Update on Fishing Rights Allocation Process (FRAP) 2020; state of marine fisheries resources; with Deputy Minister

Meeting report

Fishing Rights Allocation Programme

Ms Maggie Sotyu, Deputy Minister, Environment, Forestry and Fisheries, introduced her team and invited Ms Sue Middleton, Acting Deputy Director-General (DDG): Fisheries, to proceed with the presentation on the Department’s behalf.

In March 2016, the Marine Living Resources Act had been amended to include a definition of small-scale fishing, as per public consultation. This was followed by applications and appeals processes for fisheries. A national tip-off hotline was established, which led to tip-offs received in the Western Cape alone, which had led to delays. Following subsequent developments, the Minister had approved further amendments, such as allocating fishing rights for 15 years. The Department had engaged with other departments, sectors and private entities as part of enforcing and emphasising the need for the support of co-operatives. At the time, the Department was in phase two of support and training, which would see an increase in community members benefiting from these efforts. Near shore specifics were under threat, limiting resources for small-scale fish. This was often due to over-fishing. As such, a proposed apportionment between large-scale and small-scale fisheries had been gazetted, and was open for public comment.

Ms Middleton continued on the second part of the presentation on the Fishing Rights Allocation Programme (FRAP). In August 2019, the Minister had announced that the FRAP 2020 process would be extended to December 2021, which was supported by the Cabinet. Even with the extension, the timeframe was under pressure due to the COVID-19 Lockdown. Catch-up strategies were being followed. This was to avoid further litigation, and the controversy that had taken place from 2015. The Department was in the process of awarding tenders which would be completed by January 2021. Challenges showed the need for continued commitment to policy imperatives such as transformation.

Dr Kim Prochazka, Chief Director: Fisheries Research and Development, DEFF, continued with the third presentation on small-scale fisheries. Key resources were hake, abalone, West Coast rock lobster, demersal sharks and line fish, including silver cob, yellowtail and snoek.

[please see presentations attached for the details]
 
Discussion

Mr N Singh (IFP) asked about the rights of individual and artisanal subsistence fishing. They had previously discussed the fact that Members of the Portfolio Committee were not necessarily in office in 2013, and did not know what had informed the removal of the reference to subsistence and artisanal fishing. He was hearing about large-scale fishers and co-operatives, and so on, but there was a distinct gap in the discourse on individual rights. This was the fisherman who had been fishing for the last 100 years for his family and selling the leftovers to locals. This was part of a fundamental right – the right of individual subsistence and artisanal fishers.

In another meeting, Members had been told the Act would be amended to include the re-definition of small-scale fishers. He wanted an assurance that this would happen. They had spoken about the people who had suffered great hardships during COVID-19. While co-operatives and large-scale businesses had benefited from COVID-19 relief, the small-scale fisherman had got nothing. These were the individuals that were restricted – charged and harassed by entities, while there were illegal trawlers taking away millions of tons of fish from the South African coast without anyone observing this. He wanted some comfort in knowing that the more subsistence-based fishing -- in the Eastern Cape or KwaZulu-Natal, for example -- would be protected with his/her rights enshrined. 

Mr Singh said he noted from the presentation that the DEFF had provided training in KwaZulu-Natal and the Northern Cape. He wanted to know the nature and scope of the training, as it had been come known to him that individuals sometime received 12 hours of training, and were then expected to handle tax affairs, audits, financial management and other skills. Not all recipients of the training were as literate as the presenters to the Portfolio Committee, because they had been denied opportunities like going to school, etc. What would the DEFF do to improve the capacity of people in the co-operatives so that they could do what was expected of them.

Moving to rural communities, he said the presentation had shown that in 2013 a R424 million five-year implementation plan had been rolled out. He asked for an account of this R424 million allocated for small scale fisheries (SSF), as well as a report on the capacity of the fisheries. There had been word of getting service providers, but Mr Singh doubted whether this was necessary – had they not already built up the fisheries component in the DEFF? He also asked about the Marine Living Resources Fund (MLRF) proceeds, asking when the MLRF would be self-sustaining. 

