Fishing Industry Transformation: public hearings

ENVIRONMENTAL AFFAIRS AND TOURISM PORTFOLIO COMMITTEE
8 May 2007
FISHING INDUSTRY TRANSFORMATION: PUBLIC HEARINGS

Chairperson: Mr L Zita (ANC)

Documents handed out:
Marine and Coastal Management (MCM): Department of Environmental Affairs and Tourism presentation
South Africa's Coast submission
Transformation of the Fishing Industry – Updated Paper for Public hearings
Black Economic Empowerment in the Fishing Industry by Masifundise and Coastal Links
Trawl Investments CC submission
Mr Sulaiman Achmad submission
Artisanal Fishers Association submission
Hlanganani Fishing Business Forum submission
JC Fishing (Pty) Ltd submission
Long Term Fishing rights – Advancing Transformation in the hake long-line, hake hand –line and squid sectors by Ulwandle Fishing (Pty) Ltd
Gwendoline Fishing CC submission
The Rights Allocation Process and Related Issues by South African United Fishing front



SUMMARY
The presentation by the Department of Environment, Forestry and Marine and Coastal Management indicated that the general decline in fish stocks was largely to blame for the sharp decrease in allocation of fishing rights, as well as the migration of fish southwards along the coastline. This had changed the demography of fishing radically. The decline in employment opportunities at fish factories had resulted in even more applications for allocations, placing even more pressure on the fish reserves, and placing many communities along the coast under socio-economic pressure. Applicants who failed to secure fishing rights spoke of application forms being indecipherable and criteria that were beyond their capacity to fulfil. This all added up to a system which was not benefiting the very people it intended to include. At this stage, with fishing rights for eight and fifteen year periods having been allocated, very little recourse seemed to be available to aid those who presented their arguments at the hearings.

The afternoon session of these public hearings heard impassioned presentations from the Artisanal Fishers Association, Masifundise Development Trust and Coastal Links and JC Fishing Ltd, The main issues raised were the general displeasure of the way the industry was run, and the denying of fishing licences. People were also unable to apply for fishing quotas, as they did not have the money to do so. It was said that a white minority dominated the industry while the black majority was unable to even make a living.

Traditional fishers were disgruntled with the fact that the industry was dominated by the rich minority while the poor mainly black majority was perpetually marginalised.

MINUTES
Mr L Zita (ANC) welcomed all and commented that the hearings were an important component of the ongoing process of ensuring democratic and fair distribution of national resources. He thanked all for their submissions and their attendance and noted that leading companies like I & J, Oceania and Sea Harvest were not represented at the hearing. Perhaps the adverts which had appeared principally in the Sowetan and City Press had not reached these players. Since they were key players in the industry he felt they would have to be summoned at some stage. He reiterated that since this concerned a national resource, these players were undermining democracy by their absence.

Department presentation on the Fishing Industry
Mr Monde Mayekiso, Deputy Director-General for Marine Coastal Management, gave a presentation on the fishing industry and the legislative framework on which the allocation of fishing quotas had been based. Several Acts, such as the Marine Living Resources of 1998, which provided the framework for the management of commercial subsistence and recreational fishing, the Sea Shore Act of 1935, which would be replaced by the Coastal Management Act, were the most significant of these. Several other Acts provide legislative framework.

There was a White Paper on fisheries which was approved in 1997, an Allocation of Long Term Commercial Fishing Rights policy in 2005, a Subsistence and Small Scale Commercial Fisheries policy was being considered and a Draft Seal and Seabed policy which has received public comment and Boat Based Whale Watching and Shark Cage Diving policy. The Department was also in the process of developing a framework for recreational fishing.

Dr Mayekiso showed graphs indicating the marked decline in hake stocks since the 1950s , which revealed that stocks in that species were presently ten times lower than they were then. Comparisons of anchovy and sardine stocks between Namibia and South Africa, which share the west coast line, showed a steady decline in Namibia, while South African stocks were slightly up since 2000. He said that thirty years ago 70% of West Coast Rock Lobster was being caught around Port Nolloth, while nowadays 90% of catches were around Dassen Island and Cape Point. This indicated a migration south over the last thirty years. He illustrated the same trends in other species, revealing that the west coast had seen increasingly lower catches than before and that there was a shift in the distribution of the fish. This had resulted in a mismatch between the distribution of the infrastructure for the processing of the fish and the places it was being caught. The industry had had to absorb the increased costs of trucking the fish to these processing factories or face the cost of relocating that infrastructure. Economic activities along the West Coast had suffered the consequences of the migration considerably and unemployment was rife in the Western Cape. Factories were retrenching and large parts of the fisher population did not have permanent employment. Many of these unemployed were seeking fishing rights.

A general policy had been produced in 2005 and in the next year fishing rights were allocated for periods of
eight or fifteen years. These allocations were made according to two categories of criteria. The first category consisted of transformation criteria closely aligned with BEE codes such as race, gender, employment equity, affirmative procurement, employee share schemes and participation in management. The second category looked at performance criteria such as job creation, performance and investment in fisheries.

