IWI IKA - supporting iwi fisheries

Selling ACE

 

5-step guide to selling ACE (Annual Catch Entitlement)

  1. Find a Buyer
  2. Agree on Sale Price and Sale Conditions
  3. Document the Sale & Purchase Agreement
  4. Transfer the ACE to the Buyer
  5. Assess the Buyer’s Performance

1. Find a Buyer
Finding a buyer for your ACE is about knowing where to look.  The 3 most common places to find a buyer:

  • Tender
  • Quota broker
  • Iwi networks

Achieving a high price for your ACE is an important objective but there are other factors that are just as important.  For example, does your potential buyer have a good reputation in the industry?  If they have a bad reputation, wha t is the risk of the purchaser defaulting on payment?  Are there other benefits that the buyer could give you to supplement a lower purchase price?  What is the risk of your purchaser going bust before you receive your ACE price?  Are you looking for a local purchaser who you can meet with on a regular basis and build a long-term relationship with?  The key here is to know what is important to your AHC and iwi and then to align your ACE sale process with your desired strategic outcomes. If you have a relatively small quota package you may want to consider pooling your ACE with other Iwi so that collectively you have a larger ACE package to sell.

2. Agree on Sale Price and Sale Conditions
As well as specifying a sale price the ACE sale agreement should specify payment conditions such as the payment date, what happens if payment is late and a process to resolve disputes.  One of your conditions should be a performance report whereby the purchaser agrees to provide you with a report on their performance over the fishing year ie. how many breaches if any etc…  The report should be provided to you at the end of the fishing year and before you renew the agreement.  This way you can make a decision based on the performance report whether you sell your ACE to the same purchaser again.

3. Document the Agreement
Although some agreements are made with little or no written documentation we think that the best way to reduce your risk is to capture the agreement in writing.  As well as stating the purchase price and payment conditions, it is essential that the agreement includes conditions that will reduce your risk as the quota owner should the buyer breach any rules or regulations relating to the fishing of your ACE.  Te Ohu Kaimoana has developed a template ACE sale agreement for this purpose.  Download a copy of the agreement here.

4. Transfer the ACE to the Buyer
Once you have found a buyer of your ACE, agreed on price and conditions and documented the agreement, the fourth step is to transfer the ACE to the buyer.  The transfer of ACE is processed through Fishserve and can be carried out using paper forms or electronically via the Fishserve website.  We recommend that you complete all Fishserve transfers electronically as this is not only cheaper but much quicker.  Go to the Fishserve website and select the ACE Transfer option on Core Services.  If you are new to ACE transfers, give the friendly staff at Fishserve a call and they will guide you through the process.

In order to complete an ACE transfer your AHC and the purchaser of your ACE must be registered with FishServe.  Your AHC should have been registered with FishServe when you received your population based quota from Te Ohu Kai Moana.

If you have not dealt with a buyer before or want to play it safe, we recommend that you negotiate to transfer your ACE to the buyer after you receive full or part payment of the ACE.

5.  Assess the Buyer’s Performance
A performance report is a report that should be completed by the purchaser of your ACE.  The report should tell you as the ACE owner whether or not the ACE purchaser has complied with all of the sales conditions specified in your agreement.  All good fishing vessels and purchasers of ACE should be able to provide you with a performance report.  If the report notes any compliance issues you should discuss these with the purchaser directly. If there are continual discrepancies in that the ACE buyer repeatedly fails to meet your agreed conditions or there are major non-compliance issues, you should then exercise your options under your contract to enforce compliance or seek compensation or other legal remedies. We suggest if this occurs you seek advice from your legal advisor.