queensland ports of Cairns,
Townsville, Bowen, Mackay, Gladstone and Bundaberg involving 47 stakeholders
who applied for assistance under the Package. Participants in these meetings are
listed at Appendix B.

A survey of all individuals and businesses that applied for assistance under the GBR
SAP. The survey asked respondents to indicate their level of agreement to twenty
(20) statements about the Package and included open-ended questions and an
invitation to comment. The survey instrument is in Appendix C. Survey forms were
mailed to 1138, and 103 responses were received. The relatively low return rate
was in large part due to the reluctance of one financial/legal advisory firm, acting
on behalf of a significant portion of applicants, to release the names and addresses
of clients to whom surveys were being directed. Returns were received from a
broad geographic range, and from applicants to all components of the Package. The
coherence of messages given by the survey returns and those from the feedback
provided at individual interviews and port meetings suggest that they provide an
unbiased reflection of the stakeholder views. Analysis of key survey results are
presented throughout the report, and a summary of additional comments from
survey respondents are provided at Appendix D.

Analysis of summary data from DEWHA and the Queensland Rural Adjustment
Authority (QRAA) including regular progress report spreadsheets listing outcomes of
applications and appeals, amounts paid and key dates

Assessment of the Package policy and program design, implementation planning
and program management against a better practice model (assessment model is
provided at Appendix E).
Prior to finalisation, a draft review was provided to the Department for comment on
matters of fact only.
24
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
2.4
Structure of this report
Part A provides background information on the Package, including its intended purpose,
design, and details of assistance provided.
Part B describes and evaluates the development and implementation of the Package. It
examines key questions such as why payments exceeded cost estimates, the
effectiveness of communication, timeliness of processing applications and procedural
fairness.
Part C considers the costs and benefits of the Package.
Part D compares the Package to another marine-protected-area-related structural
adjustment package, Securing Our Fishing Future.
Part E discusses policy considerations arising from recent experiences with marine
structural adjustment packages and provides recommendations for future structural
adjustment packages.
25
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
3
Part A: The Great Barrier Reef Marine Park Structural
Adjustment Package (the Package)
3.1
Australian Government policy on marine protected
areas and displaced fishing
The Australian Government approach to the displacement of fishing activities resulting
from declaration of marine protected areas is set out in Marine Protected Areas and
Displaced Fishing: A Policy Statement9. Under this policy, the provision of compensation
or structural adjustment assistance is considered on a case-by-case basis on two
broad grounds:
1
Assistance may be provided to address the displacement and subsequent
intensification of fishing activities in areas remaining open to fishing where this may
compromise fisheries management or environmental objectives. In this event, the
Government may support the reduction in fishing activities, most commonly
through a buyout of fishing entitlements.
2
Assistance may be provided to business and communities impacted economically
through the creation of marine protected areas, particularly where the impact is
significant and there is limited capacity to absorb or adapt to the impact. This
recognises that the benefits of marine protected areas accrue to society generally,
but the costs may be borne by a small range of individuals, businesses or
communities.
To date the policy has been applied in three cases: the Great Barrier Reef Marine Park
(GBRMP), a network of marine protected areas created in south-eastern Australian
waters (see Part C of this review) and a “Cod Grounds” Marine Protected Area developed
to protect important habitat of the critically endangered grey nurse shark in New South
Wales. The approaches taken to structural adjustment in these regions differed
markedly.
As the Commonwealth Government seeks to develop a National Representative System
of Marine Protected Areas (NRSMPA) within their Marine Bioregional Planning Program, it
is essential that the policy settings outlined in the January 2004, and tested in the
GBRMP and the South-Eastern Regional Marine Plan, are critically reviewed. This review
of the GBR SAP seeks to inform the broader consideration of displaced fishing policy
within DEWHA.
3.2
Great Barrier Reef Representative Areas Program
The Great Barrier Reef Marine Park Zoning Plan 2003 (the Zoning Plan) formed a part of
the Great Barrier Reef Marine Park Authority’s (GBRMPA) Representative Areas Program.
This program aimed to protect ‘representative’ examples of each of the various different
habitat types (called bioregions) of the marine park. The objective was to protect the
ecological and biodiversity values of the Great Barrier Reef, whilst also providing
opportunities for ecologically sustainable use of the marine park.
Marine Protected Areas and Displaced Fishing: A Policy Statement, Australian Government, January 2004,
<http://www.environment.gov.au/coasts/mpa/publications/displaced-fishing.html>, accessed 9 July 2008.
9
26
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
The rezoning significantly changed the areas of the marine park open to extractive uses,
notably fishing. Under previous zoning laws, fishing was excluded in less than five per
cent of the marine park. Following the rezoning, ‘no take’ areas (green zones) were
extended to make up 33 per cent of the marine park. Similarly, prior to the rezoning,
almost 78 per cent of the Marine Park was zoned as ‘general use’, within which all forms
of fishing activity is generally allowed. Following the rezoning, around 34 per cent of the
marine park is general use.
The reduction in the areas open to fishing through the Zoning Plan impacted on the
profitability of the commercial fishers operating in the marine park as well as that of
related up and downstream businesses. PDP Australia10 estimated the likely impact on
commercial fishers on a gross value added basis at $0.5 to $2.5 million per annum. This
indicates the estimated decrease in profits for affected fishers. The Bureau of Rural
Science11 (BRS) estimated the impact on a gross value of production basis at $13.5 to
$14 million per annum. This indicates the estimated decrease in the total value of
seafood landed by fishers, before the costs to fishers of catching that seafood are
deducted. It therefore indicates the expected impacts on the profits of fishers and on
upstream industries (e.g. fishing gear, boat and fuel suppliers). The BRS report also
noted that particular regions were likely to experience varying levels of impact due to
differing historical reliance on fishing in areas closed through the rezoning and the
capacity of the region to adjust.
3.3
The nature and scope of the Package
In line with the Marine Protected Areas and Displaced Fishing: A Policy Statement, the
Australian Government established an independent panel in late 2003 to consult with
affected industries and communities and advise the Government on the design of the
structural adjustment package. Following the report of the panel, the Australian
Government announced details of the initial package on 30 June 2004. The key elements
were as follows:

Exit assistance for fisheries businesses – a buyout of fishing licences through a
competitive tender process. The buyout aimed to remove an amount of effort
equivalent to that displaced by the rezoning.

Exit assistance for fisheries-related businesses – payments to help businesses
directly related to commercial or recreational fishing wind up their operations.
Assistance was available where the business had been significantly impacted by the
rezoning, and as a result, rendered commercially unviable.

Business restructuring assistance – up to $200,000 per business to help fishing
licence holders and related onshore businesses restructure operations to ensure
ongoing commercial viability. Assistance was available where a business had been
significantly impacted by the rezoning, and as a result, rendered commercially
unviable.12
10
PDP Australia, An Economic and Social Evaluation of Implementing the Representative Areas Program by
Rezoning the Great Barrier Reef Marine Park: Report on the Revised Zoning Plan, PDP Australia, 2003
11
Bureau of Rural Sciences, Implementing the Representative Areas Program in the Great Barrier Reef Marine
Park: Assessment of Potential Social Impacts on Commercial Fishing and Associated Communities,
Department of Agriculture, Fisheries and Forestry, Canberra, 2003
12
Note that the Exit Assistance for fishery-related businesses and the Business Restructuring Assistance were
generally not available until after the end of the licence buy-out.
27
Review of the Great Barrier Reef Marine Park Structural Adjustment Package

Business advice assistance – up to $1000 to cover the costs of business
planning advice for persons considering applying for exit or business restructuring
assistance.

Employee assistance – a payment of $5000 to master ticket holders and $3000
to other crew of fishing vessels who lost employment because the fisheries business
they worked for obtained exit assistance. The payment was designed to assist in
finding alternate employment.

Community assistance – funding for projects to create new avenues of
investment and employment in communities affected by the rezoning, delivered
through the Australian Government’s Regional Partnerships Program.

Social assistance – a range of measures including industry-based personnel to act
as a link between fishers and support agencies, provision of crisis counselling
services and filling service capacity gaps in affected regions.
3.4
Changes to the scope of the Package
The initial design of the Package changed significantly over the course of its delivery.
Each change expanded the availability of assistance or increased package flexibility in
response to implementation experience and the views of industry stakeholders.
In August 2004 the following changes were announced:

For the Exit assistance for fisheries-related businesses component, assistance
was made available to an expanded set of onshore businesses (e.g. recreational
fishing related) and fishing licence lease holders.

For the Business restructuring assistance component:


Introduction of a Simplified business restructuring assistance option for
fishers as an alternative to Full business restructuring assistance. Under
the simplified option, up to $50,000 was provided to fishers impacted by the
rezoning based on the expected decreased revenue experienced (based on
past history in closed areas).

Lifting the maximum amount of assistance available from $200,000 to
$500,000 per business.

Removing the requirement for businesses to have suffered a ‘significant
negative impact’ as a result of the rezoning and as a consequence, rendered
commercially unviable. Instead, a business that experienced any negative
impact could access assistance.

Allowing group applications from business entities with multiple components
(e.g. integrated businesses).
For Employee assistance – making assistance available to employees in fishing
and fishing-related businesses that lost employment as a result of the rezoning.
In October 2004, businesses holding multiple fishing licences were allowed to sell some
licences through the licence buyout component and access Business restructuring
assistance in relation to the remainder.
In January 2005, after the licence buy-out decisions were made, the Business
restructuring assistance was amended again to allow fishing businesses to use
restructuring assistance to purchase fishing entitlements.
28
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
In February 2006, the $500,000 cap (initially $200,000) on the amount available under
Full business restructuring assistance was removed. Initially, for amounts over
$500,000, no more than two-thirds of the impact of the rezoning on profitability was
payable. This restriction was subsequently removed in May 2006. These changes
responded to cases in which it was not possible for a business to successfully restructure
for less than $500,000. Payments under this component made prior to the changes were
revisited and adjusted where appropriate.
In May 2006, Full business restructuring assistance and simplified business
restructuring assistance payments (including payments already made) were increased
by 20 per cent in recognition of the hardship experienced by the fishing and related
industries. A media release on 26 May 2006 also stated that the provisions of additional
financial and relationship counsellors to the region was extended for a further 12 months.
In September 2006, the Exit assistance for fisheries-related businesses
component was made available for businesses that could potentially be restructured, but
the cost of exiting was less than the cost of restructuring.
Closing dates for applications were extended as follows:

The closing date for tenders for the buyout of fishing licences was extended
from 6 September 2004 to 18 October 2004, and then to 15 November 2004.

The closing date for Business restructuring assistance and Exit assistance for
fisheries-related businesses was extended from 31 December 2005 to 30 April
2006, with persons affected by Cyclone Larry given a further extension to 31 May
2006.
It is clear that in serially opening up the Package to more affected businesses, and
increasing the benefits available to each, the Australian Government was responding to
public concern at a time when the fishing industry was under significant pressure on a
number of fronts.
The Government’s ambitious marine conservation agenda within the GBRMP, and at a
national scale with marine bioregional planning, had and continues to have its critics and
negative impacts on those who rely on extractive use of marine systems. As discussed
below, the approach of broadening and growing the assistance provided by the Package
appears to have silenced few of the critics and is considered by affected stakeholders to
have inadequately compensated them for the impacts.
3.5
Assistance provided under the Package
To 28 June 2010, a total of $213.7 million had been paid out in assistance under the
Package. The amounts paid out under each element of the Package and related
information is set out in Table 1 and the flow of funds by year and program component in
Table 2. The take-up of assistance under the different components of the Program is set
out in Table 3.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Table 1: Payments made under the Package*
Package component
Exit assistance for fisheries
businesses – licence buyout
Total of all payments
Average payment
Median payment
Highest payment
($ million)
($’000)
($’000)
($’000)
32.993
270.434
199.900
1050.000
7.111
444.438
176.246
3919.000
10.122
24.993
16.795
60.000
162.392
374.175
188.356
10,513.270
Business advice assistance13
0.662
0.964
1.000
1.000
Employee assistance
0.454
3.847
3.000
5.000
for master ticket holders
Exit assistance for fisheries-related
businesses
Simplified business restructuring
assistance
Full business restructuring
assistance
3.000
for crew of vessels
Total payments
213.73
* Data to 10 September 2009 compiled by the Queensland Government Rural Adjustment Authority (QRAA). QRAA has the responsibility of administering
the GBR SAP on behalf of the Department.
13
Additional business advice assistance was also a provided as part of FBRA payments. Thus the figure in the table is just the initial $1,000 payment and is therefore a substantial underestimate of
business advice assistance paid (average payment was about $4,000).
30
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Table 2: Flow of program funding under the Package*
Package component
Exit assistance for fisheries
businesses – licence buyout
2004–05
2005–06
2006–07
2007–08
2008–09
2009-10
Total
($ million)
($ million)
($ million)
($ million)
($million)
($million)
($ million)
32.018
0.975
-
-
-
0
1.233
1.502
0.421
-
3.956
7.111
Simplified business restructuring
assistance
5.101
3.110
1.829
0.011
0.058
0.013
10.122
Full business restructuring
assistance
0.167
13.936
47.297
81.393
18.199
1.400
162.392
Business advice assistance
0.251
0.295
0.097
0.015
0.003
0.001
0.662
Employee assistance
0.274
0.177
-
0.003
-
37.810
19.726
50.725
81.842
18.260
Exit assistance for fisheries-related
businesses
Total payments
32.993
0.454
5.371
213.733#
* Updated information collated from end of financial year reports provided by the Queensland Government Rural Adjustment Authority (QRAA) for F2005
through F2008 and a report provided to the Department by QRAA on expenditure up until 10 September 2009. QRAA have the responsibility of
administering the GBR SAP on behalf of the Department.
#
rounding errors.
31
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Table 3: Take-up of the Package as of 28 June 2010
Package component
Exit assistance for
fisheries businesses
Number of
applications
received
Number
applications
withdrawn /
cancelled etc
Number of
applications
assessed
Number of
successful
applications
Number of
appeals
Number of
successful
appeals
Number
unsuccessful
appeals
612
26
586
122
36
3
0
37
10
26
15
5
4
1
Simplified business
restructuring
assistance
629
137
492
405
40
8
32
Full business
restructuring
assistance
599
71
528
434
186
144
42
Business advice
assistance
721
17
704
687
n/a (as part of
other appeals)
-
-
Employee assistance
298
152
146
118
3
1
2
Exit assistance for
fisheries-related
businesses
12 withdrawn
32
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
33
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
4
Part B: Assessment of program management
The Review developed a model to evaluate the management of the Package in relation to
three key aspects of program management as follows:

Policy and program design

Implementation planning

Program management.
The assessment model reflects recognised better-practice principles, including the better
practice guide developed by the Department of the Prime Minister and Cabinet and the
Australian National Audit Office published in October 2006 – Implementation of
Programme and Policy Initiatives: Making Implementation Matter. The assessment model
is described in detail in Appendix E.
Table 4 summarises key findings of the assessment.
The assessment of program management identified the following key issues, each of
which is discussed in turn:

Clarity of program objectives

Research into the social and economic impacts of the Zoning Plan

Increases in program costs

The complexity of the Package

The timing of assistance

The achievement of equitable outcomes for applicants

Stakeholder engagement and management

Stakeholder satisfaction

Implementation planning and risk management

The timeliness of decision making

The efficiency of Package administration

Employee and social and community elements of the Package.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Table 4: Summary of key findings: Assessment of program management
Policy and program design
Elements of policy and
program design
Positive aspects of policy and program design
Policy definition
Alignment of program
objectives with policy
Program design
Areas for improvement

Defining the scope of change to be achieved in the fishery.

Defining policy goals which support triple bottom-line objectives.

Research into the social and economic impacts of closures to
inform policy direction and implementation.
High-level program objectives facilitated responsiveness to
emerging stakeholder concerns about the scope of the
Package.

Defining the objectives, scope and components of the structural
adjustment package in detail.

Clarity of the policy goals and related program objectives.

An independent panel consulted stakeholders on the design
and scope of the Package.


There was consultation with industry following the
announcement of the Package.
Assessment and provision of adequate resources and timeframes
for consultation with and engagement of industry on program
objectives and design .

Mechanisms for engaging with stakeholders.

The Program sought to be responsive to industry concerns
with the Program design and scope.


Extensive program information and guidance was
developed and provided to stakeholders.
Program design which minimises the need for applicants to seek
professional advice and assistance in the preparation of claims
and minimises costs to applicants.

Program design which facilitates timely assessment of claims.

Minimising changes to program scope over the life of the
Program.


Support was given to QSIA to develop guidance materials
and to represent the interests of industry.

The Program was monitored and reviewed through the
Cabinet Implementation Unit processes.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Implementation planning
Elements of implementation
planning
Positive aspects of implementation planning
Identification of the
challenges to
implementation during policy
development
Governance
Risk management

There was clear definition of roles and responsibilities
within DEHWA and between DEHWA and QRAA and KPMG

An IDC of key central and program agencies ensured
regular consultation with central agencies on emerging
issues

QRAA and KPMG had relevant experience in structural
adjustment programs and/or financial analysis.

A high-level risk assessment and risk management plan
was developed as part of the implementation plan
prepared for the Cabinet Implementation Unit.

This engaged the Executive and was monitored and
reviewed quarterly.
Areas for improvement

Greater involvement of the Program implementers at the Program
design stage.

Research into the social and economic impacts of closures.

The risk management plan failed to recognise and develop
mitigation approaches to a number of key risks (e.g. inadequate
economic analysis and understanding of the rezoning impacts on
different sectors; inadequate consultation with stakeholders
regarding the impacts of changes in scope and methodology).

Risk assessment of quality and timeliness of services provided by
external sources and approaches to dealing with poor
performance.
36
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Elements of implementation
planning
Positive aspects of implementation planning
Implementation planning

An implementation plan was prepared for the Cabinet
Implementation Unit which identified key success factors,
timeframes for key stages, resources to be deployed, key
risks to successful implementation, responsibilities and
accountabilities of the Program Management Team,
monitoring and review processes, and how changes were
to be managed.

The implementation plan was monitored quarterly and
reported to the Cabinet Implementation Unit.

There was a high-level procurement strategy as part of the
implementation plan.

QRAA and KPMG were engaged through DEWHA
procurement processes and appropriate arrangements
were established to manage conflicts of interest.

DEWHA contracts were utilised.

Procurement and contract management risks were
identified and managed.

Contract performance was monitored and reviewed.

A stakeholder engagement and communications strategy
was prepared as part of the implementation plan for the
Cabinet Implementation Unit.
Procurement and contract
management
Stakeholder management

The strategy was monitored quarterly.

There was consultation with industry following the
announcement of the Package.

Support was provided to QSIA to develop guidance
materials and to represent the interests of industry.
Areas for improvement

Adequate time required to develop and test implementation
planning.

Resources and timeframes for stakeholder engagement.

Effective mechanisms for engaging with stakeholders throughout
the process.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Elements of implementation
planning
Positive aspects of implementation planning
Resources

Communications
Monitoring and review
The project management team had access to external
expertise and advice.

A stakeholder engagement and communications strategy
was prepared as part of the implementation plan for the
Cabinet Implementation Unit.

The strategy was monitored quarterly.

Program implementation was monitored and reviewed
quarterly, with involvement of the Executive.
Areas for improvement

Skills and resources of the Program Management Team in
undertaking a complex structural adjustment program.

Administrative resources commensurate with the scale and
complexity of the Program.

Stakeholders viewed the communication approach as inadequate,
suggesting that monitoring and evaluation of customer
satisfaction should be a facet of future communication strategies,
as should amendment of implementation approaches where these
are indicated as necessary.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Program management
Elements of program
management
Positive aspects of program management
Program management and
delivery arrangements

Areas for improvement
Program management was responsive to government
decisions to change the Package and to increasing
demands arising from the changing nature of the Package.

More time for the contracting of outsourced providers so that
contractors can adequately gear up for program delivery.

Involvement of program deliverers in the design and
implementation phases.
Resource management

Resource usage was monitored and reviewed on a regular
basis.

Improved forecasting of resourcing requirements and recognition
of these within the Department.
Accessibility to the Program

Consultation on the Package was carried out at outset and
during implementation.

Case management of individual claims.

Arrangements for regional stakeholders to be able to make faceto-face contact with the assessment agency.
Fair, equitable and
consistent assessment
processes

Assessment processes were fair, equitable and consistent.

Addressing of concerns raised in customer satisfaction monitoring.
Fair, equitable and
consistent appeal processes

Appeal processes were fair, equitable and consistent.

Addressing of concerns raised in customer satisfaction monitoring.
Timely processing of claims

Some package components were processed rapidly.

Customer service standards for the assessment and approval of
applications, including time related targets.

Timeliness of processing FBRA and FRBEA assessments and to a
lesser extent appeal timelines.

Sufficient time allowed to respond to feedback prior to release of
Package.
Feedback mechanisms

There was extensive consultation with industry following
the announcement of the Package.

Support was provided to QSIA to develop guidance
materials and to represent the interests of industry.
39
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Elements of implementation
planning
Positive aspects of program management
Processes to monitor
customer satisfaction
Management of conflicts of
interest

Processes were established to manage conflicts of interest.
Efficient program
management

Program management costs, including the appeals process,
represented less than 4% of total program costs, which is
a relatively low ratio.
Areas for improvement

Processes for monitoring and measuring customer satisfaction
during the delivery of the Program.

Design and implementation of efficient business processes which
minimise re-working of assessments.
40
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
4.1
Clarity of program objectives
The objectives and purpose of the Package were very broad in terms of the scope of
businesses and stakeholders for which adjustment assistance might be available, and in
terms of the form of assistance. This presented a significant challenge. On one hand,
broad high-level objectives allowed the Government to respond effectively to emerging
stakeholder needs and to amend the scope of the Package to meet those needs; on the
other hand, the breadth also meant that the objectives were open to wide interpretation,
and as a consequence the Government was continually faced with an expectationmanagement challenge. This was in large part responsible for the considerable expansion
of the scope of the scheme over time.
The expectation-management issue was most obvious in the lack of a shared
understanding of the objectives of the Package. Notwithstanding the documentation
provided by the Department, fishers (individual and peak bodies) and other affected
business operators saw the Package as a vehicle for compensating them for the adverse
impacts that they had experienced or were suffering as a result of the Zoning Plan. In
actuality, the Package was not directed at providing ‘compensation’, but sought to assist
affected businesses to adjust their operations in order to continue viably in the context of
the post Zoning Plan environment.
A key factor driving the lack of shared understanding and expectations was antipathy
regarding the outcomes of the Zoning Plan development process. Another key factor was
that at the time the Package was being designed and implemented, the fishing industry
and associated sectors were facing pressures from a range of external policy and market
factors, all of which had a largely adverse impact on the viability of the industry. These
factors included:

Increased competition from imported fishing produce on the Australian market and
for Australian products on export markets.

An increase in the value of the Australian dollar.

n increase in the price of fuel.

Changes in the fisheries arising from the implementation of Queensland
Government policies and programs.

