Allocation of Fishing Quotas and implementation of Policy for Small Scale Fisheries, Progress in Transformation of Fishing Industry, Progress in Implementation of the Forestry Charter: briefing by Department of Agriculture, Forestry & Fisheries

Meeting report

Progress on Draft Small Scale Fisheries Policy
Mr Ramagwai Sebola, Deputy Director: Fisheries, DAFF, spoke on various aspects of rights allocation and the progress the department was making in terms of small scale fisheries policy. The presentation looked at the policy development process, how far they were, and look at the implementation dates, the costs associated with the process, the initiative to empower black South Africans to partake in the fisheries activities and enterprises along the value chain.

In terms of progress so far, the process on policy for small scale fisheries the Department of Agriculture, Forestry and Fisheries (DAFF) had received comments from the public and they were incorporated into the draft documents. The outline for all comments received and DAFF’s responses had been drafted. They had   drafted an implementation plan which they updated jointly with the policy comments. The department was responsible for the costing of the whole process and the final document would be presented at Nedlac. The Nedlac Task Team had been constituted but the scheduled meeting had been postponed due to delays in incorporating the comments in the final document. They had attached a roadmap which was adjusted on the basis of the proposed way forward and the roadmap did indicate that within the next two months they should finish the incorporation of the comments and would be able to start a discussion within the Nedlac process.

In terms of implementation, they were targeting the month of December for gazetting the final policy. The final policy implementation plan and costing would be submitted to Minister and Cabinet in August 2011. Within that roadmap, a key stage was negotiations with the commercial rights holders to obtain support for the implementation of the policy through the Nedlac process. Parallel to that the department would implement a pilot of the small scale fisheries policy in Northern and Eastern Cape to test the implementation and the effectiveness of the proposed structures and support mechanisms that were being proposed in the policy. They hoped that in the next financial year they would be able to extend the implementation of the policy to all parts of the coast.

In terms of how the current initiative empowered black South Africans in the sector and the entire value chain he noted that the small scale fisheries policy proposed a shift away from the past management approach. They were emphasising community orientation on transformation issues and allocating fishing rights to legal entities that were established by small scale fishing communities. Within the policy they were looking at establishing mechanisms and structures for community based harvesting and managing marine living resources, and give preference to fishers and communities that could demonstrate their historical involvement in use of traditional fishing practices. The policy encouraged environmental sustainability, and labour intensiveness. The policy recognised the importance of developing and empowering small scale fishery communities.

With respect to support, the draft policy proposed that a strategy should be developed for building capacity within the small scale fisheries sector and for implementation of customised training programmes through the Sector Education and Training Authority (SETA) including the Department of Labour. The current and immediate capacity building support was through the Expanded Public Works Programme (EPWP), Community Resource Monitoring, and decentralisation of departmental functions to areas that were remote and rollout of fishing exemptions. The policy proposed fishery support institutions, funding models and marketing, and within that process they were entering into collaborations with other government departments and ensuring the necessary support such as the extension services (as known in the agricultural sector) were extended to provide sufficient support to fisheries.

In terms of supply chain from catch to market, they were proposing various mechanisms to assist small scale fisheries communities to add value to the marine living resources that they harvest. In that process they were looking at subsidy schemes for fish storage and in the form of financial support for storage facilities and ice machines. They were already implementing through the Working for Fisheries project in 12 fishing harbors and skills training was an area they were considering promoting. Skills training in processing would ensure that skills were there for packaging and marketing and basic services skills such as financial management, human resources management and logistics. They were considering subsidy schemes for establishing locally based owned marketing companies. The South African label of certification for fish products caught by small scale fishing communities would be done in an environmentally friendly manner.

The draft policy proposed a strategy to deal with capacity building.

Transformation in South African Commercial Fishing Industry and Maritime Aquaculture Sectors
Mr Sebola noted that fishing rights were a highly contentious and politically sensitive issue. It was important to note that within the fishing industry large capital intensive offshore fisheries were initially developed without controls but quota controls were introduced in the 1970s and 1980s. Traditionay fishing communities were the main users of inshore fisheries such as rock lobster, abalone and line fish. Over time there was increasing use by recreational fishers which was recognised. When these fisheries were regulated, fishing rights were not given to traditional communities or small scale fisheries. As the resources declined and compliance efforts stepped up, traditional small scale fisheries were forced into poverty with no other alternative.

Prior to 1994 almost all valuable rights were held by white owned companies. The guidelines on fisheries management and transformation were set by the Green and White Papers and the Marine Living Resources Act (1998). But within that Act there was no specific reference to traditional small scale fisheries or in the medium and long term rights allocations in 2001 and 2005. The Long Term Rights Allocation Management Process of 2005 put business principles first but the criteria for allocation was not conducive to traditional small scale fisheries gaining rights. Community or collective allocations were not considered at all in the Marine Living Resources Act. The Subsistence Fisheries Task Group was established and had made recommendations on small scale sectors in 1998 but nevertheless during the long term rights allocations those recommendations were not considered. Although many small-scale fishers applied for individual rights in 2005, no allocations were specifically set aside for small-scale fishers in any of the main inshore sectors. All rights were allocated to individual right holders and companies within Total Allowable Catch (TAC) and Effort (TAE). It was only on the individual rights holders’ basis that the allocations were made. Since 2006, the Department had been developing a Small-scale Fisheries Policy to address this. Due to the contentious issues involved, they would finalise the policy only by the end of 2011. Ultimately all fisheries would be managed in an integrated way under a single TAC or TAE, although there might be different management models for different fisheries.

