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What to do? Instruments and Strategies

Paul Martin - Chair, Southern Catchment Management Board; Consultant on Sustainability Policy; Member of the Port Hacking Protection Society; Former Member of Hacking River CMC

There's a picture there in front of you of a person standing on a rock. That picture has significance for a number of us in the room. Those who've been involved, long term, in trying to get Port Hacking properly looked after know it is a picture of Max Kelly, a former President of Port Hacking Protection Society, a great activist and all-round gentleman.
What I'm about to highlight is in the same spirit of the work he did for a number of years, which is saying that this discussion isn't about good and bad, it is about people trying to work out how to do things better that will work for all of them.

I am not in the least bit shy in saying that we have suffered from estuary mismanagement for a number of years. No matter what bureacrats keep saying about reasons for it, people like Max stood up and fought and argued and got nowhere. And that's what we now have to fix. The pleasing thing is that of recent times, there are signs of progress, that we are starting to see agencies really worrying about sustainability issues and trying to put in place processes that will work. But one thing is also obvious. At almost every conference you attend, government agency people stand up and tell about the fantastic process, and the community and science people tell about the disastrous outcomes that are happening. We've either got to stop deluding ourselves about the 'quality' of processes, or start to get some outcomes from those processes.

Estuaries are enormously complex, I can understand why people find it terribly hard to manage them. There are so many biophysical issues, use issues and interest group issues that are going on at one time. I'm just going to focus on Port Hacking as an example.

People Want Estuaries Protected

What does the community actually want? Let's assume that the purpose of management process is just to give people what they want, let's start with that. Look at survey evidence: each of a range of surveys, in 1998, 1997, 1998, 1985, 1997, all say the same thing in different ways, (with some attempts to manipulate them to get them to say the opposite to what the statistics say). They all say that what the community values above all is the environmental qualities of Port Hacking and low impact use. That's what the surveys all say.

And then there are the use patterns. The usage surveys show a very high direct use of the water: people swimming; kayaking; paddling, walking around the foreshores; fishing. That's the kind of use that is the majority. Social interests line up with sustainability.

Economic Values Argue for Environmental Protection

The main economic activities around Port Hacking are building and retail. Why do properties have high values? We had it outlined this morning. It's very largely to do with people living with places and in places where they can enjoy generally low impact uses, to enjoy the natural environment. The economic interest aligns with sustainability.

There are approximately 20 boating enterprise who, if you stand up and say, "we wish to change the nature of the use to protect it", will say, "We'll all go bust". Yet most of those businesses used to sell smaller vessels, If the market changed, they would sell smaller vessels. Boating wouldn't go bust. Individuals might, but the industry would not go away. The difference is that we used to have a reasonably robust local boating manufacturing industry. We now have an import-reliant large vessel industry, with ownership highly concentrated and little local employment. If we were taking the lead we were given earlier today about economics and talking about where we get the value, I think you'd question whether we've made any real progress even in terms of industrial value.

The economics of other values, using Costanza's work (debatable though it is) shows that estuaries have the highest ecological services value of any environment. They produce more for us each year than any other environment we know of. On amenity, the work of Conomos and Shaw, (picking up on David's earlier point) shows that jetskis in the US impose a noise and disamenity tax of around $700 per annum per vessel, on people who would otherwise wish to use the area. We don't make the harm-causing users pay for that. I do think there are places where such things can be done that don't impose tax on other people. Our current management does not take even the quantifiable economics into account.

Policy is for Sustainable Use

What are the policy objectives? Coastal Policy, Biodiversity Policy, COAG and the Economy Policy, Enacted Law etc. What do they all say when you put them all together? They all say that sustainability is a priority and that the Precautionary Principle should be applied. They say that at-risk ecological communities should be protected, that users who cause cost should meet those costs, that it's unlawful to do various things that are ecologically or socially harmful and that foreshores should be protected as natural areas.

It is as simple as that. After having been told for a number of years by every department I can think of that it is impossible to boil down our policy into a few basic principles, I've obviously got it wrong! I think not.
A perfect alignment then. We have the community saying it is pro-sustainability. We have an economic interest that says that sustainable industry is probably at least as good for us as less sustainable use. We have policy frameworks that support sustainability. We have so many regulations that talk about the application of sustainability. We even have, as was mentioned this morning, a Memorandum of Understanding involving a number of government agencies that committed them back in 1994, to a whole lot of actions to implement sustainability within Port Hacking. And as George Cotis highlighted, there have been two surveys of the implementation. The only part of the implementation that has ever occurred has been dredging. But we do have plans and consent Memorandums that commit government at all levels to sustainability. And there is, in this estuary no high-employment extractive industry or other policy important barriers to sustainability. Port Hacking should be the dream run of sustainability.

