The Newcastle Herald can reveal that the fish farm failure also resulted in four bronze whaler sharks getting trapped in one of the fully stocked sea cages, and the government did not inform the public. 

When efforts to remove two of the sharks failed, they were killed.

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Documents obtained under freedom of information laws by the Herald after a successful six-month battle with the Department of Primary Industries (DPI), reveal long-standing problems at the joint NSW government and Tasmania-based Huon Aquaculture project, which is two years into a five-year research trial.

Two sea cages were damaged in heavy seas between January 14 and 18 at the Marine Aquaculture Research Lease (MARL), one lost its entire population of 20,000 predatory yellowtail kingfish, sparking outrage from conservation groups and local tourism operators who called for the multi-million project to be shutdown.

An interim incident report, put together by an independent investigator in conjunction with Huon and DPI, identified serious maintenance issues at the farm, seven kilometres off Hawks Nest, that led to the escape.

Predator nets on two of the pens had not been cleaned since they were installed, or more than a year, leading to a large buildup of barnacles and weed causing structural problems in heavy seas.

Net cleaning is meant to be carried out either weekly or every two weeks depending on the size of the mesh used.

According to the report, two of the three fully rigged pens at the farm were “not at an appropriate standard with considerable wear and tear to both the pens and the nets”.

“The condition of the pens in terms of excessive biofouling on both predator and inner nets would have contributed significantly to the weight of the overall fortress pen,” the interim report reads.

“Heavy nets can lead to structural damage of remaining pen infrastructure. The conditions of the pens...was sub-standard in terms of pen rigging and general maintenance and particularly the level and size of biofouling.”

The predator, or external, net on the severely damaged pen had not been cleaned in 15 months and the same net on the second damaged pen had not been cleaned in 13 months.

Internal reports and emails also reveal that the government is investigating “exclusive possession” of the lease area to keep boats and divers out.

Recreational and commercial fishers, who cashed in on the kingfish bonanza, were angered in January when the government issued a temporary closure at the MARL claiming they should not be locked out of public waters.

Vocal critics have long held the view that the farm should not have been approved in the marine park, which is a main thoroughfare for migrating humpback whales.

Marine Parks Association chairman and tourism operator Frank Future said the “whole operation sounds like a shemozzle”.

“I think they should pack up and go home,” he said. “The government calls it a success, but I really question how they quantify a success. The whole mess beggars belief.”

Huon was fined $15,000 by the NSW Department of Planning in July for failure to maintain the pens.

In the weeks after the escape, DPI issued a summary of investigation findings which blamed “biofouling growth” for the damage and said “robust” and fast growing barnacles had damaged ropes. There was no mention of neglected maintenance.

Emails obtained by the Herald also reveal that there were problems with sharks entering the pens before the storm damage in January.

“With sharks recently reported (prior to the storm event) within the predator nets and then more recently within the inner nets, we need to know how long there have been holes in these nets, the cause of the holes and the duration between finding the holes and repairing them,” a Huon staff member wrote to DPI on January 27.

After the storm, as Huon staff recovered up to 5000 kingfish, two bronze whaler sharks were found trapped inside one of the damaged pens still stocked with fish.

According to a “holding statement” prepared by the government, that was never publicly released, the sharks entered and left the pen through a hole in the net.

The feeding frenzy continued when another two smaller whaler sharks entered the pen after the first two left.

“Despite efforts to repair the net two smaller whaler sharks then entered the pen and became entrapped,” the statement reads. “Efforts continue to remove the sharks using non-lethal means.”

Several days after the holding statement was written by DPI, the Herald asked the department about reports that sharks had been congregating around the pens. It responded that it “cannot confirm this”.

When asked this week what happened to the two sharks trapped inside the sea pen, a DPI spokeswoman said they were “humanely euthanised”. 

The information can only be made public now because the Herald made an application in March for details about the failure under the Government Information (Public Access) Act.

When it was refused the majority of information following objections from Huon, the Herald requested a review by the NSW Information and Privacy Commission (IPC).

DPI had ruled that the information, including the holding statement about the trapped sharks, was “commercially sensitive”. 

In June, the IPC found DPI’s decision was “not justified” and recommended a new decision be made to release all information besides some personal details.

Last week, the department released the majority of the information with some names and small sections redacted, including two paragraphs detailing the experience and skills of Huon employees. 

Mr Future said he did not understand why the government didn’t release all the information six months ago when it was requested.

“This trial is in public waters, the government is a joint partner and they are spending public money on it,” he said.

“The public has a right to know what is going on. I question what they have to hide and what else we don’t know. When you have the government in partnership on the project, you have to wonder who is actually policing it.”

The interim investigation found that the design of the “fortress pen”, when correctly rigged and mainatined, would have been able to withstand the weather conditions in January caused by two low pressure systems off the coast.

“Early indications (subject to outcomes of reviews as listed below), suggest that poor maintenance and equipment availability, particularly a suitable net cleaner are likely to have been significant contributing factors to the escape of the fish,” the report reads.

Two different net cleaners were used at the farm, but neither was able to remove the buildup of barnacles on the outside nets. Huon had ordered another cleaner and was waiting for it to arrive. 

The report also details concerns about the skill level of Huon staff working on the project. It says in the weeks before the escape, the project manager resigned and Huon recognised the need to restructure to ensure “sufficient, current expertise” was applied to the trial.

“There are a range of skill levels and experience amongst the farm attendants, however, 40 per cent of attendants had no previous aquaculture experience,” it reads.

“There was limited contact between the operational staff at the MARL and Huon farm staff in Tasmania. This left the MARL operational team relatively isolated...and prevented, to some degree, the rapid development of understanding of Huon systems and procedures that may have assisted in better management and operation of the farm.”

A spokeswoman for Huon said on Friday that the sea pens had been temporarily removed from the MARL, but the company was committed to the remaining three years of the trial.

She said it was too soon to commit to establishing a full commercial operation off Port Stephens. This could involve up to 48 sea pens. 

“We believe in continually learning and refining our farming technologies so they are site-specific,” she said. 

“Based on key learnings from the trial, we are taking steps to upgrade and reinforce the nets and pen infrastructure.

“We expect this process to take six months.” 

It has been a difficult year for Huon. In May, storms caused a fish pen to break apart in Tasmania, releasing 120,000 Atlantic salmon into the wild.