FRAP 2022: The Nonsense That are the General Published Reasons

On 28 February 2022, the Department of Fisheries issued nine general published "reasons", purportedly setting out the reasons and bases of the decisions in each of the 9 fishing sectors.

Every fishing rights allocation process since 2001 has seen the publication of general published reasons. These general published reasons are of course necessary in a constitutional democracy premised on the principles of accountable, justifiable, reasonable and transparent governance. 

One need only take a rudimentary glance at the GPR's published in 2005 and again in 2016 (pursuant to FRAP 2015) to appreciate that these documents set out in substantial and unambiguous detail the exact processes adopted to evaluate, score and weight each criterion and then how each successful applicant is allocated a proportion of the total allowable catch and/or total applied effort. 

The fundamental purpose of the GPR is to explain to each applicant how the decision pertaining to its application was made and importantly how each applicants' total score was computed. Without these details, the GPR would be a violation of PAJA and the applicant would simply not be able to fully and lawfully exercise its rights of appeal against the delegated authority's decisions. 

The 2022 FRAP decisions are also recorded in GPR's. They are structurally and visibly different to the GPR's of 2005 and 2016 which is entirely expected given that they were prepared by different persons. What is alarming about these decisions are two important things:

Firstly, although the GPR's were published 28 February 2022, the following documentation was not made available (and remain unavailable to applicants):

• The scoresheets for each applicant remain unpublished; 
• No applicant received a decision letter explaining the individual reasons for the decision;
• The GPR's remain incomplete as a plethora of databases and EXCEL spreadsheets referred to in each of them remain unavailable to applicants. Without access to these spreadsheets and databases, it is impossible to compute applicant scores and therefore prepare an effective and legally compliant appeal.

Secondly, the substantive content of these GPR's (particularly the scoring criteria and so-called quantum methodologies) is - to put it mildly - gobbledegook, irrational nonsense. 

If this was a book we could produce 9 chapters explaining the irrationality and nonsense referred to as exclusionary and balancing criteria and the various "quantum allocation methodologies". Let's be clear. What we are told is a "quantum allocation methodology" in these documents, simply is not. A legally compliant and rational methodology setting out how a right holder comes to be allocated X% of the TAC can be found in any one of the 2005 GPR's. 

Turning to the scoring criteria, it becomes quickly apparent that these are largely a nonsensical conglomeration of words pretending to explain how a particular criterion is scored and weighted. Reading these criteria, it is apparent that no reasonable decision-maker could have scored and weighted these criteria based on these written decision rules. They are that incomprehensible and arbitrary.

Lets consider the "transformation criteria" and specifically the computation of weighting ownership and change of ownership. The GPR records that each category of transformative ownership (race, gender, youth and disability) is equally weighted at 100 points. This is irrational for obvious reasons. 

It is practically impossible to rationally score ones change in transformative ownership as well. The rule refers to an allocation of 12 points but fails to explain how this score is computed. The entire rule is littered with ambiguous wording (for example there is reference to "12 scores" and that a score is to be expressed as a "proportion" but fails to say of what.  In short, it is actually impossible to apply the rules to determine an applicant's score for transformative ownership. 

The GPR's then proceed to repeat the exact errors made in 2016 when applicants who are not required by law to comply with the Employment Equity Act and Skills Development and Levies Acts were penalised for stating that these laws are inapplicable to their businesses. During the appeals processes in 2016/17/18, these appellants were each allocated the scores originally denied them because fairness dictates that one cannot be penalised for not complying with laws the law does not require compliance with! Obviously! It beggars belief that the same costly errors of 2016 are now being repeated. 

The scoring of applicants' respective CSI contributions as a percentage relative to other applicants is simply irrational. A company that makes a R100,000 CSI contribution but has a turnover of R5,000,000 must surely be rewarded more than a company that makes a R150,000 CSI contribution but has a R15,000,000 annual turnover. The GPR's reward the latter company more points based on the irrationality of its scoring rule. 

