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And the COSATU Plot Thickens

The Mail and Guardian today (7 Sept 09) revealed the hypocrisy surrounding COSATU’s investment via its investment company – Kopano Ke Matla – in the Spanish backed fishing company called Offshore Fishing (Pty) Ltd. Feike has taken a closer look at Offshore Fishing’s application for long term fishing rights that was submitted in 2005, having held a valuable hake deep sea trawl fishing quota between 2001 and 2005. One would assume that as Offshore Fishing was significantly owned by COSATU, worker rights and issues affecting workers would be its strong points. Wrong! The following are some highlights (or rather low points) of the Offshore Fishing application:
  • Offshore Fishing failed to comply with the Employment Equity Act of 1998 despite being a designated employer! In other words, while they were benefiting from a government largesse, they were guilty of breaching an important law like the EEA. So, Mr Manyi its not just racist white companies that do not comply with the EEA. Now that Mr Manyi is the DG of Labour, we will monitor whether Offshore is served with a compliance notice under the EEA.
  • Offshore Fishing created a total of 2 jobs with their entire quota or approximately 0,0002 jobs per ton allocated! The industry average for example was 8.9 jobs per ton allocated.
  • Offshore Fishing failed to spend a single rand on employee training. The industry spent an average of 0.75% of payroll.
  • Offshore Fishing failed to contribute a single rand to corporate social investment. Forty one of Offshore Fishing’s competitors contributed to CSI.
  • Offshore Fishing failed to contribute to enterprise development.
  • Offshore Fishing failed to comply with the Compensation for Occupational Injuries and Diseases Act (COIDA), which aims to protect workers’ financial interests in the case of workplace injuries.
  • Offshore Fishing failed to contribute a single rand to employee medical aid or pension plans.
  • Offshore Fishing failed to submit a workplace skills plan as required under the Skills Development Act and also failed to submit a workplace training report.
  • In 2004 (the year before the 2005 application process), they effectively outsourced their harvesting, processing and marketing to a Steven Kruger. This is ordinarily an indication of a paper quota which is a breach of the Marine Living Resources Act.
  • Offshore Fishing scored a total of 2.5 points for investment (out of a maximum of 22.5 points) and scored the 3rd lowest overall score of the successful applicants.
So COSATU, the apparent workers’ vanguard, failed to ensure that Offshore Fishing complied with the Employment Equity Act, the Skills Development Act and the Compensation for Occupational Injuries and Diseases Act! They also failed to ensure that their staff were provided with medical aid and pension plans. And they established a formal relationship with a known convicted poacher. Talk about people living in glass houses.
I reckon COSATU has given up its right to speak out against any other entity in the fishing industry as I cannot recall another entity in the deep sea trawl sector that faired so poorly on worker rights criteria and compliance with laws. If one analyses Offshore Fishing’s score, they were allocated a hake deep sea trawl fishing right until 31 December 2009 almost exclusively because of their black ownership and management profile and despite the non-compliance with a range of laws and its failure to create a significant number of jobs and invest in the industry. Tragic.

COSATU In Bed with Spanish Fishing Interests

This Story appears in the Mail and Guardian Online, 7 September 2009.

Cosatu, a vocal critic of foreign companies’ exploitation of South Africa’s fishing quotas, has a sizeable share in a local company with controversial business links with a convicted Spanish poacher. Mail & Guardian Online reported last week on the accusation by Dumisa Ntsebeza, advocate and member of the Judicial Service Commission, that the trade union federation had a 30% share in the Offshore Fishing Company, of which he himself is a director. Cosatu had accused Ntsebeza of a conflict of interest centred on an Environmental Affairs Department contract with another company, Equilore, of which Ntsebeza is chairperson. The contract involves Equilore mediating between the department’s marine and coastal management (MCM) unit and small-scale fishermen.

The M&G has now established that Ntsebeza is correct about Cosatu’s shares in Offshore, according to MCM’s share registry. Offshore also had a joint venture with a notorious Spanish poacher, Manuel Martinez-Martinez.

In 2002 Martinez-Martinez was convicted in a South African court of overfishing. He was personally fined R100 000, his company R150 000, and his vessel was impounded. Martinez-Martinez is a beneficiary of so-called “paper quotas” from Offshore. These are quotas that local companies sell to other fishing outfits “because the holders of quotas do not always have an appetite for the risk involved”, a leading player in the fishing industry told the M&G. Such outfits have boats and factories, and they catch, process and market the fish.