In the transformation of the commercial fishing sector, medium and long term rights allocations achieved significant transformation in the fishing industry, if measured it in terms of black ownership of the TAC, to a varying extent in the different fishing sectors. Transformation criteria had not generally been agreed upon because no targets for transformation had been set by government in any of the sectors neither was there a transformation charter for any sector or for the fishing sector as a whole, and that was currently being addressed by DAFF. Some of the consequences of decisions taken during the Long Term Rights Allocation Management Process had been negative. For example, vessel ownership criteria led to exploitation of the small right holders and to many of them becoming “paper quota” holders, unable to exploit the quota economically. Small right holders were encouraged to develop sharing agreements with existing vessel owners who often put their own interests first. Due to the kind of criteria used in the long terms rights allocation, small scale fishers were put at the mercy of those that were already established in the business.

In terms of the percentage black ownership in 2001, 2005, 2009, as a percentage of right holders with a 50 % ownership allocation / total allocation, the major fishing sectors of high economic value, there was an increase in ownership from 25% in 2001 to 59% in 2009 in relation to Hake Deep Sea Trawl (see table for all all products). With the exception of the area of Small Pelagics (a decrease from 75% in 2001 to 51% in 2009), the majority of the sectors with high economic value, showed a significant increase in terms of percentage black ownership (latest figures had still to be revised from new data that had came through.) In terms of the percentage black ownership in the number of small scale fisheries (for Hake Handline, West Coast Rock Lobster, Netfish, Oysters, White Mussels and Traditional Line Fish, the figures showed an upward movement.

A summary of the results indicated that black ownership in the various sectors had generally shown an increasing trend since 2001 with a few notable exceptions, such as small pelagics, hake longline and seaweed. However, in 2001 average black ownership across the main commercial sectors (calculated as an average of black ownership per sector where black ownership was defined as the percentage allocation of black right holders holding more than 50%) the figure was standing at 49%.  As they moved on after the long-term rights allocation (LTRAMP) process in 2005, the average black ownership per sector had increased to 58%, and the latest figure was currently 59%, calculated by the same method. But if the exact percentage of ownership by black right holders as a percentage of the total allocation was used, the average was 57%. Although various methods could be used to calculate ownership, they did not produce markedly different results and it was likely that the methods used provided a fairly good measure of ownership. Therefore, in general the most important commercial sectors in the fisheries were well transformed if the ownership criterion was used as a measure (given that in fisheries they needed a charter that would be the basis to deal with all transformation issues holistically).

In terms of transformation in the commercial fishing sector Mr Sebola noted that for an informed discussion on transformation, correct facts and information should be available, to be able to look at economics, the status of transformation in each sector and statistics about revenue, jobs and level of industrialisation, and dependence of communities. It was necessary to look at the recreational sector as well, since it was well known that recreational fisheries generated valuable economic spin-offs and created jobs in a number of associated industries. The department had not done in-depth research in those areas and there was a great need to collate existing information, and that was being addressed in the current business plan of the department - where they would be conducting a detailed study to get the necessary information.

Transformation included economic activity in other parts of the value chain such as processing, marketing, exporting and wholesale and retail sales, decentralisation of services, job creation, capacity building, development of small business skills, and value adding initiatives (including a review of import rebates and  product R&D). Those were the issues that in their own study they would look at in more detail. The draft Small Scale Fisheries Policy would attempt at addressing some of the issues once approved and implemented. The department was finalising the Performance Review of the fishing industry. That was not
a Right Review but a performance review which made information available that could be used in a rights review process. The reports were available for each sector to inform the extent of transformation, investment and effective use of rights since 2005.

In 2005, rights were allocated for periods of 8, 10 and 15 years. Rights allocation policies would be revised in years preceding 2013, 2015 and 2020, based on socio-economic information and new policies such as the Small Scale Fishing Policy. This policy as well as the new information from the review process would mean a better process for 2013, 2015 and 2020. The Marine Living Resources Act would need to be revised to accommodate new policies. Therefore preparations were currently being made to revise rights allocation policies for some of the sectors such as squid, demersal sharks, traditional linefish, KZN prawn trawl, hake handline and tuna pole with a target of 2012. Parallel to that, they were looking at developing a Fisheries Transformation Charter to set transformation targets in each of the 22 current fishing sectors.

When it came to challenges and solutions, Mr Sebola noted that funding was a challenge for the department and for them to be able to deal with poaching in a comprehensive manner, they would have to relook at their funding model because poaching remained a major threat to transformation and development of many fisheries, especially abalone and rock lobster. Many resources were declining and they needed to rebuild strategies for hake, abalone and rock lobster that were still in place. The shareholding in fisheries did not necessary translate to benefits and the scoring criteria for future rights allocations needed to be revisited. Skills training, especially for small scale fishers was an area which needed improvement and would be addressed through the small-scale fisheries policy implementation.  There was a need to involve other government institutions to support the value chain. This should be addressed in the draft SSFP.