Declaration of Queensland coastal marine park adjacent to the Great Barrier Reef
Marine Park.

Labour market shortages arising from the mining boom in Queensland.
The cumulative impacts of these external policy and market factors, the antipathy of the
industry towards the Zoning Plan, and the fact that the Package was the only form of
assistance available to industries that were under significant financial stress, meant that
the Program was a focus for stakeholder concerns and angst on the state of their
industry.
The lack of shared understanding and expectations is likely to be a key cause for the
results of the stakeholder survey (see graph below), in which a high proportion of people
indicated that the Package did not meet the needs of their industry, organisation or
business.
41
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Figure 1: Response to the stakeholder survey proposition ‘GBR SAP met the needs of my
industry/organisation/business’
Achieving the right balance in objectives between flexibility and specificity, as well as
common understanding of objectives, is undoubtedly difficult in any circumstance.
However, where a program encompasses multiple sectors, jurisdictions, regional issues
and significant compounding exogenous factors, as was the case for the Package, a high
level of clarity, understanding and acceptance of objectives is particularly important. For
example, definition of the social, regional and sectoral objectives of the Package would
have provided greater direction for the Package design process, potentially enhanced the
benefits ultimately flowing from the program, and possibly avoided the multiple revisions
to Package design and associated cost increases.
In developing the Package, limited time was available for the implementation team to
explore and refine objectives and secure stakeholder input, understanding and
agreement. A focus for any future programs should be more extensive consultation with
stakeholders during the Package design to ensure a common understanding of program
objectives. Stakeholder engagement is discussed in greater detail below (section 4.6).
Additionally, it is likely that a greater level of stakeholder understanding and buy-in to
the Package may have been achieved if development of the Package occurred in parallel
with development of the Zoning Plan, rather than subsequently and in response to the
Zoning Plan. Such an approach is recommended for the future.
4.2
Research into the economic impacts of the Zoning Plan
Two reports on the economic impacts of the Zoning Plan on the fishing and related
industries were commissioned by the Great Barrier Reef Marine Park Authority at the
time the Zoning Plan was being developed:

PDP Australia, An Economic and Social Evaluation of Implementing the
Representative Areas Program by Rezoning the Great Barrier Reef Marine Park:
Report on the Revised Zoning Plan, PDP Australia, 2003.

Bureau of Rural Sciences (BRS), Implementing the Representative Areas Program
in the Great Barrier Reef Marine Park: Assessment of Potential Social Impacts on
42
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Commercial Fishing and Associated Communities, Department of Agriculture,
Fisheries and Forestry, Canberra, 2003.
Another independent report was also available at the time the Zoning Plan was being
developed:

Hundloe, McPhee and Toon, The Economic Impacts of the GBRMP RAP on the
Commercial Seafood Industry, University of Queensland, 2003.
These reports all provided estimates of net economic impact. The PDP Australia report
used a ‘gross value added’ approach and estimated the impact on the profits of fishers.
The BRS and the Hundloe et al reports used a ‘gross value of production’ approach, and
estimated the impact on both fishers and upstream industries such as fishing gear and
bait suppliers. The BRS and Hundloe et al reports also considered regional impacts and,
in the case of the Hundloe report, downstream industries (specifically seafood
processors). Because of the differing methodologies and measures used, the estimates
provided by each report are not directly comparable.
In each of the three reports, there was limited consultation with industry on the
economic impact assessment work. Stakeholders consulted during the Review expressed
a view that the estimated economic impact of the reduction in available fishing area
arising from the Zoning Plan was less than the actual economic impacts. Some
stakeholders considered that the quality of the log book and VMS data, on which zoning
decisions and impact assessments were made, was questionable. There was also concern
that the consideration of displaced fishing effort was inadequate in relation to the
economic impacts of the Zoning Plan on particular regions.
The PDP Australia and BRS reports were prepared to inform government consideration of
the cost-benefit of the Zoning Plan. The reports were not prepared to inform decisions
on, and the design of, a structural adjustment package and may not have been adequate
for this purpose.
The report estimates indicated the expected net decrease in economic activity within
certain sectors as a result of the Zoning Plan. This, on its own, does not indicate the
required structural adjustment interventions within regions or the economy more
generally flowing from the Zoning Plan, or the capacity of affected industries and
communities to autonomously adjust. Other relevant factors in this respect include
regional impacts; the number of fishing and related businesses impacted; the capacity of
those businesses to absorb or adapt to those impacts, particularly in the context of
compounding and cumulative impacts; and the capacity of affected communities and
regions to generate alternative investment and employment sources.
The economic impact assessments undertaken considered only the marginal impact of
the Zoning Plan, and not what this impact would mean in the context of other pressures.
This lack of a comprehensive understanding of the likely social and economic impacts of
the Zoning Plan meant that:

The Government and the Department were unable to accurately estimate the
structural adjustment pressure induced by the Zoning Plan and hence the likely
costs of the Zoning Plan and the Package.

The initial design of the Package did not anticipate the full range of structural
adjustment pressure induced by the Zoning Plan. This led to significant changes to
the scope of the Package, in turn significantly increasing costs.

It was difficult for the Government to proactively and effectively counter industry
and stakeholder claims about the inadequacies of the Package.
43
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
The lack of detailed assessments of economic impact also affected the capacity of people
seeking assistance under the Package to quantify and substantiate claims. The
Department took steps to address these concerns during the first two years of the
Package, including commissioning and publishing studies on the impacts of the Zoning
Plan on recreational fishing and line fishery related businesses, and on boat brokers.
In future structural adjustment programs associated with marine reserve planning, it is
strongly recommended that adequate resources be directed towards detailed assessment
of the socio-economic impacts of candidate reserve designs. For these to be meaningful
and useful within the process, the commissioning of assessments will need to be well in
advance of the decision making process.
4.3
Increases in program costs
In announcing the establishment of the Package in May 2004, the Budget Papers said
that ‘the Australian Government’s allocation in the order of $10 million to those affected
by the [Zoning Plan] is an initial allocation’ and ‘the actual amount allocated will depend
on the actual impacts of the [Zoning Plan] on fishing and land-based interests’.
The costs of the Package as at 29 June 2010 were $213.7 million (see Table 1, above).
This is significantly more than initial estimates and expectations. The principal reasons
for this increase in Package costs were the changes to the scope of the Package over
time, and a significantly greater number of applicants than initially expected.
The initial estimates of $10 million were based on a program focused primarily on
purchasing fishing entitlements, and only in certain significantly impacted fisheries. In
the end, the bulk of the cost of the Package came from the support provided to
restructure land-based fisheries-related businesses. Initially, this business restructuring
assistance was focused only on businesses that had incurred a significant financial impact
and as a result had been rendered commercially unviable. The Government subsequently
changed eligibility requirements so that any business suffering any impact could receive
support. This latter change, in particular, significantly increased the availability of
assistance and hence the costs of the Package.
Ultimately, the costs of the Package did not reflect the economic impact of the Zoning
Plan, but rather the costs of supporting the structural adjustment of affected businesses,
communities and individuals, in particular:

Purchasing fishing entitlements through a competitive tender process to ensure
displacement of fishing in areas closed through zoning did not lead to an
unsustainable intensification in fishing activities in areas remaining open.

Restructuring fishing and related businesses so they are able to operate profitably
in the context of the Zoning Plan.

Assisting businesses to wind up their operations where it was not possible to
restructure to remain viable.

Supporting employees of fishing businesses who lost their jobs because the
businesses exited the industry to find alternative employment.

Supporting communities to create new avenues of investment and employment.
The “blow-out” in costs of the Package has attracted scrutiny from within Government
and across many stakeholder groups. Indeed serious criticism has been levelled at the
Department for allowing this to happen. The Terms of Reference for this review centre on
44
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
the approaches taken by the Department to Program design and implementation, rather
than forensic analysis of the “blow out”.
Briefly however, it is clear that the significant increases in Program costs followed
significant changes to the scope of the Package, and that these changes were driven by
the Government’s willingness to respond to stakeholder concerns, rather than mismanagement by the Department. Recommendations on how future policy might be
framed to avoid scope creep in structural adjustment while meeting the needs of key
stakeholders are set out in Section 7 of this Review.
4.4
The complexity of the Package
The ‘Business restructuring’ and ‘Business exit assistance for fisheries-related businesses’
components of the Package created significant complexity for both applicants and
Package administration. Both components required consideration of the specific
circumstances of individual businesses, including the impact of the Zoning Plan on
profitability and, in the case of business restructuring assistance, options for capital
investment to restore business profitability.
It is understood this approach was adopted as a means of ensuring that public funds
were spent most appropriately, efficiently and effectively, in particular, by closely linking
support provided to the actual impacts experienced by each individual businesses, with a
focus on restoring profitability. However, there is significant evidence to suggest that the
complexity associated with this approach compromised efficient and effective
implementation of the Package.
Because of the complexity of the approach, there was a high level of stakeholder
dissatisfaction amongst those interviewed for the GBR SAP review; many people
consulted reported that it was difficult to understand how to make a claim and
substantiate the impacts of the Zoning Plan on their business. Applications under the ‘Full
Business Restructuring’ component of the Package, in particular, required good financial
literacy, adequate and organised financial records, an understanding of the impacts of
the Zoning Plan, the ability to apply sometimes quite complex methodologies, and,
generally, professional financial and/or legal advice to prepare and lodge applications.
While it was reasonable for the Department to require such information in order to
ensure efficient expenditure of public money, for many impacted businesses the claim
process presented difficulties.
For many stakeholders, the response to the complexity described above was to apply for
assistance under the ‘Simplified Business Restructuring Assistance’ (or ‘quick fifty’)
component of the Package. A number of these people ultimately were not satisfied with
the level of assistance they received, and later regretted their decision.
The Department undertook a number of initiatives to help people understand the Package
and apply for assistance, including:

The development of a range of information related to the Package to facilitate
affected businesses considering their options under the package and making
applications for assistance.

Meeting with affected businesses at selected ports along the Queensland coast.

Engaging a number of consultants to assist applicants to understand the application
process.

Funding the Queensland Seafood Industry Association to develop a guide, which
was seen as beneficial by businesses.
45
Review of the Great Barrier Reef Marine Park Structural Adjustment Package

QRAA staff providing advice and assistance to applicants in the development of
their applications.
Despite these efforts, a significant number of people surveyed by this review indicated
that the information about the Package was not easy to understand, nor did it facilitate
the process of applying for assistance.
The Package provided $1000 to potential applicants to receive some initial, high-level
financial advice on what assistance they might be eligible to obtain. In addition, the
reasonable costs of any additional business advice and assistance in compiling an
application for a claim, was paid to successful claimants (at the time the claim was found
to be successful). QRAA assessed the reasonableness of claims for business advice and
assistance. It is understood that up to $5000 was generally allowed, with a few greater
payments of up to $41,000 made. It is also understood that the Department would
guarantee the payment of reasonable expenses for advice and assistance in the
preparation of claims to those applicants who asked. It is unclear how many affected
individuals or businesses knew of this financial advice assistance component of the
Package.
Stakeholders surveyed as a part of the Review considered the business advice assistance
provided did not meet their needs, either in terms of quantum of assistance or the
quality of advice (see
Figure 2
below).
It is understood that one legal firm in particular may have provided business advice
assistance to about half of those who received assistance under the Package. Some firms
operated on the basis of a success fee, which could be as high as 10 per cent of the total
amount of assistance received by an applicant. Other firms required applicants to pay
professional service fees and disbursements to prepare and prosecute an application. It is
difficult to assess with any certainty the quantum of fees paid to professional service
firms by applicants. However, based on the information provided, it seems that fees
accounted for many millions of dollars of the Package adjustment funding.
Figure 2: Response to the stakeholder survey proposition ‘Business advice as assistance met my
organisation’s needs in terms of the money offered and the quality of the advice provided’.
46
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
In light of the above findings on the business advice component of the Package, an
alternative approach for the future might be the establishment of a panel of business
advisers that can be accessed by affected individuals and businesses. Such an
arrangement could ensure that affected individuals and businesses have access to
appropriate and consistent advice and assistance at reasonable rates.
The complexity of the ‘Business Restructuring Assistance’ and ‘Fisheries-Related Business
Exit Assistance’ components of the Package also had a negative effect on the timely and
efficient processing of applications for assistance. As discussed below (section 4.5),
delays in decision making resulted from the need to seek adequate information to
substantiate claims and the capacity of assessors to undertake assessments. These
issues arose, in large part, due to the complexity of those Package components.
In designing any future structural adjustment program, the Government might wish to
carefully consider the merits of providing assistance to restructure such a broad range of
individual businesses. In the context of the Package, the approach introduced significant
complexity, with detrimental flow-on impacts on the capacity of individuals to seek
assistance and effective administration of the Package.
Should the Government wish in the future to support fishing-related businesses affected
by marine protected areas, alternative approaches may include:

Emphasis on the buyout of a proportion of businesses in sectors where the flow of
fishing product has reduced significantly, and/or

The provision of compensation for impact (as opposed to support for business
restructuring), based on either the impacts on individual businesses in a clearly
defined class, or based on a single payment multiple for all businesses within a
particular industry group.
While the merits of such alternative approaches would need to be further explored, they
would likely reduce the complexity of the claiming and assessment processes, facilitate
understanding of how impacts are to be assessed, obviate the need for use of
professional advisers to prepare and prosecute applications, facilitate timely processing
of applications and reduce perceptions of unfair treatment.
4.5
The timing of assistance
The timelines for providing assistance under the Package were a major concern for the
businesses affected, and the Department. When the Zoning Plan came into operation, it
had immediate adverse effects on many individuals and businesses. At that time, the
Department had inadequate background data with which to estimate impacts, had been
given inadequate lead time to develop a comprehensive adjustment approach, and
inadequate resources were provided within the Department to do the job required.
Delays in assessing and making decisions on applications meant that in the absence of
assistance some businesses were forced to either cease trading or operate unprofitably.
This was a source of personal and financial stress for many stakeholders consulted by the
Review.
Many businesses also considered that the timeframe for lodging applications was not
sufficient to allow meaningful assessment of the impacts of the Zoning Plan on their
businesses. In the view of these businesses the Department and QRAA did not develop
supporting materials in a timely fashion, and in the early days lacked capacity to
efficiently administer the Package.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Stakeholders consulted during the Review cited the late provision of the Post Licence Buy
Back Impact Percentage Statements (PLBBIPS) and the late acceptance of satellite-linked
vessel monitoring system (VMS) data to prove impacts as examples of the Department
not being ready.
However, in response, the Department noted that the PLBBIPS was supplied and
discussed at port meetings in February-March, 2005, shortly after the licence buy-out in
December 2004. In relation to the VMS data, it is the Department’s contention that they
would always have accepted these as they were included in the guidelines from the
beginning of the Package. The Department accepts that the first application using these
data was submitted relatively late in the piece, but when this application was successful,
there was significant uptake in future applications.
The Department did not finalise the assessment tool for land-based business applicants
until the latter half of 2006. The tool was used to assist land-based business FBRA
assessments where applicants were unable to clearly demonstrate a rezoning impact. It
provided acceptable impacts to use, per sector and per region/city, in the absence of
other information. A few assessments of land-based businesses were made prior to using
the tool but most were unsuccessful as a rezoning impact could not be clearly
demonstrated in isolation of other impacts on the business.
In balancing the views of stakeholders with the information provided by the Department,
it is very clear that a significant issue for many business was that the onus for proof of
impact from the rezoning was on them. The multitude of pressures on fishery-related
business at that time made this a complicated and onerous task. When the Department
became aware that businesses were struggling to establish proof of impact, they
proactively developed a number of tools in response to concerns from businesses. Clearly
this was a sensible response in the circumstances – the Department was under pressure
from both the business sector and from politicians acting as advocates for their
constituents. In addition, the Government responded to concerns about the timing of
assistance by extending the closing date for applications under various Package
components.
To avoid the timing issues noted above, it is recommended that in future structural
adjustment programs, two alternative (complimentary) approaches be considered:
 Adjustment should be completed before a reserve system is declared and begins to
have impacts.
 Adjustment should be run as a two-stage process, where some immediate
assistance is provided to particular classes of applicants ahead of a second round,
say 12 months later, where there would be greater knowledge and understanding
of impacts.
Many of the stakeholders consulted during this review considered that such a two-stage
assistance process would have been of value. It is also noted that in considering the form
of the licence buy-back component of this Package, the independent panel recommended
that there should have been a two-stage buy-back of fishing licenses. In making this
recommendation, the panel noted uncertainty about the impacts of the Zoning Plan and
the need to allow affected individuals and businesses to have some time to assess the
overall impact. This reasoning could apply equally to land-based fisheries-related
businesses.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
4.6
Stakeholder communication and engagement
In early 2004, public consultation was carried out by the independent panel
commissioned by the Government to advise on the design and scope of the Package.
These consultations included six port meetings and a series of one-on-one meetings with
key industry groups, Commonwealth and state government agencies and conservation
groups. The panel reported to the Australian Government Ministers in May 2004;
however, the panel’s report was not released publicly.
The desire to finalise and announce the Package (31 June 2004) to coincide with
commencement of the Zoning Plan (1 July 2004) left little time for Departmental officers
to undertake additional consultation following the report of the independent panel, and
no such consultation was undertaken. As noted above (section 4.1), a greater level of
stakeholder engagement in Package design may have improved ‘buy-in’, helped to
ensure a common understanding of Package objectives, and resulted in improved
Package design.
Following the announcement of the Package, the Department, together with QRAA,
undertook extensive consultations with industry stakeholders. The Department also met
with stakeholders on an ongoing basis when problems were identified with various
elements of the Package. Sometimes these discussions prompted changes to the design
or scope of the Package. As a part of its stakeholder engagement, the Department
actively engaged the Queensland Seafood Industry Association (QSIA) throughout
implementation, and QSIA was provided with financial assistance which supported its
engagement. Financial assistance was also offered to the Queensland Seafood Marketers
Association, but was not taken up until quite late in the process at which stage a
consultant was engaged to examine options for seafood processor rationalization. The
consultant’s report found that there were little prospect for such rationalization due to
antagonism and completion (rather than collaboration) between businesses. Gladstone
was identified as having some potential for rationalization, and a project was developed
that merged two operators.
Notwithstanding these efforts, many people consulted during the Review perceived that
the Department tended to be reactive rather than proactive in its engagement with
stakeholders. It is understood that stakeholder satisfaction was not monitored formally
during delivery of the Package. Some degree of formal monitoring of satisfaction would
have enabled the Department to more proactively deal with issues of concern. However,
it should be noted that a key factor restricting the capacity of the Department to take a
more proactive approach to consultation was the limited funding provided for
administration of the program. There was a relatively small allocation for this activity at
the outset, but this was not adjusted sufficiently as the Program expanded because the
Department of Finance would not support additional costs for the Department, i.e. it
expected the Department to absorb costs even though the Government had significantly
changed the parameters of the adjustment package.
During the Package’s implementation, QRAA business advisors were located in regional
centres to facilitate stakeholder engagement. The Department negotiated with the
Queensland Government for Queensland Rural Financial Counsellors to take on this role
from the beginning of the package. However, this initiative failed and QRAA business
advisors were then appointed. Consequently, and lamentably, it was 18 months after the
Package’s announcement before the full complement of four advisors was in place. A
number of stakeholders noted that a local presence in the affected ports would have
better facilitated access to QRAA to seek advice and assistance and monitoring progress
with their claim.
49
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Guidelines for applicants were provided to assist stakeholders to understand the various
components of the Package. However, because of the complex suite of business types
and arrangements (e.g. partnerships vs corporations, leaseholders versus quota holders,
etc) in place across the affected stakeholders, interpretations to the guidelines were
required to be published over time. Similarly, the complexity of, and multiple changes to,
the scope of the package made effective stakeholder communication challenging. This is
reflected in the results of the stakeholder survey (figures 3–5 below) and is discussed
further in section 4.7 of this report.
Figure 3: Response to the stakeholder survey proposition ‘Information on GBRMPA SAP and how to
seek assistance was readily available to my industry/ organization/business’.
Figure 4: Response to the stakeholder survey proposition ‘Information on the Package and how to
seek assistance was accurate and reliable.’
50
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Figure 5: Response to stakeholder survey proposition ‘Information on the Package was easy to
understand and facilitated my application.’
A vast majority of stakeholders consulted during the Review indicated that they had
difficulty in tracking the progress of their applications for assistance (see Figure 6). These
stakeholders suggested that there would have been value in allocating and providing
them with contact details for a nominated case officer once their application had been
received. This approach appears to have merit and would go some way to reducing
frustrations with the application process, particularly if case managers were required to
meet appropriate case management standards and their performance against these
standards were monitored regularly.
Figure 6: Response to stakeholder survey proposition ‘It was easy to track the progress of my
organization’s application.’
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
It is clear that the majority of stakeholders believed that the Department and its
contractors could have done better in the providing information regarding the Package in
a more user friendly, proactive and open manner. There was a sense among stakeholders
that the Department avoided consultation and communication with the intention of
reducing financial exposure, and this was a significant factor contributing to a lack of
trust that built up during the delivery of the Package. The Review found no evidence that
the approach taken by the Department and its officers to consultation and
communication was deliberately aimed at reducing financial entitlements of stakeholders.
Indeed, Departmental officers were clearly very genuine in their attempts to educate and
assist claimants and appellants. However, it is also clear that stakeholder buy-in was
made more difficult by the multiple changes to the Package over time, the complexity of
the Package design (see section 4.4) the clear and considerable gap in expectations
between industry stakeholders and the Department regarding the objectives of Package
(see section 4.1), and the considerable stakeholder dissatisfaction and antagonism over
the Zoning Plan at the time.
As with any major change program, the Package demanded significant investment in
communication, clarification and/or negotiation of scope and objectives, consultation (at
all levels) regarding program design and implementation, and investment in keeping
dialogue and communication lines open for the duration of the Program. Although it is
never possible to satisfy all stakeholders, particularly when, as was the case here, many
were in serious financial difficulty, the Review concludes that the Department fell short of
what was required in stakeholder engagement and communication, particularly in terms
of proactive consultation and communication, and the maintenance of this essential
element of the Program in the third and fourth years. A number of factors appear to have
contributed to this:

The late involvement of Departmental leadership in working through the structural
adjustment implications of the Zoning Plan.

The resultant constraints on the time available for program design, communication
and consultation.
Program resourcing (staffing, budget, communication etc) being initially based on
the assumption of a relatively small number of applications and limited outgoing
funds. The significant expansion of the number of applicants and the amount of
outgoing funds stretched available resources, and it seems that this meant that
Departmental and QRAA officers were often in catch-up mode.