The Department had compiled a table focusing on black ownership in these entities for the years 2002 to 2003 and 2005 to 2006 to indicate the progress made in transformation. Dr Mayekiso cautioned that the figures were not entirely consistent, since the figures for the last two years were considered more accurate than the figures for the previous years. This table showed a considerable percentage increase in most categories of fishing rights.

The Department continued to conduct research on species and ecosystems in collaboration with universities and science councils. The South African Network of Coastal and Oceanic Research (SANCOR) continued to pursue proper resource management which would be sustainable and profitable. The Department also determined and managed restricted areas. Capacity and skills shortage remained a challenge in fulfilling these varied functions. The Monitoring, Control and Surveillance Unit also fell under the auspices of the Department and had patrol vessels and a Special Investigations Unit which worked closely with the SAPS and other law enforcement agencies. Here again they were faced with challenges of capacity and skills shortages, as well as a need for higher commitment from other law enforcement agencies towards this natural resource.

Discussion
Mr Maluleke (ANC) asked whether the reasons for the migration of fish had been established. He was uncomfortable with the word “black” and asked that it be replaced with the words “disadvantaged communities”.

Ms Chalmers (ANC) granted that it was not necessarily the sole responsibility of the Department to alleviate the suffering of the communities along the West Coast, who had been affected by the lower fish catches, but had any attempts been made to re-skill and retrain people who had been fishing for most of their lives. She asked whether the findings of research were in alignment with the opinion of the communities themselves.

Mr Khoarai (ANC) asked whether the Department had used language comprehensible to all in the application forms and whether sufficient education had preceded the allocation of fishing rights.

Mr D Mokoena (ANC) asked for greater clarity on whether big businesses were contributing towards poverty alleviation, job creation and skills development, since they were profiting out of a national resource, the benefits of which should be shared. He asked whether these companies were being held accountable.

Mr Moss said the hearings were long overdue and that it was unfortunate that the big commercial players were absent. He asked whether west coast companies could apply for fishing rights in other areas. He commented that the migration of fish had left many unemployed and that this could partly be addressed by starting alternative industries such as aquaculture .He asked if Dr Mayekiso could elaborate on this and suggested that this avenue be pursued far more aggressively as it held great potential.

Ms Chalmers said that it was inevitable that the focus was on the west coast, but asked for more information on the rest of the coast. She asked if the Department was involved in developing areas around Jeffreys Bay, Port Elizabeth and East London. She commented that chokka and squid were major seasonal industries in PE. She also asked if the working conditions on fishing vessels had been addressed by the Department.

Mr Zita asked for more information on the employment share schemes and to what extent companies had black management. He suggested that a dedicated unit be set up within the Department purely for the purposes of facilitating and monitoring transformation.

Dr Mayekiso replied that the migration of rock lobster and pilchards had not been categorically put down to climatic change although the decrease in stocks along the west coast had occurred in conjunction with extraordinarily warmer waters. This coincidence had not been linked beyond doubt, but the assumption was that an increase in temperatures had caused the migration southwards. The Department was looking at creating other opportunities and research had been conducted into new resources such as octopus and East Coast Lobster. A policy on aquaculture had been developed, published for comment, had been amended and was awaiting approval from MINMEC. Aquaculture ventures had not been successful thus far but tours had been conducted to Chile and Argentina in an effort to gain a greater understanding and knowledge of this industry.

Observation of the migration had certainly been experienced and shared by the affected communities such as Port Nolloth. Since the fish had migrated the fishing quotas had been distributed differently, but often the dispute was over the few remaining quotas that had to be allocated in such communities. Therefore the migration had been experienced directly by the communities that were hardest hit such as Port Nolloth. The Department did offer assistance to BEE companies and it had followed its mandate to ensure that the necessary forms were available in all four so-called coastal languages: Xhosa, SiZulu, Afrikaans and English. Unfortunately there was no getting away from the fact that the application systems were involved and quite complex, especially in the case of West Coast Rock Lobster. Assistance had been offered with this.

Dr Mayikiso said the empowerment of the previously disadvantaged communities and individuals had been undertaken in a two-pronged approach; through the empowerment of small entities that come from disadvantaged communities and the improvement of representation in management teams in big companies. He mentioned that in previous instances it had been found that companies had not reflected accurate figures in this regard and that such companies had had allocations removed from them as a punitive measure, whereas companies that had made considerable effort in affecting transformation had been rewarded with greater allocations.

Dr Mayekiso assured members that allocations had been spread fairly across the provinces of the Western Cape, Eastern Cape and KwaZulu Natal, even where there was the current tendency to catch in one area and process in another. One could not force this issue, since businesses would become unprofitable. Aquaculture, increased ecotourism and new fisheries were some of the avenues the Department were exploring in order to stimulate economic activity. Mossel Bay had benefited enormously from the migration of fish and it was Dr Mayekiso’s belief that places like Port Elizabeth and Jeffreys Bay would follow. He said that the extent of black ownership in companies could easily be established and made available.