New fishing quotas awarded by environmental affairs to boost black empowerment in the sector came into operation in 2006.

Local fishing companies had believed that the Spanish threat to South Africa was on the wane, partly because of their vehement campaign against paper quotas. Even so, they remain sceptical about firms such as Offshore, which are perceived to be selling their rights to make a quick buck. Cosatu owns its share in Offshore through its investment company, Kopano Ke Matla. Cosatu spokesperson Patrick Craven said the federation was studying the M&G’s revelations and would comment when all “interested parties had been consulted”. Kopana ke Matla CEO Collin Matjila referred all questions back to Cosatu.

The revelation of Cosatu’s stake in Offshore has caused ructions within the federation, which released a statement at the weekend calling the chairperson of its fishing desk, Gary Simpson, a “dissident” whose “actions will be investigated”. Simpson has been leading Cosatu’s campaign against the Spanish and has also denounced Ntsebeza’s interests in Offshore. This week he slammed the federation’s “stake in the fishing industry”, telling the M&G that it “epitomises everything that all members of the [Cosatu] fishing desk stand opposed to — political elitism, potential paper quotas in the hake, pilchard, anchovy and squid sectors and empowerment of the non-deserving”.

An Institute of Security Studies (ISS) report on illegal fishing in South Africa released in March this year revealed that the beneficiary of Offshore’s hake fishing quotas was Martinez-Martinez. Tim Reddell, the operations director of South African fishing company Viking Fishing and one of the fiercest critics of the Spanish interests, said Offshore’s relationship with Martinez-Martinez was problematic because of his reputation as a poacher. He said pressure asserted by local fishing companies on MCM to stamp out paper quotas had forced the Spaniard to retreat to Namibia two months ago.

Shaheen Moolla, author of the ISS report, said: “The incentive is simply that of better rates of pay: instead of being beholden to a large South African hake-trawl company that will harvest, process and market the fish, the small hake-trawl quota holder receives better payment from the Spanish.”

In 2007 80% of local hake was exported to Spain. The ISS report accused the Spaniards — who are notorious for overfishing — of not declaring all their catch. The Spaniards receive EU subsidies to keep their vessels operating, even if doing so is ecologically unsustainable.

Martinez-Martinez told the M&G that his involvement with Offshore had ended on July 31. “I do not see why there’s a big fuss about Spanish interests in South Africa’s fishing. It is like a German company investing in the mines,” he said.

Calling paper quotas a “political term”, and that “politicians should comment on that”. Since his conviction for overfishing he had rectified his ways, he said. “I am not overfishing any more.”

Offshore’s director, Lester Peteni, did not respond to several attempts to contact him.

The ISS report could be the last nail in the coffin for joint ventures: MCM is currently reviewing its fishing quotas, aiming to stamp out paper quotas entirely.

Permits for Whale Watching and White Shark Cage Diving

Interested parties have been invited by Marine and Coastal Management to apply for annual permits which are renewable for 5 years in the boat-based whale watching and white shark cage diving industries. There are a host of criteria, policy and rules applicable to the completion and submission of applications. Feike has compiled a user-friendly document that identifies and categorises the various criteria and rules for applications. Applications must be submitted by no later than 16h00 on 6 October 2009. Permits will be area based and allocated as follows:

1. Boat-Based Whale Watching Areas
  • Port Nolloth (1 permit)
  • Lambert’s Bay (1 permit)
  • St Helena Bay-Sandy Point (1 permit)
  • Saldanha Bay (1 permit)
  • Cape Town (1 permit)
  • Hout Bay (1 permit)
  • Cape Point-Kalk Bay (1 permit)
  • Gordons Bay (1 permit)
  • Hermanus (3 permits)
  • Gansbaai (1 permit)
  • Kleinbaai (1 permit)
  • Arniston and Struisbaai (1 permit)
  • Stilbaai (1 permit)
  • Mossel Bay (1 permit)
  • Knysna (1 permit)
  • Plettenberg Bay (2 permits)
  • Cape St Francis (1 permit)
  • Port Elizabeth (1 permit)
  • Kenton-on-Sea (1 permit)
  • Port Alfred (1 permit)
  • East London (1 permit)
  • Kei-Umgazi Rivers (2 permits)
  • Shelley Beach (2 permits)
  • Durban ( 2 permits)
  • Richards Bay (1 permit)
  • St Lucia (2 permits)
  • Sodwana Bay (1 permit)
2. White Shark Cage Diving Areas
  • Seal Island, False Bay (3 permits)
  • Dyer Island, Gansbaai (8 permits)
  • Quoin Rock, Quoin Point (2 permits)
  • Sea Island, Mossel Bay (1 permit)
  • Algoa Bay, Port Elizabeth ( 2 permits)

