Is a FRAP Failure Avoidable? Here's a 5-Step Allocation Process Fix

On 8 October 2020, the Department of Environment, Forestry and Fisheries invited all and sundry to participate in a Socio-Economic Impact Assessment Study (SEIAS) Virtual Workshop hosted by a department within the presidency charged with overseeing this policy requirement. 

In short, 4 days before the Minister's promised gazetting of draft fishing policies for the next Fishing Rights Allocation Process (FRAP), the department was trying to understand how it should lay the foundations for a 12 storey building whose first floor must be cast on 12 October 2020! 

To say that the minister lied about her department's state of preparedness in response to parliamentary questions on this subject matter to the Official Opposition is now patently obvious. 

In 12 months' time fishing rights in 12 fishing sectors would have to have been allocated for some time. The appeals processes ought to be in full swing. The South Coast Rock Lobster fishing rights and appeals processes would have had to have been completed more than 30 days ago as their season starts on 1 October every year. 

It is inconceivable that a department that has failed to allocate a mere 300 abalone rights since 2016 can remotely achieve their own deadlines. The fishing rights allocation processes for horse mackerel and hake inshore trawl remain outstanding more than 4 years after rights were first allocated! 

You have to be extremely naive to believe that the lot in charge of fisheries (including the Minister) can remotely meet any deadline - never mind allocate a single right legally and legitimately. At the very best we are likely to see a repeat of the catastrophically corrupt and unlawful FRAP 2013. The same incompetent cadres that were in charge of that process remain in place now! The key difference is that the current FRAP allows them to extort millions in bribes from compliant fishing companies in the mega value hake trawl, small pelagic, South Coast rock lobster and hake long line fisheries. 

The question that has been put to me over the past few days by dozens of right holders is whether FRAP failure is avoidable. Unfortunately, my short answer is NO. At least not if the current crop officials remain in charge of driving these processes and that includes an invisible and knowledge-deficient minister. These processes are not driven and insulated from maladministration by civil servants. The successful 2001 and 2005 processes were led by Minister Valli Moosa (and to an extent Minister van Schalkwyk). 

Given the huge social and economic risks to the Western Cape (more so considering the massive social and economic losses incurred to the province's tourism sector because of COVID-19) and to the fishing industry that is largely based in this province, organised fishing industry led by FISH-SA, SADSTIA, SASMIA, SAPFIA, SCRLIA et al need to urgently stand up and be counted. The Western Cape government led by Premier Alan Winde will certainly support the Western Cape based fishing industries protect their employees', shareholders' and investment interests in this province. 

So, how can FRAP failure be avoided? The current minister and her senior executive team at Fisheries MUST STEP ASIDE and let the professionals step in and fix their mess ... again. 

Step 1: Undertake 12 urgent SEIAS for every sector to understand the socio-economic and biological impacts of current policies. These SEIAS could be issued for input by 15 October 2020 with responses due by 11 December 2020. This has to be done BEFORE new draft policies can even be contemplated. In July 2018, and on the request of Minister Zokwana, I prepared 12 separate SEIAS questionnaires (at no fee). Here is the complete SEIAS for hake deep sea trawl. This questionnaire (And 11 others) should have been issued to each industry sector body and every right holder by the end of July 2018, which would have ensured that by October 2018, draft fishing policies could have been gazetted for comment in preparation for FRAP 2020. 

HDST Fishery Socio-Economic Impact Analysis

July 2018

INTRODUCTION

The purpose of this questionnaire is to understand the socio-economic and biological impacts of having allocated long-term fishing rights in this fishery in 2005 and to develop appropriate and adequate policy criteria and objectives for the allocation of fishing rights for the next 15 years.

In 2005, specific sector objectives were set for the allocation of fishing rights in the hake deep-sea trawl fishery. This socio-economic analysis seeks to understand –

• The extent to which these policy objectives were met; and

• To the extent that they were not met, what policy and criteria are needed to achieve these objectives (if they remain applicable) and to set new policy objectives for the next period of fishing rights; and

• What socio-economic impact the allocation of fishing rights has had on right holders, their employees and the communities in which they operate; and

• What positive socio-economic impacts future fishing right allocations and policy could have.