Mr Andre Share, Chief Director: Marine Coastal Management, said that while certainly other avenues of economic activity were being pursued, it had to be taken into account that declining fish stocks were a world-wide phenomenon and that nowhere could communities still expect to be sustained by the fishing industry alone. A holistic, integrated approach was required to address the socio economic conditions in these affected towns. The Department had drafted a policy for small fishers and a program had been developed for alternative sustainable livelihoods. The Unit for Social Responsibility was working on possible sustainable projects along the coast of South Africa, as well as looking at harbour development.

He said that working and living conditions aboard fishing vessels had been addressed and was of big concern to the Department. The Department was in the process of scrutinizing agreements between fishers and vessel owners. The Department of Labour was also involved with this problem which required ongoing attention. The Department had also started registering all crews of hake hand liners and tuna pole fishers. Increased capacity and a better mandate in this regard were still necessary to address the situation. Regarding a special unit dedicated to the process of transformation, he said that they considered transformation a key objective, which ran as a thread through the whole allocation process. Both he and Dr Mayekiso were on a Transformation Steering Committee which not only addressed transformation in fishing, but in tourism and hunting as well. This Committee continued to review the now accurate data available on criteria such as employment equity, ownership, management and gender, comparing figures to original applications. Employee share schemes were being considered in context of a draft code of good conduct from the Department of Trade & Industry.

Mr Mokoena said he was relieved to hear that punitive measures had been taken where companies had been remiss with figures. He added that such companies should be named and shamed, while companies who were working in the spirit of transformation should be acknowledged. He suggested that ongoing competitions in this regard should be organized. Mr Mokoena commented that foreigners were still poaching in South African waters and asked how this problem was being address and whether the navy was involved in catching with the perpetrators.

Ms Ndzanga asked whether there was any conflict of interest between wealthy sports fishers with boats and poor fishers who were trying to make a living. She asked how these allocations were being determined.

Dr Mayekiso said that recreational fishing by the rich was dominant in the Eastern and Western Cape, whereas the commercial fisheries were situated mostly in the Eastern Cape and KwaZulu Natal. The boats fished off shore for the “big animals” and the so-called locals or perhaps poorer fishers fished from the shore. There was little competition there apart from some competition for line fish rights. Regarding the suggestion of naming and shaming companies, he said that the names of these companies were readily available as they had been published, but that the proposal was an interesting one. He said that the Department had poaching largely under control and that only mostly Korean vessels were found on the high seas outside South African waters. The navy had certainly been requested to assist in these matters and it had readily offered its assistance at any time. However, the nature of the problem and the nature or function for which navy vessels were designed did not necessarily coincide and therefore using navy vessels was regarded a case of overkill. That said, the Department had resolved to strengthen its relationship with the navy in the hope of increasing co-operation.

Tlangananye Business Fishing Forum
The Forum representative said that the Forum consisted of a group of closed corporations which had been invited by the government to apply for fishing rights in many species. None of them had been successful in obtaining these rights. The group consisted of young entrepreneurs as well as old and experienced fishers. The group had been formed in September 2006 in an effort to represent the voice of fishers who were experiencing problems in obtaining fishing rights. The greatest obstacle was with the definition of new entrants to the industry. The group had been rejected several times and in each instance renewed appeals to the Minister had failed to provide positive results. The Minister has promised at a meeting in Woodstock on the 18^th of August 2004 that those who formed entities and included women would stand a chance of obtaining rights. Now that these rights had been allocated, those without would have to wait another eight to fifteen years for another opportunity to apply.

The Forum representative said that it had been their experience and those of others in the communities of Guguletu and Khayelitsha that only those who had aligned themselves with white and coloured medium-sized companies had had any success in obtaining rights. He said that the application forms were too complicated to complete and that only with the assistance of people in these companies could one possibly complete them in such a way as to assure any success. Despite the fact that these applications were available in Afrikaans and Xhosa, they still were too complicated to complete with understanding, especially for those people who were illiterate. He made a strong recommendation that an agent be appointed to fulfil the function of assisting groups and individuals in the completion of these forms. He said the Department and especially the MCM should have aided the public in this respect and said that the workshops which had been held had not been of sufficient assistance.

A further member of the forum (speaking in Xhosa and being translated) spoke. She said the Minister had told them to pay R300 per application and R100 for administration. They would have to pay R2000 for the right of which they had to pay R1000 up front. Yet they were unable to complete the application forms. Not one of their applications had been accepted. She said that the members had had their high hopes dashed and that they had knocked on many doors in search of assistance. The members of the forum were suffering greatly as a result of the financial strain they were now under and were not able to provide food for their families.

