environment

Culture of silence or a cover-up?

Newsroom can reveal an oyster-killing parasite was first discovered in samples from an aquaculture facility run by New Zealand’s largest independently-owned science organisation. Why did it take three years to come out and why, even now, will the Ministry for Primary Industries not confirm it? David Williams investigates.

“This is the start of something very significant,” Primary Industries Minister Nathan Guy said in April 2015, at the official opening of a new mussel hatchery near Nelson.

Guy was the star guest at the launch of the Shellfish Production and Technology New Zealand (SPATnz) facility at Cawthron Aquaculture Park, at Glenduan, just north of Nelson. The purpose-built hatchery had a bright future, considering the Ministry for Primary Industries (MPI) and seafood giant Sanford had committed $13 million each to the venture.

The hatchery ticked all the Government’s boxes. It was a regional research facility focused on high-value shellfish, built to produce reliable, year-round supplies of baby mussels, or spat, to be farmed in ever-increasing numbers and sent overseas.

“It just goes to show how much Nelson has going for it in terms of science, technology and innovation,” Guy gushed, according to a Nelson Mail report.

What Guy didn’t mention was that another significant event was happening at Cawthron Aquaculture Park. 

Newsroom can reveal that scientific experts considered the aquaculture park to be infected in a hushed-up biosecurity outbreak being investigated by Guy’s ministry. The biosecurity response delayed the construction of SPATnz hatchery’s outdoor ponds, used as a land-based nursery.

In January 2015, three months before SPATnz’s opening, the oyster-killing parasite Bonamia ostreae was discovered in samples from the Cawthron facility, which was breeding several different shellfish species – potential carriers of the parasite – in the hope of commercialising the research for farming. Taxpayers funded the research to the tune of millions of dollars, under Sir John Key’s Government (see details below).

MPI was duty-bound to inform the Paris-based World Organisation of Animal Health (OIE) about Bonamia ostreae’s discovery, which it did, in February 2015. Yet the ministry – and the minister – failed to tell the New Zealand public.

(Bonamia ostreae response controller Nicky Fitzgibbon says MPI consulted a range of stakeholders, especially those involved in the aquaculture industry, and launched a webpage. It provided a media release to the Marlborough Express, which, at that point, had a circulation of about 6500 copies. But it did not issue a general media release about the parasite’s discovery in 2015 or 2016.)

Last year, Bonamia ostreae’s existence exploded into public view. The parasite was confirmed at a Stewart Island oyster operation – a joint venture involving SPATnz owner Sanford. With a threat to the Foveaux wild oyster fishery, MPI moved swiftly – and publicly. Oyster farmers were ordered to remove their operations from Big Glory Bay. Farms in Marlborough’s Tory Channel and Port Underwood – infected since at least 2015 – got the same order.

So why was there two years of silence? MPI’s hush-hush approach to the 2015 discovery might be seen as prudent – a Government that didn’t want to unnecessarily spook offshore markets and protect the reputation of one of the country’s top research facilities. But a cynic’s view is it’s a sign of an uncomfortable intimacy between regulator and industry; that the ministry was too close to the industry it was funding and promoting.

Newsroom’s investigation has found MPI discarded advice from scientific and technical experts to remove Marlborough’s infected farms and restrict the movement of aquaculture vessels and equipment used there.

It looks suspiciously like a cover-up, says former Stewart Island oyster farmer Rodney Clark, whose business was destroyed by the outbreak.

(MPI’s director of readiness and response Geoff Gwyn, who has chaired the Bonamia ostreae response since late 2016, says he’d be surprised if there was a conscious decision not to publicise the outbreak. He suggests that because flat oyster farming was a small industry, and the infection was confined to a relatively small area, there was little the public could do to help.)

Newsroom’s investigation has found MPI discarded advice from scientific and technical experts to remove Marlborough’s infected farms and restrict the movement of aquaculture vessels and equipment used there. Those same experts raised concerns about “major biosecurity flaws” at Cawthron’s aquaculture park.

Despite repeated requests for interviews, Agriculture Minister Damien O’Connor and the former minister, Guy, failed to front – although Guy’s office provided a written statement.

From glory to ruin

In 2003, a former paua fisherman, Southlander Rodney Clark, took an interest in farming flat oysters, starting a 14-year obsession that would take him to Big Glory Bay and, ultimately, commercial ruin.

