Download Allocation of Long Term Commercial Fishing Rights

The Allocation of Long Term
Commercial Fishing Rights
Presentation to the Portfolio Committee
05 April 2005
Background: The Allocation of Medium
Term Fishing Rights: 2001 to 2005
• First ever multiple year rights allocation in South African
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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 (50%+1);
– 70% of all fishing rights are held by SME’s
– 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
South Africa’s Fishing Policy: 2005 and
Beyond
• Broad Based Black
Economic Empowerment
• Black and female equity ownership;
• Black and female control of management;
• Compliance with Employment Equity and
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• Biology of the target
resource
• Ecology in which target
resource is found
• Economic and Social
Development
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
Intervening in the 2nd Economy and
Growing the 1st Economy
Fishing: 1% of GDP;
• The 2nd Economy Interventions
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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
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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
Coastal Resources:
30% of GDP
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)
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• International Law and Regional and International Obligations
United Nations (in particular the FAO)
 Regional Fishery Management Organisations
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• Learnings, Izimbizo, and ad hoc Consultations
Learnings from medium term process
 Comments and Criticisms from Izimbizo
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• 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)
Cluster A
Hake Deep Sea Trawl
Hake Inshore Trawl
Horse Mackerel
Small Pelagics
Patagonian Toothfish
South Coast Rock Lobster
KZN Prawn Trawl
Cluster C
Handline Hake
WCRL (Near Shore)
• 19 Fishery Specific Policies
Cluster B
WCRL (Off Shore)
Hake Longline
Squid
Tuna Handline
Seaweed
Shark Long Line (Demersal)
Cluster D
Oysters
White Mussels
Beach Seine Nets
KZN Beach Seine (Pilchards)
Hake Deep-Sea Trawl
*Fishery worth R1,4 billion annually
*Employs 8800 persons directly
*Asset value estimated at R700 million
Hake Deep-Sea Trawl Policy
Largest and Smallest Allocations
Percentage TAC Held by 5
Largest Companies
100%
60000
92%
75%
80%
40000
60%
1992
2004
30000
40%
20000
20%
0%
53000
45000
50000
10000
1992
2004
Black Ownership and Management in
Non2002
HDP
26%
HDP
74%
50
0
336
TAC held by black owned companies
HDP
25%
Non-HDP
75%
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 & SME’s
– 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
Seaweed
*Employs 1700 persons directly
*Fishery worth approximately R6 million annually
Seaweed Policy
Black Ownership and Management in
2002
SME Right Holders
SME
50%
HDP
43%
NonHDP
57%
Non-SME
50%
Seaweed Policy (cont…)
• Over-all Sectoral Objectives
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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
Hake Long Line
*Employs 6800 persons directly
*Fishery worth approximately R130 million annually
* Asset value estimated at R750 million
Hake Long Line Policy
Approximate Percentage of SME
participants in 2002
Black Ownership and Management in
2002
NonHDP
10%
Non-SME
20%
SME
80%
HDP
90%
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
How are Fishing Rights Allocated?
Step 1: Consultation
•Draft fisheries policies are drafted and gazetted
•Consultation with interested and affected parties
(best practice as it combines both notice and
comment and public inquiry)
•Receipt comment and amend policies
Step 3: Verification, Evaluation and DecisionMaking
•Every application receipted is downloaded
onto an electronic database; information is
verified and separate databases established for
vessels, ownership etc
•A group of independent legal advisers then
evaluate each application in terms of criteria
and weighting determined by the decisionmaker and is overseen by the DM
•Decisions taken by decision-maker
Step 2: Invitation and Receipting
•Each cluster of fisheries is invited to apply on a
staggered basis
•Receipting of some 5000 anticipated applications
will be both central and regional and overseen by
Deloitte
Step 4: Appeals
•Once notified by DM, every applicant may
appeal to the Minister within 30 days
•For every appeal, the Department drafts a
report (2300 in 2002/2003)
•Minister takes decisions based on appeal and
report.
How are decisions taken?
• All fishing rights allocation processes are
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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
Checks and Balances: Process Security
and Integrity
Allocating fishing rights worth R70
billion
• Process security and integrity
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• 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
Beyond Fishing Allocations
• Investing in 12 new fisheries (3 in 2004/2005);
• Investing further in Aquaculture to reduce pressures on
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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