Friday, March 30, 2012

SCA Upholds Transfer of Rights Fishing Policy

In two separate judgements issued on 28 March and 29 March 2012, the Supreme Court of Appeal ruled that the Transfer of Commercial Fishing Rights Policy of 2009 was valid and rational policy and accordingly rejected the appeals by fishing companies, Foodcorp and Oceana.

The judgements effectively confirm the validity of the Transfer Policy and provide important light on the prevailing relevance of transformation and black economic empowerment in the fisheries sector. The judgements also rely extensively on the General Fisheries Policy of 2005 and the Constitutional Court's 2004 pronouncements on transformation in the Bato Star matter.

The judgements are extremely important for fishing companies as they continue to invest and purchase fishing quotas through commercial transactions involving the purchase and sale of members' interest and shares in corporations. These transactions will impact on future applications for quotas in 2013, 2015 and eventually in 2020.

Fishing companies engaged in such transactions will be well advised to properly structure their transactions and seek the applicable authorisations from the fisheries department as stipulated by the General Fisheries Policy and the Transfer Policy.

However, what the judgements do not address is the fact that although the policies are valid and binding, we continue to be faced by a department and minister incapable of taking timeous decisions. The continued failure to dispose of transfer applications (with some applications remaining undecided for more than 2 and 3 years) continues to force fishing companies to ignore the regulated procedures as they seek to survive and avoid liquidation or collapse.

In this regard, Feike's advice is to force the department and its minister to do the job they are paid to do and flood them with positive interdict (or mandamus) applications, which are relatively inexpensive and can achieve a rapid result. It is our view that the failure to decide a transfer of fishing right application that has been with the department for more than 6 months amounts to an unreasonable delay in terms of our law and is therefore reviewable.

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