Friday, May 3, 2019

Small Scale Fishers and Fishing Rights Application Processes

The next 12 months marks a critical period (yet again) for South Africa's small-scale fishers who have to re-apply for their fishing rights. With memories of the catastrophic and damaging 2013 rights allocation process process still fresh in many small-scale fishers' minds, the upcoming allocation process is again being met with trepidation and uncertainty. For example, I have been advised that fishers were apparently told by departmental staff that right holders above a certain age would not qualify for fishing rights. This is despite the fact this unlawful and irrational criterion was abandoned by the Minister during the 2018 west coast rock lobster appeal process.

Three key concerns are the ongoing uncertainty as to how the application process will unfold; what criteria will be used to evaluate applicants; and how will the concept of small-scale co-operatives be accommodated, especially since the two most important small-scale fisheries - lobster and abalone - have been decimated by a decade of mismanagement and illegal fishing. 

This Blog will address possible evaluation criteria in greater detail over the coming weeks and months, especially as they need to be applied to specific fisheries. However, it is important to note that we have repeatedly advised the department and Minister that unlike the 2013 and 2016 processes, evaluation criteria and scoring rules need to be determined specifically for individual fisheries. The generic criteria and rules that have been developed for the past 2 allocation processes are intellectually lazy and highly ineffectual to properly determine who should qualify for 15 year long fishing rights. How do you have the same evaluation criteria for an oyster harvester and for a hake handline fisher for example? 

Possible evaluation criteria for each small-scale fishery sector will be discussed over the coming weeks. 

A significant and recurring concern raised by small-scale fishers remains the apparent complexity of the application forms. Again, a principal problem we have found when attempting to remedy the flaws of the allocation processes in 2013 and 2016 has been the use of inappropriate "generic" application forms for very different fishery sectors. These generic and unnecessarily lengthy forms are more a hindrance than a help. Much of the information requested from small-scale fishers is unnecessary (such as copies of ID's, compliance with employment equity laws, skills development laws, complex salary tables for "employees", contributions of CSI etc). 

Small scale fishers spread across of the country's coastline do not have the resources, time or inclination to complete these application forms. Many are forced to use consultants or fishing companies who then tie them into repressive catching, processing or marketing contracts in lieu of payment for their "services". 

A simple solution instead is for the department to require small-scale fishers to complete an on-line fishery specific application form accessible from any smart phone. And only very necessary data is needed and can be provided in the language of choice (because the form is completed via a smart phone application, the submitted form can be automatically translated into English if necessary). In addition, because the form is submitted electronically, key evaluation and scoring data sets can be generated within hours of the forms being submitted and without the need for expensive and time-consuming human evaluation of individual applications that can take weeks to complete. An allocation of fishing rights in the white mussel, oyster, hake handline and even abalone and line fish sectors could take between 5 and 20 days to complete. 

We dont believe that a small-scale application form should take more than 45 minutes to complete and the principal questions should include the following (for existing right holder applicants):

    • Name, Contact Data and Identity number;
    • Current fishing right number;
    • Fishing area and landing site applied for;
    • The Race & Gender by which the applicant self-identifies;
    • The degree to which the applicant relies on the fishery concerned for his/her total annual income;
    • Fishing performance for the past 3 seasons;
    • Amount of fishing levies paid annually for the past 3 seasons;
    • Nature of access to fishing vessel and vessel details (not relevant for sectors such as white mussels and oysters);
    • Number of people employed and in what positions for the past 3 seasons;
    • The amount of money invested in fishing gear, vessels, electronic equipment, processing or marketing of fish over the duration of the right. 
There is no need for small-scale fishers to submit any supporting documents. Those applicants provisionally identified for fishing rights, can be randomly selected to provide vessel access agreements, tax certificates etc for verification before the final decisions are taken. 

Similarly, for new entrant applicants, only specific targeted questions need to be asked, including requesting an explanation of their understanding of the fishery and requiring a fishing plan which should set out key elements to demonstrate an ability to fish the species concerned. 

