NET PROFITS: New Zealand officials have long been aware of conditions on foreign-crewed fishing vessels but there have been no prosecutions

Secret papers reveal the government has allowed fishermen from poor countries to be exploited in New Zealand waters.

Workers are fishing in rusting boats turned into high seas sweatshops that take large parts of the country's $1.4 billion-a-year catch.

The government papers reveal that thousands of men from poor areas are beaten and forced to work for days without rest, earning between $260 and $460 a month before paying much of it over to "agents".

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Files obtained under the Official Information Act show the government has known about the problem for some time.

Foreign charter vessels – 21 in the last year – are hired by New Zealand companies to catch quota allocated to Maori under Treaty of Waitangi settlements. Many iwi granted quota under the Sealords Deal, cannot afford to buy boats, so they contract out their quota.

That catch, worth $300 million a year, is marketed as "Produce of New Zealand".

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The boats compete with companies such as Nelson's Talley's Fisheries. Chief executive Peter Talley said the government knew what was happening but had responded only by setting basic standards for onboard observers.

"They do not care about the Filipinos, Indonesians and Ukrainians on the vessels."

Government papers show high-level awareness. One official reported that crewmen had told him they had never worked in such terrible conditions. "If these tales are correct, and I have no reason to doubt them, the conditions amount to little more than 'sweatshop' ones," he warned.

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Skippers confiscate passports so crews can't flee despite violence. "Some crew members suggest they have been hit with pieces of wood, and even on the hands with a hammer," one paper said of crew from a ship whose name was censored.

Crew members are hit with fists and even with fish. "If anyone stands against the abuse, it has been known for them to be taken to a cabin and beaten. Individuals are reluctant to draw attention to themselves."

On one boat a crewman with tuberculosis got no help until fishing was completed. When he was finally put ashore, he was hospitalised for three weeks. Another crewman suffered appendicitis and received no help.

"Crews work when the fish are running, and are sometimes forced to work two or three days without a break. If fish are not running, they are sometimes not provided with an evening meal."

On one boat, three men working in the freezer were injured. "One suffered frostbite from working in the freezer, bad enough to require hospital treatment. When he returned to the vessel he was made to remove his dressings and get on with work."

Working conditions came into focus after last August's sinking of the 38-year-old Oyang 70, costing six lives, and four months later when the 31-year-old No.1 Insung, operating out of Bluff, sank in the Ross Sea with the loss of 22 lives.

Sources say the families of the crew lost on Oyang were mostly robbed of their insurance money by agents in Indonesia, while the Vietnamese on Insung earned as little as $238 a month, with deductions for agents, food and cigarettes from that.

A Talley's boat, Amaltal Atlantis, rescued the Oyang survivors 650km east of Dunedin. Nearby foreign charter vessels ignored distress calls.

"They wouldn't knock off fishing," Talley said. "We were the only ones who put man-overboard rafts into the sea. We picked up 41 of them. It is a crime, you are supposed to go to the aid of anyone in distress, but these guys are outside the law."

The foreign boats were old and none of their rescue boats were operational. "Life means nothing to them."

His claim is reflected in a government report recounting another unnamed foreign vessel losing a crewman overboard and not looking for him because it had no functional rescue craft. A New Zealand ship searched fruitlessly instead.

Talley says New Zealand fishing is like the wild west, and getting worse.

"I think because of the higher price of fuel around the world, and as more of these boats get displaced, New Zealand is ending up as the junkyard for these fleets. I think I can say without fear of contradiction that nothing has improved one bit, and, in many ways, things have got markedly worse."

Talley's has 11 ships, pays its crews New Zealand rates, and still makes a profit. "You would be amazed at the money these boys on our boats are making." Deckhands and factory workers earn between $40,000 and $80,000 a year.

Foreign charter vessels are chartered by New Zealand registered companies, in the case of the doomed Oyang 70, Southern Storm (2007) Ltd. On the morning the ship sank, 45% of the shares were held by Seoul's Oyang Corporation. Even as searchers were looking for the missing, the corporation had itself removed as a shareholder, leaving the company wholly-owned by Hyun Gwan Choi. Quota holders without their own boats hire foreign charter vessels and Talley says unscrupulous operators are using a model that doesn't require access to capital, catch entitlements, or ownership of processing factories or fishing boats.

"People are knowingly saying: 'I don't pay the crew, I just charter the boat. The crew is provided by an agent and the agent tells me he is paying full wages." The whole thing was wrecking the viability of New Zealand fishing. "All you need is an office, a secretary, a tough lawyer and you are in business. But it is not good for New Zealand."

The papers reveal government concerns that the low wages paid might become public. A Labour Department report, obtained under the Official Information Act, censors individual and boat names, but acknowledges crews were not being paid the minimum wage, and that agents take up to half of the money.

The papers reveal that a fisherman paid the minimum wage would get around $1400 a month, but officials imply that doesn't happen because it would be three to five times what an Indonesian deckhand might earn elsewhere.

Among the papers released is a 2008 Seafood Industry Council submission to government, noting "long-held concerns as to the condition and behaviour of some foreign charter vessels". The council now says charter vessel crew are paid above the New Zealand minimum wage and charter boats are not much older than the New Zealand fleet.

Auckland University's Jennifer Devlin, writing in the Australian and New Zealand Maritime Law Journal, questioned why New Zealand allowed "the exploitation of vulnerable workers in pursuit of profits for New Zealand fishing interests".

She pointed to an incident when 10 Indonesian fishermen escaped from the Korean vessel Sky 75 in Nelson. "They were fed rotten meat and vegetables, told to shower by standing on deck in the waves, made to continue working when sick or injured, and were constantly beaten. They endured all this for wages of $US200 a month – wages that weren't being paid."

NO PROSECUTIONS AND NO EXPLANATIONS

Fisheries Minister Phil Heatley refused to comment on the concerns raised by the Sunday Star-Times, describing them as "operational", before directing the newspaper to acting Immigration head Stephen Dunstan. Dunstan said that in 2006 a code of practice for foreign crews was revised, requiring employment deals to "align" with New Zealand standards. Disputes would be settled in our employment institutions.

Compliance is monitored by the Labour Department, which checks wage and time records to "help identify if any non-permissible deductions have been made".

"The code requires payment of minimum wage plus $2 an hour for actual hours worked, but in no case less than 42 hours a week. Deductions may not take wages below the minimum wage for hours worked."

There have been no prosecutions for safety or workplace offences, but Dunstan said that was the responsibility of Maritime NZ.

That authority would not say why there had been no prosecutions. It said the average age of foreign charted vessels was 25 years, and the average age of the domestic fleet 22 years.

"All foreign vessels operating in our waters must meet the same safety management and environmental protection standards as our ships," it said.

Meanwhile the Transport Accident Investigation Commission is involved in reviewing the Oyang 70 and No.1 Insung sinkings, but its authority does not extend beyond the old 12-mile territorial limit. Under international law, the responsibility for the final reports lies with the flag state of the vessel, in this case Korea. Its Maritime Safety Agency did not respond to requests for information.