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Archive for January, 2011

DAFF relents on fish levies

Due to persistent and relentless pressure by Feike, the Department of Fisheries has been forced to accept that it cannot lawfully withhold any person’s annual fishing permit and annual fishing levies are due and payable only on the issue of a valid and proper tax invoice.
In other words, the obligation is on DAFF to determine the levy amount and how it is quantified and then to issue a tax invoice to each right holder requesting payment of the levy within a specified period. The Minister would be well advised to amend her levies regulations and specify the levying and payment procedures if DAFF is to legally collect any further fish levies.
In short, right holders must not pay any levy to the MLRF/DAFF until and unless DAFF issues proper tax invoices. Further, DAFF cannot lawfully withhold any permit because levies are not paid. DAFF must therefore get its house in order or accept that it will not be entitled to the more than R70-90 million in levies that it ought to collect each year.

The President confirmed in November 2010 that he intends signing a further proclamation in due course transferring all fisheries-related functions currently with the Department of Environmental Affairs (DEA) to the Department of Fisheries (DAFF).

This would mean that the extremely costly process of setting up the Oceans Branch at DEA in 2010 would have been for nought and a further indication of just how proper planning and respect for the management of public funds are of little concern to this government.
It will also be interesting to see what happens with the all the duplicate staff hired by the Oceans Branch to date.

When is your fishing levy "outstanding"?

Is the Department of Fisheries refusing to issue your permits because they claim your levy is “outstanding”? And what about charging you a “penalty” on the “outstanding levy”.
When is your levy outstanding? Your levy payment is only outstanding once the DAFF has issued you with a proper tax invoice which is addressed to the right holder and stipulates the levy amount that is due and payable and how this amount was calculated. The tax invoice must provide you with a reasonable period from the date of issue to pay the levy. A reasonable period could be 30 days as is common practice in our commercial environment.

DAFF cannot require a right holder to calculate its own levy and then to pay the levy in the absence of a proper tax invoice. How are right holders legally accounting for the transfer of funds from their business accounts to a 3rd party account (the MLRF) without a tax invoice? And how is DAFF accounting for the income in the MLRF without a corresponding tax invoice? This lack of documentation probably explains why DAFF to this day cannot advise right holders what levy payments they have made since 2005 (and why right holders had to complete this data for DAFF in the recent performance measuring exercise).

In short, DAFF’s incompetence and regulatory laziness cannot prejudice right holders. If DAFF is refusing to issue permits because of “outstanding” levies, Feike is prepared to assist right holders retrieve permits on a pro bono basis.

Minister Scrambles to Purge Contempt of Court Order

By the morning of 13 January 2011, the Minister and her officials remained in contempt of the Court Order dated 5 January 2011 which ordered her to unconditionally issue 3 permits to the abalone right holder, Mr Scott Russell.
Although she initially refused to adhere to the Court Order, the Minister scrambled frantically to issue the 3 permits once Feike, together with Mr Russell’s attorney, Mr Shaun Hangone of Von Lieres Cooper Barlow (VLCB), served the actual contempt of court application on her and her senior officials at the Fisheries Branch.
At 12:30 on 13 January 2011, Mr Russell was finally handed all 3 of his permits.
The conduct of Minister and her officials remains shocking. Firstly, they contrived bogus and unlawful grounds to “withhold” Mr Russell’s permits. They refused to listen to reason, which forced Mr Russell to approach the Western Cape High Court for urgent relief and an order instructing the Minister to issue his permits. And even then, the Minister displayed supreme arrogance by ignoring the Court Order, further forcing Mr Russell to apply for a contempt of court order.
Although Mr Russell has his permits now, he has had to waste a substantial amount of money on legal costs and he has lost an important opportunity to sell his abalone in time for the Chinese New Year which starts on 3 February 2011. The Minister and her officials simply don’t care as they nonchalantly expend taxpayers’ money to frustrate the rule of law without any consequence or fear of dismissal.
In this matter, however, we will be requesting that the Court order the Minister, the DDG and the Chief Director of Resource Management who wilfully and maliciously frustrated implementation of the Court Order to personally pay the costs incurred by Mr Russell and not to burden the taxpayer (even though their continued employment alone is already a burden).

Be Afraid, Be Very Afraid

We do indeed need to be increasingly afraid. On 5 January 2011, Feike, together with Shaun Hangone of the law firm Von Lieres Cooper Barlow Attorneys (VLCB), secured a court order forcing the Department of Fisheries to issue 3 permits unlawfully withheld by DAFF. The Court Order stated unambiguously and clearly that the Minister (as a respondent in the matter) must issue the 3 permits withheld unlawfully by the department to the permit holder concerned. The Court Order stipulated that the Minister must issue the permits by no later than 10 January 2011.