New Zealand’s aquaculture industry was pioneered in the 1960s and was dominated by mussels, Pacific oysters and king salmon. The flat oyster, known to Māori as tio, and also called the Bluff oyster or dredge oyster, is prized for its meat and flavour, compared to the Pacific oyster, which is fast-growing and bigger but milder-tasting.

There had been attempts in New Zealand to farm flat oysters, with little commercial success, as the endemic parasite Bonamia exitiosa, a close relative of Bonamia ostreae, periodically took hold and caused huge die-offs. But get it right and the payoffs are huge. Mussels sell for cents, but oysters generally go for dollars apiece.

Farming also has an advantage over the Bluff oyster boats, trawling Foveaux Strait for the prized delicacy. Wild oysters take between four and six years to reach commercial size but modern farming methods, like baskets, can grow mature oysters in 12-to-18 months.

Clark’s interest in oysters came after the Labour Government’s moratorium on new marine farming consents, imposed in 2001, after aquaculture’s rapid expansion in the 1990s. As much of the industry stood still, Clark beavered away perfecting his breeding techniques and ensuring his oysters would have a tolerance to Bonamia.

(Oysters are bivalves – named after their two-part, hinged shells – a group of molluscs including mussels, cockles, scallops and pipi. They feed by straining plankton from the water through their gills – making them susceptible to infected water. In the wild, oyster babies, known as spat, often cling to shells, even those of other fish, after being released in the water.)

The business side of things didn’t go perfectly, however. Clark’s first company crashed into receivership, after investors shunted him aside. But Clark and wife Dee kept pushing. According to the Southland Times, the couple lived in the smoko room of the old Ocean Beach meatworks in Bluff – their business’s hatchery and nursery – for three years, “with no hot water, taking showers with buckets”.

New Zealand's Bluff Oyster Company premises at Ocean Beach last month, before an asset sale. Photo: David Williams

In 2013, Clark announced that the New Zealand’s Bluff Oyster Company – a name picked for its marketing appeal – had cracked the secret to farming Bluff oysters for export, but needed water to farm in. Later that year, it found a home in Big Glory Bay, a 12 square kilometre bay accessed through Stewart Island’s Paterson Inlet, using consents from a mussel-farming company.

(In 2008, when regulatory changes put Environment Southland in charge of environmental monitoring, there were 36 consented marine farm sites in the bay – making it the province’s most intensively farmed site. The bay has been commercially fished for salmon since 1981 and green-lipped mussels since 1987.)

In February 2015, a day after MPI notified the Paris-based OIE about Bonamia ostreae being found, Aquaculture New Zealand chief executive Gary Hooper sent an email telling his industry of the infection “on 3 sites at the top of the South Island”. MPI’s Richard Fraser updated the industry on the results from emergency sampling, undertaken to see if the parasite had spread. (It hadn’t, at that stage.)

In March, a concerned Clark emailed Fraser, to demand MPI ensure no oyster spat or larva was sent to Southland from Nelson and Marlborough. “Like all biosecurity investigations and response we are taking this very seriously,” Fraser told Clark, adding “to date no movements outside the affected area have been permitted since the response started”.

MPI called a meeting in Invercargill in June, to discuss restrictions on oysters movements, to stop the parasite spreading. “I wanted everything shut down,” Clark recalls. “I didn’t want any way we could get anything here.”

Oyster movements were restricted on June 10. “At the time I didn’t have any qualms about it,” Clark says. “We thought we’d been told everything, we really did. I thought they were being up front with us.”

Clark returned to growing his business, through the business of growing, as suspected “human vectors” moved infected material 900 kilometres south. Signs of infection take months to show up in oysters, so it’s unclear when the movements, unintentional or deliberate, were made. (As reported last month, MPI’s investigation turned up no illegal activity.)

On May 31 last year, MPI contacted New Zealand’s Bluff Oyster Company to say it was one of two Big Glory Bay farms to test positive for Bonamia ostreae. (In fact, only Sanford’s farm tested positive, “with high prevalence”. In initial tests, two of Clark’s 50 oysters had tested positive. But in September, MPI told Clark subsequent testing at the Animal Health Laboratory – done in May – showed one sample was negative and the other inconclusive.)

Nine days later, Clark’s company received the devastating news that its oysters and equipment had to be removed. The business was finished. Clark predicted his company’s 2018 production would have eclipsed that of the Foveaux fishery’s seasonal catch, of roughly 10 million animals. Instead, tonnes of his precious oysters and baskets were lifted out of Big Glory Bay and carted off to be buried in landfill.