Finally, since it had been mentioned that there were irregularities in the allocations, what comfort would be given to Members of the Committee that these irregularities would be attended to? As an example, they were aware of the in-shore hake trawlers. The whole process had been set aside in court, causing the DEFF to increase the number of users above what had been scientifically set. Furthermore, transformation was a cause of concern. He wanted to know what kind of transformation had taken place in the sector to ensure that women, previously disadvantaged and disabled individuals were being given opportunities when it came to the FRAP. Since the FRAP had been delayed until 2021, this would give the Portfolio Committee an opportunity to engage with the DEFF in this regard.

Ms H Winkler (DA) began by asking about the Marine Stewardship Council (MSC). The presentation had stated that only the hake industry was certified. Why were other fisheries not certified in terms of the MSC? This would allow access to European and other foreign markets, which would in turn allow for the sustainable management of fishing resources. Secondly, who was assessing the deep-water hake biomass level, which was said to have recuperated and was out of the red zone. She asked for an account of the decrease in sardine levels and why the fish stock had not been able to recuperate at all in the past decade.  For many, especially in KZN, this was an annual event which helped subsistence fishing communities. Similarly, with the anchovy fish stocks – what were the sustainable management practices around this, and why had there been such a drastic decrease in these stocks? Regarding the number of sharks in the red-zone, she said she was aware that it was permitted to fish one shark per diem.  Considering the status of sharks, would there be a review of this fishing allowance?

Due to poor connectivity, Ms Winkler was unable to continue over audio and posted the following in the meeting chat:

“The fishing industry has appealed to the Department to make a provision for an online application process. The Department would have to update the Committee on where the process was of rolling out the online application process, data management and required business intelligence. Paper quotas were a huge issue. They disenfranchise fishing communities. How were we ensuring that this issue was going to be meaningfully addressed?

“Shouldn’t the Department make MSC mandatory for commercial fisheries?

“Would the recreational shark catch be reviewed?”

Ms Winkler continued, once re-connected, and echoed the sentiments of Mr Singh, requesting clarity on the provisions for generational subsistence fishers, particularly in KwaZulu-Natal. She asked about aquaculture projects and how many there were nationally. This was important to ascertain, in order to equip training efforts and provide resources. She asked how many co-operatives had been assisted.

Mr J Lorimer (DA) asked what monitoring was being done with the co-operatives. Were they being run according to the plan, with community participation? He also sought clarity on whether it was correct that the DEFF had provided boats for fisherman. Though Members had heard about some boats which had been brought to Port St Johns, who was monitoring this? What sort of fishing was being done while the DEFF was setting up co-operatives, as discussed? Essentially, co-operatives were competing in some instances -- for example, handline fishers competing with commercial fishers. He wanted to know how many of the small-commercial fishers’ jobs would be threatened if catches were given to co-operatives, and taken away essentially from commercial operations. Had research been done on jobs lost?

He asked if the team had been active in following up on the 2015/16 whistle-blowing reports. There had been no action on those reports, so he wanted an update. If one read the report on the state of South African fishing resources, it stated that the DEFF had reserved a portion of the total allowable catch (TAC) for small-scale fishers who did not have suitable vessels for harvesting and processing. Contracts and marketing agreements had to be entered into with commercial companies, who utilised the allocated quota. He asked for the presenting team to comment on this. If an apportionment was already being made, what was the purpose of the public participation process if the outcome was already decided, especially with regard to squid?

DEFF’s response

Ms Middleton started by responding to Mr Singh. She confirmed that, as per previous reports, when the MLRA was amended, the definitions of ‘artisanal’ and ‘subsistence’ fishers had been taken out and replaced by the definition of small-scale. They had indicated, as part of the fisheries branch’s strategic plan, that the MLRA would be amended in its entirety, as it was a relatively old piece of legislation. This would commence in the 2022 financial year, as all the attention in 2021 would be directed towards the FRAP and small-scale process. Only thereafter would they be in a position to amend – where they would review definitions etc.

