We submitted the following comments on the draft fish processing establishment and transfer of commercial fishing rights policies.
The draft Fish Processing Establishment Policy
In short, our comment is that the draft FPE policy is an anachronistic, archaic reproduction of past ANC-led fishing policy that has stifled and stunted economic growth and activity in the South African commercial fishing industry. The draft FPE policy ought to be binned in its current format.
Our high-level comments follow.
1. Firstly, the draft policy records that there are currently approximately 346 (138 land-based, 198 vessel-based and a combination 10 of land based and vessel-based) right/exemption holders across the country. In short, the department simply does not know who or what is processing fish.
2 Secondly, the MLRA definition of “fish processing” is so wide that an FPE right and permit is legally required by every fish monger / fish shop, every retailer of seafood (Woolworths, Checkers, Pick-n-Pay, etc etc), every “slap chips and fish” seller, every fishing vessel, every restaurant, every cafe - essentially every single entity or natural person that touches seafood for a commercial reason must apply for a right and then a permit.
3. If this was actually enforced and required by the Department, the administrative burden would simply collapse the department within a week.
4. The draft FPE policy seeks to only burden such persons unnecessarily.
5. What is required, is an urgent re-write of the MLRA, including this definition of what constitutes an FPE.
6. Until such time, a “draft FPE policy” should instead focus on EXEMPTING under section 81 of the MLRA every category of processor (including every single fishing vessel which currently requires to apply separately each year for an “FPE Permit” despite being a right holder) from the requirements of section 18 and 13.
7. Instead, every processor of seafood should instead be invited to register under specified categories (Cafe, fish monger, retailer (large, medium, small) etc) so that the Department is aware of the number and locations of these processors.
8. The draft FPE policy can instead then focus on the formal regulation and permitting of specified processors - ie those that process seafood that is considered endangered, overfished or threatened such as abalone, lobster, red-listed line fish species, sharks, tooth fish, roughy, guitar fish, skates and rays etc.
9. The criteria to register as such a processor of seafood ought to be designed to ensure that as far as possible, the illicit and illegal and unregulated trade in these species is curtailed if not eliminated.
10. The current draft FPE policy serves little point other than to further stifle growth and bureaucratize seafood processing without in any way achieving the important objectives of monitoring, management and protection of seafood processing (and trade).
The draft Transfer of Commercial Fishing Rights Policy
The draft transfer policy - like the draft FPE Policy - is an anachronistic, archaic reproduction of past ANC-led fishing policy that has stifled and stunted economic growth and activity in the South African commercial fishing industry. The draft transfer policy ought to be binned in its current format.
Our high-level comments follow.
1. OVERREACH
1.1 The draft transfer policy purports to apply to and regulate the changes of membership and shares. This is impermissible given the obiter findings of the Western Cape High Court in the case of Glenda Clarke & Others vs Ismail Antooley & Others [including the Minister of Agriculture, Forestry & Fisheries] [Case No. 15312/2015], where the court held that -
"23. It bears noting that s 21(2) of the MLRA does not specifically require that an application under that section is necessary when an interest in a close corporation is sold. The section merely provides that an application for the transfer of a commercial fishing right must be submitted to the Minister and that such an application must be approved in writing.
25. … Should the legislature conclude that s 21(2) of the MLRA must also be complied with in instances where an interest in a close corporation is transferred, the MLRA will have to be amended.
26. At present the Department is limited to taking action under s 28 of the MLRA. In instances where the interest in a close corporation is transferred and s 21(2) is not complied with, section 28 authorizes the Department to call for an explanation as to why it should not revoke, suspend, cancel, alter or reduce the the appropriate fishing right.
28. … As stated above, s 21(2) of the MLRA has no bearing on the sale of the member's interest."
1.2 The same reasoning would apply to the sale of shares. The draft transfer policy cannot regulate and interfere with the commercial sale of members’ interests and the sale of shares in terms of the Companies Act.
1.3 The draft transfer policy is guilty of further overreach as it seeks to regulate “monopolies” and mergers and acquisitions. These regulatory and policy issues are the legal purview of the Department of Trade and Industry and the Competition Commission. The Minister of Fisheries does not have the legal authority under the MLRA to regulate these matters.
1.4 The draft transfer policy accordingly seeks to bestow on the Minister and officials powers they simply do not possess under the MLRA.
2. THE STATED PURPOSE OF THE DRAFT POLICY (CLAUSE 4)
2.1 We refer to our comments above regarding policy overreach.
2.2 While the Minister must have regard to the section 2 principles in the MLRA, which include the issue of transformation, the management of “monopolies” certainly is not a function of the fisheries minister but of the minister of trade and industry. The principle policy objectives and purpose of the draft transfer policy should be to ensure productivity of fisheries, job creation, investments in new fisheries, vessels, processing and marketing infrastructure, innovation and ultimately fisheries and related economic growth.
2.3 The irrational emphasis on “transformation” as a measure of allowing transfers of fishing rights only harms black right holders who cannot sell to “less transformed” buyers. A fishing right is then a noose around the necks of black right holders and stunts and sterilizes economic activity and growth, which fully explains the current depressed and collapsing state of the commercial fishing sectors.
3. CLAUSE 7.7 - OVERREACH OVERDRIVE
3.1 The department has no authority to require the Competition Commission to evaluate any transaction that does not trigger the application of the Competition Act.
3.2 This clause should be removed as it is legally invalid.
4. CLAUSE 7.8 - 1 RIGHT PER FAMILY
4.1 This draft policy provision is an economically destructive provision that harms fishing communities and should never apply.
4.2 There are entire households of fishers along our coastline and allocating 1 right to such generational fisher families is archaic and anachronistic and demonstrative of a failure to understand the social and economic structure of fisheries - especially our lobster, abalone and traditional line fisheries.
5. DOCUMENT CERTIFICATION: WHY?
5.1 Clause 9.3.5 stipulates that documents provided to the department must be certified. It is entirely unclear why this is a requirement given that most supporting documents are electronic and always an “original”. There is accordingly no legal possibility of ever certifying such documents as “copies of the original”.
5.2 In addition, the requirement is archaic, irrelevant and prejudicial to fishers domiciled in rural, small-scale commercial communities as it unnecessarily adds to the costs of fisheries administration on their part.
6. CONCLUSION
6.1 Given depressed and rapidly contracting state of the SA commercial fishing sector; and the fact that no new fisheries have been invested in or commercialized since 2004, the transfer policy ought to be a tool to boost economic activity, employment and attract investment into our commercial fishing sectors.
6.2 The draft transfer policy ought to be focussed on incentivizing investments and innovation in our fisheries. This could be accomplished by way of levy rebates and other incentives.
6.3 The current version of the draft transfer policy is nothing but an exemplar of archaic and economically destructive ANC policy, which has been issued under the signature of a DA minister.
6.4 The present draft transfer policy ought to binned and a fresh, innovative, growth friendly policy adopted instead.
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