AT WHOM IS THIS SOCIO-ECONOMIC ANALYSIS AIMED?

This questionnaire is primarily aimed at current right holders in this fishery and also recognised industrial bodies and interest groups operating in the fishery. 

The questionnaire must be completed by individual right holders and returned to the department. Interest groups and recognized industrial bodies are welcome to submit responses that may be relevant to specific questions. This questionnaire must be returned to the Department via email (________________________), alternatively delivered to the Customer Services Centre located at Ground Floor, Foretrust Building, Martin Hammerschlag Way, Foreshore, Cape Town by not later than 15h00 on ______ August 2018.  All data provided herein is treated confidentially and will not be published or used in a manner that would prejudice individual right holders’ commercial, financial, proprietary and trade secrets or personal data.

POLICY OBJECTIVES SET IN 2005

In 2005, the following policy objectives were determined for this fishery:

• Notably improve the transformation profile of the hake deep-sea trawl fishery by increasing black ownership of the TAC and to redistribute the TAC so as to affirm right holders with smaller allocations in this fishery that are transformed and have performed well; 

• Create an environment that attracts investment and stimulates job creation; and 

• Support the economic viability and environmental sustainability of the fishery.

TRANSFORMATION OF THE FISHERY

1. In your opinion has black economic empowerment in this fishery increased or decreased since 2005? Please substantiate your response. 

2. As a right holder, -

2.1 What percentage of shares / members’ interest is owned by black persons?

2.2 What percentage of shares / members’ interest is owned by women?

2.3 What percentage of shares / members’ interest is owned by persons with disabilities? 

2.4 What percentage of shares / members’ interest is owned by employees and/or community based organisations? Please specify. 

2.5 What percentage of shares / members’ interest is owned by persons under the age 36? 

2.6 What percentage of your board of directors are – 

• Black? 

• Women? 

• Physically disabled?

• Under the age of 36? 

2.7 How many permanent and seasonal employees did you employ in 2017 and during the current 2018 fishing season? Please provide separate numbers for permanent and seasonal employees. 

Permanent Employees Seasonal Employees

2017:                         2017:

2018:                         2018:

2.8 What is the average monthly salary / wage paid for permanent employees during the 2017 and current fishing seasons?

Permanent Employees: Average Monthly Wage/Salary

2017: ZAR

2018: ZAR

2.9 What are the employment-related benefits provided to permanent employees during the 2017 and current fishing seasons?

Permanent Employees: Benefits Provided

2017: 

2018:

2.10 What is the average monthly salary / wage paid to seasonal employees during the 2017 and current fishing seasons?

Seasonal Employees: Average Monthly Wage/Salary

2017: ZAR

2018: ZAR

2.11 What percentage of your turnover was spent on CSI in 2017 and is intended to be spent in 2018? 

2.12 Are you presently a designated employer under the Employment Equity Act? 

2.13 Have you invested in any enterprise development and investment initiatives since 2005? Please provide as much detail as possible regarding any of these initiatives. 

2.14 Have you supported the development of smaller quota holders in this fishery or other less capital-intensive fisheries? If you have please provide details of the support provided. 

2.15 In your view, to what extent can members of local communities in which you operate be better integrated in fishing-related processes, including catching, processing, marketing of fish or in fishery related support service industries such as gear manufacture, vessel maintenance, transportation of fish etc? 

INVESTMENT & FINANCIAL DATA 

3. As a right holder in this fishery what investments have you undertaken over the past 10 years in – 

• Vessels and gear?

• Processing facility upgrades or technologies?

• Markets and product diversification and change? 

• Greener technologies and sustainable fishing systems? 

• Reducing by-catches and unsustainable fishing practices? 