She wanted to highlight that the fishers in KZN who were not part of small-scale fishing, were fishing on a recreational permit which they obtained from the post office.  Since it was Alert Level One (COVID-19), they were entitled to use the recreational permit for fishing.

She also brought it to Members’ attention that line fish was due for reallocation, as part of the FRAP 2021 process. Line fish was one of the sectors allocated to individuals, as opposed to companies or entities. The small-scale/artisanal fishers in KZN would be encouraged to apply for the line fish permits from the post office. The training and future plans would be given by the Acting DDG.

She said a small portion of income/revenue of the Marine Resources Fund was derived from the proceeds of confiscated fish and fish products, but in terms of gross revenue streams, this was a small portion of their income. The majority of income was derived from levies on fish landings, as well as some conditional grants from National Treasury. According to the 2019/2020 Auditor-General’s (AG’s) report, the Marine Living Resources Fund was a viable concern.

Ms Middleton highlighted issues that would provide Members with comfort that the 2015 FRAP controversy would not be repeated. Firstly, Minister Creecy had taken a decision that in FRAP 2021, she would be appointing a number of delegated authorities to the fisheries needing re-allocation. This was unlike what had happened in 2013 and 2015, where there had been only one delegated authority – the DDG of fisheries management at the time. The reason for appointing a number of delegating authorities was to minimise the risk that one person would have the power to take decisions in all sectors, and to minimise the risk of irregularity in proprieties. Additionally, this was not being dealt with internally, because in 2015 matters were dealt with in-house, resulting in a feeling that by appointing service providers to oversee the implementation of FRAP, they would not only be bolstering the capacity of the DEFF, but they would also be minimising potential for impropriety, making the process more open, transparent and subject to public scrutiny. That was why a number of service providers had been appointed, including a legal team advising the DEFF, especially on the legalities of certain decisions.

In response to Mr Lorimer’s question on boats being bought, Ms Middleton said that the DEFF’s fisheries branch had seen a report that the DDG had received a donation of boats delivered to the Eastern Cape. To their knowledge, the boats had not yet been distributed to small-scale fishers. This donation was under investigation by the HAWKS.

The whistle-blowing reports during FRAP 2015 were available and on record. The comments received by the delegated authority were on the whistle-blowers’ hotline. She thus clarified that they were not tip-offs, per se, but were more comments that were taken into account when final decisions were made. She repeated that the reports were available for scrutiny. In terms of the apportionment, a gazette notice had been published on 23 October for public comment, which was still open. The DEFF had proposed an apportionment split in small-scale between squid, abalone and linefish. Public comments would be received and taken into consideration. In terms of a gazette notice, there was a decision to declassify oysters and white mussels, which would no longer be classified as commercial fisheries and would be allocated 100% to small scale fishers.

Ms Prochazka addressed Ms Winkler’s verbal questions, and said it was difficult for her to answer why hake was the only MSC certified fish, particularly because these processes were driven by the fisheries industry themselves, not by DEFF as the management authority. She speculated that there were barriers to certification, as it was a relatively lengthy, complicated process which also required reasonable financial inputs. It was a rather onerous process that was not simple. She was aware of some fisheries that were considering MSC certification, or were in a pre-certification phase. Whether they would go through with full certification, there was a process that would define this.

On another matter, the DEFF was processing hake catches from the catch data of fisheries and their own research. They did stock assessments on their own vessels, which were reviewed annually by a peer-review panel. With hake being part of the MSC, the MSC would look quite deeply into the re-certification process and surveillance process. As such, the DEFF was confident that their methodology and practice for hake was internally sound.