Port State Measures to Become Hard Law

On 1 September 2009, the Food and Agriculture Organisation of the UN announced that 91 member states agreed to adopt a treaty on port state measures (PSM). The adoption of the treaty agreement is historic as it will be the first binding international agreement to combat illegal fishing by effectively terminating access to ports by IUU fishing and support vessels . The Treaty on PSM explicitly recognizes that its success is substantially dependent on –
  • increased regional and inter-regional co-ordination of measures to implement port state measures;
  • the effective use of communication technologies, databases, networks and global records that support port state measures; and
  • financial, technological and other support for developing and island states.
The Treaty places significant emphasis on issues relating to transparency and information sharing amongst port states. A number of articles focus on these elements, including –
  • Article 3 – Application: Sub-article 2 requires that the treaty be applied in a fair, transparent and non-discriminatory manner and consistent with international law.
  • Article 5 – Integration and co-ordination at national level: Article 5 requires parties “to the greatest extent possible” to integrate, share and co-ordinate information to ensure the effective implementation of port state measures.
  • Article 6 – Cooperation and exchange of information: Article 6 obligates parties to cooperate and exchange information – with due regard to confidentiality requirements – with relevant states, FAO, other international and regional organizations.
  • Article 7 – Designation of Ports: Article 7 requires parties to designate and publicize the ports to which foreign flagged vessels may request entry.
  • Article 8bis – Port Entry: Sub-articles 2 and 3 require that where a vessel has been denied entry or where there is sufficient proof that the vessel has committed an act of IUU fishing, then the decision to refuse the vessel entry must be communicated to specified entities and the vessel should be listed on a public IUU listing in accordance with national, regional or international law.
  • Article 9 – Use of Ports: Should the port state party concerned decide to withdraw or change its decision regarding port entry, this decision too must be communicated to each of the organizations initially advised of its decision under article 8.
  • Articles 12, 13 & 14 – Inspections: The treaty puts in place a set of minimum inspection standards (Annexures B, C and E). Annexure C stipulates the format for an inspection report which must be completed by an inspector of the port state. Furthermore, the inspection must be transparent. Inspection results must as a minimum be transmitted to other relevant State Parties, RFMO’s, FAO and other relevant international organizations.
  • Article 15 – Electronic Exchange of Information: Article15 encourages parties to establish an electronic information sharing mechanism to facilitate the exchange of information for the proper implementation of this treaty.
  • Article 18 – Information on recourse: Article 18 stipulates that the public has a right to access information on the recourse taken against any foreign flagged vessel in terms of national laws and regulations.
The following 91 states participated in the discussions and agreed to the final text:
  • Algeria, Angola, Argentina, Australia, Bangladesh, Benin, Brazil, Bulgaria, Burkina Faso, Burundi, Canada, Central African Republic, Chile, China, Cook Islands, Costa Rica, Cote d’Ivoire, Cyprus, Congo DR, Dominican Republic, Ecuador, Egypt, Eritrea, Ethiopia, European Community, Fiji, France, Gabon, Gambia, Germany, Ghana, Greece, Guatemala, Guinea, Guinea Bissau, Haiti, Honduras, Iceland, India, Indonesia, Iran, Ireland, Italy, Japan, Kenya, Kiribati, Kuwait, Lesotho, Libya, Madagascar, Malaysia, Malta, Marshall Islands, Mauritania, Mexico, Morocco, Mozambique, Namibia, Netherlands, New Zealand, Norway, Oman, Panama, Papua New Guinea, Peru, Poland, Portugal, Republic of Korea, Russian Federation, Samoa, Saudi Arabia, Senegal, Seychelles, Sierra Leone, Slovenia, Somalia, South Africa, Spain, Sudan, Sweden, Tanzania, Thailand, Togo, Tunisia, Turkey, Uganda, Ukraine, USA, Uruguay, Venezuela, Viet Nam, Zambia and FAO Associate Member, Faeroe Islands.
The PSM agreement will become binding international law once the 25th member state of the FAO deposits its ratified instrument with the Director-General of the FAO. The complete PSM Treaty agreement is available from Feike.