Investment Category Brief Description of Investment ZAR Value

Vessels & Gear                                                                 ZAR

Processing Facility & Technologies                         ZAR

Markets                                                                         ZAR

Green Technologies                                                 ZAR

By-Catch Reduction & Sustainability                         ZAR

4. What is the current hull age of the vessel(s) you use?

5. What are your legal interests in the vessel(s) you use in this fishery? Do you – 

5.1 Own equity in the vessel / vessel owning company? If so, please specify number of shares / parts and ZAR value. 

5.2 Have a catching / charter agreement? 

6. To what extent are you directly involved in –

6.1 Determining the catching / harvesting strategy of your quota, including 

by-catch?

6.2 Determining the processing and marketing strategies related to your seafood?

7. How much income (before tax) did you generate from your HDST fishing right generally in 2017  and specifically from –

7.1 Hake

7.2 Monk

7.3 Kingklip

7.4 Ribbonfish

7.5 Snoek, 

        during the 2017 HDST fishing season? 

8. Do you operate your HDST fishing right in an economic consortium or formal operating joint venture with other right holders? If, so how many participants are there in this consortium / JV and what is its current total operating HDST quota (2018 season)?

LOCAL & REGIONAL ECONOMIC DEVELOPMENT

9. Where was your fish primarily landed in 2017? If it was landed at more than one harbour, please specify estimated proportions of landing at each harbour? Do you anticipate that this will remain the similar in 2018?

10. Where was your fish primarily processed? If it was processed at more than one facility, please specify estimated proportions processed at each facility? Do you anticipate that this will remain the similar in 2018?

11. Please specify the principal market destinations of your product in 2017, including type of seafood exported and export value.

Seafood Product Type Market Destination & Percentage     ZAR Value

 

THE 2020 FISHING RIGHTS ALLOCATION PROCESS

12. In your view, which are the principal criteria that should be used during the 2020 allocation process to determine – 

12.1 which current right holders should be granted long term fishing rights in this sector?

12.2 which current right holders should be excluded from future fishing rights in this sector?

12.3 whether new entrants should be permitted into the fishery?

12.4 how the HDST TAC should be allocated amongst qualifying right holders?

13. In your view, should there be a minimum quota / percentage allocation in this fishery? What would that be and why would that be reasonable? 

14. Would you support a paperless, electronic only application submission and fishing right allocation process for this fishery in 2020?

 15. The ex-post facto verification of data by applicants has proved tedious and costly,         would you support independent audited verification of applicant data prior to application submission for the 2020 process?

(ALSO PART OF STEP 1: Appoint the necessary business, data and IT experts to develop the IT platforms to ensure that FRAP 2021 can be managed and decided entirely electronically without the need of a single hard copy application to be received, protected, stored or managed. The department's current IT systems are woefully inadequate and cannot be trusted).

Step 2: Based on the above analytical data, prepare draft fishery sector policies, inclusive of objectives and allocation criteria, rights application process and application forms. Publish these drafts for a 60-day notice and comment period.  Draft policies could be published by 15 January 2021 with comment due by 15 March 2021. In order to meet these analytical and drafting deadlines, each sector should be chaired by fishery specialists aided by three roving constitutional and administrative law experts that oversee policy development, coherence, legality and policy alignment. 

Step 3: Finalise each draft policy, rights process and application form after further consultation with specific industry sector bodies and issue the final invitations to apply for rights across each of the 12 fishery sectors by the middle of May 2021. 

Step 4: Make provision for the return of applications on a staggered return date basis between 1 July 2021 and 30 August 2021 and ensure a completely electronic submission process. For small-scale fisheries like mussels, oysters, hake handline, abalone & line fish the electronic submission process is explained here. Because the application data is submitted electronically, evaluation of small-scale fishing applications could be scored, weighted and ranked within 24 hours of submission, requiring individual decision-makers to scrutinise data integrity and ensure validity of results before publishing decisions within 5 days of submission of applications. 

Step 5: Allocate the last of the fishing rights by not later 31 November 2021 with appeals set for completion by not later than the end February 2022. 

FRAP 2021 could realistically happen but it requires the current Minister and her ANC cadres to acknowledge their failures and limitations and do what is in the best interests of South Africa and its fishing industry. This is why FRAP 2021 will not happen or if does miraculously happen, it will epitomise failure.