Regarding the abundance of sardines and anchovy, these fish had short life spans, which meant the abundance was variable over time – there were good years and bad years. They therefore kept close track of these resources, conducting surveys twice a year so that they could keep monitor this variability. Sharks were very vulnerable to fishing, largely because of their biology, as they had long lifespans, reproduced late and were slow growing. This meant that catching sharks needed to be conservative. They were in a process of reviewing the national plan of action for sharks, which would continue into the following year. All of the management measures contained in the plan would be reviewed in this process. They would shortly be publishing a report they had done under the COVID-19 lockdown. They had local and international expertise, which provided advice on how to improve the management and conservation of sharks, amongst other key targets.

Ms Middleton added that in response to the audit of 2013 and 2015, one of the tenders being advertised was for the appointment of a forensic audit team. They would be auditing all the successful applicants in the FRAP 2015 process to verify that the basis on which they were given rights was valid, and that the decisions they had taken in good faith were accurate. In terms of the Marine Living Resources Act, should it be revealed that false information had been provided, they were able to revoke the rights at any stage of the 15-year period.

The specifications for the database of one of the tenders were that the 2021 application process would be online, rather than manual. The service provider was required to assist those communities or individuals who did not have the capacity or digital means to apply online. In particular, they pre-empted that the linefish sector might require some technical assistance in order to apply online.

Mr Abongile Ngqongwa, Acting DDG: Small-Scale Fisheries Management, DEFF, responded to matters of training and the governance of small-scale co-operatives.

As part of the process of registering co-operatives, they had started conducting an economic baseline in just over 300 communities since 2016. This was to better understand the communities and to establish a profile in these communities. This helped them to establish the basis under which they could support the co-operatives. One of the clear indicators was that there were low levels of literacy in fishing communities, where there was an average age at 44 years. There was also a clear lack of infrastructure, which compared poorly with business models of corporations that needed to comply with requirements. From this, the DEFF had to come up with requirements to facilitate their operations.

There were three main issues that they had identified to support co-operatives:

• The lack of capacity to run business entities such as a co-operative;
• Their limited participation in the value chain; and
• The limited infrastructure.

Before they could register cooperatives, the first thing they had asked themselves was whether communities understood what a cooperative was, the implications of a cooperative, as well as the rights of individuals and cooperatives within a fishing community. This was the reason they had set up a two-day training workshop --mainly to break down what a cooperative was and what was expected of them. They had been aware that two days’ training might not be enough. The DEFF had also partnered with other government departments, and some of the business training that had taken place in fishing communities had involved business skills training, value chain, safety at sea and other. Training needed to have a long-lasting impact, so they were working towards a mentorship programme whereby there would be a permanent facilitator within the co-operative that would mentor the business and ensure the co-operative was economically stable moving forward.

He said that resources were finite, as had been highlighted in the presentation, so they needed to find supplementary livelihoods for all those reliant on small-scale finishing. Agriculture would play a vital role in this regard. This was the reason the DEFF had decided that as part of the rights allocated in the Eastern Cape, they would include abalone ranching as a project under those rights. There were about 30 co-operatives currently part of setting up an abalone ranching project. This was where baby abalone was thrown into the water and allowed to grow. Once grown, the communities would be able to harvest their own abalone through zones for co-operatives. The DEFF was hopeful that other aquaculture projects would emerge from this. As an example, there was a community-based aquaculture project in Hout Bay, Cape Town, which the DEFF hoped would continue to expand.

Cooperatives would be monitored, though this was one of the most difficult tasks that the DEFF was ensuring it carried out. If this did not happen, there was a risk that cooperatives would fail. It was for this reason that the DEFF was setting up a mentorship programme, ensuring co-management structures. The model the DEFF was using for co-management was a three-tiered structure, whereby local, regional and national co-management structures would look at policy and legislative requirements. Since the majority of co-operatives had been allocated fishing rights only on the eve of the national COVID-19 lockdown, there had been some form of engagement with co-operatives over bulk WhatsApp groups, though the DEFF saw the need to better implement co-management as quickly as possible.