A lack of experience in working with multifaceted marine industries.
It is clear from the Department’s approach to structural adjustment associated with the
declaration of marine protected areas in south-eastern Australia in 2006 that a number of
these issues had been recognised (see Part D of this report for further discussion). This
adjustment was conducted as part of the Department of Agriculture, Fisheries and
Forestry (DAFF) Securing our Fishing Future package. To facilitate stakeholder
engagement in and communication regarding the SE Australian MPAs DAFF engaged an
independent facilitator, with credibility in the fishing industry and with government
agencies. This enabled both industry and government agencies to work through sensitive
and complex issues related to the package and negotiate and agree effective outcomes
for all the parties involved. This approach is recommended for future adjustment
programs involving the fishing industry, particularly as a way of enhancing the likelihood
of industry buy-in to the Package.
52
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
4.7
Stakeholder satisfaction
Stakeholders surveyed and consulted during the Review indicted considerable
dissatisfaction with the Package. Around 80 per cent of the 103 people who returned
surveys felt strongly that:

The Package did not meet the needs of their businesses.

The Package did not deliver benefits to their industry and local region.

Assistance received did not enable their businesses to operate successfully.

The Package was not cost-effective in achieving its objectives.

Assistance was not provided in an equitable way across their industry.

Information on the Package was not readily available, accurate and reliable; nor
was it easy to understand and did not facilitate their business in applying for
assistance.

Assistance was not provided in a timely manner.

It was not easy to track the progress of their applications.
Further details of feedback from the stakeholder survey are in Appendix D.
The key causes for the poor stakeholder satisfaction with the Package are discussed in
other sections of the report and include:

The absence of a shared understanding and expectations regarding the objectives
of the Package (discussed in section 4.1).

The significant antipathy regarding the Zoning Plan, which affected attitudes
towards the Package (discussed in section 4.2).

Compounding factors affecting the fishing and related industries at the time the
Zoning Plan took effect, including Queensland fisheries management change,
exchange rates and fuel prices. As a result, many businesses were under significant
financial pressure. The Package was the only source of assistance available at the
time, and sought to respond only to the impacts of the Zoning Plan (discussed in
section 4.2).

The timing of the provision of assistance, as discussed in section 4.5. In particular,
while impacts were felt immediately, assistance was not available in some cases for
up to two years later. Conversely, some stakeholders felt that not enough time was
provided to understand the full impacts of the Zoning Plan on their businesses.

The complexity of the Package (see section 4.4), which made it difficult for people
to understand their options and successfully apply for assistance and led to delays
in assessments and the provision of assistance.

A perception that employees of QRAA, KPMG and the Department lacked awareness
and understanding of the industry, region and practicalities of running a business.

The perception that assistance was not provided equitably, as discussed in section
4.12.

The many changes to the Package which, while responding to stakeholder feedback
and concerns, also contributed to confusion, complexity and a perception that
assistance was not provided equitably.

The fact that many people applied for ‘Simplified Business Restructuring Assistance’
because of the need for immediate financial support and complexity associated with
53
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
the ‘Full Business Restructuring Assistance’ component. Many people later regretted
their decision and felt they would have received significantly more if they had
applied for full business restructuring assistance.
4.8
Implementation planning
An implementation plan for the Package was developed in April-May 2004, in the context
of planning and reporting obligations to the Cabinet Implementation Unit in the
Department of the Prime Minister and Cabinet. The implementation plan incorporated the
following key elements:

governance

implementation strategy

risk management

stakeholder engagement and communications strategy

resources

procurement plan

quality assurance, monitoring and evaluation.
The risk assessment and risk management plan included in the implementation plan was
the only risk assessment and risk management plan prepared for the development and
management of the Package. It is understood that the implementation plan was not
revised over the life of the Program to take account of changing circumstances. The Plan
required the Department to report quarterly on progress and emerging issues and risks
to the Cabinet Implementation Unit, although it is understood there were limited
resources available to identify and assess risks. The plan and the quarterly reports were
signed off by the Secretary of the Department.
The Review concludes that the initial development of the implementation plan fulfilled
best practice principles, as did the approach and adherence to regular reporting.
The Australian Government had agreed in February 2006 that an independent review of
the development and implementation of the Package should be undertaken to guide
future policy development. This was not commissioned until 2008, and thus was not able
to influence the GBR Package.
4.9
Governance and administration of the Package
Overall responsibility for administration of the Package rested with the Department.
In April 2004, the Department engaged the Queensland Rural Adjustment Authority
(QRAA) to assist it in processing and assessing applications. QRAA is a Queensland
Government agency with extensive experience in the administration of restructuring and
structural adjustment programs in a number of industries. Subsequently, following the
expansion in the scope of the Program and the receipt of a large number of applications
in April 2006 (in advance of the closing date for applications), KPMG was engaged to
provide additional assistance with the assessment of applications. KPMG was selected on
the basis that the Department considered that they had good industry knowledge and
financial experience.
Roles and responsibilities for the assessment of applications varied for the different
components of the Package and are summarised in Table 5.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Table 5: Agency/group assessing applications made under Package
Package
component
Agency/group
assessing
initial decisions
Comments
Agency / group
assessing
appeals
Comments
Exit assistance
for fisheries
businesses –
licence buyout
DEWHA SAP
Team
QRAA provided
input
DEWHA SAP
Team
Exit assistance
for fisheriesrelated
businesses
QRAA (DEWHA)
DEWHA SAP
Appeals Team
processed only
one application
DEWHA SAP
Appeals Team
For further
detail, refer to
flowchart of
application and
appeals process.
Simplified
business
restructuring
assistance
QRAA
Information to
run the
Simplified
Business
Restructuring
Assistance
component of
the package was
provided by
Primary
Industries
(QDPI&F)
DEWHA
DEWHA outside
of assessment
team
Full business
restructuring
assistance
QRAA / KPMG
DEWHA SAP
Team provided
oversight
DEWHA SAP
team and then
Appeals Team
For further
detail, refer to
flowchart of
application and
appeals process.
Business
advice
assistance
QRAA / KMPG
$1000 was an
automatic
payment
processed by
QRAA.
n/a
Some appeals for
FBRA / FRBEA
included a
business advice
cost component
DEWHA
Two appeals
received only
Application for
amounts over
$1000 were
considered
alongside
applications for
other fund
components.
Employee
assistance
QRAA
The Exit Assistance for Fisheries Businesses (i.e. fishing licence buyout) component
of the Package was assessed by QRAA with support from the Department. A technical
advisory committee, with representatives from the Department, the Department of
Agriculture, Fisheries and Forestry, the Queensland Seafood Industry Association, the
Queensland Rural Adjustment Authority and the Queensland Fisheries Service, provided
advice on:
55
Review of the Great Barrier Reef Marine Park Structural Adjustment Package

Effort reduction targets for each fishery.

The adequacy of coverage for each fishery based on effort reduction targets.

The regional distribution of effort reduction.

Issues to be taken into account in measuring impact.

The interpretation of catch and effort history data.

Other relevant issues.
Applications under the Simplified Business Restructuring Assistance component
were assessed by QRAA, who also made the decisions.
Applications under the Full Business Restructuring Assistance and the Exit
Assistance for Fisheries-Related Businesses components were processed as follows:

QRAA (mostly fishery-related businesses) or KPMG (mostly land-based businesses)
undertook an initial assessment of the application and made a recommendation to
the Department.

A Departmental team based in Canberra considered and reviewed QRAA or KPMG
recommendations to ensure consistency/quality assurance with the Package
objectives. Decisions were made by the First Assistant Secretary of the then Marine
and Biodiversity Division.

An independent Departmental team based in Hobart assessed appeals made by
applicants. Appeal decisions were made by a Deputy Secretary of the Department.
The following diagram shows the processes used for the ‘Full business restructuring
assistance’ and ‘Exit assistance for fisheries-related businesses’ components.
56
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
SAP Initial Application & Decision Process
Applications
received and
registered by QRAA
 QRAA sends
letter to applicants
acknowledging
receipt
 Application
remains at QRAA
or sent to KPMG
for assessment
QRAA/KPMG
proposed
methodology and
assumptions
 Assessment by
assessor
 Confirmation by
manager/partner
QRAA/KPMG first
draft
 Assessor to draft
full report based
on methodology
and assumptions
 Review by
manager/partner
DEW confirmation of
proposed
methodology and
assumptions
(Budget A Review)
Assessor to
email and
prelim draft
report, set up
meeting, followup by email
QRAA/KPMG final
draft
 Assessor to
incorporate
comments from
DEW review
 Review by
manager/partner
DEW First Review
QRAA/KPMG
send First Draft
DEW Confirmation
of Final Report
DEW decision to
send Final Report to
QRAA including
“Recommended
Wording”
 Letter of offer or
letter of decline
sent to applicant
providing 28 days
to indicate their
intention to appeal
QRAA/KPMG final
report
 Assessor to
incorporate minor
comments from
DEW review
 Final sign off by
manager/partner
QRAA/KPMG
send Signed
Final
QRAA/KPMG
send Final Draft
SAP Appeals Process
Appeal or
intention to
submit appeal
forwarded to
DEWHA
Secretary via
QRAA
Commencement of
appeal
 Case officer
(CO) nominated
 Appellant
notified
 Information from
original
assessment
provided by
KPMG, QRAA,
SAP team
Assessment process
conducted by CO
with reference to
program criteria,
guidelines and
interpretations,
models and history /
precedents set by
relevant cases
Draft appeal
assessments
provided to
appellant/business
advisor
Review of draft
Submission of draft
Decision (letter of
assessment by
assessment to
offer or rejection)
Recommending
Decision Officer
provided to appellant
Officer (RO)
(DO) (Dep Sec)
through QRAA
(Assistant Secretary) AgreeAgree-
Information
from other
sources
ment
ment
As required –
revision of draft
assessment
based on RO or
DO comments
Figure 7: Process flow charts for inputs and decisions made on initial applications and appeals.
To 10 September, 2009, the administrative costs incurred by the Department in
administering the Program were $8.4 million. Key elements of this expenditure included
expenditure on consultants, primarily QRAA and KPMG and Department salary-related
costs.
Table 6
provides a breakdown of administrative costs.
Table 6: Administrative costs of the Package
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Expenditure
component
2004–05
2005–06
2006–07
2007–08
2008–09
2009-10
Total
($ ’000)
($ ’000)
($ ’000)
($ ’000)
($ ’000)
($’000)
($ ’000)
—
—
1,087.875
Salaries and
related
expenditure –
Canberra
Team
88.165
445.217
325.130
Salaries and
related
expenditure –
Appeals Team
—
—
229.919
311.549
Administrative
expenditure –
Canberra
Team
42.543
28.227
11.877
0.370
Administrative
expenditure –
Appeals Team
—
—
10.582
2.897
Travel14 –
Canberra
Team
25.383
16.617
26.569
2.817
Travel –
Appeals Team
—
—
1.376
10.655
1,690.230
1,634.835
1,827.884
—
—
Consultants
Legal services
Grants
Total
expenditure
802.126
13.810
229.363
212.000
164.500
1,184.027
2,128.937
3.376
—
—
2,360.375
2,484.678
167.322
—
8.824
—
7.539
—
.124
—
.042
708.914
83.017
22.345
—
71.386
—
19.570
.110
5,955.185
16.406
—
33.592
—
—
376.500
200.091
0.276
8,358.384
The average ratio of administrative costs to program costs over the four years from
2004–05 to 2007–08 was four per cent. Although there are no standard benchmarks for
the ratio of administrative costs to program costs, this review considers that four per
cent is relatively low, taking into account that it includes the costs of administering the
appeals processes. Given earlier observations within this review that communication and
consultation was underdone in this program, it may be that the level of resourcing to
Departmental teams was less than that required.
The consultancy costs of $5.96 million (initially to engage QRAA and then, later, KPMG),
amount to about 73 per cent of program administration costs. This was justified by the
Department’s need to acquire capacity to assess applications. When, in the Department’s
view QRAA did not have the capacity to undertake the task alone (as discussed
elsewhere (section 4.10), QRAA experienced difficulty in recruiting staff with the skills
and experience required to deal with the inherent complexity of some components of the
Package), they secured the assistance of KPMG.
14
This item includes travel for departmental staff and non-departmental staff
58
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Assessments by QRAA generally required extensive review and reworking by the
Department. This accorded with comments received from stakeholders, some of whom
suggested that QRAA and KPMG lacked awareness and understanding of the industry,
region and practicalities of running a business.
There was considerable scope for applicants to challenge assessments and appeal initial
decisions.
A relatively small proportion of all cases (10.4 per cent) and 35.5 per cent of FBRA cases
were appealed, 76 per cent (77.2 per cent of FRBA) successfully. Table 7 provides
analysis of the quantum difference of appeal decisions broken down into categories
related to the size of the original application. It is clear that there were very significant
dividends (52–71 per cent higher payments) for all appellants, regardless of the size of
their original claim. In the case of businesses with very large (>$1 million) applications,
the quantum of the increase was highest ($170,000 median), but the final result as a
percentage of the original application was significantly lower than for all of the other
categories.
Table 7: Financial analysis of the benefits secured through the appeals process.
Initial
application
category
($,000)
Number of
appellants
Total payout
per category
Median
Median
First
decision
Second
decision
(after
appeal)
Median %
difference
(first:
second
decision)
Median %
second/final
decision as $
of initial
application
0–125
18
$331,559
$13,853
$44,020
+71.29
76.72
125–250
36
$2,363,122
$62,708
$147,702
+48.13
86.23
251–500
47
$5,710,441
$91,000
$265,165
+53.10
66.41
501–1000
35
$5,310,426
$106,735
$326,496
+51.79
52.78
>1000
33
$10,102,505
$214,229
$596,512
+61.14
32.69
It is clear that the approach taken by the appeals team (i.e. carefully working through
each claim, in light of the issues raised in the initial assessment of the claim, and in
consultation with the appellant and/or their agent) provided a dividend to the vast
majority of those who chose to appeal. Their effort and approach was strongly
commended by many stakeholders.
The Review found no evidence to suggest that the appeals team differed in their
interpretations of the guidelines from the QRAA, KPMG and Departmental teams that
conducted the original evaluations.
As game theory would predict, it is clear that as the Package ‘matured’ and networking
among applicants and appellants increased (facilitated in the main by legal/financial
advisors), the approach to and content of appeals improved. Thus, the chance and
dividends of successful appeals also increased.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
4.10
Timeliness of decision making
Table 8 details processing times for applications and appeals under each element of the
Package.
Table 8: Processing times (weeks) for applications made under the Package.
Package component
Average time for
processing
initial
applications
Median time for
processing
initial
applications
Average time for
processing
appeals
Median time for
processing
appeals
Exit assistance for
fisheries businesses –
licence buyout
10.6
8.4
n/a
n/a
Exit assistance for
fisheries-related
businesses
38.6
36.9
10.5
-
3.2
1.9
n/a
n/a
40.2
37.9
14.1
12.0
Business advice
assistance
1.7
0.1
-
-
Employee assistance
5.6
0.1
4.6
-
Simplified business
restructuring
assistance
Full business
restructuring
assistance
Applications under the ‘Full business restructuring assistance’ and ‘Exit assistance for
fisheries-related businesses’ components, often took a considerable time to assess. The
primary cause of these delays appears to have been the complexity of those Package
components.
Much of the time taken to process and determine applications was spent going back to
applicants or their advisors (often on a number of occasions) seeking adequate
information to substantiate the applicants’ claims. As noted previously, many applicants
had limited financial literacy and sometimes inadequate or poorly organised financial
records. The provision of adequate information to substantiate claims was necessary
from the Department’s perspective to ensure that funds were spent appropriately in the
context of the nature and scope of the Package and the requirements for the expenditure
of public money under the Financial Management and Accountability Act 1997.
Processing times were also affected by the need for QRAA to rework its assessments of
individual applications following initial review by the Department, with an average of 3–5
reworks per claim and up to 15 in some instances. The Review heard that QRAA had
difficulties in attracting suitably skilled and experienced staff to undertake the
assessments and that this had an adverse impact on the quality of the initial
assessments provided to the Department. QRAA also noted that the Department’s
approach to consultation regarding the design of the Package and its complexity
compounded their staffing issues. In QRAA’s view, early guidance from the Department
was considered to be at too high a level to be particularly useful for claims assessment.
Clearly this is more evidence that the timeframe for the development and announcement
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
of Package had negative impacts on a number of components of the Program. Processing
times for QRAA improved over time as the Program evolved.
Other factors contributing to processing times included:

A late rush of applications in the months before the closing date of 31 May 2006,
which resulted in an extensive backlog of claims.

The approach of making draft offers to applicants before they were finalised, which
often led to considerable discussion and negotiation.

The provision of an appeals process which, while beneficial to the applicants
concerned, also added to processing times.
Progress with the processing of claims was monitored by the Department on a monthly
basis. The Department discussed issues with QRAA regarding processing times and a
range of strategies were implemented to overcome backlogs, including:

Providing additional resources to QRAA.

Working with QRAA to simplify claims assessment processes.

Engaging KPMG, Canberra, to provide additional claims assessment resources.

Developing guidelines for the assessment of claims. These guidelines evolved over
the life of the Package in response to emerging assessment issues. They provided
guidance and advice to the assessors on how to treat particular issues such as
testing the viability of a business, business restructuring for lessees of fishing
licences, and fishers exiting via full business restructuring.
Many stakeholders considered that the value of the assistance provided was significantly
discounted by the considerable time involved in finalising applications. This was
compounded by the fact that many individuals and businesses suffered an immediate
impact from the time the Zoning Plan took effect and were otherwise under financial
strain from compounding factors affecting the industry, such as Queensland fisheries
management changes, fuel prices and exchange rates.
A further concern raised by a number of people consulted during the Review was the
timing of payments. Payments made close to the end of the financial year often exposed
the recipients to major tax bills because they had virtually no opportunity to plan their
affairs to minimise or reduce their taxation liability. This discounted the value of the
assistance, in some cases significantly. This tax liability issue was offset, at least in part,
through the provision of a ‘hardship payment’ in May 2006, increasing full business
restructuring assistance payments by 20 per cent.
The Review concludes that the compounding impacts of complexity, multiple changes to
the Package and its guidelines, and capability shortfalls in QRAA (and the Department at
times of high demand) impacted on the ability of the Department and its agents to
deliver adjustment decisions and payments to those that required assistance. Lengthy
delays to decisions and payments had a significant negative impact on businesses
affected by the Zoning Plan.
4.11
Employee, social and community assistance elements
of the Package
Employee assistance consisted of a one-off payment of $5000 (for master ticket holders)
or $3000 (for fishing boat crew and employees of land-based fishery-related businesses
to cover the costs of dislocation, retraining etc resulting from the loss of employment due
to the rezoning). QRAA assessed and paid applicants for employee assistance: 118 out of
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
298 applicants were paid assistance; the average payment was $3847; and payments
totalled $454,000.
Assistance provided under the social component of the package included:

A grant of $249,000 provided to the then Department of Family and Community
Services to supplement existing financial and crisis counselling programs in
Queensland.

Employment of officers in industry organisations (QSIA and ECOFISH) to facilitate
fishers’ access to social support services and business advice. Grants to QSIA and
ECOFISH totalled $213,000.This funding supported activities such as liaison with
government agencies and development of a 'how-to guide’.
Community assistance was provided through supplementation of the Regional
Partnerships Program to undertake initiatives in regional communities impacted by any
restructuring in the fishing industry. The Regional Partnerships Program was initially
administered by the then Department of Transport and Regional Services, but in the last
year of the Package it was taken over by the Department. There were many community
grant applications, of which three were successful.
Detailed data on the employee, and social and community assistance elements of the
Package are inadequate to allow a comprehensive evaluation. The stakeholder survey
contained questions related to these three components of the package. In general,
respondents were either unable to answer the question of whether these components
were well targeted, successful and beneficial, or they believed they were not.
In conclusion, there was little adverse comment about the employee, and social and
community assistance components of the Package from the people who were meant to
benefit. The one exception concerned the SBRA business advice provided by QRAA
officers, which for some stakeholders was seen as either not helpful or misleading. To
balance this, the Review Team received strong support for the personal approach taken
by some QRAA officers.
The Review supports development of targeted employee, social and community
assistance within future packages, particularly where these can be linked to existing
regional initiatives that are likely to have significant local knowledge.
4.12
The achievement of equitable outcomes for applicants
As the Package progressively evolved to meet a range of stakeholder concerns and
issues, a complex set of guidelines evolved to provide the basis for assistance to
stakeholders. Stakeholders ranged from fishing equipment suppliers to commercial
fishers; fish processors to fish shop owners; boat builders to boat sales agents; and
recreational fishing equipment retailers to charter boat operators. The guidelines required
each claim/application to be assessed on the unique situation of individual businesses
with respect to zoning impact, debt, profitability, business planning etc.
Under these circumstances, an assessment of financial equity between cases would
require a full reanalysis across a wide range of differing circumstances and business
sectors – a task considered beyond the scope of the Review. Thus, an alternative
approach was taken. First, the procedural fairness of the Package was reviewed in
respect to the way individuals and their applications were considered by the Department
and/or their agents. This was followed by a broad review of the potential differential
impacts on individuals of progressive changes in the Package and the overall complexity
of the process.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Procedural fairness
As outlined above, the Department developed a rigorous governance model for
evaluation of applications and subsequent appeals against initial decisions. This model
was followed closely by the two Departmental sections charged with delivering the
Package. The initial decisions and appeals were managed by independent teams,
overseen by different senior executive service delegates of the Department.
Detailed analysis by this review of a random subset of applications and appeals
confirmed that thorough records of all decisions were maintained, as were review
comments and questions from delegates. The appeals team were provided access to all
files and information provided for the initial application, but worked independently in
reviewing the original decision. Despite the high percentage of successful appeals, the
interpretation of the guidelines by the two sections appears to have been consistent,
based on interviews and review of the documentation. Thus, the Review concludes that
the Department conducted its evaluation of applications and appeals following good
governance and procedural fairness guidelines, and that these procedures neither
advantaged nor disadvantaged individuals.
Differential impacts of changes in the nature and scope of the Package on
individuals
Notwithstanding the procedural fairness of the Department, there was considerable
concern amongst those applicants interviewed that they were not treated consistently or
equitably under the Package. Almost 80 per cent of stakeholders disagreed that the
Package was provided on an equitable basis.
Figure 8: Response to the stakeholder survey proposition: ‘Assistance was provided on an equitable
basis across my industry.’
The most serious and common stakeholder concerns around equity were:
1. Those who chose and accepted the Simplified business restructuring assistance
(SBRA) early in the processes were disadvantaged relative to those who applied
later for Full business restructuring assistance (FBRA) because:
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
a.
Their early decision was based on the relative benefits of the two funds
($50,000 compared to the initial FBRA cap of up to $200,000), their
assessment of the probability of being successful at securing more assistance
when overall funding was likely to be limited, and the dire state of their
businesses. If they had known that the FBRA would expand to $500,000 and
then finally be uncapped, and that the overall funding was not going to be
limited, their argument is that they would have opted for an FBRA application.
b.
Their decisions were in many cases influenced by advice (or, as some of those
interviewed claimed, ‘pressure’) from officers or representatives of the
Department that taking the SBRA would be in their best interest, given the
uncertainty surrounding their cases and the short period (28 days) provided
to accept an SBRA offer or make a full FBRA application.
c.
A limited number of stakeholders in this group also questioned whether the
dual role of QRAA officers in providing advice and assistance to applicants, as
well as assessing applications, represented a conflict of interest, and noted
that they had been disadvantaged by the late release of the PLBBIPS data and
a ‘how-to guide’.
The Review found that many of these stakeholder concerns were based either on
mis-interpretation or mis-understanding of the package guidelines, e.g.. at the
time the SBRA was introduced, the FBRA cap was $500,000, not $200,000; the
SBRA was offered at a time when Package expenditure for licence buy-outs had
significantly exceeded the initial funding estimates, and the door had been opened
to significantly increased FBRA payments, so there was no hint that it was SBRA
or nothing; and the PLBBIPS was supplied and discussed at port meetings in
February-March, 2005, shortly after the licence buy-out in December 2004 (i.e.
well in time for consideration of SBRA versus FRBA options).
The Review found that many stakeholders were inadequately prepared for making
the decision whether to apply for (complex) FBRA or accept the easier and faster
SBRA. In making this choice, many chose not to seek professional advice or found
advice unhelpful. Many were in financial difficulty and opted for a quick and
certain payment.15 In hindsight, many SBRA recipients regret their decision in
light of the significant FBRA payments to others in their sector and ongoing
financial hard times for the GBR fishing industry.
It is beyond the scope of this review to test the veracity of claims that officials
pressured and/or gave invalid advice to individuals to accept the SBRA over FBRA.
These claims were made from one end of the GBR coast to the other, suggesting
that many had heard this advice first- or second-hand. Regardless, in future
programs, the Department needs to ensure that clear and consistent advice is
provided to all those affected by declaration of marine reserves. In the age of
electronic communications, it is recommended that this advice be available and
easily accessible on the Departmental website, and supported by a frequently
asked questions page.
Many of those who opted to apply for FBRA rather than SBRA received
significantly more adjustment funding from the Package than if they had chosen
the SBRA component. However, given the availability of choice (including the
15
Note a number of fishing businesses applied for both the SBRA and FBRA components of the Package, and
were able to and chose which to accept after the decisions were made.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
provision to apply for two components and choosing which suited best), the fact
that those who opted to accept SBRA were well aware that doing so ruled out
future claims, and the procedural fairness under which the Package was delivered,
this review concludes that the SBRA component was delivered equitably.
2. Within the inherently complex FBRA process, the evolution in scope and increased
potential benefits and the ‘gaming’ skills of applicants (particularly those who used
advisors/consultants who were able to understand what did and didn’t work within
claims) advantaged those who remained in the game for longest and used (often
expensive) professional advisors. This introduced inherent inequity into the
Package. Commonly raised specific concerns were:
a.
The perception that the Department ensured that assistance was provided on
a least-cost basis to the Commonwealth Government.
b.
The perception that the Department changed its interpretation of the
assessment criteria, as evidenced by changes to the guidelines.
c.
The perception that the introduction of the ‘two thirds rule’ introduced unfair
advantages to those that had claims pending when this was articulated by the
Department.
d.
The perception that those who used professionals to develop and negotiate
their claims for assistance and those applicants who did not had unequal
probability of success.
e.
The perception that businesses which had debt benefited more than those
that did not.
f.
The perception that the introduction in 2007 of the ‘investment option’, in
response to concerns raised by land-based businesses, increased the potential
payments to those still in the application/appeals process, thereby
disadvantaging those who had already accepted FBRA payments.
Regarding these claims, the Review found that:

The Department was justified in offering ‘least cost’ options as all decisions
were made following the Package guidelines. There is no provision for
Government to provide public funding over and above what is judged as fair
and least cost. The assessment process always sought the least cost option
for restructuring and if debt reduction was that option it was the basis of the
offer made. The aim of the restructuring process was to achieve the least cost
income stream to manage the assessed annual impact of the rezoning.

Many of the changes introduced by the Department indeed advantaged those
individuals/businesses with applications or appeals pending. However, where
there was a change in policy/rule, the Department reviewed all previous
payments made within that component of the Package, and where recipients
would be better off as a result of that change an additional payment was
made to applicants even after their acceptance of an offer. No alternation was
made to those who would be worse off.

Regarding the inequity claims around debt, it was true that some (but not all)
businesses benefited by receiving more money. The benefit depended on the
nature of the actual debt as the cheapest (highest interest rate) debt was
always chosen first – including credit cards with 20% interest charges – this
providing a five times multiple.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package

The rationale and approaches taken to the adjustment of debt were discussed
thoroughly with stakeholder representatives, accepted and welcomed by
industry from the beginning of the Package. Inevitably, when developing such
a complex set of provisions, there will be some that benefit one group more
than another, while others will be the opposite. Looking at the debt
provision/guideline in isolation ignores the fact that many businesses that did
not have debt received significant payments to facilitate other adjustments.
Thus, the Review considers the singling out of debt adjustment as an inequity
within the Package to be invalid criticism.

Consistent with previous conclusions regarding procedural fairness, the
Review found that teams evaluating original applications, and appeals,
consistently ensured that where a new provision was introduced (e.g. ‘the two
thirds rule), or where an interpretation altered as a result of precedent, all
pending applications and appeals were reviewed and amended according to
the new provision/interpretation. As with all changes, all earlier decisions
were also reviewed and additional payments made where necessary.

In decisions where the Government agreed that new provisions should flow to
all applicants, regardless of the status of their claim (e.g. hardship provisions
of May 2006), these were paid to everyone. This clearly meets equity
provisions.

Criticism of the equity of the investment option appears more substantive.
According to stakeholders, after significant pressure from land-based industry,
Government agreed to the imperative for adjustment of this sector and in
particular adjustment of the investment option; this occurred relatively late in
the delivery of the Package. The investment option under the ‘Full business
restructuring assistance’ (FBRA) component of the Package was provided to
clients where ‘no other restructure option was available’. The option was first
introduced towards the end of 2005, to provide an ongoing annual investment
return from investment equivalent to the assessed rezoning impact. Originally
calculated on a rate of return of 7.25 per cent, the rate of return was
increased to 9.07 per cent in October 2006 and was set equivalent to the
investment return available on a standard property-based managed fund at
that date. In the first iteration, the option had a multiple of 12.75, which was
later decreased to 11.03.

From the Department’s perspective, the investment option provided a lower
multiple than the debt it was prepared to accept. It was therefore introduced
in order to cap the payments in cases where debt would have been very
expensive to pay out.
Once it was clear that higher grants would be paid through the investment
restructure option than any of the other FBRA options, business advisors were
quick to ensure that applications submitted post 2006 (many of which
provided skeletal detail of the businesses involved) had this option as the
‘only viable restructure option’. Without an effective audit process, it is
uncertain whether the funds have been used as approved, or not.
This option provided greater returns, and more freedom to choose how funds
were expended. It is thus not surprising that stakeholders unable to access it
(i.e. all those who had settled before this option was first available), were
concerned about the equity of the approach.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package

The benefits of professional advice, challenging the basis for decisions, and
the advantages of ‘staying in the game’ are further indicated by the very high
success rate of appeals and the significant benefits arising from these.
With respect to the achievement of equitable outcomes the Review concludes that:

Many of the stakeholder accusations regarding inequity in the Package related
to the incremental development of provisions, which necessitated evolution of
guidelines. Stakeholder expectations were that within any component of the
Package, all applicants should have been judged under one set of guidelines.
The Review agrees with this, and finds that this expectation was met by the
Department through its thorough appeals process and approach to
retrospective payment where these were justified.

The post hoc expectation from stakeholders that the Package as a whole
should have been reopened for review of all previous decisions in light of
sequential changes to the Package is unrealistic. The Departmental guidelines
on the rights of applicants following acceptance of offers were clear, and as
noted above, the retrospective payments within components of the Package
ensured fairness and equity provisions were met.

The inherent complexity and evolution of the FBRA component of the Package
was a major design flaw in terms of delivery of equitable outcomes. There
were Package options that provided to some, but not all, the benefits of
higher payments and freedom to chose how funds were expended.

It is reasonable that stakeholders hold the view that many ‘features’ of the
Package demanded technical expertise to maximise benefits, and that those
who invested in professional advice were more likely to benefit than those
who did not (although some advisors did much better than others). The ability
of advisors to cross-reference Departmental responses to the clients’
applications and appeals undoubtedly challenged the system and allowed
these clients to benefit from incremental learning. Improved performance
through ‘gaming’ is common in grant schemes, adjustment packages etc,
particularly where guidelines are open to interpretation and the range of
plausible interpretations is broad. Although not inherently inequitable –
everyone had the option of engaging advisors (financial support from the
Package was provided to do so) – the ongoing gaming and continuous
challenging of the system militated against efficient delivery of the Package,
and once again left the Government open to criticism regarding equity. The
lesson from this is to avoid open-ended and complex adjustment programs
wherever possible.

The governance of the Package was well conceived and the Department
ensured through a system of checks and balances that the Package was
delivered according to the principles of procedural fairness. Thus, decisions at
any point in the delivery of the Package were based-on and well aligned with
the guidelines in place at that time.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
5
Part C: The costs and benefits of the Package
Consistent with the Marine Protected Areas and Displaced Fishing: A Policy Statement 16,
the Government’s decision to provide structural adjustment assistance to businesses
impacted by the Zoning Plan responded to two policy considerations:

The potential for intensification of fishing in areas remaining open to fishing
impacting on environmental and fisheries management objectives.

Equity, fairness and efficiency considerations, recognising that the benefits of the
rezoning were accrued primarily to the public generally, while the costs were
experienced by a limited class of fishers and related businesses and communities
that had limited ability to absorb or adapt in response to those costs.
The following chapter considers, in turn, the cost-benefit of the Package in delivering
against these two objectives.
5.1
Managing displacement of fishing effort
The ‘Exit assistance for fisheries businesses’ component of the Package sought to
manage the potential impacts of the displacement of fishing activities from areas closed
to fishing by the Zoning Plan, to areas remaining open. Given that relevant fisheries were
fully allocated (and in some cases, investment warnings were in place due to overallocation), the intensification of fishing in areas remaining open caused by this
displacement had the potential to compromise both the economic and ecological
sustainability of relevant fisheries. Accordingly, the ‘Exit assistance for fisheries
businesses’ component sought to purchase and retire an amount of fishing effort from
relevant fisheries equivalent to the effort that had historically occurred in areas closed to
fishing by the Zoning Plan. To do this, a competitive tender process was employed
whereby holders of effort entitlements had the opportunity to offer up entitlements,
specifying the price per unit they were prepared to accept. The Government used this
process to purchase effort units up to effort reduction targets (ERTs) calculated for each
relevant fishery, which included regional targets in recognition of the distribution of
impacts. Through this tender process, 122 operators received $33 million for effort
entitlements in six Queensland state fisheries (East Coast Inshore Fin Fish Fishery
(ECIFF), Queensland Mud Crab Fishery, East Coast Trawl Fishery (ECTF), Coral Reef Fin
Fish Fishery (CRFFF), East Coast Spanish Mackerel Fishery (ECSMF) and the other reef
line fishery).
An independent review of this component of the Package (FERM 2007) found that the
approach of calculating ERTs to establish the scale of buyout required for each fishery
was generally sound, and the strategy of meeting the ERTs at least cost (i.e. through use
of a competitive tender process) had been successfully implemented.
FERM cautioned, however, that a lack of catch and effort data of sufficient spatial
resolution, and the resultant need to make various assumptions about the impacts of the
rezoning, meant that the ERTs derived from calculations were ‘imprecise estimates of the
true level of displaced effort’. It is also clear that the ERT for the trawl fishery, in
particular, was a source of disagreement with industry. Some industry stakeholders
consulted during the Review contend that the trawl fishery ERTs were set too low, and
that this has increased competition among the fleet for a reduced resource base, and has
16
Appendix F provides an overview of this policy, consideration of structural adjustment more broadly and
Australian examples of structural adjustment in natural resource and biodiversity management.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
resulted in reduced viability, as indicated, for example, by reduced unit prices and vessel
values. The accuracy of this claim is difficult to assess, given other significant factors also
impacting on the industry at the time (discussed in further detail below).
The FERM review also considered the potential impacts of latent, or under-utilised, fishing
effort on the cost-benefit of the ‘Exit assistance for fisheries businesses’ component of
the Package. There was some suggestion that in the net and crab fisheries, fishers who
had received a buyout for their active effort were able to re-enter the fishery by
purchasing latent effort, thereby undermining efforts to negate the potentially perverse
effects of displaced effort. It is unclear whether this is true. Industry stakeholders
consulted suggest that it is; however, log book data show decreases rather than
increases in effort.
The extent to which effort removal provided benefits to the sustainability and profitability
of the fisheries and viability of fishing businesses remains an unresolved issue. For
example, industry contends that the setting of trawl ERTs below what was justified has
increased competition among the fleet for a reduced resource base, and resulted in
reduced viability (as indicated by drastically reduced unit prices and vessel values). As
discussed below, the buyout came at a time when the Australian and GBR fishing
industries were being negatively impacted by a range of external factors, and there is
little doubt that these too impacted on the viability of all sectors.
This review, in considering other components of the Package, found that the ‘Full
business restructuring assistance’ (FBRA) component may have inadvertently
undermined the benefits of the ‘Exit assistance for fisheries businesses’ component in
negating the effects of displaced effort. In some fisheries, financial support provided to
restructure fishing businesses under the FBRA component had the effect of increasing
fishing power by supporting investment in larger vessels and engines and fishing gear. In
Queensland, where the majority of fisheries are managed through input controls, an
increase in effective effort or fishing power without tightening of management controls
increases the risks of overcapacity driving unsustainable catches. FBRA assistance has
also allowed fishers to diversify into components of fisheries (eg. Queensland East Coast
Inshore Fin Fishery), where sustainability limits and impacts on vulnerable species are
poorly understood, and controls of catch have been rudimentary.
A key conclusion of the FERM review was that ‘unless fisheries management
arrangements are capable of controlling the level of effort in areas remaining open to
fishing, a fisheries buyout of itself will not necessarily prevent displaced effort from
having unsustainable impacts’. This review supports that conclusion. In any future
adjustment package, careful consideration should be given to the potential for latent
effort to undermine attempts to negate displaced effort, and the potential for structural
adjustment support to encourage effort-creep or diversification of fishing activities into
species, areas or ecosystems that are vulnerable, unassessed and inadequately
managed.
5.2
Responding to equity and fairness considerations
In addition to addressing displaced effort, the Package responded to the Government’s
view that the benefits of the Zoning Plan accrued primarily to the general public, while
the costs were experienced by a limited class of fishers and related businesses and
communities that had limited ability to absorb or adapt in response to those costs.
A number of Package components responded to these equity and fairness considerations.
The Full business restructuring assistance (FBRA) and Simplified business restructuring
assistance (SBRA) components of the Package sought to assist businesses to restructure
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
and operate successfully in the changed circumstances resulting from the Zoning Plan.
The Package also provided support for unviable businesses to wind up their operations,
and to fishing industry employees made unemployed as a result of the Zoning Plan, to
help them find alternate employment.
The FBRA component was by far the biggest component of the Package, with over
$155 million in assistance provided. Assistance under this component sought to
restructure businesses to operate profitably in the context of the Zoning Plan. To access
support, businesses had to submit a number of alternative business plans associated with
potential restructuring options. Support was then provided to take up the most costeffective restructuring option.
Because this approach sought to ensure that affected businesses could remain financially
viable, it is more likely to lead to greater benefits than, for example, the provision of
compensation for the impacts of the Zoning Plan, which would not necessarily fully offset
the costs of adjusting to the Zoning Plan. Further, the requirement to develop detailed
business plans on restructuring options provided a mechanism for ensuring that these
benefits would be delivered at least cost. This review found, however, that there were a
number of practical implications that may have affected the cost-benefit of the business
restructuring component of the Package.
First, as discussed in section 4.4, the need for detailed financial records, the development
of restructuring options and detailed business cases introduced significant complexity into
the Package, impacting on effective administration and the capacity of affected
businesses and individuals to access assistance.
Second, as noted in section 4.2, a wide range of compounding and cumulative factors
were affecting fisheries and fisheries-related businesses around the time the Zoning Plan
commenced. In this context, it was difficult to ensure that the Package provided support
only in relation to the impacts of the Zoning Plan, and not in relation to compounding
factors. Against this, if the Package only provided support in response to the impacts of
the Zoning Plan, there was a significant risk that the benefits of the Package would be
undermined by the extraneous factors. Providing temporary relief to businesses that had
become fundamentally unviable clearly undermines the benefits accrued from the
Package.
Third, business restructuring assistance was assessed and provided on a business-bybusiness basis. While this was a necessary and appropriate means of seeking to ensure
assistance was provided on an equitable and cost-effective basis, this review found that
the cumulative effects of support for individual businesses may have in some cases
undermined the overall effectiveness of the Package. For example, in Bundaberg, the
Zoning Plan and a number of external factors have had a very significant negative impact
on the prawn trawl fleet that has operated out of the town for decades. A 50–75 per cent
reduction in numbers of operators and landings has had a major negative impact on the
Bundaberg-based fish processing sector (and other up- and down-stream businesses).
Yet, FBRA assistance was provided to all fish processors in Bundaberg, to diversify,
modernise and increase efficiency of their operations.
The Bundaberg processors interviewed emphasised that it made no sense to have all of
them supported to stay in business. Greater benefit would have accrued to both
individuals and the local economy if the Package had supported adjustment of a reduced
number of operators and provided a mechanism for the remainder to exit. Their view was
that while the Package offered a business exit option within the Package, the amount of
money available for exiting processing business made that an unviable option.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
The Department contends that these views are invalid: attempts were made to discuss
rationalization, but the businesses were unwilling to undertake this at the time; early
changes in the guidelines to allow multi-business applications were designed to further
encourage the sector; and the business exit component of the Package was always
‘uncapped’ and related to business value (i.e. if the business was made unviable by the
rezoning (in combination with other factors) the Department paid full business value as
determined by an independent valuer).
Differences in opinion, interpretation and motivations aside, it seems unlikely that
investment of adjustment funding into this sector will result in the same number of
profitable businesses as there were before the rezoning, and that the benefits accrued
from the cost may be sub-optimal.
There is no evidence to suggest that the Department, to guide its investment, started
with a ‘structural adjustment plan’; in other words, a plan of how a fishery or an industry
sector (as a whole, or within a region) might best benefit from the adjustment
expenditure. This is perhaps not surprising given the lack of information available to the
Department in 2004 on the nature and extent of likely impacts of rezoning on these
industries. It is difficult to plan for an outcome when you are unsure of how the sector or
region will be impacted.
It is also not generally government policy to engineer the size and shape of private
business sectors, except where this is seen as a cost-effective strategy for ensuring
sustainable and profitable natural resources industries (see Appendix F for review of the
approaches and recent history of structural adjustment in natural resource management
in Australia). However, in the case of the up- and down-stream industries affected by
conservation management measures, it also makes little sense to provide structural
adjustment support on an individual basis without a careful analysis of business viability
at a sectoral or regional scale.
The Review concludes that, notwithstanding the difficulty of preparing a structural
adjustment plan, the lack of a such a plan, based on best estimates or qualitative
analyses of impact on the fishing and land-based sectors, was a serious oversight within
the Package. In future, this work should be conducted in advance of investment in
structural adjustment, preferably incorporating rigorous economic and social analyses.
Given that the Department’s guidelines and decision rules for the Package were formed
around assistance to individuals and procedural fairness, rather than with any higher
objective, measuring the economic benefits of the Package requires an in-depth analysis
of viability/profitability of individual businesses, pre- and post-adjustment. The Review
recommends that this analysis should be undertaken for the non-fishing sectors, both as
a quantitative cost-benefit analysis of the Package, and as a guide to future investments
in structural adjustment of fishing-related businesses.
Within the fishing sector, the Package combined fishery buyback and industry
restructuring components – an unusual approach to adjustment of a commercial fishing
sector. The Review recommends that over the next two years a detailed bio-economic
analysis should be conducted of the impacts of structural adjustment on the six
Queensland fisheries assisted by the Package. Of particular interest would be the impact
of adjustment assistance on the efficiency and profitability of individual operators; the
extent to which Package funds have been reinvested in the fishing and related industries
of the region; and the extent to which this investment has impacted on the levels of
effort, catch and sustainability of state and Commonwealth fisheries in the region.
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5.3
Economic benefit to regional economies
At a regional level, commercial fishing accounted for less than one per cent of the gross
value of production of industries in the broader GBRMP catchment in 2002 17. Thus, the
financial benefits of the Package are unlikely to have had a significant and ongoing
economic impact at a regional level. There are, however, major concentrations of fishing
and fishery-related businesses at a number of ports along the GBR coast. When
designing the Package, the Department was advised that the Zoning Plan was likely to
have significantly heterogeneous impacts along the GBR coast, and that this should be
taken into account. They did this through some regional focusing of license buyouts, and
by using a land-based business tool (using data from consultant reports, Queensland
Department of Primary Industries and Fisheries and the Queensland Department of
Transport) which took regional impacts into account for the FBRA component of the
Package.
The Review understands that the Department has not conducted an analysis of the
assistance provided by the Package to particular centres or regions, or a comparison of
what was provided against the projected needs analysis18. The Review recommends that
this kind of analysis should be conducted as part of the broad bio-socioeconomic analysis
of the Package outcomes outlined in section 5.2 above.
The $209 million in structural adjustment assistance provided over the last four years –
over $50 million per annum – is substantial compared to value of fishing production from
the GBRMP.
The average annual value of Queensland wild catch fisheries production over three years
from 2004–05 to 2006–07 was $196.1 million19, of which approximately one third ($65
million per annum) comes from the GBRMP region 20 affected by the Zoning Plan. Even
without quantitative analysis, the injection of significant adjustment funding will have
had a significant positive financial impact on the fishing and related sectors, and flow-on
effects through fishing industry and benefits to the communities most closely associated
with fishing. Offsetting this, however, was a number of significant externalities that
severely and negatively impacted the viability of many Australian fisheries, including
those affected by the rezoning.
Over the period 2004–2009, fishers along the GBR coast experienced:

Significant increases in fuel price.

Shifts in foreign exchange rates (reducing export earnings).

Competition for labour with a booming mining sector.

Bad weather and extreme cyclonic events.

Increased imports of cheap seafood with resultant loss of market and lower prices
for Australian product (prawns in particular but also finfish on the local market).

A series of changes to Queensland Government fishery regulations that reduced
access to resources and increased the cost of doing business.
17
Productivity Commission 2002 reported in BRS 2003.
18
BRS 2003
19
ABARE 2008
20
BRS 2003
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package

Creation of the Great Barrier Reef Coastal marine Park by the Queensland
Government without the provision of assistance to manage the impacts on
displaced fishers.