Member of the forum speaking in Xhosa and being translated) thanked the Committee and the Department for the opportunity to speak at the hearing and asked them to consider the older members in the forum who would have to wait another fifteen years before they could hope to apply again. He said it seemed that the allocation of rights, which was supposed to have occurred to aid those previously disadvantaged, still continued to benefit only the advantaged.

The previous member reiterated her appeal for help as they had not only lost their means to earn an income and to provide for their families but also their dignity. She asked for the opportunity to regain and restore this dignity. She said that they might have to take the matter to court.

Ms Chalmers thanked the members for their presentation and asked for clarity on exactly what the reason was behind the failure to obtain fishing rights.

Mr Mokoena said that it was not so much the nomenclature used by people that was important but the attitude with which that language was used. He said there should be no need to apologise for the use of words like “black”, “white” or “coloured”. He said that there was possibly a way out of this dilemma, since there should be sufficient reserves of fishing rights still available which had been pegged for distribution using discretion and sympathy.. He said this promise should be testable. Reserves which had been removed from others could in this instance be re-allocated. He said he was disappointed to hear that the forms were too complex to complete for some, when the Minister had specifically assured them that his was not the case. He agreed that an agency was needed to take up this problem in providing people with assistance.

Mr Maluleki asked how many groups of closed corporations the forum represented. He wanted to know whether the Minister had actually committed himself to giving these people fishing rights if they applied. He asked that these application forms be made available to the committee so that they could see for themselves how complex they were.

Ms Ntuli said she had attended some of these imbizo’s and obviously not everyone who applied would be successful, although an attempt had been made to make the process more accessible. The fact that not one application for rock lobster and hake fishing rights had been successful should be considered a serious problem and further information should be obtained. She asked how many women had been granted allocations and found it disturbing that only those who aligned themselves to previous advantaged groups could hope to obtain fishing rights. This state of affairs could not be considered progress but regress. She commented that the scenario painted by the forum before them was probably being experienced by many others. Something needed to be done since the disadvantaged were not benefiting from this process at all.

Ms C Zikalala (IFP) commented that only the have-nots were in attendance. It seemed that the greatest obstacle was the format of the application forms. It was important to understand the difficulty experienced when not being able to converse in one’s mother tongue and that much was lost in the translation when heart felt issues were being expressed. She expressed gratitude for the opportunity given in the hearing for people to speak in their own language as well. She said that no one felt the pain of poverty more that a women when a plate of food needed to be on the table every night. She asked what the Department intended to do about this issue of application forms and this particular case before them.

Mr Zita said the Committee would be responding appropriately. He said the suggestions about an agency and the format of forms were noted. The Committee could not become involved in Court proceedings. He supported the initiative to pursue aquaculture and any other avenues in aiding those who had not been successful in obtaining rights.

Dr Mayekiso said the complexity of the forms had varied depending on which Cluster they were from. Those from Cluster D were admittedly complex and these were applications for hake fishing rights. This cluster specifically dealt with capital intensive fisheries. Unfortunately there was a trade-off between accuracy of data obtained from applicants and complexity of the form. The more accurate the information required the more involved the questions that needed to be answered. Some of the criteria they had considered were race, gender, ownership, contribution to skills development. Employee share schemes also scored points for applicants. These transformation criteria could total up to 50% of the points needed to obtain rights. Conversely if one could not score in these areas, you were half way to losing the allocation.

Response by the forum: The reason they were not granted fishing rights was as a result of not being able to provide for job creation, affirmative procurement as well as many of the other criteria of transformation, as this simply did not apply to them. Ironically the very people these criteria were meant to help were the very criteria that excluded people who requested fishing rights on the basis of being disadvantaged. In answer to Mr Maluleke’s question, he said they were a group representing 54 entities.

Mr Sulaiman Achmat presented his case next. [This was not minuted by PMG]

Submission by the Artisanal Fishers Association
Mr Andrew Johnston, Director, informed the Committee that the association was of the view that, if the attempt of transformation in the fishing industry was to correct the imbalances of the past, then the process was a “complete failure”. They said that people who had obtained their rights during the apartheid era had now cemented themselves in the industry and rich white people had used the system to their advantage. Swindlers and con-artists had found the fisher folk easy prey to defraud them of their empowerment or development. They had thus jeopardised any attempt to address the needs of the disadvantaged fishing community.

Mr Johnston felt that the implementation of the allocations had become the “curse of the poor” for the fishing communities. And is had become a vehicle for the privileged to take advantage of the quota system. He said that there had not only been a shameful exploitation of marine resources but also of the illiteracy and ill-informed traditional fishers. This exploitation allowed the influential groupings of Apartheid beneficiaries to exert control over fishing rights. Along with these unethical practices and the implementation of the inequitable allocation system the livelihoods, identity and food security of individuals was being destroyed and poverty being elevated to a new level.

As the income for many of these traditional fishers was very low it was almost impossible for them to apply for a fishing quota, as they did not have the money.