Tuesday, April 23, 2019

Fishery Seminar at the Lord Charles Somerset - What's the Point?

On 23 and 24 April 2019, the Fisheries Branch of the Department of Agriculture, Forestry and Fisheries (DAFF) will be holding a 2-day seminar to "stimulate discussions and thoughts on issues [aimed at] broadening participation in the fishing industry in an equitable and fair manner guided by the need to restructure and transform the sector, investments and development finance for small businesses and new entrants, aquaculture and agro-processing (diversification of the fishing sector), seafood trade and regulation."

The stagnation and collapse of significant parts of the South African fishing industry have occurred at a staggering pace over the past 2 years. Not only do we see the the factionalised corruption-fuelled battles at a national macro-level playing out in the Fisheries Branch, but a substantial consequence of this has been the mismanagement and collapse of fisheries like the lobster, abalone and pilchard fisheries. The single most important fishing rights allocation process (FRAP) since 2005 - the 2020 FRAP - looks set to collapse into failure like the 2013/2014 FRAP. 

The current infighting, corruption and maladministration afflicting the DAFF does not present an environment for a successful seminar or an ethically defendable FRAP 2020. The allocation of additional fishing rights to new entrants in the large pelagic, hake inshore trawl and horse mackerel fisheries in 2016 confirmed that allocating additional fishing rights without ensuring a proper and functioning department only supports paper quotas and fronting. The failure to restructure the horse mackerel fishery, for example, as was advised in order to support the allocation of new fishing rights, has created a fishery dominated by single vessel and fishing company that has easily been able to hold an entire fishery hostage. Those new, predominantly black right holders who have elected to try and utilise their paper rights have been offered as little as 96 cents a kilogram for their fish on a "take-it or leave-it" basis, while counterparts in Namibia are currently negotiating with Icelandic, Russian, Chinese, Namibian and Spanish vessel owners at prices between R1,80/kg and R3,20/kg - a consequence of competition. 

The collapse of the pilchard fishery - due principally to climactic reasons - has been on the cards for some time but nothing has been done to mitigate the annual contraction of the TAC to the current point where it is effectively zero. An effective and pro-active department would have opened up a red-eye herring fishery and chub-mackerel fishery and long understood what were the bottlenecks to additional investments in fish-meal processing factories given that the anchovy TAC has increased substantially but we lack the processing capacity for such a TAC.

The SA West coast rock lobster fishery may never recover from a decade of mismanagement and the addition of unsustainable numbers of fishers to the fishery who will continue to legally and illegally fish our stocks to complete collapse. The same applies to abalone. We may as well confirm these two  iconic small-scale West Coast fisheries to doppies and empty shells on our beaches. Why have we done nothing to urgently reduce the illegal trade in these two fishery sectors? We keep talking about the re-establishment of the specialised "green courts" but nothing has materialised after more than 2 years talking (it took us 6 months from conceptualisation to opening the first green court in 2003 and another 3 months for the second court in PE). 

And tuna. We all recall how elated we all were when CCSBT confirmed South Africa's substantial 450 ton CCSBT TAC (up from 40 tons). In 2016, we allocated dozens of additional fishing rights and yet today we continue to not harvest our full Southern Bluefin tuna allocation and most fishing rights remain in envelopes in the draws of right holders. Again, because fishing rights were allocated without the department ensuring that the right policy and regulatory frameworks were in place to support vessels, investments and market access. 

The problem is not "transformation" or a lack of investors or too few right holders. We need DAFF to fix itself, eliminate the in-house and institutionalised corruption and ensure that the few honest and committed staff left are supported to their jobs. 

Friday, November 9, 2018

Dead Fishers and Fishing Rights

During the course of my three month appointment as Chairperson of Minister Zokwana's West Coast rock lobster appeals advisory team charged with advising on the more than 2000 appeals submitted to the Minister for decisions, it became apparent that the Fisheries Management Branch had strangely decided to declare applicants for fishing rights who passed away either just before or after submitting fishing right applications persona non grata and summarily refused their applications. 