Falling capital value of vessels, licenses and quotas.
These, combined with the impacts of the rezoning drove profitability down to the point of
where many operators and fishery-related businesses were unviable. Thus, while the
Package may have seemed generous from a perspective that it provided a major
injection of funds into the fishing and related industries, it was not sufficient to stave off
financial losses. Indeed, a consistent comment across a wide range of stakeholders was
that the Government’s $209 million adjustment investment would have best been used
to conduct a more complete buyout of the GBR fishing fleets.
5.4
Ecological benefits of the Zoning Plan
In many respects, the Package represented a transaction cost against the expected
ecological benefits of the 2004 Zoning Plan.
The Government’s commitment to increasing resilience of the GBR in the face of multiple
pressures from climate change, habitat degradation (resulting from polluted discharge
from GBR catchments), and fishing, prompted the proactive and precautionary
declaration of 33 per cent of the GBRMP as green (no-take) zones. The Zoning Plan has
since been applauded globally, and is being used as a model for many other marine
conservation initiatives.
That this major policy decision was supported by only high-level socioeconomic analysis
(i.e. without detailed assessment of the impacts of the Zoning Plan, or other concurrent
regulatory and economic pressures, flowing from the decisions) suggests a view within
Government and the GBRMPA that regardless of the quantum of transaction cost, the
decision was justified by the risks to the reef weighed up against the benefits of
increased protection.
Having invested $209 million in structural adjustment, there is as yet relatively little data
regarding the impacts of the rezoning on the GBR. However, early indicators appear to
be positive.
The GBR Outlook Report 200921 concludes that:
‘the Great Barrier Reef is one of the most diverse and remarkable ecosystems in the
world and remains one of the most healthy coral reef ecosystems. Climate change,
continued declining water quality from catchment runoff, loss of coastal habitats
from coastal development and a small number of impacts from fishing are identified
as the priority issues reducing the resilience of the Great Barrier Reef’.
The report identifies that the 2004 zoning is having positive effects. The abundance and
size of key fish species in areas now closed to fishing has increased, while the impacts of
non-extractive activities, such as tourism, some research and shipping, are minimal.
This review makes no judgement on the adjustment cost versus ecological and financial
benefits derived from the Zoning Plan. In future, however, it is recommended that an
integrated and comprehensive analysis of the perceived conservation benefits, projected
impacts on ecosystem services and socioeconomic costs of conservation measures should
be undertaken before the declaration of marine protected areas.
21
GBR Outlook Report : http://www.gbrmpa.gov.au/corp_site/about_us/great_barrier_reef_outlook_report
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
5.5
Stakeholder perspectives on cost-benefits
Despite the substantial expenditure, a majority of stakeholders across all sectors felt
strongly that the Package failed to adequately compensate them for the impacts of the
Zoning Plan. At the time of this review, many had suffered and were still suffering severe
financial hardship, in their own assessment due in large part to the rezoning. Thus, they
saw little long-term benefit accruing from the Package expenditure.
On questioning stakeholders as to whether the Package had provided any short-term
benefits, a number of fishers and land-based businesses noted that the provision of funds
had helped in the short term, but this had been rapidly eroded.
A minority indicated that the Package had assisted them significantly; for example, to
adjust/restructure their operations to meet the changes flowing from the Zoning Plan –

In the case of fishers: to exit; reduce or retire debt; improve vessels and/or
gear; or to target other areas/fisheries.

For shore-based industries: to reduce or retire debt; to diversify into nonfishery-reliant activities; move outside the GBRMP.
The extent to which businesses considered they benefited from the Package appeared
related to:

The level of assistance received.

The nature of the businesses (those with good business plans and solid records
were more likely to be successful with adjustment applications and to accrue
significant benefits, than many of the smaller fishing and land-based operations).

Whether they had legal or financial assistance.
Many considered that the value of the assistance provided was significantly discounted by
the considerable time involved in finalising applications and the impact of the
unpredictability of payment timing on taxation of monies they received.
Fees for financial and legal advice – often significant and tied to the level of assistance
received – also decreased the benefits flowing to many businesses.
This review observed first-hand the significant emotional cost to some individuals from
the impacts of the Zoning Plan and the long-running antagonism surrounding the
development and management of the Package. Clearly, this was unintended. However, to
avoid a repeat of the antagonism, future marine reserve development needs to involve
more effective consultation with and support for stakeholders throughout marine reserve
development processes, and minimise the complexity of adjustment arrangements.
5.6
Cost-benefit summary
The very short time period available for the Department to develop the Package,
combined with the paucity of economic and social baseline data and socio-economic
assessments of the impacts of the Zoning Plan, prevented quantitative cost-benefit
analysis of alternative adjustment approaches prior to announcement of the Package.
Thus, the Package had no detailed plan for how sectors could or should be adjusted to
maximise benefit. Restructuring without a structural adjustment plan appears to have
eroded long-term adjustment benefits, a shortcoming compounded by investment into
marginal or even unviable businesses.
The relatively small expenditure on buying out fishing licenses did reduce impacts of
displaced effort, particularly in the coral trout/reef line fishery and some parts of the
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
trawl fishery. Taking into account the multiple pressures on the fishing industry, and the
particular impact of the Zoning Plan on fishers in the southern GBR, the Review
concludes that greater ecological benefits and a more economically sustainable GBR
fishing sector could have been achieved if licence buyouts had been a higher priority
within the Package.
The responsiveness of Government to the claims and needs of businesses led to many
changes in the scope of, and approaches to, adjustment. In lieu of either an adjustment
plan or a quantitative basis for evaluation of the claims of impact, the Department was
left with the difficult task of developing least-cost approaches to adjusting a diverse
range of businesses.
The adoption within the FBRA component of uncapped support for restructuring of
individual business, rather than the alternative of capped compensation for impacts, was
at best a risky approach to maximising benefit to cost outcomes. The diverse range of
shore-based businesses seeking support, and the complexity of the approaches used
opened the system up to gaming, and in the end the move towards payments in
multiples provided little guarantee of value for money. The lack of accountability for
adjustment expenditure against these multiples was also cause for concern. Five years
after the announcement of the Package, there is little in the way of quantitative
assessment of socioeconomic benefits, for any sector.
The majority of stakeholders interviewed believe the structural adjustment funds could
have been used to greater effect for local and regional economies. Many factors outside
the control of the Department contributed to dissatisfaction of stakeholders with the
Package, and it is important to recognise this in evaluating the comments received during
this review. However, the consistency of stakeholder commentary regarding unrealised
benefits is persuasive. Seeking the views of businesses on the best ways to maximise
benefits flowing from adjustment packages to local and regional economies – as distinct
from individual businesses – is recommended in future reserve planning.
In many respects, the Package represented a transaction cost against the expected
ecological benefits of the 2004 Great Barrier Reef Marine Park Zoning Plan. Having
invested $209 million in structural adjustment, there is as yet relatively little data
regarding the impacts of the rezoning on the GBR. However, early indicators appear to
be positive.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
6
Part D: Comparison of the GBRMP Structural Adjustment
Package with the Commonwealth South-east Marine
Region structural adjustment process
In 2005, the Department undertook an internal review of the GBRMP zoning process and
the first 18 months of the Package, in preparation for its development of a national
representative system of marine protected areas (NRSMPA). The lessons learned from
these two largely independent processes were then taken into the development of the
first marine reserve network, in the South-east Marine Region (SEMR).
The displaced effort adjustment package for the SEMR reserves was a relatively small
component of a $220 million 'Securing our Fishing Future (SOFF)' package, announced by
the Commonwealth Government in November 2005. The SOFF Package was designed to
deliver profitable and sustainable Commonwealth fisheries for the future and was the
most significant financial contribution to the Australian fishing industry ever made by the
Australian Government.
The SOFF Package included three key features:

The Australian Fisheries Management Authority introduced new fisheries
management actions to ensure that Commonwealth-managed fisheries remained
sustainable.

DAFF developed policy and administered the $220 million fisheries structural
adjustment package. This included elements such as business exit assistance,
business advice assistance, assistance for skippers and crew, onshore business
assistance, fishing community assistance and an AFMA levy subsidy.

The network of marine protected areas (MPAs) was created in the South-east
Marine Region to protect marine biodiversity.
Although the GBRMP and SEMR/SOFF structural adjustment packages were similar in
many respects, there were key differences: the context/situation in which they were
employed; their purpose, design and implementation; their guidelines for providing
financial assistance; and their outcomes.
This chapter compares the GBRMP Package and SEMR structural adjustment process,
with a view to examining the advances made in, and performance of, the latter. These
findings then feed into this review’s recommendations on policy considerations and
approaches to structural adjustment associated with establishment of marine reserves
(Part E below).
6.1
Conservation objectives and the contexts for
adjustment
The primary fisheries objectives of the SOFF Package were enhanced sustainability and
profitability of Commonwealth-managed fisheries, and in the end this involved targeted
reduction of overcapacity in three large Commonwealth fisheries: the Northern Prawn
Fishery (NPF), the East Coast Tuna and Billfish Fishery (ETBF) and the South East
Scalefish and Shark Fishery (SESSF).
The SEMR stretches from the far south coast of New South Wales, around Tasmania and
Victoria and west to Kangaroo Island off South Australia, an area that overlaps with SETF
and ETBF, and potentially a number of state-managed fisheries.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
The conservation objectives for the GBRMP and SEMR were broadly similar. Both sought
to protect biodiversity in a comprehensive and representative manner, and to provide
adequate spatial coverage to ensure effectiveness of the protection being afforded
species, communities and ecosystems. In practice, however, there were very significant
differences in the way GBRMPA and the Department met these objectives, and these had
significant flow-on effects for the adjustment needs.
The GBRMP Zoning Plan followed closely a set of biophysical operating principles (BOPs)
designed to achieve specific levels of protection for all bioregions, along the entire
GBRMP, and at fine scales. These principles left comparatively little room to negotiate
with impacted fishers or to relax representational objectives by moving boundaries.
The GBRMP Zoning Plan encompassed extensive areas of inshore and coastal habitat in
which commercial, charter and recreational fishing effort was high. Thus, the
displacement impact of the zoning, in particular the 33 per cent of the marine park
designated as no-take zones, was significant. The lack of a strategy to harmonise GBRMP
zoning with parallel Queensland state fisheries management and coastal marine park
declarations further impacted on stakeholders. The state decision to force autonomous
adjustment fuelled discontent towards the Commonwealth. Finally, there was inadequate
consideration of the needs for and likely level of structural adjustment required as a
result of the GBRMP Zoning Plan.
The SEMR reserve network was developed following an assessment of the conservation
values of the SEMR, and taking into account the existing and projected resource use
within the region. The definition of habitats was made at a relatively coarse level
compared to that used in the GBRMP, and the Department was not constrained by
targets for individual habitat protection (i.e. they were able to make calls on which
habitats may have more or less protection). The Government released the proposed
system of SEMR reserves for public comment in December 2005 and received a number
of submissions from industry, conservation groups, scientists and members of the
community. The Government made around 20 changes to boundaries and zoning based
on stakeholder inputs. The changes produced a reserve network that was both larger and
more representative of the region than that originally proposed, and one that had far less
impact on industry.
The result of this iterative and relatively unconstrained process was a network covering
226,458 square kilometres of representative examples of the diverse seafloor features
and associated habitats found in the region. All are within Commonwealth waters.
Although some are located on, and others extend onto, the continental shelf, the
majority of habitats protected by SEMR MPAs are in shelf-slope or abyssal depths where
historically there has been little commercial fishing and no recreational fishing. Thus, the
impact of the MPAs on fishers was minimal. In those deep waters where trawling had
occurred, a management measure introduced by AFMA as part of the SOFF banned
demersal trawling at depths greater than 700 metres. This assisted the acceptance of the
proposed MPAs.
Having reviewed the GBRMP Zoning Plan and Package, the Department’s approach to
establishing the SEMR MPAs was to use broad consultation, remain flexible and seek
agreement on areas to be protected and, wherever possible, accommodate options that
minimised impacts on the commercial fishing industry (and other stakeholders) while
maintaining key conservation objectives. As a result, the SEMR reserve network was far
less contentious than the GBRMP Zoning Plan. The Department also recognised the need
for integration of reserve planning and evaluation of structural adjustment needs –
effectively determining tradeoffs that could achieve the most, at least cost. They worked
with DAFF and AFMA to harmonise measures across the SOFF Package (such as the deep
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
water trawling ban). As a result, conservation objectives were achieved for a relatively
low cost22. There was criticism from some stakeholders that this more flexible process
had resulted in lower-than-optimal representation of continental shelf habitats where
fishing and/or oil and gas exploration existed or was planned. However, it is clear that
the approach taken was much more successful in achieving community buy-in than that
used in the GBRMP.
6.2
Design and adjustment processes
The design and program management of the GBRMP Package are described in Part B of
this review. The Department took the following key lessons from this Package into the
development and implementation of the SOFF/SEMR structural adjustment package:

The pitfalls of short timelines for design and implementation.

The largely uncontrolled scope and budget creep.

Inadequate focus
stakeholder buy-in.

The drawbacks of third-party contractors in the delivery of such a complex
Commonwealth program.

The advantages
businesses.
on
of
a
consultation,
capped,
expectation
competition-based
management
program
for
and
getting
land-based
Thus, the SOFF/SEMR reserve network and associated adjustment package were
developed through extensive consultation with stakeholders and with close industry
involvement. A consultant with credibility in the south-east Australian fishing industry
was hired to facilitate discussions between the Department and industry. Sufficient time
was allowed for consultation during key phases of the process and this time was factored
into schedules. This ensured that a fully formed package was released and there was no
requirement for major revisions or additions.
There were a number of factors that made the climate for consultation with industry less
challenging within the SOFF than with the GBR:

The need for industry restructuring through reduction of overcapacity was
recognised by both industry and government in the SOFF negotiations, and thus
where adjustment also served conservation objectives, agreement on levels and the
nature of adjustment were relatively straightforward. In contrast, the GBRMP
Zoning Plan was seen as an imposition, forced with inadequate consultation and
negotiation.

The Government made a large up-front financial commitment to the SOFF
adjustments, allowing industry to feel confident that adequate adjustment
compensation was available without protracted debate. In the GBRMP, the funding
available for adjustment was more limited, and in the eyes of the fishing industry
provided inadequate compensation for the impacts they had suffered.

The SOFF consultation with stakeholders was run from the DAFF portfolio, with
support from AFMA. Their longstanding and close links with industry undoubtedly
22
The proportion of the licence buyout and other financial assistance this was directed toward SEMR adjustment
is not publicly available; however the Review understands that this amounted to approximately $20 million or
10% of the SOFF.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
built trust in the process. The GBRMP consultation process, run by the GBRMPA with
minimal input from the Department, resulted in significant animosity regarding the
rezoning, and distrust towards the Commonwealth Government from a large
majority of the fishing and shore-based industries.

The SOFF adjustment involved a relatively small number of larger and more
commercially sophisticated stakeholders than the GBRMP adjustment.
The outcome was that industry supported the buy-out component of the SOFF Package at
the outset; stakeholders (individuals and industry bodies) were engaged and accepting of
process, had clear expectations on what the package was to deliver, and consequently
there was relatively little criticism during its implementation. This is less-the-case for the
land based business adjustment, where this Review understands there has been a
significant level of criticism from businesses towards the DAFF approach.
In contrast, industry support for the GBRMP Zoning Plan was minimal, and criticism of
the GBRMP Package was loud and well organised. The inherent distrust and antagonism
made development and implementation of the GBRMP Package a fraught process from
the very start.
6.3
Package components
Both the SEMR and GBRMP adjustment packages included a licence buyback and sought
to respond to flow-on effects by providing adjustment assistance to onshore businesses,
fishing industry employees, and communities impacted by the buyout. A summary of the
SOFF Package is provided in
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Table 9,
and a comparison of key elements of both packages in Table 10.
The primary focus within the SEMR adjustment was on the licence buyback which
accounted for 68 per cent of expenditure, while onshore business exit and adjustment
assistance took 14 per cent, and community assistance 9 per cent. Expenditure on each
of these components was capped.
Within the GBRMP Package, over 80 per cent of package expenditure was on the
adjustment assistance and 16 per cent on the licence buyback. While the licence buyback
cost was capped, the major component of expenditure, business restructuring assistance,
was not.
There were differences in the licence buyback components of the two packages: in the
SEMR this involved a two-stage buyback, allowing operators a second chance to apply,
and preferential treatment was given to operators more significantly impacted by
closures or management changes. These factors assisted in addressing equity concerns;
in the GBRMP Package a single stage buyback process and relatively short time lines
meant operators were faced with the one-off choice between exit and adjustment, with
no clarity on the quanta of either.
The onshore business exit assistance and development assistance provided under the
SOFF Package were provided to operations most directly linked to the fishing industry
rather than broadly in the case of the GBRMP Package. These offsetting payments were
capped and competitive, a consideration made given the primary purpose of the SOFF
was fishing industry adjustment.
This Review understands that the SOFF has had significant issues with the administration
of the industry and community assistance programs of the package. An ANAO report 23 on
the SOFF noted “DAFF effectively established the programs and gave potential applicants
the opportunity and information necessary to apply for assistance. DAFF developed
appropriate program guidelines and a sound framework to assess and approve the
applications received for the three programs. However, in practice, the department’s
documented processes and procedures were not followed during the assessment process
and when recommending applications to the decision makers”
This component of the package is yet to be completed, more than two years after the
buy-back component was finalized.
Another issue with the SOFF was that adjustment to State fisheries was not considered
and therefore any impact (however small) on these fisheries was not managed. I
understand that this is still an issue for some State-based fishers.
23
Administration of the Securing our Fishing Future Structural Adjustment Package Assistance Programs
(http://www.anao.gov.au/director/publications/auditreports/20082009.cfm?item_id=66F1A7791560A6E8AABE7C127C928F24#7FC1C4281560A6E8AAB2152C884132E8)
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Table 9: SOFF Package components and costs
6.4
Fishing Concession Buyback (Business Exit Assistance) $149m
A one-off, voluntary tender process to encourage individual fishing businesses to exit the industry.
A competitive process with a capped budget to reduce excess fishing capacity in those fisheries
that are either subject to overfishing, or are assessed as being at significant risk of future
overfishing due to excess capacity.
While licence holders in all Commonwealth-only fisheries (except the southern blue fin tuna fishery
which is internationally managed) were able to tender, the main target fisheries were:



the Southern and Eastern Scalefish and Shark Fishery (excluding the Great Australian Bight
Fishery, which is not subject to overfishing);
the Eastern Tuna and Billfish Fishery; and
the Bass Strait Central Zone Scallop Fishery.
Funding was set aside to assist the Northern Prawn Fishery with a transition to a management
system based on output controls should the industry choose to do so. Commonwealth and State
fishers affected by the declaration of Marine Protected Areas in the South East marine region were
also be eligible for business exit assistance.
Onshore and Related Assistance Programme - $30m
Up to $30m available for assistance measures including:



grants to help restructure businesses directly related to the fishing industry (e.g. marine
suppliers, fish processors and ship chandlers) who are severely impacted by the reduction
in fishing activity.
Grants of $5,000 and $3,000 each will be paid to skippers and crew respectively who lose
employment due to the fishing reductions to help offset the costs of job seeking, retraining
and/or relocation.
Up to $1,500 each will be available to fishing businesses and directly affected onshore
businesses to offset the costs of obtaining professional business advice on their best
options.
Fishing Communities Programme - $20m
Up to $20m for a grants programme to work with local business partners to fund projects capable
of generating local economic activity and opportunities in communities that have been affected by
the reduction in fishing activity.
AFMA Levy Subsidy - $21m
For those remaining in the industry, a $15 million subsidy for AFMA fisheries management fees
brought in for 3 years on a reducing scale, commencing 2006-07. A further $6 million directed
towards improved science, compliance and data collection to ensure improved management
outcomes.
GRAND TOTAL - $220m
Source: 2006 Ministerial media release
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Table 10: Comparison GBR and SOFF structural adjustment packages
Component /
features
GBRMP structural adjustment
package
SOFF structural adjustment
package
Policy
objective(s)
Structural adjustment was
provided in relation to the GBRMP
Zoning Plan recognising industry
and community regarding impacts
of the Zoning Plan and other
factors.
Structural adjustment was part of an
integrated package focused primarily
on reducing overcapacity in the fishing
industry and to a lesser extent assist
fishers to adjust to impacts of an MPA
network.
Cost
$214 million
(June 2010)
$220 million budget
Capped
no
yes
Balance of
expenditure between
package components
licence buyout 16%, business
restructuring assistance 82%,
community assistance 2%
licence buyout 68%, onshore
assistance 14%, community assistance
9%
Approach to and cost
of business exit –
licence buyout
(fishing)
Tender for licence buyout and
may be eligible for FRBEA
Tender for concession buyback and
may be eligible for onshore exit
assistance
Business exit (shorebased business)
Yes – uncapped total and
individual payments
Yes – but capped total and individual
payments
Business
restructuring
assistance
Quantum of payment was initially
capped at $200,000 later
$500,000 and later uncapped;
broad eligibility
Capped costs and limited eligibility
Business
restructuring
assistance (fishing)
Yes – or uncapped
No
Business
restructuring
assistance (related
businesses)
Yes – all businesses and any
degree of adverse impact
Yes – significantly impacted
businesses may compete for
assistance to strengthen the onshore
sector
Simplified BRA
Not available initially, but in
revised package, capped at
$50,000
Not available
Charter fishing
Yes
No
Recreational fishing
Yes
No
24
$32.9 million to 122 operators in
single-stage buyout
$149 million to 550 operators in a
two-stage buyout24
Source: DAFF annual report 2006–07
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Component /
features
GBRMP structural adjustment
package
SOFF structural adjustment
package
Significant impact
test
Generally no
Community
assistance
Yes
Employee assistance
$3000 crew; $5000 masters
Yes
Business advice
assistance
$1000*
$1500
Difficult
circumstances
payment
Yes – 20% top-up
No

Yes for onshore business assistance;
any business can tender a fishing
concession
Yes
Further advice assistance paid to applicants when successful.
6.5
Outcomes
In the case of the SOFF Package, the Government was able to deliver a structural
adjustment package with greater certainly, on time, to budget and with relatively little
adverse stakeholder comment.
More favourable outcomes in the SEMR resulted because:

An integrated package was developed that addressed fisheries sustainability and
industry viability together with the displacement of effort from a marine protected
area network.

The MPA network in the SEMR had less impact on industry and was less contentious
than in the GBRMP.

Expenditure was focused on reducing overcapacity through the buyback, rather
than on business restructuring assistance.

Agencies engaged with industry to develop an overall package that was acceptable
to industry and was in fact in industry’s best interests.

Sufficient time was available to ensure that the package was fully formed.

Expenditure on package components was capped and the budget estimates proved
reliable.

The licence buyout comprised two phases and gave preferential treatment to fishers
incurring a greater level of impact.