He felt that the impact of the past policy was not taken into account when moving towards long-term rights. There was no concern for the “disastrous” effect on fishing communities of the implementation created by the previous allocation policy since 1998. No measures were put in place to assess the social, environmental and economic impact this would have on communities. He said that those who applied for quotas only for profit seeking were not concerned about the effects they had on communities or the environment. Also, some people used Black Economic Empowerment (BEE) as a rent seeking exercise to empower their greed. There was a situation where people used the identity of both fishers and non-fishers to obtain quotas and no benefits reached the successful candidate.

Mr Johnston said that fishing was a very important part of communities and the effects of this negative system were far reaching. The introduction of long term rights and erosion of human values was taking place and marine resource was longer a building block for social change. With the implementation of the fisheries policy the government had failed to ensure the well being of its citizens. The implementation of the Marine Resources Act, historical injustices were not taken into account. As a result there was no room for restitution or any real transformation. He felt that sustainable development needed to be people orientated and not economically centred.

Discussion
The afternoon session started with a discussion on the document presented before lunch by Mr Nazeem Paulsen from Trawl Industries.

The Chair said that it seemed to him that one of the difficulties Mr America was talking about was “corrupted fisher people” who received fishing rights during the apartheid era. He pointed out that one of the problems in the Western Cape was that most coastal communities, where there was Artisanal fishing, were mainly “coloured” people. And some of the new applicants were “African”. He asked if that was the contradiction that was being talked about. He mentioned that some managers at I&J, for example, had never “seen the sea” but were in the fishing industry. They were there as a result of their management skills. He then said that one could not say that only bona fide fishermen should get fishing rights. The point he was making was that not only one group should benefit from the rights. He asked if he was right about the insights he was drawing from the presentation.

Mr America said that part of what he was saying was correct. However, traditionally artisanal fishing consisted of black, white and so-called “coloured” people. He said that the problem was not so much defining who was involved but how was this “cake” shared. What was the basis for the distribution of the total allowable catches made? Was it still based on the apartheid type of sharing? Where those who were privileged and benefited from the status quo of the past still the beneficiaries at this time? The full intention of the policy was to address this issue. So far everything has been written and amended etc. but not that issue. It was no use to have a new policy that still represented the wrongs of the past.

The Chair asked if he felt that the allocation process reinforced the imbalances of the past. He said it would be difficult to ignore established companies as they had massive investments and employed maybe 1000 workers. Taking from them would potentially dislocate many communities. He questioned how to strike a balance where we could keep the industry sustainable and at the same time transform the industry to undo the damage of apartheid.

Mr America said that it was very strange for him that it was not researched that small-scale fisheries over the centuries had created more jobs than the industrial sector. It was a fact that had been recorded. He said that although big industries had created many jobs they had also shed many jobs. As a result of becoming more mechanized, jobs were being done by machines and not people. Big industries did not use traditional methods. They did not catch bony fish; traditional fishers caught low value fish. They opted for the export lines and in those lines it was best to use mechanical equipment because of their carrying capacity. Thus, as result of using machinery and not humans more jobs were lost annually in the full-scale industrial sector than there could possibly have been in the small-scale sector. It was said that 66% of the quotas were amongst the poor fishers. He aid that this was impossible, he believed it was 80% that was held by the big businesses. Yet they were the smallest sector, although they did provide jobs and contribute to the national economy. So did (and would) the small-scale fishers but they would have more benefits. They would create jobs, sustain livelihoods and create food security. Because everything was exported, one could even afford to buy the products in your own country. Starvation was one of the realities that faced many of the people in out country.

Ms J Chalmers (ANC) said that there were some very worrying facts being put before the committee. For example, applicants received quotas but did not have access to a vessel.

Mr Paulson asked the Chair if the verification unit was still in place. He also asked if the verification process not have taken place before before allocations were granted. It made sense that if one submitted an application auditors would be required to do some sort of verification. It was always maintained that members of the verification unit should go out to the applicants and then do the verification. He felt it was being done the wrong way around. He did not know whether the unit was still in existence. Or if there would be follow ups to check with successful applicants if the information they gave was still true.

Ms M Ntuli (ANC) pointed out the one thing that the presenters had in common was the “rent a black” system that they had in the Western Cape. She then asked for clarity from Mr America on the issue the mentioned about the formal reports he had made and was still awaiting the results of the investigation. Where were these reports lodged? She asked if he followed the right procedures when lodging the reports.

She said that she felt the new policy for the quota system was a good idea. The only challenge that they had was the implementation. She felt that the presentation would assist the committee and the department had to go back and see where they went wrong so they would be able to correct things. If the policy was not benefiting the people that were supposed to benefit then they had not achieved anything.

Mr M Kalako (ANC) said it was very disheartening to hear the lamentations that were coming through from the voters. He felt that the committee should engage with the department and the ministry and do a thorough audit and publish the results in newspapers. The department must now do due diligence on the companies that had been allocated in respect of identifying false presentations of credentials. Information must be thoroughly investigated and if they were found to be misrepresenting themselves they must be punished.