The GPR's also fail to explain how these individual criterion scores are weighted to make up the total scores.

These explanations are critical to applicants being able to understand the decisions and then to design proper appeals in terms of the MLRA and PAJA. 

The scoring criteria for jobs, investments and social contributions are similarly irrational, ambiguous, vague and disconnected to the apparent purpose and objectives set out in the respective policies and section 2 of the MLRA.  

What is apparent from studying these GPR's (and having been a decision-maker in 2004/2005 and a legal adviser to various subsequent decision-makers and ministers) is the following:

• These decisions could never have been made by a reasonable human being decision-maker applying his/her mind to the applications and then producing the written rules we see before us. To do so in 30 days is simply impossible. In our view, these decisions are the product of an irrational and automated process. The attempt at explaining these scoring rules highlights this; and
• There is no logical or rational reason why there has to be a 30-day delay for the publication of letters and scoresheets unless these are being produced as this blog is written. This occurred in 2017 when the Department of Environment produced the most unlawful set of decisions in whale watching and shark cage diving sectors I ever came accorss. There were 9 reviews and the Minister lost every single one with costs. 

FRAP 2022: The Rights are Allocated

Due to the intensity of the fishing rights allocation process last year and early in January, we largely kept clients and the broader industry updated on FRAP developments via our TWITTER HANDLE. 

However, a BLOG article providing some initial analysis of the FRAP 2022 decisions is now necessary. 

Firstly, the decisions were clearly aimed at placating the majority of the industry. The decisions in hake trawl, small pelagics and south coast rock lobster were the exact opposite of the Minister's threats in 2021 to introduce new entrants and "transform" the industry. Remember her (empty) threats about breaking up monopolies etc? All hot air of course.

Given the significant process and legal failures of FRAP, the decisions to maintain the status quo as far as possible are understandable. Not to mention that in capital intensive, transformed sectors like hake deep-sea trawl, small pelagics and South Coast rock lobster, the introduction of large numbers of new entrants would have resulted in the collapse of the FRAP as existing right holders would have simply challenged these decisions. The ongoing failure to finalise the horse mackerel appeal decisions remains a case in point.

Secondly, the failure to introduce any significant numbers of new entrant applicants in fisheries like hake long line or any in squid was unexpected, but again given the failure of processes and systems leading up to these FRAP decisions, hardly surprising. 

Thirdly, the significant exclusion of applicants (Especially existing operators in the tuna pole sector) highlights a bizarre policy decision by delegated authorities to simply bestow unto themselves law-making authority to make up exclusionary criteria ... unlawfully. There are a substantial number of exclusionary criteria which were never gazetted as part of the General Policy or any sector specific policy. In short, if these exclusionary criteria were not gazetted in either policy document, they are unlawful. If your application was excluded on any one of these grounds, the decision to do so is unlawful. 

There are at least 6 of these unlawful exclusionary criteria. 

Fourthly, the decisions to not weight new entrants on their investments and fishing plans / fishing ability is also certainly unlawful. There is no justification or explanation as to why this was not done. The only possible reason for abandoning such important criteria is the lack of time required to evaluate these substantive criteria. Evaluating and scoring fishing plans, knowledge and experience are subjective evaluations requiring decision-makers to actually read these documents and then allocate score according to an objective scoring and criteria template. 

Fifthly, a high-level analysis of these decisions (And scores allocated based on the criteria published in the respective General Published Reasons) seems to confirm that these applications were never actually properly scored and evaluated. What appears entirely plausible is that given that these decisions were published within 30 days of receipt of the applications, the applications were simply subjected to a mechanical and electronic scoring process. It is entirely unlikely that any decision-maker actually considered each and every application or even read, weighted and scored a single criterion.  