The Minister and her officials simply proceeded to ignore the Court Order. A DAFF official stated on the record that they would refuse to issue the permits unless the permit holder paid his annual abalone fish levies. DAFF was reminded by Feike and VLCB that the court order was peremptory and binding and did not make the issue of the permits subject to the payment of any levies. Furthermore, two of the permits (an abalone transport permit and an export permit) are not subject to the payment of any levy and in any case DAFF did not issue the permit holder with any invoice or statement of account requesting payment of the levy. This latter point is very important. DAFF – through its own incompetence and regulatory laziness – obliges right holders to calculate their levies. The obligation is on DAFF to quantify the levy owed by a right holder and then to invoice that right holder on a proper VAT invoice for the payment of levies. A levy cannot be due and payable unless an invoice has been issued by DAFF and a reasonable payment period has passed (such as 30 days).

Furthermore, DAFF cannot summarily withhold a fishing permit. If a right holder’s levies are outstanding (after a properly issued VAT invoice has been sent to the right holder) and despite a written request to pay the outstanding levy, DAFF is still not entitled to “withhold” issue of a permit. DAFF simply has no authority in law to “withhold” permits. In such a case and in all cases where DAFF alleges a breach of the MLRA, the Regulations or permit conditions, DAFF MUST adhere to the due process provisions set out in section 28 of the MLRA. DAFF is not entitled to take short cuts and create its own abbreviated procedures.

When DAFF and the Minister failed to adhere to the Court Order of 5 January 2011 at the close of business on 10 January 2011, Feike and VLCB prepared to make urgent application to the High Court for a contempt of court order against the Minister and her senior officials who refused to implement the court order.

On the afternoon of 11 January the Contempt of Court application was served on the Minister and her senior officials. This Order will now request that the Minister and her officials be made to personally pay punitive costs and not burden the taxpayer any further because of their blatant disrespect for the authority of the Western Cape High Court.

What is extremely alarming about this matter is that the Minister and her officials are so vindictive, crass and arbitrary that they will force a law-abiding small scale fisherman who pays taxes and employs people to spend unnecessary amounts of money to obtain a court order forcing the Minister and her officials to merely adhere to the most basic principles of our law. These are the types of orders human rights lawyers used to obtain against the Apartheid regime to force Ministers to respect the rights of citizens to “natural justice”. The second alarming aspect is the utter arrogance, disrespect and blatant contempt that the Minister and her officials have for court orders and the rule of law. If a Minister and her officials refuse to abide by a court order, then the most basic principles of constitutionalism, such as legality, are under direct and dire threat.

The Minister should either resign or be fired. If she claims she did not know about this matter, then she is duty-bound to dismiss her senior officials at DAFF and her advisers as they ought to have immediately informed her of the matter as she is named as the First Respondent in CASE NO. 27978/2010 and she is now in contempt of court.

On 5 January 2011 the Western Cape High Court issued an order agreed to by DAFF to issue 3 permits DAFF had decided to summarily and unlawfully withhold. On 10 December 2010, an administrative official advised Mr Scott Russell, the spokesperson of the SA Abalone Industry Association, and an abalone right holder that his permits would not be issued. No reasons were given and Mr Russell was not allowed to make any representations regarding this apparent decision. Mr Russell was also not informed as to whether he breached any provisions of the MLRA, the permit conditions or the fisheries regulations.
His permits – it was decided by someone at DAFF – would simply not be issued. Despite numerous attempts to get answers from DAFF officials, Mr Russell’s urgent requests for reasons explaining why his permits were being “withheld” were simply ignored.
Mr Russell then contacted Feike and we demanded that DAFF issue his permits as the “withholding” of the permits was clearly unlawful under the MLRA, the Promotion of Administrative Justice Act, the Constitution and South African common law which requires that before any administrator can take a decision which may adversely affect someone’s rights, the administrator must first inform the person to be affected of the allegations against him and allow the person to defend himself against the allegations.
Even under apartheid, the National Party was held to be bound by the principles of “natural justice”. DAFF has attempted to take us back to the apartheid era by simply acting as complainant, judge, and jury and worse still, deciding to not even inform the affected person that his rights will be affected.
The case made out on behalf of Mr Russell by Feike was that the MLRA does not allow for the “withholding” of permits; let alone the summary withholding of permits. If any person is suspected of breaching the MLRA, the regulations or any permit condition, then DAFF is duty bound to institute proceedings under section 28 of the MLRA which provides the necessary safeguards to ensure that the complainant and decision-maker are separate persons; that the permit holder is provided with written notice of the allegations against him; and he is afforded a fair and just opportunity to make representations to defend the allegations.
DAFF cannot simply decide to withhold permits. To do so would be a fundamental violation of our common law principles of natural justice, the MLRA and our Constitutional system which is predicated on the principles of accountability, participation and transparency.
If your permits are being withheld by DAFF please feel free to contact Feike.