The rollout of small-scale fisheries policy was occurring, though the primary concern was what was happening in these communities while this was being rolled out. In the Western Cape, fishing communities had been granted access through an interim relief dispensation. This interim relief dispensation stemmed from a 2007 court order, where fishing communities had taken the government to court, saying that the fishing rights allocation process of 2005 was unfair, unconstitutional and marginalised fishing communities. Out of this court process, there had been a settlement whereby the DEFF had had to draft a policy that addressed the needs of small-scale fishers in South Africa. The policy also dictated that they needed to put an interim relief dispensation in place while they were in the process of formalising small-scale fisheries in South Africa. Since 2007, fishing communities in the Western Cape and the Northern Cape had been fishing under this dispensation. In KZN and the Eastern Cape, they had been fishing under an exemption which exempted the fishers from the provisions of Section 18 -- the requirement to have a fishing right before being able to fish. They had been fishing under subsistence fishing until rights were allocated in KZN and the Eastern Cape. In terms of Section 14(1) of the Marine Resources Act, the delegated authority needed to determine the allowable catch or total allowable effort for each and every season. Each permit was valid for a year. Squid was mentioned in a specific apportionment.

Follow-up questions

Mr Singh recalled a presentation by the fishing industry where they had reported that they were importing 90% of their pilchard requirements. He requested an account on the importation of very large quantities to be put into tins and then sent out of the country. Secondly, did the DEFF have any research vessels? He remembered a vessel called the Afrikaner, which had outlived its use. What was being done to ensure that the DEFF itself had a vessel?

Mr Lorimer wanted to know if the DEFF envisaged a loss of jobs in the small-scale un-mechanised sector because of the allowances given to co-operatives. Secondly, he asked the DEFF to clarify their position on paper quotas. Was this something the DEFF was against, and was it something it was trying to avoid across the FRAP process? If so, how were they doing this?

Ms Winkler felt that for large-scale fisheries, it should be considered mandatory that they obtain MSC certification. She wanted to know if this was something that the DEFF would look at, as sustainable management of fishing resources needed to be a priority, especially for artisanal fishers who depended on this for their livelihoods. She asserted that if there was not a lot of MSC certification, all industries should be underpinned by the science.

She posted this final question on the chatline:
 
“The OR Tambo District Municipality has indicated that it is supporting 34 small- scale fishing cooperatives on business governance matters and is in the process of rolling out aquaculture projects where these cooperatives would participate. Almost all Government-led aquaculture projects in rural communities have failed, and diagnostic reports demonstrate that basic issues were not addressed in the conceptualisation and planning stages. The Department should inform the Committee on its involvement in the small-scale aquaculture projects as part of diversifying small-scale fishing cooperatives, the nature of support, duration and exit strategy.”

Ms S Mbatha (ANC) commented on the areas that were over-fished. She wanted to know how the DEFF was protecting those areas that still had fish. She stated that very few cooperatives had rights. What was the DEFF doing to empower the cooperatives with fishing rights, especially in previously disadvantaged communities? She wanted to know about the fishing rights for small, medium and micro enterprises (SMMEs). In most cases, the big companies had fishing rights, and in the Committee’s previous meeting with these entities, she had asked how they assisted SMMEs and cooperatives to enable them to get fishing rights, so that the smaller companies could grow. SMMEs were trying their best, but with the competition of big companies, this was difficult.

Ms Mbatha said she was pleased to hear about the research the DEFF was doing. It did not make sense to her that bigger companies were doing research, as the big companies could not be the referee and the player. The DEFF needed to take charge, as they had a research unit. She doubted the quality of the research if conducted by the companies themselves, as it could be biased or manipulated. She therefore urged the DEFF to take charge of this, and was pleased they had started to do so. Big companies needed to be reminded that there was still 30% that was secured for small businesses, and they needed to adhere to this. It was important to include communities, as it was part was part of employment for the nearby communities.

The Chairperson asked about the building of capacity in the DEFF. They had heard about many service providers which were being appointed. They had no problem with this, except that their experience was that the Department was not always getting value for what they paid for. The Committee would be very strict in looking at what caused the Department to outsource services that they had internal capacity for. If they could get value for their money, this would be understandable, but they needed to ensure that they received value for their money.