Mr A Mokoena (ANC) asked whether the verification process took place before or after the allocations.

Mr Paulson said it appeared as if the verification process took place after allocation. For instance an auditor’s report was only required for the small pelagic sector. However for hake long line, West Coast rock lobster and the others there were no audits required for the applications. They always maintained that verification should take place before allocations were granted. He was not sure if at the time verification unit was still in place.

He pointed out that Trawl Investments had made huge investments in fishing vessels but they had no fishing rights. As a result the investments were no longer feasible.

The Chair then asked if the fact that their investments were no longer feasible was more of a case of over investment of the side of Trawl Investments.

Mr Paulson answered that if you had a vessel in the hake long line sector, which cost over R3.5 million and you have a quota of fish of 120t, the vessel would only be busy for two months of the year. And a vessel of that size engaged a crew of about 24 members who could not sustain that operation all year round. He then mentioned that there were other vessels where there was over capacity. They were smaller vessels that had bigger quotas than Trawl Inv.

The Chair asked if Trawl Inv. had made appeals to the Minister on the issues that they were raising and, if so, what his response had.

Mr Paulsen replied that they had submitted an appeal with regard to the increase in allocations. There was no response because, according to them, the TAC (commercial quota) could only handle so much and they did not allow any new members/rights holders. He said that he thought quotas were being cut because of the TAC.

Mr Sher said that with any appeal there would have been notification to the appellate. So there would have been a response from the department whether the application was successful or not. The Minister was the appeals authority.

He pointed out that in the past three years there had been a decline in hake resources of 10%. The small pelagic resource in 2005 declined by 47%. And the current season by 25%. So the more people that were let into the fishery on the appeals process the lessor quantum the other successful applicants would have got. There was a quantum mechanism where, if one had performed and transformed significantly, then you would have had access to another pool of quantum. That was how some of the small, medium and micro enterprises were affirmed.

Ms Ntuli raised the “rent a black” issue and asked if the department could shed some light on it because she found it very worrying. During apartheid black people as fisherman were not allowed to go into water to get abalone. It was a criminal offence. What was the department doing to train black fisherman? It was said that one needed R500 000 to buy a boat but how was someone who had never worked in the fishing industry supposed to be able to afford that.

Mr Sher said it was articulated very clearly in each of the fishery specific policies that there would be performance measuring. Either after one or two year of allocation or two years of the allocation of the actual right. The department was now in a process to develop what would be the mechanism with which they would determine criteria. So as to address the issues around transformation and share holding, for example, where people had signed agreements with people who had applied for rights. In the end they did not derive the benefits from the agreements that they signed. And if an investigation was needed they had the verification unit to do an audit.

The issue around the facilitation of skills had raised long debates in the department because of its mandate. The DG felt very strongly that as the department they should facilitate skills development in the fishing industry whether it was through the Transport and Education Training Authority (TETA) or NGO’s. He said that with abalone there had been a number of diving courses offered especially to people from disadvantaged communities at a reduced price. When those rights were granted in 2003 for a period of 10 years they were not qualified divers. In the Eastern Cape over the last few years where there were people fishing for abalone under exemption, there were trained divers that were harvesting on their behalf. TETA had skippers courses for people from the disadvantaged communities to be able to skipper a vessel under 25t. He said that there were initiatives though they might not be directly in the department’s mandate but they would facilitate it.

The Chair said that was good that the department did these assessments and evaluated how people were complying with the conditions for their allocations. He said that those were long term allocations and he did no think that they should have a framework where people do the minimum and still enjoy the benefits. For example if the aim now was to have 20% of people in management positions were from historically disadvantaged groups but it should not stay like that for the next 15 years. He said that there needed to be some measure of progression. In 2020 they did not want to be evaluating people on 2005 criteria. They needed to find a way of engaging with stakeholders so that the transformation would be progressive.

Mr Kalako asked if it was possible to set up a timeframe. People want to know when things were going to happen. The department had been running the process for a long time. He was worried about a reserve that was spoken about by the ministry.

Mr America said that the ministry said there would be emergency relief measures instituted for genuine fishers who had been left out of the “lottery” that included him. Unfortunately the reality of that was it was negotiated with MCM via the courts. The court was instructed to act upon the fishers’ request and plight so as to get them some relief measure for the next month. It was now the 8^th day of the month and there would only be 3 or 4 days left to harvest, after the “red tape” would be completed by MCM. So that was no relief measure at all.

The Chair said that they were not aware of that and it was good that it was brought up.