But the Outcomes are not Sustainable nor Equitable

What are the outcomes? From this picture, one of a number showing similar things, you can see various bits of Posidonia roots thrown up on the shore. These pictures that are generally taken after a weekend at Jibbon where there are thousands upon thousands of these roots and grasses cast up. Boat anchoring is what causes this, and this is scientifically demonstrated in other places.

The biodiversity effects of this type of harm have been outlined this morning.. I'm now about to outline the economic outcome. We are consistently subsidising the harmful use and consistently taxing , the low impact use. We have what's termed a path-dependence problem. And what about equity of use? What we are seeing is that the people who would wish to enjoy the area, say for swimming, find themselves fearful of doing so quite often because of fear of being injured by high impact users. We have all sorts of reasons why the opportunity for the non-rich to access the foreshores are being diminished. The opportunity to enjoy the natural spaces is being diminished. The state of policy implementation is appalling.

Then we come to something else which Gary Caines raised, and which I support fully. "What about the first peoples?" When I raised the issue some time ago with a particular department about "where are Aboriginals represented in the estuaries?", the answer I got was "We try and get them on committees". Now I'd ask any one of you who sits on committees: do you really think it's a benefit to be asked to sit on a committee? And if you are an Aboriginal person, why would you bother? It doesn't makes sense. There are a few things we need to think of. Many of the traditional uses are no longer accessible. Yes, cultural heritage sites do exist and they are mapped. Estuaries are largely unalienated Crown lands. We are not seeing land rights claimed, but we should be negotiating with Aboriginals as if they had that right already. National Parks are fantastic places which increasingly provide employment opportunities for Aboriginal people, which is really good. But it is different having a job on a piece of land than being able to say "its my land". And the evidence is clear that Aboriginals have economic needs. We're not representing Aboriginal needs and interest in estuaries and I think we should be ashamed of it.

Where we are putting our effort and our money. On this fairly complex chart, the top shows the different types of impacts. You'll see the box on your right talks about high environmentally sensitivity to low. You'll see that swimming is up the top and high speed power boats down the bottom. This table shows a hierarchy of: costs to the community; impacts; infrastructure requirements; and a number of other issues. Components in it are contestable, but let's look at where the money and effort goes.
On low impact uses in the Hacking estuary, by my calculations, we spend less than $100,000 a year on supporting things like picnic and foreshore use, or swimming, or kayaking or surfing.. They represent over 80% of the use of the Port.

I put a figure of $600,000 a year on supporting the high impact use. It's actually a lot higher. Next year, as I understand it, we'll probably spend $1m-$1.5m, depending on how you cost dredging and putting a boat ramp in a national park.

Neither are the Outcomes Efficient

Let me ask you, does that make sense? Is that really implementing sustainability with equity? I find it very hard to believe that that's the case. It's a classic application of two versions of the Pareto rules. Pareto, the 80/20 rule, is where 20% of the uses get 80% of the money. In fact it's 90/10 in this case. And 'Pareto optimality' is the idea that you can re-allocate uses to allow the maximum value for all users. We're not doing that either.

Here is a picture of an area of Jibbon which is now of the few remaining intact Posidonia beds. In the middle of that area are two seagrass-friendly moorings which cost an enormous amount to put in some years ago. Now you look at that and you think "Why would you spend a lot of money to put in seagrass-friendly moorings and then have every boat around come and anchor beside it, and every time they put an anchor they take the Posidonia?"

What you won't see anywhere near there is a toilet. There was a fight that went on for about three years where everyone agreed that there should be a toilet to protect the dune area and the lakes behind the dunes. So why we don't have a toilet here? Because no-one could agree on who was going to pay for cleaning costs. There were five agencies involved. It's has to be a farce, doesn't it?

These are everyday examples of a much larger set of issues. Let's examine three aspects of the problem.

The Fundamental Causes of the Problem

Path dependence. We've got to excuse our ignorance, but once the ignorance is gone, the excuse is gone. We traditionally subsidised activities that we saw, in a narrow vision, as being economically important. Agencies, people who worked in these divisions who'd come up as an engineer or something like that, believed in doing engineering. But what we've done over time is create a dependence on the path that will give us the least value, by continuing to see the issues through this type of lens.

In ecological economics, we've only got three choices in our demands on the environment. We either do more harm, we manage demand, or we somehow increase the supply. We've seen that it is very hard to increase the supply of (say) Posidonia beds, which means we really have to manage the demand or accept that we're going to lose them.

