A DA FISHERIES MINISTER ISSUING 11 TON HAKE LONG LINE FISHING RIGHTS!

Minister Dion George of the Democratic Alliance has issued 11 ton hake long line fishing rights. Yes, you read that correctly. 11 tons. Of hake long line granted to new entrant, black-owned fishing companies! 

If you are not familiar with fishing, an 11 ton hake long line fishing quota is worth about R80,000 annually, where vessels cost upward of R10 million (used and 50 years old); and processing and export costs would consume 50% of that income.

11 tons would be caught in approximately 10 hours of fishing. 

Essentially, allocating 11 ton rights to right holders is effectively unlawful as those right holders can only ever be paper quota holders in violation of the MLRA and policies promulgated in terms of it. 

It is inconceivable how Minister Dion George of the DEMOCRATIC ALLIANCE could allocate right holders such quotas particuarly since the Hake Long Line Fishing Policy states that the allocation of quota must "facilitate their meaningful participation in the fishery throughout the value chain.

COMMENT ON THE DRAFT TRANSFER & FISH PROCESSING POLICIES

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. 

Climate Change Act and Impacts on & Opportunities for SA Fisheries

 On 23 July 2024, the President of SA assented to the Climate Change Act (22 of 2024). The Act will come into force on a date still to be determined. 

However, the SA fishing industry is listed as a sector that will be subject to the setting of limits on the production of greenhouse gases. 

Section 25(1) of the CCA states that "[t]he Minister must, within one year of the coming into operation of this Act, by notice in the Gazette, list the greenhouse gas emitting sectors and sub-sectors that are subject to sectoral emissions targets."

Section 26(1) states that "[t]he Minister must, by notice in the Gazette, publish a list of greenhouse gases which the Minister reasonably believes cause or are likely to cause or exacerbate climate change." 

Section 26(4) records that: "The thresholds contemplated in subsection (3)(b)—

(a) must be expressed in carbon dioxide equivalents for carbon budgets and

greenhouse gas mitigation plans and shall be applicable at company level

based on operational control;

(b) must be based on the availability of feasible mitigation technology; and 

(c) must take into account any opportunities and constraints to implementation of

policies and measures."

Section 27(1) states that "[t]he Minister must allocate a carbon budget to any person that conducts an activity listed in terms of section 26(2)."

Schedule 1 of the CCA has identified the fisheries sector as being subject to the determination of sectoral emission targets. 

Of course, the "fisheries sector" is far from being an homogenous sector as we well know. The vast differences in the size of individual quota holders across 22 commercial and small scale fishing sectors are profound and provides opportunities for individual companies and fishing sectors to -

• negotiate sustainable emission targets;
• enter into agreements with smaller sectors and companies to sell excess carbon credits to larger companies and sectors. 

A DA-Led Fisheries Administration Looks Certain

For the first time ever, it now seems certain that the South African fisheries and environmental affairs ministry will be led by the Democratic Alliance. 

I have previously written about what should happen IF the DA was to assume leadership of this ministry. Read that here.  It now looks certain that this will happen. 

Sadly, a repeat of the clean-out of the corrupt and incompetent - similar to what happened in 1999/2000 - will be needed. The fisheries branch in particular will need to be re-constituted and re-engineered to ensure that it is able to grow our commercial fisheries sector; serve the fishing industry and fishing communities along our coast and protect our marine ecology from mining and unchecked illegal fishing.  

The next week will be an important one for SA fisheries and environmental affairs. 

Can the Fisheries Ministry Expect a DA Minister?

Will South Africa's Department of Forestry, Fisheries & Environment get a minister from the official opposition, Democratic Alliance, party? 

South African fisheries management is in a depressed state and requires serious and substantial re-invigoration.

What governance aspects and fisheries management areas should a new minister focus on in the first 100 days of office?

These are my suggestions:

1.    New fisheries development and innovation: Lift the ill-advised moratorium on new fisheries development and urgently address the bureaucratic and unnecessarily complicated application to develop and innovate our fisheries. In short, the objective must be to ENCOURAGE expansion of our commercial fisheries and the size of the commercial TAC. And where existing right holders seek to invest in fisheries growth and innovation, make provision for levy rebates. 

2.    FRAP Litigation: There are numerous cases still outstanding from FRAP 2016. These need to be resolved with great urgency. Of particular concern is Minister Creecy's unnecessary "self-review" of her decisions in the hake inshore trawl fishing sector. In addition, there are more than 30 review applications pending in just the hake long and small pelagic fishing sectors. Many of these ought to be settled and rights allocated because of the patently obvious scoring and decision-making errors. 