As his business was winding up, and compensation claims were being lodged, Clark wondered how it had come to this. The more he dug, the more he came back to one place – Cawthron Aquaculture Park.

Chance discovery

Bonamia ostreae’s discovery in 2015 happened by chance. It wasn’t found by a diligent Government lab technician or uncovered by an observant border official, suspicious at finding a lesion-ridden, yellowing oyster. Rather, an Otago University PhD student found it while studying the other Bonamia, exitiosa, at MPI’s Animal Health Laboratory in Wallaceville, Upper Hutt. The student found Bonamia ostreae in Cawthron Aquaculture Park samples taken from Marlborough Sounds oyster farms in May and August 2014. He called MPI’s biosecurity hotline on January 30, 2015.

MPI refuses to confirm Cawthron was infected. Compliance investigation manager Gary Orr says it doesn’t comment in detail on compliance investigation and won’t identify anyone involved. “We cannot confirm or deny whether Cawthron were involved in this investigation.” However, Newsroom found confirmation of Cawthron’s infection in an MPI document published last year.

Cawthron Institute’s chief commercial officer Stuart Cooper says it was one of many organisations that cooperated with MPI’s investigation. “MPI is the only organisation that we are aware of that will have all the facts. We genuinely believe you need to seek the answers to the questions you have from MPI. They have data from Cawthron as well as many other organisations.”

In June 2015, as aquaculture stock transfers from Nelson and Marlborough were banned, MPI convened a technical advisory group of six experts to advise its response controller. The group’s report, released to Newsroom under the Official Information Act, contains a scathing assessment of Cawthron’s response to Bonamia ostreae – even suggesting legal action be taken to bring the park’s practices into line. Names in the report have been redacted, but it’s clearly referring to Cawthron Aquaculture Park, or CAP.

Bonamia 2015 TAG Report by David Williams on Scribd

The report said the aquaculture park’s new biosecurity plan and procedures failed to address “major biosecurity flaws”, and there was an “unacceptably high risk of release of B. ostreae at the site” because of its design and engineering. Existing shellfish hadn’t been destroyed, there was no thorough decontamination of the pipework and water supply and flat oysters from infected sites had been reintroduced to the site without being assessed for disease. In particular, the site’s water supply wasn’t “biosecure”, as inlet and outlet mixing was allowed, making it “certain that organisms are living in the drain”.

During a visit, the expert group even witnessed Cawthron staff violating its new biosecurity plan. “All bivalves on site are a risk,” the report said.

Green-lipped mussels and Pacific oysters – potential carriers of the parasite – had already been transferred to the North Island, the report noted. Allowing movements of potentially infected bivalve species from within the “contained zone” was likely to spread the disease, the experts warned.

The group was unimpressed Cawthron was keen to claim it was, or wished to be, free of Bonamia ostreae, “with no evidence to support that assertion”. At the time, it still had flat oysters on-site and was applying to bring in flat oysters from infected in-sea sites.

“It would appear that the only way to change practices at [redacted] will require legal means.”

A bright spot for Cawthron was the good biosecurity controls noted at one part of the site, possibly the SPATnz hatchery opened by Nathan Guy in April. It was “potentially able to be a separate compartment” from the rest of the facility with “little additional investment”, the report said.

The experts recommended MPI treated the aquaculture park as an infected site, and should only be declared free of Bonamia ostreae after two years of clear tests. MPI’s Gwyn thought that might have been achieved. But MPI’s press office says all infected sites in Nelson-Marlborough were depopulated – “so there is nothing further to test”.

Removing farms ‘extreme’

Among the 2015 advisory group’s key recommendations were removing oysters and equipment from infected Marlborough farms and adding commercial aquaculture vessels and equipment to the restrictions. Those recommendations weren’t followed.

Gwyn says removing the infected Marlborough farms would have been “extreme” and the decision to restrict shellfish movement “was the appropriate one, given the circumstances”. The “game-changer” in 2017 was Bonamia ostreae’s proximity to the Foveaux fishery.

Geoff Gwyn. Photo: MPI

Former minister Guy, who was briefed on the decision, says a full risk assessment was done and a controlled area notice was thought to provide the necessary safeguards. Yet, privately, MPI was worried about the risks from farm equipment movements. In March 2016, MPI’s Dunedin team manager Allen Frazer responded to concerns from Southland oyster farmers about the spread of Bonamia ostreae by saying “most, if not all, oysters” from the top of the south were destined for a plate or overseas. He added: “The likelihood of an oyster travelling south and ending up in the sea is very low. For example, our assessment is that equipment (eg. farming and fishing gear) may be a higher risk pathway.”

