Tuesday, April 3, 2012

SCA Judgements Will Strangle Empowerment

The recent judgements by the Supreme Court of Appeal in the Oceana and Foodcorp matters will undoubtedly result in the regression of black economic empowerment in the commercial fishery sectors.

By confirming the validity of a policy that states that fishing rights can only be transferred to black buyers, the policy (and rulings) essentially hand to black quota holders a rope with which to hang themselves.

The judgements explicitly recognises that the fishing industry is one of the most transformed economic sectors in the country having achieved more than 60% black control through two successive and highly successful quota allocation processes in 2001 and 2005.

However, the court fails to recognise that economic and market realities today, coupled with substantially reduced fishing quotas in the pilchard and hake fisheries (for example) have forced many of the smaller quota holders, which are predominantly black owned, into serious financial distress. There are countless fishing companies along our coast that are 100% black owned and in serious financial trouble with substantial debts owed to SARS and to third party creditors as a result of poor governance and a fishing economy that has seriously contracted since the heady days of 2004, 2005 and 2006.

The test will be for the department to decide whether to implement an outdated and backward looking policy that focusses solely on race to the exclusion of all economic and broader social factors or adopt an approach to quota transfers that seeks to grow the commercial value of the fisheries sector by encouraging consolidation (which is also a stated policy objective in terms of the 2005 General Fishing Policy of SA) and job creation as opposed to creating a false sense of "transformation" defined by economic marginalisation, poverty and unemployment.

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