3.    Re-starting sector-wide consultations and meetings: The new fisheries minister needs to re-commit to consulting with industry on a sector-specific basis as opposed to Creecy's ill-advised "I will only consult with FISH SA". And senior managers need to be talking to industry and fishers more directly and frequently. Fisheries will be better managed when policy-makers spend more time on harbour walls and on the decks of fishing vessels as opposed to on the 7th floor of the Foretrust office building. 

4.    Fisheries crime: Special focus needs to be placed on curtailing lobster and abalone poaching and the massive surge of illegal recreational line fishing in KZN and the sale of recreational caught line fish and tunas. The dedicated anti-poaching green courts with properly trained and staffed personnel need to be re-visited. Abalone fishing rights need to be urgently allocated and a new thinking about the TAC and displacing illegal fishing needs to be adopted. 

5.    Fishing harbours: The management of fisheries harbours such as Hout Bay, which are known conduits of fisheries and other crimes should be devolved to capable local governments and these harbours require rehabilitation and investment by the private sector.

6.    High Seas Treaty: South Africa needs to urgently sign the High Seas Treaty and then to ratify it. 

7.    Review fisheries administration: We need to simplify fisheries administration and management. For one, an urgent review of the multiplicity of permits needed to land and transport fish from one place to another requires re-thinking. Two, the permitting process has to be migrated away from the current ancient hard copy paper process to a simple on-line system capable of being accessed from any computer or smart phone. 

Over the longer term (6 to 18 months) we need to review the MLRA, the 1999 fisheries regulations and current fisheries policy framework, including the embarrassingly cumbersome "transfer of fishing rights" policy. 

Fisheries Minister States that Fishing Rights are PROPERTY RIGHTS

 In a review application involving traditional line fishers set to be heard before the Western Cape High Court this month, the Minister of Forestry, Fisheries and Environment, Barbara Creecy, states on oath that fishing rights are considered to be property rights and that these rights cannot be revoked or cancelled as that would amount to a violation of section 24 of the Constitution. 

The Minister's attempt at framing fishing rights as property is convenient in that particular matter but it will certainly harm her interests in the various other review matters she is presently facing, most particularly her own "self-review" matter in the hake inshore trawl fishing sector.

But members of fishing industry may want to interrogate this change of view by the Minister which effectively recognises your fishing rights as property rights no longer capable of "expropriation" without compensation as provided for in section 24 of the Constitution. 

WC High Court Case: 17507/2023

Citation: RIYAZUL HAQ EBRAHIM GOOLAM HUSSAIN & 1 Other vs THE MINISTER OF 

FORESTRY, FISHERIES & ENVIRONMENT & 46 Others

UPDATE ON FRAP 2021 (& 2016) LITIGATION

 This is an update on litigation currently before our courts concerning FRAP 2021:

1. Squid

Readers may recall that last year, SASMIA obtained an order against the Minister of Fisheries which required the Minister to redo her squid appeals. Essentially, the court held that the Minister's decisions to allocate rights to additional applicants during the appeals process without first consulting the successful applicants and right holders in the fishery constituted a violation of section 80(3) of the MLRA. Section 80(3) requires the Minister to consult with every party who has an interest in the matter before making decisions that would affect the rights and interests of existing right holders. 

The Minister has until the end of April 2024 to remedy her unlawful appeal decisions and issue fresh appeal decisions. 

2. Hake Deep-sea Trawl

Learning from past mistakes is clearly not for our esteemed Minister and her legal advisers! ZWM Fishing has taken the Fisheries Minister to court** in the hake deep-sea trawl fishing sector because the Minister again issued appeal decisions which adversely affected the rights and interests of existing right holders such as ZWM without first complying with her legal obligations under section 80(3) of the MLRA. 

The Minister's decisions in this fishery resulted in the fishing quota of ZWM being reduced but the Minister failed to first consult with ZWM (and others) to obtain their views before making a final decision. The Minister's repeated failure to comply with section 80(3) and pertinently with principle of audi alterem partem does really beggar belief. 

**Citation for this case is: ZWM FISHING (PTY) LTD v THE MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT (Case No. 6149/2024)

There is also a review application by Pioneer Fishing (Pty) Ltd (Case No. 5788/2024) which seeks the setting aside of the entire appeals process and to have the Minister redo the appeals within 90-days of a court order reviewing and setting aside the Minister's decisions. 

In our view, both applications are likely to succeed. The ZWM Fishing application will certainly succeed with the result that the Minister's appeal decisions will be reviewed and set aside. This will have an effect on all those Category A, B and C appellants granted rights by the Minister - they will lose those rights. 

