Friday, March 4, 2022

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. 


 

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