Sixthly, the explanatory notations to the criteria in each of the GPR's are largely not understandable and many are just irrational. For example, the decision to re-categorise applicants from being Category A to Category B (for example) is entirely unlawful and ultra-vires. The delegated authorities were never given such authorities and powers! The Minister set out clearly in each policy document what defined Category A, Category B and Category C applicants. Each of these decisions are unlawful and impact a number of decisions. Another example was the decision to score applicants that nominate a "foreign flagged" fishing vessel. The sector specific policies are clear that only South African registered vessels qualify for access to the fisheries. What we see is delegated authorities literally making up policy on the run and acting in direct violation of the General and Sector-Specific Fishing Policies. 

In short, the decisions in each of these fisheries are generally unlawful and reviewable. Never before have I seen delegated authorities simply make up policy and law as they saw fit during a fishing rights process. 

That said, what are the high-level numbers from these allocations.

1. Hake Deep-Sea Trawl

• Successful Cat A: 25 
• Successful Cat B: 2
• Successful Cat C: 2

Prior to this FRAP, the fishery comprised 32 right holders. The number of right holders have been reduced to 29. The smallest allocation is now less than 100 tons. 

2. Small Pelagic: Anchovy

• Successful Cat A: 59 
• Successful Cat B: 3
• Successful Cat C: 6

Prior to this FRAP, the fishery comprised 78 right holders. The number of right holders have been reduced to 68 right holders. While all new entrants were allocated 0.555% of the TAC, Afro-Fishing was inexplicably allocated 1,2% of the TAC. The GPR contains no explanation for this allocation. 

3. Small Pelagic: Pilchards

• Successful Cat A: 46
• Successful Cat B: 2
• Successful Cat C: 4

Prior to this FRAP, the fishery comprised 80 right holders. The number of right holders have been reduced to 52 right holders. While all new entrants were allocated 0.8% of the TAC, Afro-Fishing was inexplicably allocated 3,2% of the TAC, making it one of the largest right holders in the fishery. The GPR again contains no explanation for this allocation. 

4. South Coast Rock Lobster

• Successful Cat A: 7
• Successful Cat B: 1
• Successful Cat C: 1

Prior to this FRAP, the fishery comprised 8 right holders. The number of right holders have been increased to 9 right holders. 

5. Squid

• Successful Cat A: 73
• Successful Cat B: 0
• Successful Cat C: 0

Prior to this FRAP, the fishery comprised 77 right holders. The number of right holders have been reduced to 73 right holders. No new entrants have been accommodated in this fishery. 

6. Hake Long Line

• Successful Cat A: 64
• Successful Cat B: 7
• Successful Cat C: 15

Prior to this FRAP, the fishery comprised 105 right holders. The number of right holders have been reduced to 86 right holders. 

7. Tuna Pole

• Successful Cat A: 37 
• Successful Cat B: 32
• Successful Cat C: 29

Prior to this FRAP, the fishery comprised 94 active right holders. The number of right holders have been increased to 98 right holders.  The introduction of this number of new entrants is surprising. 

8. Demersal Shark

• Successful Cat A: 1
• Successful Cat B: 0
• Successful Cat C: 0

Prior to this FRAP, the fishery comprised 6 right holders. The number of right holders have been reduced to 1 right holder. The collapse of this fishery is hardly surprising given that it has little economic value and the growing global anti-shark seafood sentiment has effectively destroyed the market for shark meat. 

9. Traditional Line Fishery

• Successful Fishing Zone A (Western Cape): 215 
• Successful Fishing Zone B (Southern Cape and Eastern Cape): 37 
• Successful Fishing Zone C (KZN): 38 

Prior to this FRAP, the fishery comprised 450 right holders. The number of right holders have been reduced to 290 right holders with an approximate total crew complement of 2900 fishers. 

South Africa had a total of 930 commercial right holders prior to these decisions. These decisions have reduced right holder numbers to 706 (24%) across the 9 fisheries.  There will also be a substantial reduction in employment as a consequence especially in the crew intensive sectors like traditional line fish.