SA Gets to Claim Restitution from HBFI

On 4 January 2011, the United States Court of Appeals delivered a long awaited judgment ordering that Arnold Bengis, Jeffrey Noll and David Bengis of the now non-existent poaching company, Hout Bay Fishing Industries (Pty) Ltd (HBFI), pay restitution to South Africa following the most substantial illegal fishing spree in South African commercial fishing history. HBFI, under the direction of its managing director, Arnold Bengis, is responsible for plundering some of South Africa’s most valuable fish stocks, including south coast rock lobster and west coast rock lobster.
The exact amount that the convict Bengis and his comrades will have to pay in restitution will be determined by a US District Court but it is estimated that the Department of Fisheries’ Marine Living Resources Fund could net about R363 million (US$54 million). These funds would have to be applied to the recovery of lobster stocks and to compliance.
The onus will no doubt fall on the south coast rock lobster and commercial west coast rock lobster sectors to ensure that the DAFF does not squander any restitution funds on business class travel, entertainment and lekgotla and to blindly prop up illegal fishing by the interim relief lobster sector.

Interim Relief Quotas decimates lobster market

The last two months of 2010 witnessed the collapse in the price of South African lobsters on the international market by more than US$20/kg. The collapse in price has been blamed on the large scale illegal fishing by the interim relief sector dumping excess and poor quality lobsters on both the domestic and international markets.
Industry sources have advised how the interim relief quota “management” process has simply been overrun by corruption, bribery, overfishing and a complete lack of monitoring. What is of greater concern is the easy access that has been gained to these quotas by organised gangs, including TRIAD elements, as they replicate their organised abalone poaching activities in the lobster sector.
Feike has been advised that these operators offer cash for the interim relief quotas and simply harvest the quotas themselves for substantial profit as the quota holder is paid a few hundred or thousand rand. The cheap price at which the quota is obtained allows these illicit operators to then market the lobsters both domestically and internationally for a substantially lower price than a legal, tax-paying quota holder that also employs people. The result has been devastating as the price of lobsters fell from about US$50/kg to less than US$30/kg in a few weeks. In addition, the strength of the rand has further threatened the sustainability of smaller legal commercial operators.
Of course DAFF will deny that the interim relief quota process is a mess with no monitoring and large scale corruption and mismanagement. We need only remember that they had also flatly denied that abalone poaching was a crisis or of concern.
This is what is actually happening on the west coast (perhaps the Minister of Fisheries could bother to actually go to the west coast landing sites unannounced and witness what she and her departmental officials are complicit in):
  • Interim relief product is being landed without any monitoring or recording of catch data;
  • Landing slips are almost never signed off by a fishery control officer;
  • There are no inspectors at most landing sites in any case;
  • Where there are any “monitors”, they simply witness and observe the chaos when lobsters are landed and then leave the chaos noting that they will not get involved;
  • The so-called white slips are not signed by either the permit holder or a monitor;
  • The landed weights of the lobsters are never recorded on the landing slip, which farcically states that the recording of this weight is “OPTIONAL”! How does the department think they are ever to know how much fish is harvested by the interim relief sector if recording the landed weights is “optional”. Talk about the ostrich head in the sand!
  • The department requires a 7 working day period to issue an export permit (excluding the the frequent “technical” delays that occur). This means that product landed on a Thursday, for example, will in the best possible scenario have an export permit some 13 days after landing. The ensuing tank mortalities and cannabalism resulting from these delays is devastating. This results in substantially less money being paid to quota holders who inevitably simply poach more to make up the difference.
Lobster buyers have also advised that the unregulated landing of product has all but destroyed the local market. Before the time of the interim relief product, it was almost impossible to sell illegal product onto the local market, as hawked product was more often than not easily identified as illegal because of its poor quality (and because it was hawked). The vast quantities of illegal product from the interim relief sector is now being channelled into the local market at ridiculously low prices. The illegal prices has forced down the local price of lobster to levels that are currently less than or equal to the catching and processing costs of legally caught product.
DAFF’s incompetence and collusion in this regard will inevitably result in job losses; increased poaching, devastation of our lobster stocks, liquidation of legitimate right holders and the destruction of the South African lobster brand on the international market. DAFF and its predecessor – MCM – successfully did this to abalone. Unfortunately lobster was next in their sights.