Presentation to the Portfolio Committee

1
Presentation to the Portfolio Committee
The Allocation of Long Term Commercial Fishing
Rights

• 05 April 2005

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Background The Allocation of Medium Term
Fishing Rights 2001 to 2005

• First ever multiple year rights allocation in
  South African commercial fishing
• Purpose and Objectives
• Effect further transformation of the industry
• Establish economic stability in the industry to
  stimulate job creation and further investment
• Sustain or reduce fishing effort to ensure
  sustainable resource management
• Challenges (1994)
• 1 of fisheries black owned 0 black managed
• Transformation to be effected with less fish
• 400 right holders in total
• Results
• 66 of all fishing rights are held by blacks or
  black controlled entities (501)
• 70 of all fishing rights are held by SMEs
• 3930 commercial rights are currently being
  exploited
• South African hake fishery only hake fishery in
  the world to be MSC certified
• All our fisheries are well managed but currently
  maximally exploited, save for some line fish
  stocks and abalone, which are near collapse

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South Africas Fishing Policy 2005 and Beyond

• Broad Based Black Economic Empowerment
• Biology of the target resource
• Ecology in which target resource is found
• Economic and Social Development

• Black and female equity ownership
• Black and female control of management
• Compliance with Employment Equity and Skills
  Legislation
• Worker empowerment (share schemes)
• CSI (1 and more to be considered)
• Affirmative Procurement
• Managed through the setting on an annual basis of
  Total Allowable Catch and/or Total Applied Effort
  limitations
• The Ecosystems Approach to Fisheries (EAF)
  Management is an international obligation
  determined at WSSD with a deadline of 2010
• Fisheries is an important food source. It also
  provides important jobs and livelihoods for
  thousands along our coast

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Intervening in the 2nd Economy and Growing the
1st Economy
Fishing 1 of GDP Coastal Resources 30 of GDP

• The 2nd Economy Interventions
• Allocating Long Term Rights and access to capital
• Geographic Justice
• Facilitating Access (fees application forms
  language see further below)
• Allocating inshore resources to local fishers not
  large companies
• Neutralising monopolies in the small fisheries in
  particular
• Researching new fisheries
• Growing the 1st Economy
• Allocating rights within a legally sustainable
  framework
• Supporting investment in infrastructure and
  rewarding value adding and job creation
• Rewarding adherence to BEE and adherence to
  equity and skills legislation
• Identifying and eliminating fronting

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What Informs our Policies?

• South African Law (Statute and Case Law)
• Section 24 of the Constitution
• Broad Based Black Economic Empowerment Act and
  Codes of Practice
• Section 2 of the MLRA
• High Court, SCA and Constitutional Court
  Judgments (48 fisheries cases during 2002-2004)
• International Law and Regional and International
  Obligations
• United Nations (in particular the FAO)
• Regional Fishery Management Organisations
• Learnings, Izimbizo, and ad hoc Consultations
• Learnings from medium term process
• Comments and Criticisms from Izimbizo
• State of the Nation Addresses (2004 and 2005),
  Ministerial Budget Votes and Interviews
• January 8th Statement by the African National
  Congress
• The People Shall Govern
• The People Shall Share in the Wealth of the
  Country

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Policy Structure

• General Fisheries Policy (clustered approach to
  fisheries management)

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Hake Deep-Sea TrawlFishery worth R1,4 billion
annuallyEmploys 8800 persons directlyAsset
value estimated at R700 million
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Hake Deep-Sea Trawl Policy
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Hake Deep-Sea Trawl Policy (cont)

• Over-all Sectoral Objectives
• Improve the transformation profile
• Ensure the long term sustainable utilisation of
  hake stocks
• Manage all known impacts on the marine ecosystem
  affected by trawling, including preventing and
  reducing by-catches
• Redistribute TAC rewarding BEE entities SMEs
• Exclude poor performers
• Job creation
• Economic and environmental sustainability
• Duration
• 15 years
• How do the quantum pools work?
• 10 for SME
• 10 for Transformation
• 20 for Performance

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SeaweedEmploys 1700 persons directlyFishery
worth approximately R6 million annually
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Seaweed Policy
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Seaweed Policy (cont)

• Over-all Sectoral Objectives
• Improve the transformation profile
• Value adding to seaweed harvested
• Increase the number of participants
• Encourage right holders who do not engage in
  seaweed beneficiation to instead join with local
  communities in application for seaweed harvesting
  rights
• Economic viability of environmental
  sustainability of the fishery
• Duration
• 10 years
• New Entrants
• Applications from new entrants are encouraged

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Hake Long LineEmploys 6800 persons
directlyFishery worth approximately R130
million annually Asset value estimated at R750
million
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Hake Long Line Policy
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Hake Long Line Policy (cont)

• Over-all Sectoral Objectives
• Maintain or improve the transformation profile
• Encourage investment in vessel and processing and
  marketing infrastructure, and jobs
• Mitigate against avoidable by-catch and to
  eliminate bird strikes
• Facilitate research on impact of long lining on
  hake stocks
• Affirm applicants whose registered place of
  business is in the Eastern Cape
• Economic viability of environmental
  sustainability of the fishery
• Duration
• 15 years

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How are Fishing Rights Allocated?
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How are decisions taken?

• All fishing rights allocation processes are
  polycentric and criteria based.
• Once all applications are receipted and databases
  analysed, weighting and detailed criteria are
  designed to meet objectives.
• The criteria
• Exclusionary criteria (improper lodgements,
  material defects, essential requirements)
• Balancing Criteria (where must the line be
  drawn?)
• Tie-Breaking criteria
• Quantum/Effort Criteria

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Checks and Balances Process Security and
Integrity

• Allocating fishing rights worth R70 billion
• Process security and integrity
• NIA scrutiny of offices
• Forensic Auditing and Verification Internally
  and Externally
• Deloitte Forensics (Pty) Ltd
• Independent Project Managers
• The Resolve Group (Pty) Ltd
• Independent Legal Advisers
• Professor Halton Cheadle
• Advocate Johan de Waal

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Beyond Fishing Allocations

• Investing in 12 new fisheries (3 in 2004/2005)
• Investing further in Aquaculture to reduce
  pressures on capture fisheries
• Investigating alternative sustainable livelihoods
  such as facilitating further economic development
  in fishing harbours
• Expanding access to non-consumptive tourism based
  activities such as SCUBA diving, boat based whale
  watching and white shark cage diving