Monday, May 19, 2014

Report into FRAP 2013: Analysis of Findings

The report by Attorneys firm Harris, Nupen & Molebatsi on the legality of the 2013 Fishing Rights Allocation Process (FRAP 2013 / #FRAP2013), makes for some sober reading. The extent of the governance failures and maladministration is immensely profound. What makes the findings even worse is the fact that this 2013 process could have been a massively successful one - more so than the 2001 and 205 processes given the foundations of these past processes and that the department was handed a detailed template on which to build a successful 2013 process. 

This is not to say that the 2001 and 2005 processes were perfect. Far from. But what is patently clear and beyond any contradiction is that the 2005 process was built on the lessons learnt from the errors and criticisms of the 2001 process, which made the 2005 process the success it remains. Of course, not every applicant, let alone fisherman was going to get a right. No responsible and sustainable quota allocation process will ever grant a quota to every fisherman simply because of resource and accessibility constraints. But neither process redounded into the farce and tragedy that defines the current 2013 FRAP. 

The Harris, Nupen & Molebatsi report makes the following findings and recommendations:

1. On the validity of the policies: The report is of the view that Cabinet need not pass these policies but rather that section 85(2)(b) limits the authority of Cabinet to national policy making. Accordingly, the report finds that the 2013 General and Fishery Specific policies may be valid despite not having been passed by Cabinet. 

The Report's reasoning is not very convincing in my view especially if one has regard to the following facts (and practices). Firstly, (and most importantly) the Report does not address the fact that the 2005 policies were passed and adopted by Cabinet in terms of section 85(2)(b) of the Constitution. It is therefore incomprehensible that a "mere" Minister can then subsequently amend or repeal Cabinet adopted national policy without any subsequent Cabinet authority. By analogy, if the Report is correct, then the Minister of Fisheries could unilaterally amend Chapter 6 of the National Development Plan dealing with fisheries. 

Secondly, all fishing policies have been considered to be national policy warranting Cabinet approval in terms of section 85(2)(b). The most recent policies that went to Cabinet for approval included the Tuna Long Line policy and the 2012 Small Scale Fisheries policy. If these relatively minor policies required Cabinet approval, how could a major suite of policies regulating a national fishing rights allocation process and policy not require Cabinet approval? 

Given the extremely poor drafting of these 2013 policies, our recommendation would be that the new process should be underpinned with a proper set of policies, which are passed by Cabinet to avoid any possible future legal challenge. 

2. On the line fish consultation process: The report recommends that the consultation process be more inclusive and take into consideration the locality of affected parties and distances that must be travelled to attend consultative meetings. 

3. On the disjuncture between the policies, criteria and the application form: The Report alludes to the fact that the delegated authority - Desmond Stevens - refused to explain why the evaluation criteria were not rationally connected to the information requested in the application forms and the criteria published in the policies. The Report recommends that the process of developing criteria and policies should be done at the same time as the development of the application forms. The Report finds that the departure would be irrational and arbitrary. 

4. On the failure to issue an "application fee": The Report notes that while the failure to issue and publish an "application fee" is unlawful, it does not constitute administrative action in terms of the Promotion of Administrative Justice Act because for an act to constitute reviewable administrative action, it must "adversely affect the rights of any person". The Report clearly took an awfully narrow approach here considering only the rights of applicants who were clearly not prejudiced by paying nothing for a costly administrative process. 

However, the decision to not publish or require an application fee clearly would have adversely affected the rights of the broader tax-paying South African public who must now pay for the rights allocation process, which ought to be paid for by those persons applying for fishing rights and then being granted fishing rights. 

5. Delegation of powers: The Report raises concerns with the extent of powers delegated by the Minister to the DDG: Fisheries Branch. The Report notes that the delegation of authority to allocate fishing rights under section 18 of the MLRA reads "I (namely the Minister) delegate the following authority in terms of the Act..." and that this delegation may be valid but is issued without conditions (as required by section 79 of the MLRA). The Report does appear to overlook the fact that section 79 of the MLRA requires the Minister to only delegate those powers under the Act to an official other than the director-general who has been nominated by the DG herself. Accordingly, the DG had to nominate the DDG: Fisheries Branch as the person to whom the Minister should delegate her powers under section 18. The purpose of this requirement is presumably to ensure that the DG, as the accounting officer in terms of the MLRA, is satisfied that any other official granted the authority to take decisions is suitably skilled and qualified to do so. 

It is Feike's view that this failure could render the actual delegation invalid as it fails to materially comply with the provisions of section 79 of the MLRA.   

6. Appointment of service providers to assist with FRAP 2013: The Report concludes that the appointment of service providers was flawed in its implementation and operation. The appointment of the consultants (ORCA) to the value of R3,7 million was also undertaken in the absence of a full tender process. It is noted that the investigation did not find any evidence of collusion or similar irregular activity. The failure to comply with the full tender processes appears to have been more the result of poor planning and the lack of time to implement the rights allocation process.