Guy also says commercial considerations played no part in the decision, which he said was based on “science and risk mitigation”. But that’s contradicted on multiple occasions by MPI emails. In May 2015, MPI’s Richard Fraser, a senior analyst in the aquaculture unit, wrote to aquaculture industry figures: “MPI must consider, assess and manager the legal, trade, reputational and biosecurity risks at all stages of this response.” A month earlier, Fraser said the response “aims to minimise negative impacts to the aquaculture industry, wild fisheries, the environment, socio-cultural values and trade”. The same email trumpeted “No trade implications have been raised by our trading partners” – his emphasis.

Another jarring point was Fraser’s comment, made to Bluff oyster farmer Clark in March 2015, that “no movements outside the affected area have been permitted since the response started”. Gwyn tells Newsroom there was freedom of movement before June 2015, when the controlled area notice was imposed, so it’s possible that oysters were taken to Stewart Island legally.

Seafood giant Sanford confirms oysters went elsewhere in Southland, but says the larvae never reached an oyster farm or even the ocean. Chief operating officer Greg Johansson, who has just retired, confirms its joint venture partner Tio was aware of one transfer of oyster larvae to Southland before the controlled area notice was imposed. “It was delivered to a building near Bluff which Tio used as a hatchery facility and the sample was destroyed before it could interact with other stock because it had not travelled well and was not of good quality.”

Through Sanford, Tio, which ran the two oyster farms, says that in its work with Sanford it “has not transferred oysters or larvae from the upper South Island to Big Glory Bay at any time”.

Newsroom approached Sanford’s former Southland manager Tommy Foggo, who retired to Clyde last September, to ask what he knew about spat movements, but he refused to comment.

Is former minister Guy satisfied enough was done to track the movement of oysters before and after controls were put in place? He wouldn’t say. “MPI did extensive track and tracing of how the oyster virus got here. They also ran a compliance investigation, which is now publicly available.”

Guy’s words don’t soothe former oyster farmer Clark, who’s seething about Sanford’s link to Cawthron. “If I had known that, I can tell you now I would have been jumping up and down and asking a hell of a lot more questions.”

Money for molluscs

While Cawthron wouldn’t answer Newsroom’s questions, a December 2016 presentation given at its Nelson offices said the discovery of Bonamia ostreae had “major implications in terms of stock movements and therefore our research programmes”. Research at its aquaculture park had “ceased for now”.

That caused alarm within Cawthron, which had received millions of taxpayer dollars to pursue its aquaculture research – and a self-perpetuating dream. Ten years ago, when an estimated one-third of New Zealand's 3.5 million farmed oysters were produced using Cawthron-produced hatchery spat, the research body’s stated aim was to “make the New Zealand shellfish industry the world’s first completely domesticated shellfish producer through production of hatchery spat”.

That aim, which would lift in exports, gelled nicely with those of former prime minister Sir John Key, who swept to power in 2008 on a platform of lifting the country’s economic performance.

The Government wasn’t just an enabler, it picked winners and became their champion. That meant working more closely with industries. The Government was a “partner” making “investments” from contestable funds, especially those matched dollar-for-dollar by industry.

“We need to sort out aquaculture and get this sector moving,” Aquaculture Minister Phil Heatley said in 2008, while committing the Government to helping the industry achieve its target of reaching $1 billion of sales by 2025.

(Heatley’s interest in oysters even extended to the wild variety. In 2011, he gave a special permit for an extra million Bluff oysters to be pulled up for the Rugby World Cup.)

The Government-industry partnership extended to biosecurity responses. Gwyn confirmed Aquaculture New Zealand – whose funders include Sanford but not Bluff’s Rodney Clark – and the head of MPI’s aquaculture unit were present for key decisions about the Bonamia ostreae biosecurity response. Gwyn rejects any suggestion MPI is too close to the industry to make hard decisions. “I think depopulation in Big Glory Bay shows that, where it’s warranted, we will work incredibly hard to remove the risk and will act very decisively.”

After the 2008 election, Government money flowed into aquaculture.