The Value of IUU Fishing in SA Waters

In April 2009, Feike’s Shaheen Moolla, together with the Institute for Security Studies, published a research paper which sought to contextualise and place a value on the quantum of fish illegally harvested across South Africa’s major commercial fisheries. The research paper estimated the illegal harvests to be worth R6 billion (US$790 million), which is approximately R1 billion more than the total value of the legal commercial landings in 2008. The publication of the research paper generated much interest and debate, which convinced the ISS to host a public discussion forum where the paper’s methodology and findings were open to debate and criticism.
Although Marine and Coastal Management, which is criticised extensively in the paper for its role in allowing the mushrooming of illegal fishing, objected strongly to the findings as being devoid of fact and truth, they strangely opted to not attend the public debate where they were free to expose the paper’s flaws and factual inaccuracies.
On 30 April 2009, MCM issued a press statement objecting to the research report. Part of the press release stated that MCM intended to present the “facts” and had accordingly appointed a panel of experts to peer review the paper. Despite numerous requests, MCM has elected to not elaborate on this “peer review” panel, including who is on it and what their brief was. There has also never been a tender issued calling for the appointment of this panel. The press statement went on to promise that the “the findings of the peer review, which we anticipate to be completed within the next few weeks, would be made available to the public.” More than 5 months have passed since this press statement and no one has yet to hear anything further about or from this panel.
The public debate did conclude that the findings of the research report were indeed startling and worrying. Perhaps more importantly, the publication of the paper started an important debate about the financial, ecological and social costs of illegal fishing in South Africa. The ISS and Feike will publish an updated report on IUU fishing in South Africa toward the end of 2009. It is intended that this report will focus on the illegal trade in abalone, hake and shark fins.
post script: Perhaps the peer review panel should rather adjourn and wait for the findings of the updated 2009 report.

Policy on the Transfer of Commercial Fishing Rights

In July 2009, the Minister of Water and Environmental Affairs published her government’s final position on the transfer of commercial fishing rights in South Africa. In terms of the Marine Living Resources Act, 1998 (MLRA) fishing rights – once allocated to a specific legal or natural person – are not transferrable or saleable. To transfer a fishing right from one person to another requires the permission of the Minister under section 21(2) of the MLRA. So what of this policy document?

Its farcical. Its farcical because the total rationale and purpose of the policy is centred around the need to further transform the fishing industry and to consolidate the number of right holders and effort. The policy attempts to create a number of pre-defined scenario hierarchies as to which transfer application is more likely to succeed. The decision as to whether a right should be transferable must be based having regard to the principles under section 2 of the MLRA. Section 2 of the MLRA remains the definitive set of rules as to who is entitled to be allocated a fishing right. The decision-making processes cannot be limited to a selection of the objectives (see for example the Constitutional Court decision in Bato Star v The Minister of Environmental Affairs and Tourism, 2004 (4) SA 490 (CC)).
Further, it is our view that section 21(2) is an outdated anachronism. Once allocated, fishing rights should be tradable and saleable, thus ensuring that only the most efficient and committed stay in the business. Paper quotas and empowerment fronts can be removed entirely because efficiency and competition will simply not allow such expensive fronts to continue, especially in the current economic climate. Feike has long proposed a gradual and trial-based approach to implementing an independently transferable quota system for certain preselected fisheries, such as the Patagonian toothfish and KZN Prawn Trawl sectors.
It ignores some basic laws. The policy interestingly grants the Minister powers she never had under section 21(2), section 2 or section 18 of the MLRA. Firstly, the policy stipulates that where there is a sale shares in a company (unless the company is a listed company) or a sale of members’ interest in a close corporation, and the sale results in a change of control (which is not defined), then a transfer of right application must be lodged. As section 21(2) speaks to a transfer of a fishing right, any attempt by this policy to regulate the sale of shares or members’ interest is ultra vires the authority of the Minister and accordingly unlawful. Feike’s advice to right holders intending to sell equity in their business – regardless of the quantum – is to proceed with the sale (subject to the usual regulatory approvals such as competition commission approval that may required, for example). No permission from MCM or its Minister is required. Why listed companies are conveniently excluded and under what legal authority is not explained. The policy is also unclear about whether this convenient exemption applies to privately owned right holder subsidiaries of public entities.
Secondly, the policy also confers upon the Minister the power to “monitor whether any large right holders (not defined) act in a manner contrary to fair competition practices”. This is a most odd provision and confirms two things. First, the entire policy may be invalid in law as it is a policy promulgated contrary to the provisions of section 85(2)(b), which makes national policy development the prerogative of Cabinet. In other words, had this policy made its proper way through Cabinet first, the Minister of Trade and Industry would have surely objected to the attempt by the Minister of Water and Environmental Affairs to usurp the powers granted to the Competition Commission and Tribunal. Second, the Competition Commission is empowered by the legislature under the Competition Act of 1998 for the investigation, control and evaluation of restrictive practices, abuse of dominant positions, and mergers. MCM and the Minister of Water and Environmental Affairs simply have no authority to meddle in such complex commercial determinations.
It is our view that the “policy” on the transfer of commercial fishing rights should never have seen the light of day in its current form. There is no doubt that should it be challenged, a court of law will set the “policy” aside. Simply pick your ground of review.