There did not appear to be issues around the adequacy of economic and social
assessment or around data reliability.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
7
Part E: Policy considerations and recommendations for
future structural adjustment packages
7.1
Policy considerations
Following an agreement on the need for a comprehensive, adequate and representative
system of protected areas covering Australia's exclusive economic zone, Australia’s
governments have committed to developing a national representative system of marine
protected areas (NRSMPA) throughout our entire marine jurisdiction by 2012.
As part of its marine bioregional planning, the Commonwealth Department of
Environment, Water, Heritage and the Arts is now developing a draft network of
proposed marine reserves for each of Australia’s marine bioregions.
The Department is concurrently reviewing the policy settings for structural adjustment of
industries impacted by establishment of marine reserves. Their intent is to build on the
Marine Protected Areas and Displaced Fishing: A Policy Statement 25 .
An expected outcome of this review is an updated Australian Government policy on
addressing the impacts on commercial activities displaced by the creation of
Commonwealth marine reserves.
The recommendations below take into account the lessons learned from the GBRMP
Package, analysis of the literature and discussions with a number of people involved in
recent development of structural adjustment programs involving the fishing industry.
7.2
Recommendations relating to marine reserve structural
adjustment policy
First, it is important to emphasise that while the Package had many detractors, and
indeed this review has found significant room for improvement in the design and
implementation of structural adjustment programs for fishing and related industries, the
guiding policy of the Package – the 2004 Marine Protected Areas and Displaced Fishing: A
Policy Statement – provides an excellent foundation on which to build a more
comprehensive marine reserves compensation or structural adjustment policy. Many of
the clear statements of intent and directives within the 2004 policy statement were only
partially implemented due to the very short lead time involved in the GBRMP Package,
with significant negative consequences.
The significant and uncapped cost, changes to and complexity of the package
components and processes, stakeholder dissatisfaction (setting aside the benefits of the
Zoning Plan) and questionable structural adjustment outcomes of the Package suggest
the need for an improved approach to adjustment associated with displaced effort in the
future.
A large number of lessons have been learned from the GBR experience: those most
relevant to policy amendments are:
25
Marine Protected Areas and Displaced Fishing: A Policy Statement, Australian Government, January 2004,
<http://www.environment.gov.au/coasts/mpa/publications/displaced-fishing.html>, accessed
9 July 2008.
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1. Without a well-defined set of structural adjustment or compensation package
guidelines and boundary conditions (e.g. what elements of the affected industry
and associated up- and down-stream industries will and won’t be considered;
whether or not compensation will be capped; how individual businesses will be
evaluated), there is increased probability of “gaming”, “special circumstances”
pleading and associated political influence, scope creep, cost overruns and
stakeholder dissatisfaction.
2. Without enough time to adapt a policy or set of guidelines to the specific
circumstances of each marine protected area displacement (including time to
collect and analyse required bio-socio-economic data and consult with
stakeholders), the likelihood of the program meeting its objectives is significantly
decreased.
3. Fishers, particularly smaller owner-operators, found the complexity of the
Departmental processes difficult – in particular with regard the documentation
requirements, but also because of their inherent lack of familiarity with such
processes. Business advisors were thus required, and a not-insignificant
proportion of the Package benefit went to these advisors rather than those for
whom the Package was developed.
4. The inclusion of up- and down- stream industries within a structural adjustment
process increases complexity. In general terms, one can expect that the further
up- or down- stream a business is from the displaced fishing industry, the smaller
the impact of displacement will be on the viability of that business. As a result,
the ability of the business to autonomously adjust/adapt is greater than those that
are more closely reliant on fishers and fish products. The experience with this
Package was that the further a business was from the fishing industry, the more
difficult it became to quantify the impact and estimate the need/quantum of
compensation.
5. There was a fundamental mismatch between stakeholder desires and expectations
for adequate (and timely) financial compensation for impacts of the rezoning,
and the Department’s approach to implementation of the Displaced Fishing Policy
which for some components required complex evaluation of structural adjustment
entitlements of individual businesses. The mismatch and associated dissatisfaction
created an adversarial environment for development and implementation of the
Package. This could have been avoided by simplifying the process.
6. The lack of due and timely consideration of the requirement for, and design of, an
adjustment program associated with the GBRMP Rezoning provides a salutary
lesson around the need for integration of processes involved in marine park
design and implementation and those of adjustment planning and
implementation. Assuming that adjustment will remain a tenant of Commonwealth
Marine Protected Area implementation, these should be considered components of
one process.
7. Despite the Department’s best efforts to run the Package on a least-cost basis, the
very significant expenditure suggests that future adjustments should not be
conducted without adequate estimation of the economic impacts of fishing
displacement, or be offered on an uncapped basis.
Given these lessons, the following are recommended for consideration in an amended
Displaced Fishing Effort Policy:
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
1. To avoid the necessity for each package to be designed from the bottom-up, and
the risks associated with special circumstances cases driving repeated amendment
(and growth) in adjustment package, we recommend that a displaced fishing policy
should be supported by delegated legislation. This would allow core/higher level
components of adjustment packages to be set. The legislation would preferably set
out a “tool box” of secondary adjustment measures that could be implemented as
required. A useful example of this approach can be seen in Commonwealth Fishery
Management Plans for fisheries in which statutory fishing rights are established.
We accept that this will take significant effort (including wide consultation), and
open the Department to the potential for challenges in the Administrative Appeals
Tribunal. However, we see significant benefit in broad stakeholder engagement in
setting up the delegated legislation, and in providing a strong design framework
for this critical component of the Commonwealth’s National Representative System
of Marine Protected Areas.
2.
3.
The amount of money and assistance set aside for compensation and/or
adjustment should be capped. The cap should be commensurate with the projected
impact of conservation measures on the fishing and related downstream industries.
Adjustment should primarily focus on impacts on the fishing industry.
4.
With certain provisos regarding pre-existing fishery management arrangements
(see section 7.3 below), the most cost-effective adjustment approach for the fishing
industry is reduction of fishing through vessel/effort unit/quota buyout. A two-stage
tender process is recommended.
5.
There should also be some consideration of compensation of first-order downstream
industries (e.g. processors/fish wholesalers), as these are commonly local
businesses solely or heavily reliant on the product of local fishers. We recognize
that these businesses will not satisfy the requirements for dispossession under just
terms compensation. However, there likelihood of significant impact provides an
argument for consideration.
6.
For first-order down-stream businesses, where economic analysis at the local
and/or regional scale suggests fishing sector downsizing will have very significant
impacts on viability, consideration of one, or a combination, of the following two
approaches is recommended:
a.
Tendered buyout proportional to the assessed impact
b.
A formula-based, single compensation payment to all operators in those
sectors, based on proportional assessed impact. The compensation should
take into account a reasonable period for business adjustment, but certainly
not account for ‘lifetime’ impact.
9.
For other land-based businesses (second- and third-order up- and downstream and all upstream) operating where fishing is a minor component of the
regional economy., autonomous adjustment is recommended. This is in part
recognition of the likely positive impacts of marine reserves on increased
conservation-based tourism, and in part the inherent autonomous adjustment
potential of these businesses.
10.
For land-based businesses where fishing is a more significant component of
the regional economy, funding directed towards regional assistance programs
targeting affected towns/communities is recommended. The lessons learned from
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
this Package and SOFF regarding community/regional assistance should be taken
into account in the design of any future program.
7.3
Recommendations relating to structural adjustment
program design and implementation.
Drawing on the lessons from the GBRMP Package, and those conducted in the South East
Region Marine Reserves development, in the context of the future development of
structural adjustment programs, through the relevant agencies, the Government should:
Before adjustment is considered and announced
1. Ensure that a comprehensive assessment of economic and social impacts of
closures on the relevant industries and regions is undertaken before developing
the structural adjustment/compensation package. This must include
consideration of potential displaced fishing effort on particular regions. The
impact assessment should be done on a consultative basis with industry and
other affected stakeholders.
2. Integrating the desired conservation goals with the impact assessment, define the
extent of change to be achieved in the fishery and design the buyout and/or
restructuring packages in a way which will achieve the change objectives for the
fishery.
3. Determine the adjustment requirements to ensure that these adequately take into
account the extent and productivity of marine reserve areas and the likely
impacts of any displaced fishing.
4. Seek to harmonise, as far as possible, restructuring of a fishery with relevant state
government fisheries management policies and programs. In this regard,
buyouts and adjustment of fishing fleet size and potential effective effort where
there are not adequate fishery management measures to prevent activation of
latent effort and increased competition for decreased resource access, should be
avoided.
Once agreement is reached that an adjustment package is required
5. Define the scope, objectives and components of the structural adjustment
(including buyout) package in detail and consult with all relevant industry and
government stakeholders to test its efficacy before it is announced.
6. Ensure that a comprehensive stakeholder engagement and management strategy is
developed which identifies the key stakeholders and their interests, the
Government’s objectives for stakeholder management in respect of each of the
key stakeholders and the approaches to be followed in dealing with each of the
key stakeholders during both the design and implementation phases, including
how expectations are to be managed by the Government.
7. Consider the engagement of a skilled and experienced independent facilitator, with
credibility with industry and government, to work within industry and government
agencies in the design and implementation of structural adjustment packages.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
8. Ensure that adequate resources, commensurate with the size of the Program, are
provided for stakeholder engagement and management during the design and
development of the Program and in the implementation of the Program.
9. Ensure that adequate time to consult and engage with stakeholders is factored into
program planning and design.
10. Seek to optimise accessibility and minimise the application costs for applicants
and facilitate the provision of timely assistance to applicants.
11. Ensure that information about the packages is written and presented in a way that
will be understood by industry participants. Information should be thoroughly
tested with industry representatives and operators before it is used.
12. Provide adequate levels of advice and assistance to industry participants to enable
them to understand the implications of the packages and facilitate their making
appropriate decisions about the packages for themselves.
13. Consider establishing a panel of qualified business advisers to assist affected
individuals or businesses with the preparation of applications for structural
adjustment assistance.
14. Consult and involve the Program implementers in the development of the design
of the package as soon as possible and well before the Government makes and
announces decisions about the design and scope of the package.
15. Consult with other agencies which have experience in the development and
management of structural adjustment packages and feed this knowledge into the
design of the package being developed.
Once an adjustment package has begun
16. Once a package has been developed and announced, minimise, as far as possible,
changes to the scope, contents or assessment criteria of the package. Where
changes are necessary, consideration should be given to retrospectively applying
the new conditions to finalised claims.
7.4
Recommendations relating to program management
The Government, through the relevant agencies, should:
1. Allow adequate time for industry to assess the impacts on their businesses of any
closures and consider staged assistance to ensure that affected individuals and
businesses receive some assistance once the restructuring of the fishery takes
place, and to ensure that businesses are not disadvantaged by lengthy
assessment of their claims for assistance.
2. Adopt efficient assessment and review process design arrangements that minimise
the amount of re-working of assessments.
3. Set customer service standards for the assessment and approval of applications,
including time-related targets for the assessment and finalisation of claims, and
monitor and assess performance against these standards.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
4. Measure customer satisfaction progressively as the Program is implemented and
delivered and use the results to assist with the delivery and management of the
Program, including the management of any third-party service provider engaged
to assess claims for assistance.
5. Establish a case management approach to the handling of applicants for assistance,
involving the allocation of a nominated case officer to each application providing
their contact details to the applicant. Case managers should be required to meet
appropriate case management standards and their performance against these
standards should be monitored regularly.
6. Ensure that there are appropriate arrangements in place to facilitate locally affected
individuals and businesses to make face-to-face contact with representatives of
the assessing agency.
7.5
Knowledge management
The experience and knowledge derived from the GBRMP Structural Adjustment Program,
and more recent programs involving structural adjustment (e.g., SEMR Adjustment
within the SOFF; Queensland Government Moreton Bay Structural Adjustment) provide a
significant body of experience covering better practice approaches that could be adopted
for future SAP design, planning and implementation.
The Government should ensure that the lessons learned from these programs are
codified through the development and publication of program design, implementation and
management guidelines for structural adjustment packages. This will enable the
management and staff of relevant agencies to follow better practice in the design,
implementation and management of such programs in the future and benefit from the
lessons associated with GBRMP Structural Adjustment Package. This guide should build
on the work already undertaken by ANAO and the Department of Prime Minister and
Cabinet in their publication Implementation of Programme and Policy Initiatives: Making
Implementation Matter.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Appendices
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Appendix A – Terms of reference
Introduction
Rezoning of the Great Barrier Reef Marine Park (the GBRMP) came into effect on 1 July
2004. The Australian Government has provided a Structural Adjustment Package (GBRMP
SAP) with the objectives to:
1.
assist fishers, fishery-related businesses, employees and communities adversely
affected by the rezoning, and
2.
manage in the most cost-effective manner any displaced fishing effort that has
unsustainable ecological or economic impacts.
There are five key elements of the Package:


Exit assistance

Fishing business exit (licensed buyout) assistance

Fishery-related business exit assistance (FRBEA)
Business restructuring assistance

Simplified business restructuring assistance (SBRA)

Full business restructuring assistance (FBRA)

Employee assistance

Business advice assistance

Social and community assistance

Counselling service

Regional Partnerships Program projects.
Condition 4.2(n) of the GBRMP SAP – October 2004 Amended Information Package and
Request For Offer Guidelines, states that:
‘The Australian Government will review the Licence Buy Out process at its conclusion to
determine its effectiveness in meeting the Package objectives.’
The Australian Government has undertaken an independent and comprehensive review of
the licence buyout process to determine its effectiveness in contributing to Package
objectives. The final report is available at (http://draft.environment.gov.au/
coasts/publications/gbrmp-adjustment-package.html). No further review of the licence
buyout component is proposed but a licence buyout review may inform the current
review of the Package as a whole.
In September 2007 the then Minister for Finance and Administration proposed that the
Package be subject to an ex-post review of the cost-effectiveness of the various elements
as a basis for guiding future policy development. The then Minister proposed that there
be a full independent review of the GBRMP SAP, commencing in early 2008.
The Review should focus on the major financial expenditure components of the Package,
being the business restructuring assistance components (full and simplified) and the
fishery-related business exit assistance components of the Package.
0
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Review outcomes
The Review will consider the extent to which the Package has met its objectives. In
particular, the Review will consider:
1. The extent to which the Package has met the needs of different sectors, and in
particular, commercial fishing industry sectors, recreational fishing and charter
operators, land-based fish processing and marketing businesses and land-based
service businesses.
2. The level of funds provided for adjustment assistance and why the cost of the
Program increased to the extent that it did over the life of the Package. Was the
Package cost-effective and could alternative approaches have achieved similar or
improved results?
3. Whether regional restructure requirements and fishing displacement caused by
rezoning were adequately addressed.
4. Whether the Package was adequately communicated to those impacted and
whether those who warranted assistance were provided with sufficient information
and support to pursue their entitlements under the Program.
5. Whether the Package was equitable in terms of the assistance provided to
recipients under different components and also to different recipients within the
same component. Did recipients in similar circumstances receive similar levels of
adjustment assistance?
6. Whether the time provided for applications to be lodged and the time to deliver
adjustment assistance was appropriate. Were there better ways to administer and
deliver the Package? Were applicants adversely affected by modifications to the
Package over time?
7. Whether the information and databases available at the time were sufficient for
delivery of the Package. To what extent did the availability, reliability and
accuracy of information affect the ability to deliver the Package?
8. Whether the employee assistance, community assistance and the Regional
Partnerships components of the Package were appropriate and well targeted.
9. Lessons for the design of other Australian Government structural adjustment
packages, and particularly those relating to Marine Protected Areas. Have other
adjustment packages learned from the GBRMPSAP experience?
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Appendix B – Stakeholders interviewed during the Review
Person
Position
Organisation
Representatives of the Department of Environment, Water, Heritage
and the Arts
David Borthwick
Secretary
DEWHA
Donna Petrachenko
First Assistant Secretary
DEWHA
Dr Diana Wright
First Assistant Secretary
DEWHA
Stephen Oxley
Assistant Secretary
DEWHA
Ian Cresswell
Assistant Secretary
DEWHA
Tony Bigwood
Director
DEWHA
Steve Jackson
Acting Director
DEWHA
Andrew Coleman
Assistant Director
DEWHA
Geoff Rohan
Assistant Director
DEWHA
Tania Rishniw
Assistant Secretary
DEWHA
Renee Alderson
Acting Assistant Director
DEWHA
Representatives of other Commonwealth and Queensland Government
Agencies
Dr Conall O’Connell
Secretary
Department of
Agriculture Fisheries and
Forestry
Mark Doohan
Queensland Department
of Primary Industry
Jim Fitzgerald
Queensland Department
of Primary Industry
Jim Higgs
Queensland
Environmental
Protection Agency
Colin Holden
Rodney Hallam
Chief Executive
Queensland Rural
Adjustment Authority
Queensland Rural
Adjustment Authority
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Person
Position
Organisation
Grant Hall
General Manager
Fisheries
Queensland Department
of Primary Industry
James Larcombe
Bureau of Rural
Sciences
John Talbot
Department of
Agriculture, Fisheries
and Forestry
Representatives of Industry Organisations
Col Bishop
Ted Loveday
Queensland Seafood
Association
Managing Director
Queensland Seafood
Association
Barry Pollock
Sunfish
David Bateman
Sunfish
Martin Perkins
Executive Officer
Queensland Seafood
Marketers Association
David Windsor
Executive Director
Australian Marine Park
Tourism Operators
Bradley Hellem
Pilot Partners
Individuals and Businesses from Cairns, Townsville, Bowen, Mackay,
Gladstone and Bundaberg who applied for and/or received assistance
under GBRMP SAP
Don Gilson
Bundaberg
Peter Loveday
Bundaberg
Sid McKeon
FishMac Bundaberg
Paul Farmer
Urangan Fisheries
Bundaberg
Seth Parker
ASP Holdings,
Bundaberg
Graham Lucke
Bundaberg Electronics
Bundaberg
Don Robertson
Bundaberg
Tony Baker
Quicksilver Cairns
3
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Person
Position
Organisation
Wayne Bayne
Mitchells Marine Cairns
Peter Todd
Aqua Cat Charters
Cairns
David Greenwood
Solicitor
Greenwood Solicitors
Cairns
Roger Smith
Cairns
Greg Massey
Ben Lexen Marine Cairns
Leigh Pickering
Norships Marine Cairns
Lyle Squire Jnr
Cairns Marine Cairns
Graham Dean
Horizon Seafoods Cairns
Paul Goodall
Airsure Cairns
Bill Izard
Cairns
Kathleen Broderick
Great Barrier Reef
Marine Park Authority
Michael Kingswall
Townsville
Andrew and Renae
Tobin
Townsville
Townsville Fishermen
Group organised by
Terry Taylor
Townsville
Os Blacker
Kapercroft Pty Ltd
Gladstone
Michael Axford
Gladstone
Gary Grant
JilGild Pty Ltd Gladstone
Rob Houghton
Keencraft Pty Ltd
Gladstone
Neville and Stuart Wise
Gladstone
Dane King
Gladstone
Wayne and Leanne
Teakel
Bowen
R J Fellows
Bowen
O F Borlase
Bowen
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Person
Position
Organisation
Terence Must
Arabon Seafoods Bowen
Graham Caracciolo
Mackay Reef Fish
Supplies Mackay
DA and KA Pope
Mackay
Col Mitchell
Mackay
J Hicks
Mackay
J and PM Morgan
Mackay
AF Welk
Mackay
Chris Thompson
Law Essentials
Gladstone
Mellisanne Grey
Brisbane
Ken Atherton
Mackay
Ted Whittingham
Gladstone
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Appendix C – Survey instrument used during the Review
Independent Review of the Great Barrier Reef Marine
Park Structural Adjustment Package - stakeholder survey
Objectives of review
The Department of Environment, Water, Heritage, and the Arts (DEWHA) has established
an independent review of the Great Barrier Reef Marine Park Structural Adjustment
Package (GBRMPA SAP). The objectives of the Review are to:

Undertake an independent review of the GBRMPA SAP including the costeffectiveness of the various program elements, as a basis for guiding future policy
development; and

Make recommendations on how any future Structural Adjustment Packages within
Marine Protected Areas could be more effective, including by identifying alternative
approaches.
Review outcomes
The Review will consider the extent to which the Package has met its objectives. In
particular, the Review will consider:
1. The extent to which the Package has met the needs of different sectors, and in
particular, commercial fishing industry sectors, recreational fishing and charter
operators, land-based fish processing and marketing businesses and land-based
service businesses.
2. The level of funds provided for adjustment assistance and why the cost of the
Program increased to the extent that it did over the life of the Package. Was the
Package cost effective and could alternative approaches have achieved similar or
improved results?
3. Whether regional restructure requirements and fishing displacement caused by
rezoning were adequately addressed.
4. Whether the Package was adequately communicated to those impacted and
whether those who warranted assistance were provided with sufficient information
and support to pursue their entitlements under the Program.
5. Whether the Package was equitable in terms of the assistance provided to
recipients under different components and also to different recipients within the
same component. Did recipients in similar circumstances receive similar levels of
adjustment assistance?
6. Whether the time provided for applications to be lodged and the time to deliver
adjustment assistance was appropriate. Were there better ways to administer and
deliver the Package? Were applicants adversely affected by modifications to the
Package over time?
7. Whether the information and data bases available at the time were sufficient for
delivery of the Package. To what extent did the availability, reliability and
accuracy of information affect the ability to deliver the Package?
8. Whether the Employee Assistance, Community Assistance and the Regional
Partnerships components of the package were appropriate and well targeted.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
9. Lessons for the design of other Australian Government structural adjustment
packages, and particularly those relating to Marine Protected Areas. Have other
adjustment packages learned from the GBRMPSAP experience?
Scope of review
The Review of the GBRMPA SAP will address all aspects of the Package except the Fishing
Business Exit Assistance (FBEA) Licence Buyout process which has been the subject of a
separate review. The Review will take into account the results of that review.
The Review will address in particular:

Fishery-Related Business Exit Assistance (FRBEA), and

Business Restructuring Assistance
Restructuring Assistance.
including
Simplified
and
Full
Business
The Review will also consider whether the Package contained a suitably integrated set of
measures to achieve the overall objective. In this context the Review will also consider
other elements of the package, namely:

Business Advice Assistance

Employee Assistance

Community Assistance, and

The contribution of the Regional Partnerships Program (RPP)
Stakeholder survey
The Review Team will be undertaking a range of stakeholder consultations involving oneon-one and focus group discussions with stakeholders associated with the GBRMPA SAP.
It is recognised that not all potential stakeholders will be available to attend these
meetings and we have developed a questionnaire to enable as many stakeholders as
possible to provide their views to the Review Team
Thank you for participating in the stakeholder survey and making some of your valuable
time available to us. This survey is an important process for the GBRMPA SAP review.
The feedback you provide will help the Review Team to evaluate the success of the
Program and identify opportunities for improving the design and delivery of similar
programs in the future. Your individual responses will be kept confidential and will
not be used for any purpose other than the conduct of this review.
This survey will take approximately 15 minutes to complete and should be completed and
returned by …..date . For any queries related to completing this form please contact
(email address).
Date ……/………/…….
Type of organisation:
Please indicate what type of organisation you represent by ticking the
appropriate box:

Peak Body

Association

Company/Partnership

Individual
Other (please specify)
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Nature of Business:
Please indicate what type of business you operate by ticking the appropriate
box:

Commercial Fishing

Land-based Fish Processing

Recreational Fishing Operator

Charter Operator

Land-based Fish Marketing

Land-based Service Business – Not sure what this means – we may want
better granularity than this??