Mr Sher replied that there was no quantum in reserve. In the entire total allowable catch fisheries the quantum was fully allocated. In 2001 medium term rights allocation process 10% was set aside for appeals for the minister of the time, Mr V Moosa. And the quantum would be derived from the 10% that was set aside. Long term rights, all the allocations were fully made all the quantum was fully allocated. That was why there was a quantum mechanism and this varied from fishery to fishery. So after the appeal there had to be a re-organisation of the quantum in terms of the quantum mechanism, that was why people’s quantum changed from the first allocation, that was successful on appeal. He reiterated that there was no quantum in reserve.

The Chair said that that was not what the Minister had said at the Imbizos.

Mr Sher responded that the Minister was probably referring to new initiatives.

The Chair said that that raised the challenge of rights holders. It meant that those who received allocations must really show the department that they were working and doing what they promised to do.

Mr Sher said there was a plea made to the department for interim relief in respect of fishers in those communities. The Minister decided that there would be some interim relief and that they would fish on a recreational fishing permit till the end of May. That was for West Coast Rock Lobster, taking four lobsters a day, every day of the week. Then there was an issue around traditional line-fish where there was a deviation from the current regulation in respect of the bag limits (that is the number of fish that could be taken per day). The relief was only for four species, namely, Snoek, Yellowtail, Silver fish and The Hottentot. He said that Mr America may not be aware that the department had been engaging with his group and another NGO, Masifundise, around the identified group of fishes. He said it was not that the department was not committed to what the court order said but there was a process. They found people on the list that had rights and were not entitled to relief, as this was a measure put in place for those who did not have rights at all.

Masifundise Fishing Development Trust
Mr Nafseegh Jasser, representing the Masifundise Fishing Development Trust (MSDT), stated that his development organisation has been working in poor communities in the Western Cape (WC) for the last 20 years. And in particular, in the last 10 years, they had been working with rural fishing communities in the WC. They had, over the last year, attempted to extend their footprint more into the Eastern Cape as well as KwaZulu-Natal.

Mr Jasser pointed out that he was also representing Coastal Links, which was a consumer-based organisation (CBO) that they had facilitated and supported very actively. It was based in communities alongside the WC coast. He felt that it was important to note that there was a process underway with marine and coastal management and it was linked to equality court action that they brought against the department a few years ago. A court order was signed a week ago that made provision for an interim relief measure. He concurred with Mr America that they should not lose the opportunity for Rock lobster as the season ends the end of May. But that did not mean that the agreement should only be finalised at the end of May.

Masifundise’s position on BEE in the fishing industry Act 53 of 2003 was a powerful and critical legal method for achieving transformation in economic inequality in South Africa. The current fishing policies do not provide the means whereby the BEE act can articulate with fishing policies and bring about economic empowerment for the most marginalised traditional fishers.
The fishing industry has historically been a white dominated industry and highly capital-intensive industry. The poor black traditional sector dependent on marine resources for their livelihood ranges from subsistence to small-scale commercial fisheries.

The policy process in marine and coastal management over the last 10 years had focused on promoting BEE in the formal industrialized fishing sector and maintaining international competitiveness at the neglect of the small-scale sector. The Marine Living Resources Act (MLRA) excluded artisanal fishers; it was not mentioned in the Act at all. However the Subsistence Fishery Task Group that was convened after the MLRA was introduced identified the need to accommodate these fishers. This task group found that there were 147 traditional fishing communities countrywide. Comprising approximately 30 000 individual fishers, living in 28 000 households of which 53% were food insecure. And a large number of these households were considered to be ultra-poor.

There was no charter for the fishing industry identifying the transformation intentions of the industry and locating traditional fishers as a key target group within the industry. South Africa had chosen what appeared to be a “one size fits all” approach to fishing policy and seems to favour commercial fishing almost exclusively. Small scale traditional fishers have to compete with the large commercial interests in both the medium and long term allocation, without any input or support in terms of capacity building, training in marketing etc. Even where they did get rights they were totally dependant on the larger companies for processing and marketing their produce. Much of the value was added at that stage. Hence, this value was lost to traditional fishers.
The use of the individual quota system runs contrary to the BEE act, which aimed to facilitate “The extent to which communities, worker co-operatives and other collective enterprises own and manage existing and new enterprises.” The general fishing rights allocation policy used an inappropriate policy mechanism that did not facilitate re-distribution. As with the medium term rights allocation process, the department had used the quota system as the tool for allocating rights. The individual quota system was not an appropriate tool for the near shore, small-scale sector as it was contrary to traditional and collective ways of fishing. And it precluded allocation to legal entities such as community based co-operatives. In addition the quota system does not support the multi specie livelihood approach and it was proven to be socially divisive putting one fishers against another, one household against another, particularly in black communities.