Our regulatory system is designed to have the highest possible transaction cost; that is, the highest costs of administering the regulation. I will use policing of jetskis which was raised earlier. Most jetskiers, I'm sure, are perfectly responsible people. But if you want to catch the irresponsible one, you've got to get someone out on a boat - an expensive task - have them out there all the time, have them catch the person, prosecute them, take them to court, win, and hope that somehow that's going to cause the behaviour change we want. That's an incredibly expensive process, which is why it doesn't happen.

So what's going wrong and what are the recommendations to make it better? What's going wrong is about economics. It's about institutional structure which we're only now starting to reform. As I said, I'm not negative about the reforms that are occurring, I just wish they'd occurred a long time ago.

Disrespect for policy and data is an issue. A few years ago when one of these dredging programs was being considered and there was a bureaucratic concern about what the community who opposed this would do. There was a meeting involving representatives of one of the boating groups, senior Council officers, and a couple of departmental officers. They got into a room, they drew lines on the map and dredging went ahead, because they didn't want to have to consider any other information. The result and outcomes proves that to be dreadful decision making. You can't judge the quality of decision making by the quality of the policy or the process, you judge it by the outcome, and the outcomes are appalling. And there's a failure to understand that we actually do have a real interest in sharing.

What Should We Do to Get it Right?

What do we do about it? Let's get some real integrity into the current policy. Let's actually have sustainability targets in (say) dredging programs. Let's not say "It's about removal of sand to allow boats to come in and out". Rather let's say "Every such program has to have a sustainability outcome, if it doesn't give that outcome, we just 'can' it and save some money to put into hospitals" or some other clearly important competing demand for funds.

Let's make the least harmful more powerful. User group consultation embeds the power of those causing the harm. We shouldn't be surprised at the outcome. We need to invite everyone, including those whose activities do not cause harm or require subsidisation, to sit down and agree to the targets. Not agree to detail but at least agree to targets.

And then let's get rational in what we subsidise. The cost of a subsidy should include the cost of fixing any problems it causes. We'll subsidise dredging - and we know that dredging causes by-product effects in some very sensitive environments in the area - so let's cost remediation in. If you want half a million dollars and you're going to cause a million dollars worth of harm, well you better get a million and a half dollars. It makes sense environmentally, and it certainly makes sense from a public accountability point of view...

In terms of managerial reform, we really do need a single authority governing Port Hacking. That's been our view for a long time.

Then we can talk about things like market instruments. The catchment board of which I'm chair is picking up on some of these issues but only some of them. I'm fully in favour of what my board has done and I'm totally committed to it and they are a great bunch of people, but what we've got is obviously a consensus decision. We're going to do work on measurement, and work on policy outcomes which recognise Aboriginal interests. There is a lot more that needs to be done beyond what we can propose.

Some Radical Thoughts to Consider

And here are some radical thoughts which the Board is not proposing but which might bear some thought:
  • Maybe we should have cap-and-trade for mooring, anchoring and storing rights.

  • Maybe we should use market instruments to restrict damaging use.

  • Maybe we should have a market for management. Maybe we should privatise like we do the prisons. But at least we should think about a different way of doing it.

  • Maybe we should make common law rights more powerful. Perhaps neighbours should be able to sue for the loss of their water view; not for loss by a tree growing in front or some other natural occurrence, but for having 25 boats moored over public lands, right in front of them without their consent.

  • Make government accountable.

  • Listen to those who create least impact.

  • Have transparent performance review.

  • Have effective complaints mechanisms. Waterways Authority are the worst in the world at this. They hate having complaints, so they make it impossible to make a complaint. This should not be permitted.

  • Social and economic impact reviews should be conducted. We really should be managing the full outcome, not just one aspect (like boating or residential development).

  • What role for Council? Council should be setting performance standards on behalf of community and having them measured rather than trying to do it on behalf of agencies. Councils should be guardians with integrity.

  • Sutherland Shire Council should actually implement their plan of management.

  • On accountability, agencies should report on their environmental and social outcomes compared to policy. None of them report outcomes compared to policy. The policy gets written, announced and goes into the internal process, but no-one sets targets and measures against them.

  • Council should have an annual review of state agency performance against policy. For agencies, there should be public accountability for the subsidies we provide, and there should be public reporting of complaints.

The First Step - Credible Governance

It's clear where we need to go. We've got to get away from a point where the only way you get rich in using an estuary is by using it up in some form. We've got to start getting a market for conservation values, but first we've got to get integrity into the management we've got now.
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