Tourist-related

Agricultural

Retailing

XXX
Other (please specify)…………………………………………………………………….
Staff Numbers / or Membership numbers: ()

Small (Under 25)

Medium (25-150?)

Large (150+)
Location:
Please specify where your organisation or business is located
……………………………………………..
Organisation/Company Name (optional) ……………………………………..
Which element of the GBRMPA SAP did your organisation/business access

Fishery Related Business Exit Assistance (FRBEA)

Simplified Business Restructuring Assistance

Full Business Restructuring Assistance

Social and Community Assistance – Counselling Service

Social and Community Assistance – Regional Partnerships Program
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Strongly
Agree
Agree
Unable to
answer
Disagree
In relation to each statement please tick the
box which most accurately describes your
assessment of the GBRMPA SAP
Strongly
Disagree
Statements about the operation of the GBRMPA
SAP
1. 1GBRMPA SAP met the needs of my
industry/organisation/business
2.
3.
GBRMPA SAP was cost effective in achieving its
objectives for my
industry/organisation/business
GBRMP SAP assistance was provided on an
equitable basis across my industry
4. 2Information on GBRMPA SAP and how to seek
5.
assistance was readily available to my
industry/ organisation/business
Information on GBRMPA SAP and how to seek
assistance was accurate and reliable
6. 3The information on GBRMPA SAP was easy to
understand and facilitated my
industry/organisation/business applying for
assistance
7. 4Assistance under GBRMPA SAP was provided in
a timely manner to my
industry/organisation/business
8. 5It was easy to track the progress of my
organisation’s application for assistance
9. 6GBRMPA SAP delivered real benefits to my
industry/organisation/business
10.7GBRMPA SAP delivered real benefits to the local
region
11.8Program delivery mechanisms for GBRMPA SAP
were effective and met my organisation’s needs
12.9Business advice assistance met my
organisation’s needs in terms of the money
offered and the quality of the advice provided
13.1The Employee Assistance component met the
0needs of employees
14.1The Employee Assistance component targeted
1the right people
15.1Community Advisory Services were adequate,
2accessible and pitched at the right level
16. Community Advisory Services were targeted at
the right people
17. Community Advisory Services met the needs of
those assisted
18. 1The Regional Partnership Program projects
were successful
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Strongly
Agree
Agree
Unable to
answer
Disagree
In relation to each statement please tick the
box which most accurately describes your
assessment of the GBRMPA SAP
Strongly
Disagree
Statements about the operation of the GBRMPA
SAP
19.1Regional Partnership Program projects
4effectively targeted the needs of the region
20.1GBRMPA SAP enabled my
5organisation/business to operate successfully
following the receipt of assistance
Other Comments
21.2 Are there any other comments you wish to make about the
1
GBRMPA SAP
22. In your opinion, could other approaches to providing assistance
been more effective in achieving the objectives of GBRMP SAP? If
yes, what other approaches could be used in the future?
23. What improvements, if any, would you make to any similar
program in the future, e.g., administration of the Program,
provision of information about the Program, timeliness of
decision making, etc?
Thank you for your views on GBRMP SAP and taking the time to
respond to this survey.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Appendix D – Detailed summary of stakeholder comments made in
response to the stakeholder survey
In addition to rating performance on a number of explicit package components, the
stakeholder survey allowed for additional comments:
Question 21: Are there other comments you wish to make about the GBRMPA
SAP?
This commentary is summarised below:
Impacts (of RAP / SAP)

Several respondents claimed that they or others were forced out of industry, the
industry was decimated, businesses were rendered unviable (both fishers and some
land based – processors) and that fishers lost their only means of making a living.

Several respondents claimed that they had seen major social impacts, stress on
families and relationships and on individuals.

SAP restructure was considered to be inadequate to compensate for impacts of RAP
closures. SAP did not provide enough benefit to enable the industry to cope.

Several respondents mentioned there had been adverse impacts on particular port
or home region, including reduction in numbers of boats and decline in port activity.

Several respondents claimed reductions in value of business, licence, quotas,
vessels, equipment, loss of business confidence – a commonly cited figure was the
reduction in value of licences to half.

Some respondents recognised that other factors have impacted on the region and
industry, particularly competition from imported seafood and rising fuel prices.

Several respondents mentioned that with people leaving the industry it has become
difficult to get experienced crew.

Several respondents believed that RAP had resulted in a loss of Australian export
capacity and that consumers will find it difficult to purchase local fish product.

It was claimed that RAP has closed the most productive areas, leading to
overfishing in some areas, due to displaced effort resulting in increased competition
between fishers.

Several respondents claimed that RAP has had impacts on fishing grounds beyond
the GBR.

In many cases respondents appeared to be referring to the RAP, SAP and other
fisheries management changes such as the Queensland Government’s trawl plan,
rather that to the SAP specifically.
Process

There was a general view that SAP has been handled poorly and many expressed
anger and disappointment with the Program and were highly critical of its
administration.
Timeliness

SAP took far too long, and there were unreasonable waits for assistance. The delay
in receiving funds reduced the value of the package to individuals and the
community. Some complained that no satisfactory explanations were given for
delays.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package

A number of respondents cited waits of two years (one up to four years), and some
respondents are still waiting for appeals and/or an original assessment.

The process was very time-consuming for applicants, and required a great deal of
data that may not have been necessary.

Complaints that the short timeframe available for applicants to respond or make
decisions was unreasonable and put pressure on applicants.

One respondent noted that keeping good records helped.
Consultation

There was a general view that there was little or no consultation with the fishing
industry while the RAP/SAP was being designed.

Industry knowledge and stewardship was not recognised or accounted for.

There were complaints that consultation on the Package and process once
announced was in ineffective and misleading.

There were complaints of misleading and wrong advice from the Program and from
government advisors.

There were complaints that people were advised to take the ‘quick 50’ by
government representatives including QRAA.
Information provided and transparency

There were complaints that the process was complicated and difficult to understand
and the information provided to explain it was difficult for the average person to
understand.

A number of respondents were not aware of or had incorrect understanding of the
Program components.

A number of respondents mentioned that it was difficult to understand who to talk
to or to find out what is happening or track progress with their applications. Some
respondents referred to not being aware of progress with their claims for a long
time.

The multiple assessing groups caused confusion and made it difficult to track where
applications were.

There were some complaints about the lack of competence and unhelpfulness of
agency staff and the difficulty of applicants had to contact them.
Logic/data/formulas

There was a perception of a lack transparency – in terms of how decisions were
made.

There was disagreement with the logic used to make decisions on eligibility and to
calculate payments, in particular that people processing applications lacked
understanding of the industry / businesses / the region.

There was concern that questionable data was used to make estimates of impact.
In particular, log book or VMS data were regarded as unreliable.

There were complaints about complicated
understand, and were not accepted as valid.
formulas,
that
were
difficult
to
Equity

There was a common view that changing guidelines/deadlines led to inequity
(shifting goal posts).
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package

Respondents considered that the Government aimed to minimise payments so the
process was biased against applicants.

There was a general view that RAP/SAP was unfair for smaller operators and those
lifestyle fishers and family businesses without technical expertise, those who were
unsophisticated or those who lacked ‘clout’ or inside knowledge.

The potential legal and financial costs of making a claim or appeal were a
disincentive to some smaller operators, and a cause of inequity.

There were complaints of poor treatment of owner operators and those with longterm service in industry compared with recent ‘investors’. It was claimed that
payments were made to the wrong people, not to long-term fishers

Some considered that recent investors including those who entered the industry
with investment warnings should not have received funds.

There was a common view that those who took the Quick 50 were ripped off. Some
disagreed that the Quick 50 should have been offered at all. Some considered it a
way for Government to avoid the more expensive FBRA.

There were complaints that similar businesses got very different outcomes.

There were complaints that some operators were able to negotiate better
outcomes, leading to inequity.

There were significant costs in obtaining professional assistance – legal and
financial – and some respondents could not afford to pay professional fees and so
were unable to appeal decisions.

Some fishers consider it an injustice that that their knowledge and past input to
and support for government research has been used against them, in particular
their log book data has been used against them.

There was one case of a sole trader not classed as a business, who was only able to
access employee assistance.

Some respondents were not aware of the employee assistance element of the
Package.
Benefits

Some respondents accepted that the SAP provided benefit, and in some cases
allowed their businesses to stay afloat.

SAP funds were considered to be much less than the impact of the RAP, and the
benefit of the SAP was greatly reduced by taxation, and legal and financial advice
costs.

The lengthy assessment of claims was considered to have reduced the benefits of
package to operators and the community.

There was a general view that there would have been more benefit or better value
for money from buying out more licences.

There was a view that SAP benefits to the industry or region were reduced because
they went to people who didn’t reinvest in the industry or region.
Other comments

There was a perception the Government set out to deliberately destroy the
industry.

There was strident criticism of GBRMPA, including allegations that GBRMPA told lies.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package

There were allegations
governments/agencies.
of
collusion
and
unethical
behaviour
between

There was a view that the ill will created in relation to RAP and SAP is expected to
last for some time.

The implementation of the process prior to an election was criticised.
Questions 2: In your opinion, could other approaches to providing assistance
have been more effective in achieving the objectives of GBRMP SAP? If yes,
what other approaches could be used in the future?
Question 23: What improvements, if any, would you make to any similar
program in the future, e.g., administration of the Program, provision of
information about the Program, timeliness of decision making, etc?
Impacts

Carry out sufficient upfront research to fully understand the economic impacts
(including long term) of closures of fishing areas for fishers and shore-based
business .

Give greater consideration of social impacts, particularly impacts on poorer,
disadvantaged people, unsophisticated operators.

Consider long-term industry viability and providing industry- or community-level
support to enhance viability.

Put great emphasis on reducing overall effort through licence buyout, that
provides genuine operators who wish to leave the industry with a reasonable exit
package.

Consider the flow-on effects for all fishers in a region of displaced effort.

Evaluate the state of the industry post-restructure (called for by some
respondents).
Process

Overall, there could have been a better managed, simpler, transparent and
equitable process based on consultation with industry and community in the
design phase and during implementation.

Greater time should be spent up front in developing the package.
Timeliness

The process should be quicker overall, but with increased timeframes for
applicants to make decisions and provide input, and set timeframes for decision
making on applications.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Consultation

During the development phase of the Program, there should be more effective and
personal consultation with the community and businesses to understand the
industry and its needs.

Stakeholders and fishers should be listened to and their advice trusted.

There should be locally available contacts and regionally located offices or claim
centres.

There should be more personal, face-to-face consultation, with site visits during the
assessment phase.
Information and transparency

There should be simple information on the Program that is easily understandable by
all operators without requiring legal and financial assistance – this would also
provide more equity.

A one-stop shop would reduce confusion, improve transparency and improve
accessibility.

There should be an independent organisation to administer future programs (called
for by some respondents).
Logic/data/formulas

There should be greater industry input/knowledge in the decision-making process:
through consultation during the package development phase, through assessors
having an understanding of the industry/region or taking more account of the
advice of the applicant (called for by some respondents).

While some respondents called for a more simple approach to calculating benefits,
that is more easily understood and provides for greater equity, there were also
requests for more detailed information (scientific and socioeconomic) that
supports/justifies the approach and calculations/values and formulas used.

There should be accurate, reliable and verified data underpinning the calculations.
Equity

Guidelines and timelines should be consistent throughout the process.

If guidelines or timelines do change during a process, there should be
retrospectivity, with a review of decisions to provide equity, and the ability to
resubmit applications.

A simple process that is accessible to the ‘average person’ would provide greater
equity.

Program equity could be achieved by equal payments for operators based on size
and characteristics of business and licence/quota units involved.

There should be consideration of equity for long-term operators compared to recent
‘investors’.

Reasonable and fair offers for business exit and restructuring should be made up
front.

Some considered that there should be no quick payment option such as the ‘Quick
50’.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Benefits

A general view was that the Program provided some benefit, but that a greater
emphasis on licence buyout would have provided more benefit.

Overall the Program was not considered to represent good value for taxpayers’
money.

The general view was that that funds provided should not be taxable. However, if
there is a tax liability, there should be flexibility with payment options to avoid an
unreasonable tax burden on operators.

Reducing the need for legal and financial advice and assistance to prepare and
prosecute applications would increase the industry/community benefits and
increase value for money.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Appendix E – Best practice assessment model for program
management
(a) Policy and program design
Better practice
element
Relevant characteristics of better practice
1. Policy
definition
(a) Policy goals have been thoroughly researched and
appropriately consulted on.
(b) Policy goals have been clearly defined and appropriately
address triple bottom line requirements.
(c) Policy goals clearly establish whether the SAP program is
intended to support structural adjustment, to provide
compensation or a mix of both.
2. Program
objectives
alignment with
Policy
(a) Program objectives reflect underlying government policy
goals and intentions.
(b) Program objectives are clearly expressed and reflect a need
to address triple bottom line requirements.
(c) There is a shared understanding amongst program
managers and program delivery staff and key stakeholders
of the Program objectives.
3. Program
design
(a) Program design supports achievement of policy goals and
program objectives including effective targeting of support.
(b) Program design supports efficient and cost-effective
program delivery.
(c) Program design appropriately addresses regional
restructure requirements and fishing displacement effects.
(d) Program design provides for testing external factors that
may impact program performance including external
economic factors.
(e) There is high quality and relevant program guidance and
other documentation provided to managers and staff, third
party providers and other stakeholders.
(f)
Program design supports accessibility for applicants
including ease of application preparation and lodgement.
(g) Program design supports timely and transparent
assessments of clients’ applications.
(h) Program design and assessment criteria support effective
targeting of package components.
(i)
Program design supports the consistent and equitable
treatment of clients within and across industry groups.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Better practice
element
Relevant characteristics of better practice
(j)
There are effective processes for measuring and reporting
program performance and policy effectiveness.
(k) There are effective processes for providing information to
and maintaining dialogue with applicants and key
stakeholders.
(b) Implementation planning and development
Better practice
element
Relevant characteristics of better practice
4. Identification
of the
challenges to
implementation
during policy
development
(a) The means of and barriers to implementation of the
Program were considered when the Program was
developed.
(b) Stakeholders were engaged to develop a sense of
potential barriers to implementation and possible means
of addressing them.
(c) The Program implementers were engaged during the
policy development stage.
(d) There are clear arrangements for service delivery.
(e) Sufficient consideration has been given to major
implementation risks, including rigorous assessment of
the risks and the development of treatment strategies.
(f)
The Government was informed of the significant risks to
implementation.
(g) The knowledge and experience of the Program
implementers was taken into account during policy
development.
(h) Uncertainties in assumptions in the development of the
policy and program that may have consequences for the
success of implementation have been identified and
addressed.
(i)
Where there has been limited time for consideration of
implementation issues, appropriate risk management and
engagement of the implementers has been undertaken.
(j)
Appropriate record keeping and accountability
mechanisms have been established.
(k) An assessment of the adequacy of data to support
implementation assumptions was undertaken. Where data
was assessed as not being reliable, efforts were made to
address any gaps.
(l)
5. Governance
Appropriate processes were established to monitor and
assess the roll-out of the Program to ensure that problems
do not reduce anticipated outcomes.
(a)
There was a single senior officer responsible and
accountable for implementation of the Program.
(b)
The responsible senior officer responsible for
implementation of the Program had the appropriate
authority, skills and resources to deliver.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Better practice
element
6. Risk
management
7.
Implementation
planning
Relevant characteristics of better practice
(c)
The Executive and other key players were consulted to
understand their expectations and arrangements were in
place to ensure that this alignment is regularly checked.
(d)
The expectations of the Executive were communicated
to the Program Management Team.
(e)
The roles and responsibilities of those involved in
implementation of the Program were clearly defined and
articulated in a formal manner.
(f)
The Program Management Team had the appropriate
skills to implement the Program, e.g., financial, legal,
contract management, project management.
(g)
The Program Management Team had access to relevant
external expertise to assist with program management.
(h)
The governance arrangements provided for adequate
reporting and review mechanisms, including escalation
of significant issues and ‘bad news’.
(i)
Where relevant, there was adequate consultation with
central agencies in relation to program implementation.
(j)
Where third party providers have been used, there were
appropriate arrangements in place to manage
governance and risk management associated with their
provision of services.
(a)
The agency developed a comprehensive and rigorous
risk assessment and risk management plan for the
implementation of the Program before the Program was
implemented, which was signed-off by the senior officer
responsible for the Program.
(b)
The risk assessment and risk management plan was
undertaken by appropriately skilled personnel.
(c)
Where appropriate, the Executive and/or the
Government was briefed on the significant risks to
implementation of the Program.
(d)
The risk assessment and risk management plan included
consideration of the risks associated with the use of
third party providers.
(e)
The risks and risk treatment strategies were formally
documented and responsibilities assigned and timelines
set for implementation of treatment strategies.
(f)
The Program Management Team regularly reviewed and
monitored implementation of risk treatment strategies
in a formal way.
(g)
Emerging implementation risks were considered and
assessed by the Program Management Team and
reported to the senior officer responsible for the
Program.
(a)
A structured implementation plan was developed by the
Program Management Team and endorsed by the senior
officer responsible for the Program.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Better practice
element
8. Procurement
and contract
management
Relevant characteristics of better practice
(b)
The project management team took account of previous
experience with implementation of similar programs in
developing the implementation plan.
(c)
The implementation plan identified key success factors
for the implementation of the Program.
(d)
The implementation plan covered the use of third party
providers involved with the implementation of the
Program.
(e)
The implementation plan identifies the timelines for
critical stages in the implementation of the Program.
(f)
The implementation plan identifies the resources to be
deployed in the implementation of the Program.
(g)
The implementation plan identifies the key risks
involved with the implementation of the Program and
how they are to be managed and communicated.
(h)
The implementation plan identifies responsibilities and
accountabilities for implementation of the Program.
(i)
The implementation plan specifies monitoring and
review processes for implementation of the Program.
(j)
The implementation plan specifies how changes to
planned implementation of the Program will be dealt
with by the Program Management Team.
(k)
The assumptions underpinning the implementation plan,
e.g., in relation to pace of roll-out, timeliness,
resourcing were tested before endorsement.
(a)
A strategy for procurement of third party provider
services was developed.
(b)
In procuring services, regard was had to value for
money considerations.
(c)
The Program Management Team addressed all ethical
and probity issues related to the procurement of third
party provider services.
(d)
The Program Management Team identified and assessed
the risks associated with the use of a third-party service
provider and developed and implemented appropriate
risk treatment strategies.
(e)
The contract with the procurement of third party
provider identified all relevant contract deliverables and
performance requirements to be met by the third party
provider.
(f)
The contract established formal arrangements for
monitoring and review of performance under the
contract which were followed over the life of the
contract.
(g)
The contract specified procedures for raising issues and
handling problems so that they were able to be dealt
with as soon as possible.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Better practice
element
9. Stakeholder
Management
10. Resources
Relevant characteristics of better practice
(h)
The contract provided for the allocation and
management of risk between the agency and the third
party provider.
(i)
The contract provided adequate mechanisms for dealing
with under performance by the third party provider.
(a)
The Program Management Team identified the purpose
and objectives of stakeholder engagement in the
planning and implementation of the Program.
(b)
The key stakeholders or stakeholder groups, including
those with a knowledge and understanding of the
issues, those likely to be affected and those with an
interest in the workability of the Program, were
identified by the Program Management Team.
(c)
The Program Management Team identified how
interactions with stakeholders were to be managed
during the implementation of the Program.
(d)
Areas of likely stakeholder resistance were identified
and how the agency would deal with these issues
(e)
The stakeholder management strategy took account of
the differing interests of particular groups of
stakeholders.
(f)
The Program Management Team allocated sufficient
time and resources to the engagement of stakeholders.
(g)
The stakeholder management strategy had strategies to
ensure that stakeholder expectations were managed
effectively.
(h)
There were appropriate arrangements in place to
manage any conflicts of interest involving stakeholders.
(i)
The information gained from stakeholder consultations
was used to inform the development of the Program and
the communications strategy in implementing the
Program.
(a)
The Program Management Team had the relevant skills
and experience to implement and manage the Program
efficiently and effectively.
(b)
The Program Management Team had access to external
expertise to augment their skills and experience.
(c)
Where necessary, staff were provided with adequate
training and support to ensure that they had the
necessary skills to fulfil their responsibilities in
implementing and managing the Program.
(d)
Adequate financial resources were allocated to enable
successful implementation and management of the
Program.
(e)
Resources, including staffing and financial, were
monitored to ensure that they were adequate to deal
with demand for the Program.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Better practice
element
11.
Communication
12. Monitoring
and review
Relevant characteristics of better practice
(f)
There were adequate processes for monitoring and
controlling expenditure on implementation of the
Program.
(a)
The Program Management Team developed a
Communications Strategy which identified the target
audiences, identified what needed to be communicated
to those audiences, how it will be communicated, when
and by whom.
(b)
The Communications Strategy was signed off by the
senior officer responsible for the Program.
(c)
The Communications Strategy identified the obstacles to
communicating and how they were to be overcome.
(d)
The Communications Strategy addressed both proactive
and reactive media management.
(e)
Sufficient resources were allocated for the
implementation of the Communications Strategy.
(f)
The Communications Strategy was reviewed and revised
during the life of the Program and took account of
stakeholder feedback on the implementation of the
Program.
(g)
The timing of key messages was aligned with key stages
of program implementation.
(a)
There was a process for monitoring and review of
progress on the implementation of key deliverables.
(b)
The data supporting monitoring and review processes
was adequate.
(c)
Monitoring data included the financial costs of the
Program.
(d)
Reports on progress with implementation were provided
to the senior responsible officer and the Executive,
where appropriate
(e)
The risks to success were regularly reviewed and the
results of these reviews were provided to the senior
responsible officer and the Executive, where
appropriate.
(f)
Corrective action was taken to address concerns and
emerging issues as they became apparent.
(g)
The implementation was reviewed to learn lessons from
the implementation of the Program.
(c) Program management and delivery
Better
Practice
Element
Relevant characteristics of better practice
13. Program
management
and delivery
(a) Effective program planning, budgeting, control and reporting
activities were undertaken by the Department.
(b) Resource requirements were defined for both program funding and
administration requirements.
22
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Better
Practice
Element
Relevant characteristics of better practice
(c) Program delivery functions were well defined and structured within
the Department.
(d) Well defined resource management and reporting processes were
applied.
(e) Effective controls were applied to the activities of third party
assessors.
(f)
Effective processes for stakeholder and client communication were
applied.
(g) All program clients were dealt with consistently and on a level
playing field.
(h) Clients were able to easily understand and respond to the SAP
requirements and processes.
(i)
A transparent and equitable appeals mechanism was applied giving
consistent decisions.
(j)
Applications were dealt with in a timely way.
(k) Effective feedback mechanisms were in place to advise program
management about program and policy performance.
(l)
Results against Budgets were closely monitored and progressively
reviewed and reported to program management.
(m) Client satisfaction was monitored.
(n) Conflicts of interest were managed.
(o) Program management was efficient.
23
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Appendix F – Overview of structural adjustment considerations
and history in Australian natural resource management
What is structural adjustment?
Structural adjustment is a change in the make-up or structure of an economy – that is, in
the distribution of resources and economic activity between companies, industries or
regions. It can be caused by market factors; for example, a change in international
commodity prices or the natural environment may lead to decreased primary production
within a region or the economy as a whole. Structural adjustment can also be caused by
government policy. For example, the introduction of restrictions on forestry activities for
environmental reasons may prompt forestry industry consolidation or a shift to valueadding activities.
Structural adjustment can have both positive and negative effects. Adjustment in
response to market factors is an essential component of economic efficiency and growth
over time, but can also be a source of cost and hardship for particular people, industries
and communities. Similarly, a government policy that produces benefits for the public
generally, such as the conservation of biodiversity through the creation of protected
areas, may present costs for particular individuals, such as private landholders or
commercial fishers.
Structural adjustment assistance is when government drives or supports structural
adjustment. Sometimes, assistance is directed specifically at producing structural
adjustment; for example, the purchase of commercial fishing rights as a means of
improving industry sustainability. Other times, adjustment assistance is aimed at
mitigating the negative impacts of government policy; for example, assisting farmers to
adapt farm operations in response to government restrictions on land clearing.
Structural adjustment assistance is not the same as compensation. However, the two do
share a common context – responding to the costs of government policy.
Compensation is recompense for costs or loss incurred. Adjustment assistance is about
needs, not costs, and is directed at helping people, industries, communities and/or
regions adjust their economic activity. For example, adjustment assistance might
involve:

helping businesses to exit an industry or restructure operations to enhance
commercial viability

retraining or otherwise assisting workers employed in a restructured industry to
find new employment

developing new sources of economic activity and employment within particular
communities and regions.
When is structural adjustment assistance or compensation provided?
Various commentators26 have considered the circumstances in which governments
provide adjustment assistance or compensation as a part of, or in response to,
government policy. While there are no hard and fast rules, there are four, often
interrelated, circumstances:
26
Productivity Commission 2001, Structural Adjustment – Key Policy Issues, Commission Research Paper,
AusInfo, Canberra; Newby J., Gooday, P. and Elliston, L. 2004, Structural Adjustment in Australian
Fisheries, ABARE eReport 04.17, Prepared for the Fisheries Resources Research Fund, Canberra; Aretino,
B., Holland, P., Matysek, A. and Peterson, D. 2001, Cost Sharing for Biodiversity Conservation: A
Conceptual Framework, Productivity Commission Staff Research Paper, AusInfo, Canberra
24
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
based on equity and fairness considerations

to assist with the efficiency of adjustment

as a means of addressing potentially perverse flow-on effects of a government
policy

where adjustment assistance or compensation is itself an appropriate mechanism
for achieving desired policy outcomes.
Equity and fairness considerations may arise when a policy measure is of benefit to the
broader public but has a sizeable negative impact on a small or already disadvantaged
group; is unexpected; or significantly devalues a real or ‘implicit’ property right,
particularly where the policy change is outside the bounds of reasonably anticipated
business risks.
Assisting the efficiency of adjustment may be a consideration where individuals,
businesses, industries and/or regions affected by a policy measure have limited capacity
to adjust to a changed policy environment. For example, affected businesses may have
significant investment in capital that cannot easily be diverted to other uses, or there
may be limited alternative investment and employment opportunities in a region or
community that is dependent on an affected industry.
Addressing potentially perverse flow-on effects is a consideration where a government
policy displaces economic activity leading to undesirable flow-on effects. An example is
the creation of protected areas in which economic activities exploiting natural resources,
such as fishing or forestry, are restricted for environmental reasons. This can result in
increased exploitation of natural resources in areas not subject to restrictions, which in
turn can compromise industry economic and environmental sustainability. Adjustment
assistance or compensation can address this by encouraging people to leave the industry
or to adjust their businesses activities in a way that ensures natural resource use
remains economically and ecologically sustainable.
Adjustment assistance or compensation may be used as a policy measure in and of itself
where it is an appropriate and effective means of achieving desired outcomes. This may
particularly be the case where the security of property or statutory rights is an important
consideration (for example, because it encourages investment to maximise the value
derived from natural resources). An example is the purchase of commercial fishing
entitlements as a means of addressing overcapacity within a fishery. Similarly,
governments may purchase water use entitlements or fund private water efficiency
projects so that water can be made available for environmental river flows.
The decision to provide adjustment assistance or compensation may be based on one or
more of these considerations. This in turn defines, at a high level, the objectives of the
adjustment assistance or compensation package and influences package design. Package
design might also be informed by more general policy criteria 27 such as:

effective targeting – the package should target the problem as directly as possible
and in a way that facilitates the process of change, particularly where assistance or
compensation is provided in response to efficiency concerns.

cost efficiency – the package should achieve desired outcomes at least cost relative
to other options, and produce a net increase in social welfare.

equitable sharing of costs –where possible, those benefiting from a policy should
bear some or all of the cost of assisting those negatively impacted.
27
Productivity Commission 2001, Structural Adjustment – Key Policy Issues, Commission Research Paper,
AusInfo, Canberra
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
transparency and accountability – appropriate governance arrangements should be
in place to promote the efficient and effective delivery of the package.
Examples of adjustment assistance and compensation packages
There are numerous and varied examples of structural adjustment assistance and
compensation packages in the areas of natural resource management and environmental
protection. These packages vary significantly in their objectives and design with key
parameters including:

Availability of assistance – assistance may be available to all or only certain
businesses and people within an affected industry, to industries up or downstream
of a directly affected industry, and/or to affected communities and regions.
Assistance may be available only to businesses and persons significantly impacted,
or experiencing any negative impact.

Nature of assistance – assistance may take the form of compensation for loss,
measures to assist with the process of structural adjustment, or the purchase of
property rights or entitlements.
Land clearing
Governments in South Australia, Western Australia, New South Wales and Queensland
have provided adjustment assistance in relation to regulatory reforms ending broad-scale
land clearing. These packages, for the most part, responded to equity, fairness and
efficiency considerations – they recognised that the benefits of land clearing restrictions
mostly accrue to the community generally, but that the costs are borne by a select group
(notably landholders), that may have limited capacity to absorb or adapt in response to
those costs.
Land-clearing-related adjustment assistance packages have included measures such as:

Exit assistance – the purchase of farm property for market value to enable farmers
to exit the industry or relocate operations where a farm business is no longer
commercially viable as a result of the changes. In New South Wales, purchased
properties were on-sold subject to environmental management conditions,
addressing potentially perverse flow-on effects. Funds derived from sale were
added to a revolving pool to purchase additional properties.

Business restructuring assistance – funding for on-farm measures to improve the
commercial viability of the farming business up to a predetermined cap. In
Queensland, only landholders significantly impacted were able to access assistance.
In New South Wales, landholders suffering any loss were able to access assistance;
however, measures funded needed to produce improved environmental, as well as
economic outcomes and landholders were required to contribute half the cost.

Related industries – in Queensland, clearing contractors were able to access an
interest subsidy through the Small Business Emergency Assistance Scheme, a
social safety net measure generally available to support businesses affected by
emergencies and other incidents that fall beyond a government-determined
reasonable level of business risk.

Flexibility mechanisms – restrictions on land clearing generally provide flexibility
through the use of ‘offsets’ – vegetation can still be cleared if it is offset by the
planting and/or protection of native vegetation elsewhere. This allows farmers to
clear land where it will allow a particular farm to remain commercially viable, whilst
still delivering desired environmental outcomes.
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Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Biodiversity conservation
Legislation in Victoria, Queensland and Tasmania28 provides for the payment of
compensation to landholders and other specified persons (such as water managers) for
financial loss suffered as a consequence of action to protect biodiversity, including a
conservation or protection order, declaration of a nature reserve or a land management
agreement. The amount of compensation is determined on a case-by-case basis, having
regard to factors such as the change in value and profitability of the land.
The provision of compensation reflects equity and fairness considerations. It recognises
that the benefits of biodiversity conservation accrue primarily to the community
generally, but the costs are borne by a select group (i.e. landholders).
Forestry
The forestry industry has undergone significant structural adjustment over the past 10–
15 years, notably as a result of regional forestry agreements (RFAs). RFAs changed the
nature and availability of forestry resources in order to promote conservation and
sustainable management of native forests. Structural adjustment assistance packages
were made available on the basis of fairness, equity and efficiency considerations. These
packages were quite broad ranging, and included measures such as:

assistance for forestry businesses wishing to leave the industry

assistance for people to retrain and relocate into other industries – available to
people working in the forestry industry and people significantly dependent on the
forestry industry

restructuring assistance for forestry businesses, including retraining and interest
subsidies for capital investment in new plant and equipment to move into valueadding activities

regional adjustment and development assistance to create new sources of
investment and employment within affected communities and regions.
Fisheries
Governments generally require that fisheries autonomously adjust to changing market
factors and biological conditions, as well as to government fisheries management
measures such as effort and catch quotas directed at ensuring industry economic and
ecological sustainability29. Governments may, however, support structural adjustment of
a fishery as a policy measure in and of itself where:

there is substantial overcapacity within a fishery that is compromising the
effectiveness of fisheries management measures such as catch and effort quotas

urgent adjustment is required to avoid serious or irreversible harm 30.
Governments may also provide compensation or adjustment assistance where fishing
activity is displaced by marine protected areas. This is discussed separately below.
28
Flora and Fauna Guarantee Act 1988 (Vic); Nature Conservation Act 1992 (Qld); Threatened Species
Protection Act 1995 (Tas)
29
See e.g. Marine Protected Areas and Displaced Fishing: A Policy Statement, Australian Government, January
2004, <http://www.environment.gov.au/coasts/mpa/publications/displaced-fishing.html>, accessed
9 July 2008
30
See Newby J., Gooday, P. and Elliston, L. 2004, Structural Adjustment in Australian Fisheries, ABARE eReport
04.17, Prepared for the Fisheries Resources Research Fund, Canberra
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Fisheries structural adjustment schemes have been employed to address overcapacity in
the northern prawn fishery, south east trawl fishery, and the east coast trawl fishery,
among others. These schemes involved the buyout of fishing entitlements, and generally
formed a part of a broader suite of fisheries management measures, such as the setting
of effort caps and the allocation of statutory fishing rights. Generally, buying out of
entitlements was done through a voluntary competitive tender process, primarily as a
means of minimising costs.
A more expansive fisheries structural adjustment package was provided by the Australian
Government as a part of its 2006 Securing our Fishing Future package. This package was
directed at reducing overcapacity in Commonwealth-managed fisheries. It also responded
to the displacement of fishers caused by the creation of a network of marine protected
areas in south-eastern Australian waters. The package sought to address overcapacity in
multiple fisheries through the buyout of fishing entitlements. It also responded to flow-on
effects in response to efficiency considerations, providing adjustment assistance to
fishing industry employees, onshore businesses and communities affected by the buyout.
The package included:

the buyout of fishing entitlements through a voluntary tender process

reimbursement of the costs of business advice for fishers considering submitting a
tender

one-off payments to fishing vessel skippers and crew members who lost
employment as a result of a successful tender

exit and restructuring assistance for onshore businesses directly associated with the
fishing industry, and significantly impacted as a result of the buyout of fishing
entitlements

funding for projects creating economic and employment opportunities with
communities affected by the restructure of fisheries.
The buyout of entitlements to address overcapacity within a fishery is often funded
jointly by government and industry. This recognises that the major beneficiaries of such
an adjustment are those who remain in the fishery. Industry contributions can be
provided through industry levies or other mechanisms such as the voluntary surrender of
entitlements.
Marine protected areas
Commonwealth and state governments generally provide adjustment assistance or
compensation where the creation or zoning of a marine protected area displaces
commercial fishing activities. Most often, assistance is provided in response to fairness
and equity considerations, recognising that protected areas primarily deliver benefits to
the community generally, but impose costs on particular fishers and communities.
Additionally or alternatively, assistance may seek to address potential perverse flow-on
effects caused by displaced effort intensifying use of areas remaining open.
In Western Australia, the Fishing and Related Industries Compensation (Marine Reserves)
Act 1997 provides commercial fishing licence holders with a right to compensation for the
loss in market value of the licence caused by declaration of a marine park or a change in
management arrangements. Displacement of commercial fishing might also be addressed
through a voluntary or compulsory adjustment scheme established by the Fisheries
Minister under the Fisheries Adjustment Schemes Act 1987. Under voluntary schemes,
fishing licences or entitlements are acquired on a tender basis. Under a compulsory
scheme, market value is paid for acquired licences and entitlements. The Minister also
has the discretion of purchasing the fishing vessel and/or gear of a person whose licence
or entitlements have been acquired. Where there has been an adjustment scheme, the
28
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
amount of compensation payable to fishers affected by a marine park is offset by any
increase in the market value of fishing licences or entitlements as a result of a the
adjustment scheme.
In Victoria, the National Parks (Marine National Parks and Marine Sanctuaries) Act 2002
established a network of marine protected areas and, at the same time, provided for the
payment of compensation to specified commercial fishers, collectors and charter boat
operators affected by the creation of the protected areas. The amount of compensation
payable was determined in accordance with legislative formulas directed at providing
recompense for lost profit. Compensation was payable annually, for a maximum of
(generally) three years. A panel appointed by the Minister determined the amount of
compensation payable. Appeals could be made to a compensation appeals tribunal,
appointed by the Governor-in-Council, on the advice of the Minister.
In South Australia, the Marine Parks Act 2007 requires that the government pay ‘fair and
reasonable compensation’ where management arrangements for a marine park restrict
rights conferred by a statutory authorisation (such as a commercial fishing licence), or
alternatively, compulsorily acquire all or a part of the authorisation, paying fair and
reasonable compensation. Regulations may (but do not currently) set out further details,
such as the method of calculating compensation payable.
Guidance materials have been developed setting out the South Australian Government’s
approach to the adjustment effects of marine parks on commercial fishing and
aquaculture31. For commercial fishing, government assistance is provided where
displacement occurs. Where this displacement can be absorbed within the fishery, the
government will pay relocation expenses and an amount in recognition of the
inconvenience. Where relocation is not an option, the government will acquire an
appropriate amount of fishing entitlements (quota and gear) at fair market value or, if
the displacement is more significant, buy back fishing licences at fair market value. Any
buy-back will initially target only affected fishers and is voluntary. If necessary, the buyback offer can be extended to the entire fishery. As a last resort, licences may be
compulsorily acquired. An income support payment and amount in recognition of the
inconvenience is paid to licensees bought out.
The Tasmanian approach to the displacement of economic activities by marine protected
areas is set out in the Marine Protected Areas – Displacement Assessment Process 32,
issued by the Minister for Primary Industries and Water. The approach targets fairness,
equity and efficiency concerns, providing assistance to people who have suffered
‘significant material financial hardship’ (evidenced by historical dependency on a relevant
area) and who have no feasible alternative areas or options available to them to continue
their activities. Structural adjustment assistance is not provided to manage the flow-on
effects of the displacement of fisheries activities to other areas, which are instead
managed through fisheries management processes, where necessary.
There is no fixed form of assistance, but options include the purchase of relevant licences
and entitlements at fair market value, ex gratia payments to compensate for the costs of
readjustment over a maximum of three years, and continued conditional access to the
protected area for up to 10 years. An assessment panel determines the need for, and
31
Government of South Australia, Department of the Environment and Heritage, Marine Parks and Commercial
Fishing, <www.environment.sa.gov.au/coasts/marineparks/pdfs/commercial_fishing _handout.pdf>,
accessed 9 July 2008; Government of South Australia, Department of the Environment and Heritage,
Marine Parks and Aquaculture, <http://www.environment.sa.gov.au/coasts/marineparks
/pdfs/displaced_aqua _effort_handout.pdf>, accessed 9 July 2008
32
<http://www.dpiw.tas.gov.au/inter.nsf/WebPages/PCOX-7CN39N?open>, accessed 9 July 2008
29
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
nature of assistance that should be provided, and makes recommendations to the
Minister.
In 2009, the Queensland Government committed $15.1 million to a structural adjustment
package for commercial fishers affected by a rezoning of the Morton Bay Marine Park 33.
The aim of the package was to reduce the environmental, social and economic effects of
commercial fishing effort displaced by new zoning arrangements in the marine park. The
package targeted only the flow-on effects of displacement, aiming to maintain fishing
effort in areas remaining open to commercial fishing at the same level as prior to the
rezoning. Adjustment was based on voluntary surrender of eligible licenses, a
standardised offer price for each eligible fishing licence, and determination of which
licenses represented best value in terms of effort reduction targets and catch potential.
A similar approach is taken in New South Wales, where the establishment of marine
protected areas has been accompanied by a buyout of fishing licences and entitlements
with the object of maintaining fishing effort in areas remaining open at a constant level.
The Australian Government approach to structural adjustment induced by marine
protected areas is set out in Marine Protected Areas and Displaced Fishing: A Policy
Statement34. This policy has been applied in the context of the Great Barrier Reef
Representative Areas Program and the creation of a network of marine protected areas in
south-eastern Australian waters.
Under the policy, the provision of adjustment assistance is considered on a case-by-case
basis to address potentially perverse flow-on effects and in response to equity, fairness
and efficiency considerations. Adjustment assistance may be considered were a marine
protected area causes the displacement of fishing activities, which in turn creates a need
for a reduction in fishing effort in order to achieve fisheries management objectives. In
this case, the government may support the reduction in effort through, for example, a
buyout of fishing entitlements. Adjustment assistance may also be provided to fishers,
related businesses and local communities to offset foregone profits or other impacts
where the impact is significant and there is limited capacity to adapt.
33
34
http://www.derm.qld.gov.au/parks_and_forests/marine_parks/moreton_bay_marine_park_zoning_plan_revie
w/structural_adjustment_package.html, accessed 28 October 2009.
Marine Protected Areas and Displaced Fishing: A Policy Statement, Australian Government, January 2004,
<http://www.environment.gov.au/coasts/mpa/publications/displaced-fishing.html>, accessed
9 July 2008.
30
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Acknowledgements
The frank input of the many people we interviewed, some of whom had prepared
significant documentation for the Review Team, is gratefully acknowledged. Many thanks
also to the stakeholder questionnaire respondents. Your contributions, in particular the
insightful comments, were very helpful.
The Review Team asked many questions and made significant requests for data and data
synthesis from the DEWHA teams involved in the Package. Their willing and able
assistance is much appreciated.
Mr Travis Bover and Mr Andrew Zacherak were the Review Team’s primary contacts
within the Department. Their balanced and knowledgeable contributions assisted the
Review Team considerably.
Ms Anne Domaradzki provided technical support for the Review Team and acted as a
focal point for stakeholder input. Her contributions were significant and her patience
unparalleled.
CSIRO provided salary support for John Gunn and Anne Domaradzki while the Review
was being conducted.
31
Review of the Great Barrier Reef Marine Park Structural Adjustment Package
Appendix G – References – further reading
An Economic and Social Evaluation of Implementing the Representative Areas Progr by
Rezoing the Great Barrier Reef Marine Park: report on the Revised Zoning Plan, PDP
Australia 2003
Annual Report 2006-07, Department of Agriculture, Fisheries and Forestry, Government
of Australia, Canberra
Aretino, B., Holland, P., Matysek, A. and Peterson, D. 2001, Cost Sharing for Biodiversity
Conservation: A Conceptual Framework, Productivity Commission Staff Research Paper,
AusInfo, Canberra
Audit Report 2008, Administration of the Securing of our Fishing Future Structural
Adjustment Package Assistance Programs, Austrailan National Audit Office, Canberra.
FERM (2007) A Review of the Business Exit (Licence Buyout) Assistance Component of
the Great Barrier Reef Marine Park Structural Adjustment Package. Unpublished Report
prepared by Fisheries Economics, Research Management Pty. Ltd. (FERM). Department of
Environment and Water Resources, Canberra.
Financial Management and Accountability Act 1997, Department of Finance, Government
of Australia, Canberra
Flora and Fauna Guarantee Act 1988 Government of Victoria, Melbourne.
GBRMP Act Review Panel (2006) Review of the Great Barrier Reef Marine Park Act 1975 –
Review Panel Report, Commonwealth of Australia, Canberra.
Great Barrier Reef Marine Park Zoning Plan 2003
Hundloe, McPhee and Toon, The Economic Impacts of the GBRMP RAP on the Commercial
Seafood Industry, University of Queensland, 2003
Implementation of Programme and Policy Initiatives: Making Implementation Matter,
Department of Prime Minister and Cabinet and Australian National Audit Office, Canberra,
October 2006
Implementing the Representative Areas Program in the Great barrier Reef Marine Park:
Assessment of Potential Social Impacts on Commercial Fishing and Associated
Communities, Bureau of Rural Sciences, Department of Agriculture, Fisheries and
Forestry, Canberra, 2003
Independent review proposed management arrangements for Queensland's east coast
inshore fin fish fishery, October 2008, Gunn J S, F Mere, J Stevens, Department of
Environment Water Heritage and the Arts, Government of Australia, Canberra.
Marine Parks and Aquaculture Handout, Department of the Environment and Heritage,
Government of South Australia, accessed 9 July 2008
Marine Parks and Commercial Fishing Handout, Department of the Environment and
Heritage, Government of South Australia, accessed 9 July 2008
Marine Protected Areas and Displaced Fishing:
Government, January 2004
A Policy Statement, Australian
Marine Protected Areas and Displaced Fishing:
Government, January 2004, accessed 9 July 2008
A Policy Statement, Australian
32
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Ministerial Media Release – Increase in Assistance 26 May 2006
Moreton Bay Marine Park Zoning Plan Review w/structural adjustment package,
Department of Environment Resource Management, Queensland, Brisbane accessed 28
October 2009.
Nature Conservation Act 1992 Government of Queensland, Brisbane
Newby J., Gooday, P. and Elliston, L. 2004, Structural Adjustment in Australian Fisheries,
ABARE eReport 04.17, Prepared for the Fisheries Resources Research Fund, Canberra;
Productivity Commission 2001, Structural Adjustment – Key Policy Issues, Commission
Research Paper, AusInfo, Canberra
Productivity Commission Report 2002, Bureau of Rural Services (Reported in 2003)
Structural Adjustment – Key Policy Issues, Commission Research Paper, Commission
Research Paper, Productivity Commission, AusInfo, Canberra 2001
Threatened Species Protection Act 1995 Government of Tasmania, Hobart.
Webpages, Department of Primary Industry and Water, Government of Tasmania, Hobart
accessed 9 July 2008.
blications/auditreports/
33
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