Although my advices to the department that follow below were intended for the consumption of my client's staff, it has become evidently clear that a staff member who was a recipient of various such "confidential" advices and documents shared these with her partner who coincidentally is employed by a large South African fishing group. I have seen the evidence of this unlawful conduct on whatsapp chats. Even though these patently unlawful and corrupt communique's have been shared with the department, there has not been any consequences for the corrupt official concerned and I can thus only assume the employer approves of such corrupt and unlawful disseminations of confidential advices to certain corrupt fishing interest groups. Given that these advices are now in the "public" realm and openly for sale to corrupt parties (and thus no longer confidential), it cannot be fair to law-abiding right holders and interested parties to not know that the departmental practice of refusing dead applicants fishing rights is unlawful. This is particularly important given that small-scale commercial applicants will shortly be applying for their fishing rights in sectors such as abalone, line fish, oysters, mussels and hake handline. 

My reasoning follows. 

The decision to refuse applicants fishing rights simply because they had died prior to the submission of their application or after the submission of an application for a fishing right appears to be premised on an incorrect conflation of two separate and distinct decision making processes, which need to be made under separate binding departmental policies. 

Importantly, in terms of our laws of succession (correctly encapsulated under the General Policy of 2013), the rights and interests of the deceased right holder / applicant transfers automatically upon death to his / her executor who represents the “late estate”. Accordingly, any decision on an application for a fishing right by a deceased individual must follow the following 2-stage process - 

1. Step 1 is to enquire whether the applicant (i.e. the deceased person) qualifies for a fishing right under the MLRA and policy and criteria for that specific fishery based on the content of his/her application and history. If yes, the right MUST be granted to the LATE ESTATE represented by the EXECUTOR and the EXECUTOR must then see to transferring the right in terms of the Laws of Succession (i.e. whether to a beneficiary named in a valid will (testamentary succession) or if no will, then the law of intestate succession will apply). 

2. Step 2 will be for the department to then decide a section 21 transfer application filed by the legal beneficiary of that right (whether in terms of testate or intestate succession) and the department must then decide whether the transferee meets the stated criteria of the Transfer Policy and section 21 of the MLRA. 

Accordingly, a deceased applicant cannot automatically be refused a right in terms of section 18 of the MLRA. But neither is the lawful beneficiary of that right automatically entitled to a positive decision to have the fishing right transferred to him/her under section 21 of the MLRA. 

Wednesday, October 17, 2018

SA West Coast Rock Lobster Appeals Process Completed

On 16 October 2018, the SA Minister of Agriculture, Forestry and Fisheries, Senzeni Zokwana, completed the process of deciding 1741 appeals in South Africa's West Coast rock lobster (WCRL) nearshore commercial fishery. By 30 August 2018 - less than 30 days after having been appointed - the Minister issued his decisions on 272 appeals filed by the WCRL offshore fishery appellants. In total, 2013 appeals were considered, evaluated and decided over a period of 60 days. 

The Minister's official decisions and his record setting out the reasons for his decisions on the appeals filed in the WCRL nearshore fishery (ZONE F)  have now been made public on the Department of Agriculture, Forestry and Fisheries' website. 

A total of 739 appeals in Zone F were filed against the initial decisions taken by the Deputy Director-General: Fisheries Management in her capacity as the Delegated Authority on 31 July 2017. 

As is the case with the WCRL Offshore, the nearshore commercial fishery remains a highly competitive fishery sector with substantially more demand for fishing rights than can be sustainably accommodated, particularly in fishing zones adjacent to large population centres. 

The Minister received, considered and determined a total of 739 appeals for fishing rights in the WCRL Nearshore Fishing Zone F.

