Inside MPI's $2.5m fishing investigation

It's the longest running district court case ever, costing millions of dollars in court time and Government investigative resources. 

The dispute between Hawke's Bay Seafood and the Ministry for Primary Industries (MPI) related to fish that had been caught but not reported and then sold at fish markets in Australia.

The D'Espositos' lawyer says the case has been a waste of money, but MPI says it was important to hold Hawke's Bay Seafood to account.

"I think this investigation was necessary and it's something we owe the public of New Zealand to investigate this and uncover the sustained underreporting of this fish species. This was by New Zealanders against New Zealanders," says Steve Ham, MPI investigations manager.

The species misreported was bluenose, a valuable mid-water species already under significant pressure from fishing. 

MPI found that the weight of bluenose recorded in documents was different to the actual amount being sent to be sold in Australia. In total, 27 tonnes of bluenose was unaccounted for - fish that was then sold in Australia for more than $253,000.

In total, there were 20 separate occasions where illegal exports were identified. 

Steve Ham of MPI.
Steve Ham of MPI. Photo credit: Newshub Nation.

During the seven-month trial, a deal was struck that saw two-thirds of the initial 380 charges dropped. In the end, company director Nino D'Eesposito, his brother Jo and son Marcus pleaded guilty to a total of 130 charges.

"My clients are normal business people in a normal business environment," says the D'Espositos' defence lawyer, Mike Sullivan.

"They are not black market poachers. They are not criminals. They are simply people who failed to meet a requisite standard required by the law."

Mr Sullivan says the D'Espositos have spent well over $1 million defending the case. MPI says its investigation and prosecution has cost around $2.5 million. 

"There's a cost associated with everything that we do," says Mr Ham. "It was worthy for this investigation to be conducted to unearth this type of offending. Further to that, what's the cost of not doing the investigation?"

"We've got rules for a reason," says commercial fisherman Karl Warr, who's based in Napier.

"Rules have to be upheld or we might as well get rid of them. Because if they're not being upheld, what's the point of them being there?"

He says misreporting skews fisheries population data and could ultimately lead to declines in fish numbers. 

"It frustrates me because a lot of the fisheries science is based on catch per unit effort, so if we've got fish coming out that's not being recorded then in terms of the fisheries management picture, it tips that upside down."

History of conspiracy


The D'Esposito family has been involved in fishing in New Zealand since migrating here from Italy in 1918. They own 14 vessels, they process fish, export it and sell it from retail shops and online.

Hawke's Bay Seafoods is the dominant player on the docks in Napier and a big employer in the region. But it's not the first time they've squared off in court against MPI. 

Nino D'Eesposito
Nino D'Eesposito. Photo credit: Newshub Nation.

"Historically there are offences that have been committed by this company before," says Mr Ham.

Another MPI investigation, Operation Round Up, found Joe and Nino D'Esposito were behind one of the biggest illegal fishing conspiracies ever uncovered. It was in the early 1990s when they fished out of Wellington. 

The case summary says they colluded with fishermen to falsify records and 574 tonnes of orange roughy was misdeclared as cardinal fish - a fish of lesser value - or not declared at all.

Over several weeks the D'Esposito brothers' company paid cash for illegal hauls of fish - and no landing returns were submitted.

They were fined close to $1 million, which at the time was the biggest fine ever dished out by the district court.

Newshub Nation
The Trial B. Photo credit: Newshub Nation

It was after that case the D'Espositos left Wellington and headed for the harbours of Hawke's Bay. 

Then in 2009 they were caught misreporting again. This time at least 900kg of moki was landed from their vessel 'Trial B' and falsely reported as blue warehou, another lesser value fish.

MPI has to 'follow due process'

 

Despite this history, Steve Ham says MPI can't stop the D'Espositos fishing.

"We are bound by the court process and we bound by what we can do. It's not a matter of purely MPI placing banning orders on a person. We have to follow due process. 

"Technically they were gaining a market advantage across other legally operating operators in NZ who were fishing in the same fishery."

But Mike Sullivan says there was never any deliberate intent.  

"There is another scenario that is not in play in this courtroom which is that a person sets out to deliberately misreport fish for personal pecuniary gain. That is not the scenario that is before this court."

Marcus D'Esposito, the company's general manager, has been identified as the most culpable as he knew of the misreporting and didn't stop it. 

Joe and Nino didn't know of the offending, but because they are company directors, they bear some responsibility. 

"They own that responsibility for that offending and have subsequently taken steps to ensure it doesn't happen again," says Mr Sullivan.

Karl Warr says the convictions for Hawke's Bay Seafoods are a bad look for the industry. 

"We as commercial fishers have been given the privilege of managing the surplus stock for benefit of the economy and wellbeing of the country, so we have a duty of care to do that well. And offending in those areas does not bode well for a good public image."

MPI has been criticised for not prosecuting in other cases - like Operation Bronto in 2011, where hundreds of tonnes of hoki was under-reported by some of our biggest fishing companies. 

The D'Espositos claim they've been unfairly targeted, but MPI says that's not the case.

"I think we need to make the point here that if this offending had occurred elsewhere with any other company we still would have taken this case, and we would have still investigated it to the full extent. They're by no means special," says Mr Ham. 

The judge in this case has reserved his decision on sentencing. The Crown has signalled it wants up to $1.5 million in fines.

 As for the four offending vessels, they're now technically the property of the Crown and there will be fines to get them back. But they haven't been stopped from going fishing. 

If you have further information, contact Michael Morrah at michaelmorrah@mediaworks.co.nz.

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