7. Allegations of corruption, collusion and maladministration: The Report notes that the service providers charged with these verification and oversight functions did not fulfil their respective mandates. As a consequence, the investigation team has now forwarded a number of complaints of possible corruption etc to the applicable authorities. 

8. Verification processes: The Report confirms that the lack of data verification (even of the most basic level of data contained in the application forms and in annexures to the forms) has led to a number of the problems faced by the FRAP 2013. 

9. FRAP Steering Committee: The Report's findings with respect to the Committee are perhaps the most concerning. Firstly, the Report recognises that this Committee's governance falures are a consequence of a lack of planning and time. The Report states that a rights allocation process essentially requires 3 years of pre-planning! Further, the Committee did not record any of its meetings and it is therefore impossible to understand the reasoning for its decisions. 

Pertinently, the Report confirms that it would simply not be possible to once again timeously and legally allocate fishing rights in 2015.

These are two extremely profound findings that go to the heart of explaining the utter failure of FRAP 2013. By way of comparison, the team that managed the preparation and implementation of the 2005 process was constituted in June 2002 under the chairmanship of Svein Munkejord, a former Norwegian  Minister of Fisheries (presently Senior Advisor to the Norwegian Fisheries Department and past chair of the UN FAO Committee on Aquaculture). Each fishery sector was led by the chief scientist responsible for that fishery and was supported by a senior compliance officials and a team of senior lawyers - the 2005 process had Marius Diemont, Adv Johan de Waal, Peter Harris and Prof Halton Cheadle available 24/7 for 2 years prior to Cabinet adopting the final fishery policies in June and July 2005.

On a number of occasions, the legal team was unable to agree unanimously on the legal sustainability of a set of proposals presented by the management and policy development teams. On these occasions, the counsel of independent senior members of the Cape Bar was sought to ensure that every decision; every policy proposal and every step of the process was legally defensible. And every step of the process was recorded and minuted. I wonder where these records are today and why they were never consulted?

10. Apportionment of TAE between new entrant applicants and right holder applicants: The delegated authority - Desmond Stevens - once again appears to have been unable to explain how the effort was divvied between successful new entrant and right holder applicants. The failure to provide a detailed and rational explanation justifying this would render these decisions unlawful. In addition, the failure to consult right holders on the apportionment of effort is a further violation of the requirements of fair and rational administrative action. 

11. The failure to apply exclusionary criteria: The Report confirms that the decision to depart from the policy requirements pertaining to the implementation of peremptory exclusionary criteria cannot be justified and would therefore be unlawful. This included, for example, the failure to exclude applicants who failed to prove that they had access to a suitable fishing vessel for the fishery concerned. In addition, exclusionary criteria were incorrectly incorporated into the scoring criteria of the scoresheets and certain applicants who were refused a right because they had failed to comply with an exclusionary criterion were told that their applications were refused because of balancing. 

12. Comparative balancing criteria: Once again, the Report confirms that the delegated authority did not provide reasons explaining how the criteria for each fishery were developed. The Report concludes that it appears that the criteria were developed not for any rational or lawful management purpose but instead to contrive a decision sought by the delegated authority. 

This is an extremely concerning and damning finding and warrants a separate investigation - perhaps by the Public Protector - into possible fraud and corruption. How else does one explain the allocation of fishing rights to every member of an Arniston-based ANC politician's family; or the allocation of multiple fishing rights to another ANC leader in Hout Bay? 

13. General Scoring failures: The Report sampled a number of applications and found serious scoring and data evaluation errors which are listed in the Report. Reading these inconsistencies and errors is mind-boggling and a further indication of the appallingly amateurish process that was followed. 

14. Grant of Right Fee: The Report found that the failure to publish the grant of right fee is a breach of a mandatory provision prescribed under section 25(1) of the MLRA. However, the Report states that the non-compliance is not material as the fee will be published in the future and failure to pay the fee could result in section 28 proceedings under the MLRA. 

It is unclear how non-compliance with a crucial provision (which is mandatory for a reason) such as this is immaterial to right holders especially since it could - as confirmed by the Report - result in the revocation, cancellation or suspension of a fishing right. Knowing what the grant of right fee is prior to the rights allocation process is profoundly material for prospective applicants - especially in effort controlled fisheries - as it will inform them of the size of vessel to nominate and use, the number of crew needed to make a fishing venture economically sustainable and ultimately whether the application process will be affordable. 

15. Documentation to be made available: The Report confirms that the absolute majority of information recorded in the application forms, together with the departmental database used, must be disclosed to requesters under the Promotion of Access to Information Act. To refuse access to these records and database would be unlawful. 

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