In the Pioneer matter, the notice of motion seeks the reviewing and setting aside of the appeal decisions but requests that the court orders these impugned decisions to remain in force until the Minister re-takes the appeal decisions as directed by the Court. 

2. Hake Long Line

There are 5 review applications before the Western Cape High Court in the hake long line fishery. Three of these are historic right holders who refused their rights back on appeal and two are Category C new entrant applicants who were unsuccessful. 

These 5 matters are set to be heard on 16 May 2024. 

Feike's Shaheen Moolla is the legal counsel in all of these matters and we naturally believe that these 5 matters will all succeed. In terms of a current interim court order which set out the timeframes for the conduct of the matter, the Minister was supposed to have filed answering papers in these review applications some weeks back but has failed to do so. 

Should she eventually decide to present her answering affidavits, she will have to first seek the court's permission to file these. We are certain the 5 hake long line applicants will oppose such requests by the Minister. 

3. Traditional line fish

There are two review applications in the traditional line fishery brought by line fishers in the KZN management zone. These fishers are seeking a review of the Minister's decision to deny them rights because the Minister had stated that there was not enough effort available to accommodate these two right holders.  It is however apparent that the Minister's decisions are just bad in fact and law as she added up the number of rights allocated incorrectly. Instead of recording that 38 rights were allocated in Zone C, she somehow concluded that there were 43 rights granted. This computational error resulted in the bad decisions to deny these two fishers their rights. 

Feike's Shaheen Moolla is acting as legal counsel in these matters as well. 

In addition, there is a broader industry-wide review application against the decision to grant fishing rights in this fishery for period of 7 years as opposed to 15 years as with the other FRAP fishing sectors. Although this application was filed last year, the Minister has failed to file any answering papers to date - a further indication that she simply has no legally sustainable response to the allegations of unlawful decision-making. 

Feike's Shaheen Moolla is acting as legal counsel in this matter as well.

4. South Coast rock lobster

Risar Fishing CC is reviewing the Minister's quantum allocation methodology employed in the South Coast rock lobster (SCRL) fishery. This matter is presently before the WC High Court and scheduled to be heard in early 2025. 

Feike's Shaheen Moolla is acting as legal counsel in this matter.

5. Tuna pole

The Western Cape High Court recently issued judgement in two tuna pole review applications - PUFFIN FISHING CC and RIVER QUEEN TRADING 499 CC v THE MINISTER OF FORESTRY, FISHERIES AND THE ENVIRONMENT (Case No. 11413/2023). 

The court reviewed and set aside the Minister's decision to refuse Puffin Fishing CC a tuna pole right on the basis that the Minister's interpretation of what constituted a "brother-sister" relationship was unlawful. 

The court however upheld the Minister' decision to refuse River Queen a right due to poor catching performance. 

Feike's Shaheen Moolla acted as legal counsel in these matters.

A further review application by Greenfish Traders CC will be heard in May 2024 challenging the Minister's decision to refuse Greenfish a tuna pole fishing right. 

6. KZN Prawl Trawl

Dyer Eiland Visserye had brought a review application in the KZN Prawn Trawl fishery on the basis that despite it scoring higher than a competitor, the Competitor was arbitrarily and unlawfully allocated a right. In addition, the Minister appears to have made another computational error as she incorrectly determined the amount of effort (permits) available for allocation in this fishery. 

Feike's Shaheen Moolla is acting as legal counsel in this matter.

7. FRAP 2016

As unbelievable as this may sound, the Fisheries Minister has yet to finalise and resolve the 2016 fishing rights allocation process. 

In the hake inshore trawl and horse mackerel sectors, she has indicated that she wishes to review her own decisions as these decisions are unlawful! Her "self-review" application in the hake inshore trawl fishery is before the courts and being opposed by at least 3 right holders - T&N Visserye, Zimele Fishing Enterprises and Cape Fish Processors. 

In the horse mackerel fishery, Dyer Eiland Visserye is challenging the Minister's decision to refuse it a horse mackerel fishing right.

In the hake inshore trawl fishery, there are at least 3 outstanding and current review applications against the Minister, including review applications by SEVLAC, Hacky Fishing and LETAP. 

Feike's Shaheen Moolla is acting as legal counsel for Dyer Eiland Visserye, LETAP, T&N and Zimele in these matters.

Conclusion

There can be little doubt that the last two fishing rights allocation processes have been the most chaotic and disruptive processes costing the fishing industry millions in lost and interrupted revenue. Sadly, this is however the hallmark of ANC governance - maladministration, chaos, bad decision-making and a refusal to consult experts and work with business.