The Minister decided to allocate a total of 84 additional fishing rights in Zone F. Of these 84 successful appellants, 6 were excluded for failing to disclose an admission of guilt of fine, 14 were refused rights purportedly for being “medically unfit”, 22 were excluded because they were 65 years or older and 42 were initially refused rights on the basis of comparative score balancing.

Each right holder in Zone F will be entitled to a maximum of 0.23% of the WCRL Nearshore TAC determined in any one season for Zone F. 

Should any appellant require further reasons for the Minister’s decision, they may address these requests to requesting reasons under section 5 of the Promotion of Administrative Justice Act, 2000. 

Friday, October 5, 2018

SA Minister of Fisheries Issues Decisions in Lobster Fishery

The SA Minister of Fisheries has issued his decisions on appeals filed by nearshore (hoop net) west coast rock lobster fishers. The decisions are recoded zonally in accordance with the geographic distribution of the WCRL from Port Nolloth (Zone A) to Zone F (Kleinmond/Hermanus/Gansbaai).

The decisions for Zone F are anticipated next week. What is recorded below are the decisions for fishing Zones A to E.

Zone A:

Zone B:

Friday, June 22, 2018

How to Destroy a Successful Eco-Tourism Sector

The recent unlawful and irregular allocation of boat-based whale watching and white shark cage diving permits has demonstrated a narrow-mindedness to destroy South Africa's two most successful eco-tourism sectors second to none. 

Feike has served as the legal advisor to the South African Boat-Based Whale Watching Association (SABBWWA) and the Great White Shark Protection Foundation that represents the majority of shark diving operations in the country of some time and a number of historical operators summarily lost their operating permits to new entrant applicants who have no resources, client access, vessels, websites, or ability to operate a whale watching or shark cage diving operation. 

Of course, the need to allow new entrants and even additional permit holders is a legitimate way of growing the economy particularly in these non-consumptive sectors whose success is determined by the number of foreign and domestic tourists willing to come aboard an operator's vessel and jump into a metal cage that can be knocked about by 5m long, 2 ton white sharks. Whether any tourist is prepared to pay a few thousand rand for this adventure to be overseen by someone with zero historical experience, knowledge or ability is doubtful to say the least but the Minister of Environmental Affairs and her department seem convinced that by dishing out permits to a plethora of new entrants who do not own or have access to suitable vessels, employ properly qualified skippers, expert staff, knowledgable marine guides who could at least impart some level of information to high paying tourists or even have a website or access to a single client would magically "transform" the industry. 

In Kleinbaai, the heart of the global shark diving industry, 6 of the 8 historical operators, employing some 90 skilled local personnel with investments in assets exceeding R50 million and who spend an average of R30 million annually in Gansbaai and the surrounding areas were refused their permits. These 6 operators have been operating for an average of 18,5 years. The Minister instead elected to allocate permits to 7 new entrant applicants. The financial impact on Gansbaai's local economy will be substantial. Job losses are a certainty as most of the new entrants will simply not be able to afford the costs of operations. A number have already attempted to sell their permits thinking that these paper permits are worth millions of rand. 

However, a number of historical permit holders have already successfully launched urgent interdict and review applications against the Minister and her department's unlawful decisions. The first adverse order against the Minister was issued on 12 December 2017, which included an adverse costs order. 

The first of the whale watching decisions in the Gansbaai area which denied a permit to a founding member of SABBWWA, Ivanhoe Sea Safaris, has now been reviewed and set aside by the Western Cape High Court. The Minister failed to even file an affidavit trying to explain her unlawful and irregular decisions. 

Three further review applications are now set down for hearing on 16 August in the Western Cape High Court. The decisions in each of these three matters are so irregular that they beggar belief. 

In two of the matters (concerning whale watching permits), the initial decision on 9 November 2017 was to allocate the historical permit operators their respective 10-year permits. Then on 13 March 2018, these permits were summarily stripped from the operators in blatant violation of due process and the Promotion of Administrative Justice Act. In one case, the permit was allocated to an entity without a SAMSA certified commercial passenger vessel (instead they nominated a fishing vessel without a safety certificate), no public indemnity insurance or a tourist guide. In the other case, the Minister demonstrated her lack of commitment to local jobs and the well-being of local communities by denying the only applicant for a permit and instead elected to not allocate any permit - leaving the area with no operator, employer or investor! 