DEFF’s response

Deputy Minister Sotyu said the DEFF was committed to ensuring it received value for money in the services they outsourced. In each of the delegated authorities, at every step of the process, there were different requirements. In order to ensure the integrity of the process, they had decided it might be useful to have external capacity that was not involved, per se. They were looking to ensure that whoever was appointed, there was no risk of bias. To ensure the integrity of the process, they were drawing on their past experience. They wanted to ensure that upfront, the process was secure so that any decisions taken were not subject to legal contestation, which would delay the process, and the industry itself would not be able to move forward.

Ms Middleton addressed the matter of boats in the Eastern Cape. What had been explained was that the former DDG had facilitated the donation of some boats to Eastern Cape cooperatives. To the DEFF’s knowledge, these had not been handed over to small-scale cooperatives. The donation of these boats was under investigation by the HAWKS. This was thus sub-judice until the matter was finalised.

Though many staff members of the fisheries department were in acting positions, all the vacant posts, including some director positions, had been advertised. Departmental capacity, and the management of FRAP, meant they could report a number of vacancies could not be filled in certain instances because of a lack of funds in the cost of employment budget. There was a critical shortage of personnel in the DEFF, which had led to a decision to augment their capacity with service providers.

The DEFF did not foresee job losses in the fisheries’ sector. The apportionment process made provision for mitigation -- they were not “robbing Peter to pay Paul” in the sector. Public consultation was needed as they reviewed the policies for FRAP 2021, including the definition of “paper quota holders” -- defined as an individual or entity who did not participate in the catching, marketing or processing of fish.

Ms Prochazka said that since the local catch of sardines was low, the total allowable catch had been set accordingly, and sardines were imported and processed locally in order to keep the factories operational.

The DEFF had two research vessels and a fleet of small research vessels. The larger vessel, the Afrikaner, was capable of off-shore research and trawling, while the smaller vessel did more in-shore work. The Afrikaner was an older vessel which was being kept sea-worthy, though this was costing an increasing amount to keep her in a seaworthy condition. They were in the process of attempting to get a replacement -- for example, through Operation Phakisa -- in order to capitalise and synergise vessels to be multi-purpose. This was a long process, however, and the DEFF did not have much hope that they would get funds for this in the post-COVID19 world. The first thing that was done to limit over-fishing was through the enforcement branch, as well as through a water-borne wing and large in-shore vessels for patrolling the coasts. In most fisheries, vessels and ships were required to have vessel monitoring systems which were monitored in Cape Town.

She reminded Members that MSC certification was a spin-off -- an NGO and market-driven initiative in order to attempt to foster sustainable fisheries management. The Marine Life Resources Act in South Africa enforced similar measures to ensure sustainable management of fisheries. As such, she doubted whether a volunteer entity could be imposed as compulsory on industries.

Ms Middleton clarified that fishing by foreign vessels was not allowed. Though foreign vessels were allowed passage to pass through South African waters, they were tracked as they passed through. They were able to ascertain, based on the speed they were travelling, whether they were fishing or not. There was also misinformation about fishing in local waters, where cargo vessels were accused of fishing.

Mr Ngqongwa said that the DEFF had engaged with the OR Tambo district in the hope of expanding an aquaculture project. However, this was yet to be established in the district for small-scale fishing operatives. This might be mainly due to the fact that all of the cooperatives had been allocated fishing rights on 5 March, before the national lockdown. Despite this, there was consistent engagement to ensure that small-scale businesses and aquaculture could continue. Aquaculture was by nature complex, and often the project could fail if due diligence was not followed.

The nature of community-based projects was that they were very sensitive, so the approach was everything. The DEFF had been working with these communities for a long time, so he felt confident that they had an understanding of the approach for projects. Other municipalities and partners would be critical in following due-diligence for projects in fishing communities. In short, there were no aquaculture projects, except for the abalone ranching in 25% of the cooperatives in the Eastern Cape. There was a policy guideline for this.

The meeting was adjourned.