Performance Measuring Process

The opportunity to submit comments by members of the South African commercial fishing industry on the proposed criteria and processes for the commercial fisheries performance measuring process ended on 31 August 2009. Feike had submitted comments as an interested party. In brief, it is our view that the –
  • the notice and comment process is inappropriate and prejudicial to a number of right holders;
  • the proposed key performance indicators (KPI’s) are too generic in nature and contrary to the sector specific fishery objectives and policy frameworks; and
  • the proposed KPI’s are extremely vague, bordering on being irrelevant.
The full version of Feike’s comments are available. Simply email (smoolla@feike.co.za) me with the subject-heading “Feike’s performance measuring comments” for a copy of the comments.
The next step in the process will be for Marine and Coastal Management to consider the various comments and submissions made and thereafter to publish the final version of the KPI’s for each commercial fishery (if they maintain the “one-size fits all” strategy). If they decide to abandon the “one-size fits all” strategy, then they would be obliged to re-advertise the new sector specific key performance indicators in terms of the Promotion of Administrative Justice Act, 3 of 2000.
Feike wishes to remind commercial right holders that participation in this process is not voluntary. Every right holder is obliged in terms of the conditions under which their commercial fishing right was allocated in 2005 and 2006 to participate in the performance measuring process. For more information, contact Feike.

So Who’s the Real Minister of Fisheries?

It is September 2009 – the start of spring in the Southern Hemisphere. In April, South Africa elected Jacob Zuma as the third democratically elected president. By May 2009, news broke that the President appointed Minister Tina Joemat-Pettersen as the first ever minister of fisheries. Her full title was the Minister of Agriculture, Fisheries and Forestry. However, it later emerged that in fact the minister of fisheries would not be responsible for fisheries afterall! Fisheries regulation would remain the political purview of the new Minister of Environment and Water Affairs.
So why is the Minister of Fisheries not the minister of fisheries and why do we continue to have a minister of fisheries? Sadly – as is becoming typical of how our government attends to hard issues – this issue is surrounded by conjecture, rumour and (race-based) whispers. To date, we do not have a leadership with the courage to come forward and explain why taxpayers’ hard earned rands still pays for this confusion. And there certainly has been confusion! Imagine addressing fisheries related correspondence to the minister of fisheries only to be told that you need to address your correspondence to some one responsible for environment and water affairs. To date, we have not had any official word from the Minister of Environment and Water Affairs stating that she is responsible for fisheries despite her colleague carrying the title and why this is so.
And 5 months on (or 150 days) neither the departments of environment, water affairs, agriculture, tourism and forestry have got around to establishing their own respective homes on the world wide web. Fisheries related news is still cumbersomely located on the website for the non-existent department of environmental affairs and tourism or www.deat.gov.za!
Ok, so who is in charge if what? Based on responses to media stories and decision-making processes about fisheries issues, the Minister of Environment and Water Affairs, Ms Buyelwa Sonjica, is responsible for marine fisheries management – in other words, enforcement of the Marine Living Resources Act except aquaculture. The Minister of Fisheries, Ms Joemat-Petterssen is in fact responsible for fresh and marine aquaculture or fish farming, which also happens to occur under the Marine Living Resources Act and its regulations and policies.
Question. Who takes a decision with regard to, for example, the ranching of abalone. Ranching of course involves the planting of farmed abalone spat into the natural marine environment to produce wild stock – it’s a restocking strategy. Will you have to apply to one Minister for permission to grow the spat and then to another for permission to ranch and harvest the spat? Can you imagine the bureaucratic confusion that will be sowed in this process and the disincentives to invest in ranching opportunities which we so desperately require if we are to recover our collapsed abalone stocks and the jobs that went with it? The departments will have to establish joint working groups and advisory bodies whose members will have to fly between Pretoria and Cape Town to consult each other and ensure “collective” decision-making.
We will keep monitoring developments on who the Real Minister of Fisheries is.

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