Cawthron’s $5.7 million aquaculture park, officially opened in 2011, was built with $1.7 million from the taxpayer. Two years later, Cawthron and its research partners secured $7.4 million a year for four programmes, including a seven-year commitment for its cultured shellfish programme. And in 2016, Cawthron got $5.3 million, over five years, in the Endeavour round of scientific funding to research “novel farming systems enabling multiple shellfish species culture in open ocean sites”.

The Bonamia ostreae biosecurity threat jeopardised years of Cawthron research, backed by millions of taxpayer dollars. The tap of Government money could turn off. Cawthron’s December 2016 presentation said it would “work with MPI to find way forward to enable research” and consider “new options for targeted research”.

Big Glory Bay presented that opportunity.

About five hours after MPI announced Bonamia ostreae had been found on Stewart Island, Cawthron issued its own statement, stating its scientists were “well-placed to respond”. “There’s a need for targeted research on the New Zealand species and we hope to work with Government agencies and industry on this,” the institute’s aquaculture group manager Serean Adams said.

Cawthron didn’t have to wait long. In mid-September, just a week after the last of about 1500 tonnes of oysters were removed from Big Glory Bay, the Ministry of Business, Innovation and Employment announced its $250 million Endeavour round of science projects. Cawthron received the largest pledge, $14.6 million over five years, for research into “the risk to NZ aquaculture from infectious diseases and aquatic health issues”.

The Government had again backed one of its repeated winners, and granted money to the organisation that knew more about Bonamia ostreae, first-hand, than any other.

It’s an ironic twist not lost on former oysterman Clark. “Good grief,” he says, when told of the $14.6 million grant. “Now that does make me wild.”

Stuck in a rented Bluff house, struggling to pay his company’s bills while waiting for MPI to consider his compensation claims – he was paid out for the work of removing his farms, but no more – Clark looks back glumly as he wonders what the future holds.

“I just feel like a failure. What a waste of 14 years. I could have friggin’ done something else.”

* The word “contaminated” has been removed from one sentence of this story because, as it was originally written, the reader might think listed company Sanford confirmed that “contaminated” oysters were moved from Nelson/Marlborough to its joint venture oyster farm. That is not correct and was not the intention. Given additional comments from Sanford’s former chief operating officer Greg Johansson, we've clarified oyster larvae went to its joint venture partner’s hatchery, near Bluff – not to Stewart Island. Comments from MPI's Bonamia ostreae response controller Nicky Fitzgibbon have also been added.

Timeline

2015

January: Bonamia ostreae found in samples from Cawthron Aquaculture Park, the first time the parasite has been found in the Southern Hemisphere.
February: Samples from two Marlborough Sounds oyster farms test positive for the parasite, the World Organisation of Animal Health is notified.
March and April: Oysters from other parts of the country are sampled and tested, confirming the parasite hasn’t spread from Nelson/Marlborough.
April: Primary Industries Minister Nathan Guy officially opens SPATnz, at Cawthron Aquaculture Park.
June: MPI imposes controls on oyster movements through a controlled area notice, the first time such a notice has been used in the New Zealand marine environment.
September: A technical advisory group’s report, to advise the biosecurity response controller, is completed. The six-person scientific and technical group recommends the removal of two infected marine farms in the Marlborough Sounds and the addition of commercial aquaculture vessels and equipment are added to the controlled area notice. MPI doesn’t follow that advice.

2016

April: Further testing reveals Bonamia ostreae in oyster farming operations and scattered wild populations in Queen Charlotte and Pelorus Sounds.
September: A surveillance survey in Queen Charlotte Sound finds the parasite infection in farmed oysters of “up to 100 percent”.

2017

May 31: MPI announces two oyster farms in Big Glory Bay, Stewart Island, have tested positive for Bonamia ostreae, some 900 kilometres south of Nelson/Marlborough. The controlled area notice is reissued, to restrict shellfish movements in and out of Nelson, Marlborough and Stewart Island, and adding farm equipment and vessels.
June 9: Oyster farms in Big Glory Bay and Marlborough will be urgently removed, MPI says.
June 19: The removal of farms in Big Glory Bay begins.
July: Farm removals begin in Marlborough.
September 6: Final oyster lines removed from Big Glory Bay.
September 13: Cawthron is the biggest recipient of research funding from the 2017 Endeavour Fund, the Ministry of Business, Innovation and Employment announces. It gets $14.6 million over five years to study “the risk to NZ aquaculture from infectious diseases and aquatic health issues”.

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