It was internationally recognized that there were more appropriate and equitable ways of enabling access to the total allowable catch. Such as using effort control s, this was shown to be more economically, socially and environmentally sustainable for the near shore and small-scale sector. The use of the individual quota system also ran contrary to the BEE Act. The Act aimed to increase the number of black people who managed and controlled enterprises and productive assets. The fishing policies of the past 9 years had systematically eroded traditional fishers’ access to marine resources. For example, in WC in 2000 the department allocated 1600 crayfish subsistence permits. These fishers were personally verified by departmental officials by doing door to door interviews. In the medium term 511 crayfish rights were allocated. Many of these individuals shared their rights with with up to 5 fishers. But in 2006 the Minister allocated only 813 crayfish rights, in particular West Coast Rock Lobster. Not only the quantity but also the quality of the rights has impacted on traditional fishers. Fishers were now limited to, in most instances, one species only whereas previously they were able to harvest a “basket of species”.

The limitations on access rights for bona fide traditional fishers runs contrary to the BEE act. Which aimed to empower rural and local communities by enabling access and economic activities, land infrastructure, ownership and skills. Some of the communities had experienced serious obstacles when trying to get support for community driven initiatives. For example, in Doringbaai on the West Coast, where the fishing company, Oceana, was closed in order tomove southwards. And local traditional fishers developed what they believed was a sound proposal to take over the factory for the small-scale sector in that region but they have had no success to date. Traditional fishers are vulnerable to fraud and corruption through Black Empowerment fronts. He pointed out that this was rife along the coast line. They were recently asked to investigate a number of companies were they found workers or members that were so-called share-holders knew nothing about the company they have shares in. They are never called or informed about meetings and so on. This share-holdership that they had in these so-called companies were the traditional fishers in these areas. And they have, for the past year, received, R1000 p/a. Because they get this benefit they were prevented from applying for any other fishing rights. They do not qualify for the emergency relief measure either as a result of their share holder status.

Traditional fishing communities were facing high levels of poverty and unemployment. A study conducted by University of the Western Cape in 2005 from existing indicated 15% and 11% of household members in the BCLME West and South Coast respectively had regular employment. And 16% and 23% respectively were unemployed. This research suggested that employment figures amongst fisher households were on the lower spectrum of unemployment, is in the higher spectrum of overall ranges found in these coastal communities. As noted earlier a significant number of fishers were considered to be ultra-poor. He pointed out that many fishers had to borrow funds to cover their long term applications. And because they were unsuccessful in their applications they had as a result gone into debt.

Recommendations
The MSDT believe that the government should review the current policy, not just the allocation rights. They believed that the fault lies in the policy. They suggested that government should conduct an urgent review of the MLRA and the long term general policy to ensure that its implementation was compliant with BEE requirements. With the particular intentions to promote and protect the needs of the small-scale traditional fishing sector.

They recommended that an exclusive fishing turf to be allocated. Government should consider taking measures that allocate the near shore fishing zone of between 5-10 nautical sea miles as an exclusive fishing turf for the traditional and small-scale fishing sector, so that their economic viability was secured. Also, full scale or commercial fishing in the allocated area should not be allowed. Traditional fishers should be allowed to conduct their fishing activity in such a manner as to be able to harvest a variety of marine species, “basket rights” as they call it, instead of being limited to one species; so that they can ply their trade in a sustainable manner throughout the year. Control mechanisms should be put in place to ensure that the stock was not over exploited.

It was recommended that the department develop an explicit and participatory co-management procedure to ensure that the socio-economic rights of the traditional sector were protected and developed further.

Mr Jasser said that a new working style and ethic was needed. Government should review and revise the internal structures of MCM so that it becomes an organisation that was more suited to address, administer and facilitate BEE in the fishing sector. Efficiently and from a socio-economic perspective. In particlular restructure the relationship between MCM and the Department of Trade and Industry, so that unscrupulous practices can be avoided.

JC Fishing (Pty) Ltd
Mr Timothy Jacobs, JC Fishing MD, informed the Committee that JC Fishing was a Hout Bay based 100% Black Owned company. It was a rights holder in the Small Pelagics Sardine and West Coast Rock Lobster offshore fisheries during the medium term rights period. During this period JC Fishing established itself as a sound performer within the fishing industry and set itself the goal of maximising its investments in the industry. It was with some relief that JC fishing welcomed the Minister’s announcement that the long term rights allocation procedure would be cheaper and simpler. This made the company very confident going into the procedure. Unfortunately, the results of long term rights process did not tie in with the stated objectives of the Minister. This lead them to wonder whether the process achieved its objective and whether the objectives were objectives in the first place. This process has been riddled with controversy. Major problems were encountered in the long term rights process. The application form was complex and was clearly in favour of large companies with greater resources. The application procedure was extremely costly and there were unreasonable delays with the rights allocations as well as the appleals process. There were a number of errors in the assessment process as well as problems with the statistical model used in the assessment of applications. There was no credible verification process. Also, there were procedural irregularities where the provisions of the Marine Living Resources Act were skillfully circumvented.

JC Fishing was mostly concerned with the issue of transformation. Was the constitutional imperative of the transformation of the SA Fishing industry achieved by the Minister? JC Fishing did not think so.

[PMG was unable to attend the rest of the meeting after 17h00].