Strengthening the Inshore Regulations – Engagement Video Series: Licence holder education and obligations

Slide 1 - Strengthening the Inshore Regulations

Licence holder education and obligations

Slide 2 - Context

Being an Owner Operator includes managing the enterprise.

So it is necessary that licence holders are also aware of their regulatory requirements.

To help licence holders better understand the requirements they often rely on professional services, such as accountants or lawyers.

DFO’s objective is to Identify tools or supports for licence holders to understand their obligations and access independent expert advice.

Slide 3 - Managing the enterprise

Being an Owner Operator is more than just fishing. While fishing is the activity, owner operators are also required to plan, manage, and run their enterprise.

It can be a lot to manage all the aspects of the enterprise when all you want to do is fish

However, it is important that owner operators are aware of the responsibilities beyond fishing

The regulations can be complex but they are law and it’s important that your enterprise is compliant

DFO wants to ensure that licence holders have the tools they need to be successful.

Slide 4 - Return on your investments

As part of managing the enterprise, it is important that licence holders consider how agreements or several agreements can impact their overall independence.

For example, licence holders should also consider whether the agreements they enter into allow them to actually benefit - where they can balance bills such as paying their crew boat, gear, fuel, bait, as well as life’s other obligations such as their mortgage, groceries, car payments etc…)

Slide 5 - Dual representation and conflicts of interest

Many licence holders seek help from professionals such as lawyers, accountants, or companies that provide services (such as management companies) to help them be compliant with the regulations.

But, not all advice obtained from professionals is independent or focused on licence holders’ interests.

Sometimes a professional may represent both the licence holder and the lender. This is referred to as dual representation.

While not prohibited, there are some risks.

• Some professionals who are paid by the party with commercial interests (the lender) may be unable to provide independent advice that equally serves both the lender and the licence holder.
• Or, sometimes in remote or rural communities, access to professionals can be limited as there may not be many options.
• Or, in some cases, licence holders may choose dual representation; for example due to a desire to avoid added costs.

When the professional favours the interests of the one paying them over the licence holder’s interests, this can lead to a conflict of interest.

A conflict of interest can make the professional unable to fully protect the interests of both parties.

Even if the professional acts in good faith, the perception of a conflict of interest can cause doubt and lower trust.

Slide 6

There are several different ways that DFO could address the concerns from the previous slides.

The ideas presented here are for discussion and do not necessarily reflect the final options that will be put forward.

Instead, we want to get a sense from you about which of these areas you think DFO could pursue to address the identified concerns:

Specifically, should DFO focus on:

• Developing information or guidance documents to help licence holders better understand their regulatory obligations
• Requiring business plans when licence holders use third party lenders (non-recognized lenders)
• Identifying ways to support licence holders in obtaining independent advice
• Identifying ways to address conflicts of interest

Slide 7 - Discussion question

What tools would be most helpful for you when it comes to managing your enterprise?

Slide 8 - Discussion question

How can DFO support licence holders in obtaining independent advice without risk of conflicts of interest?

Slide 9 - Thank you!