The only proverbial light at the end of this horrible tunnel for whale watching and shark cage diving operators who were unlawfully denied their permits, is the extent to which simple legal principles have been wilfully ignored and recklessly sidestepped in favour of maladministration and socio-economic destruction. The decisions will simply not stand in law and have already begun falling. 

Tuesday, June 19, 2018

The Viking Buy-Out: Good or Bad?

Over the past few months we have seen two large transactions concluded involving the procurement of wild fish quotas worth more than R230 million. 

The first one to be approved this year by the Competition Tribunal and the Department of Agriculture, Forestry and Fisheries involved the effective buy-out of Talhado Fishing Enterprises by Premier Fishing in the squid sector. The Talhado transaction was particularly well-timed given the recent recovery of squid stocks and vastly improved fishing conditions (including prices) and the current depressed South African currency. Premier's purchase of Talhado's squid interests gives it effective control over some 20% of the total fishing effort available in the SA squid industry and just under 25% of the South African squid export market share. 

The purchase of Viking Fishing's entire portfolio of fishing quotas by the Sea Harvest Consortium Group is a substantially more complex and important transaction for South African fisheries management. For one, the consortium's purchase extends across 9 of South Africa's 22 commercial fishing sectors and involved 34 individual fishing rights transfers in sectors such as hake deep-sea trawl, hake inshore trawl, KZN prawn trawl, horse mackerel, West Coast rock lobster (offshore), tunas and small pelagics. 

Although there have not been any notable objections raised to either transaction, the Viking/Sea Harvest transaction raised a minor concern about the impact the deal would have on "small-scale" fishing and the relationship between directors of Sea Harvest, Oceana Ltd and Brimstone Investments, which owns equity in both Sea Harvest and Oceana. Giving the transaction the green light in May 2018, the Competition Commission authorised the transaction subject to the condition that Oceana Ltd and Sea Harvest (Pty) Ltd may not share any single director. With regard to the concern raised by a third party about the impact on "small-scale" fishing, this concern was patently misplaced given that the transaction did not concern any small-scale fishing sector fishery or small-scale fishing fishing rights. 

With the contraction in the size of wild fish quotas, coupled with increasing operating costs (particularly fuel and labour costs), consolidation of fishing effort (and thus the number of large fishing companies that principally export substantial volumes of high value South African seafood such as white fish, lobsters, tunas and wild-caught prawns) is a necessary commercial reality. Consolidation of fishing effort has long been a fisheries management policy (since at least 2005) and of course is in congruence with the policy prescripts of the National Development Plan, which recognised the importance of consolidating South African fishing quotas within the context of global seafood trade where South Africa is a very small contributor. 

South Africa's principal area of fishing instability and mismanagement remains the small-scale fishing sector which continues to operate schizophrenically under the notion that allocating small-scale fishing rights to hundreds of "fishing co-operatives" with hundreds of members will magically solve the dire socio-economic hardships faced by fishing communities. But this matter has been extensively covered by previous blog-posts. 

One of the more interesting aspects of the Viking/Sea Harvest transaction is the condition which the Fisheries Department attached to the approval of the buy-out of Viking's horse mackerel fishing rights. The horse mackerel sector quota purchase will create a significant competitor to Oceana Ltd for the first time. But more importantly, the Fisheries Department has required that an initial 5% of the quota has to be landed and processed in South Africa before being marketed (whether locally or regionally). A consequence of this condition will be that smaller fishing vessels will have to be deployed to the fishery as opposed to a single, expensive and inefficient large mid-water trawler, allowing smaller right holders in the fishery to be less dependent on Oceana Ltd to catch, process and market their quotas. The prospect of on-land fishing processing jobs is also created.