DAFF wanted to highlight that the Marine Aquaculture sector was a relatively new sector and had transformation challenges.  The industry had developed in RSA because wild fish stocks could not meet the food security needs of the country as a result of investment in a lucrative export industry. It was skills and technology-based and capital-driven and therefore funding was a major issue for all participants and a challenge for new entrants because of the required infrastructure. The SA Marine Aquaculture industry began about 35 years ago as a small self-regulated industry however, Marine Aquaculture Rights were issued since 2002. BBBEE was first addressed through the inclusion of seven pillars in the assessment criteria for new applicants in 2008/09. There were currently 43 farms in the aquaculture sector and it employed 1120 individuals of which 907 were Historically Disadvantage Individuals (HDIs) and 213 were Non-Historically Disadvantage Individuals (that is 19% Non-HDI and 81% HDI employees).

In terms of profiling the sector he noted the current trends were similar to trends in other research, technology and high capital-driven South African industries such as Forestry, Tourism and Agriculture. HDIs pre-dominated the unskilled and skilled labour sector while non-HDIs dominated the management sector. The skilled labour group of the Marine Aquaculture sector differed from these three other sectors because HDIs dominated the skilled sector. The South African Marine Aquaculture industry had transformation disparities in respect of ownership, management and unskilled employment levels.  A concern was the high percentage of about 60% unskilled workers. This was reflective of a lack of skills transfer and training programmes in the sector. There were few academic institutions and training facilities such as Sector Education and Training Authorities (SETAs) offering training in aquaculture because it was an emerging sector. In terms of employment profile, the Non-HDIs were concentrated in management and HDIs formed the large pool of unskilled labour. Those were some of the challenges the department needed to address.

In terms of objectives, the key objective of BBBEE was to increase the number of HDIs that participated in decision-making at management level as well as ownership levels in the South African Aquaculture Sector, because there was less than 15% representivity of HDIs at these levels. Fewer than 15% of Marine Aquaculture companies were black owned. Clear transformation strategies should be developed, and include existing farmers. An enabling environment should be created for the participation of HDIs through direct ownership of enterprises and increases in at management and professional levels. The failure of black-owned enterprises in the sector was a challenge that needed to be addressed, most of which were not operational or operated in a non-sustainable manner.  A study needed to be done to identify the reasons for the failure and to address such failures. It was a known fact that sectors such as Agriculture, Forestry and Tourism identified the transformational challenges and problem areas as an initial step in transforming their sectors. If they continued in Fisheries without having a formal transformational programme and charter, things would continue to go wrong so they needed to get on board.

Forest Sector Charter Council (FSCC) presentation
Mr Pasco Dyani, Chairperson of the FSCC, noted that the presentation outline talked about the Forest Sector Charter, the operation of the Council, and the progress in the implementation of the Charter. The Council was established in May 2008 and it was gazetted as a sector code. In terms of section 9 of the sector codes, the main objective was to extend economic opportunities and benefits of the forest sector to the previously disadvantaged black communities in particular. The main responsibility of the Council was to oversee, monitor and encourage implementation of the Sector Charter. The Council was composed of the Industry, which involved Business, Government (that provided policy and regulations), Labour (which included trade unions), Communities such as civil society groups, FIETA which was a skills institution, & the IDC. The issues that were debated in the Council were Qualifying Small Enterprise (QSE) threshold, land matters, water use licensing, industry codes of good practice, delivery of undertakings, and the transformation status of the sector, and they talked to the needs arising from strategic sessions. They had already had two strategic sessions for 2009-2010, 2010-2011, and 14 meetings between 2008-2011. The Council reported to the President, the BEE Advisory Council, and the Ministers of DTI & DAFF. The Council had its guiding principles and it was very strong in terms of corporate governance and transparency. It was people driven, and therefore they were in constant consultation with communities.

Mr Dyani noted that they were a structure that encouraged, supported and facilitated the implementation of the Charter in terms of reviewing yearly priorities, identifying new activities and defining a work programme and the role of the task teams. They provided access to information to stimulate further interaction with other stakeholders through their website and distribution of pamphlets. The action plan involved holding strategic sessions yearly and drawing up business and budget plans. The industry was expected to come with the programme plan of their obligations and government was expected to come with its programme plan every year. The duty of the Council at each meeting was to ensure each stakeholder had to account for its particular obligations. The Council monitored and reviewed such progress in each and every meeting. The most important achievements on Charter obligations was the payment of the lease which was blessed by the President in Umtata whereby the KwaZulu-Natal and Eastern Cape communities were given monies that were due to them in the Council. They achieved the Letsema project to fast track water use licences, funding for EIAs, finalised a strategy for Sawlog, finalised strategy for SMMEs, and finalised a strategy for National Protection.

Mr Dyani noted that for the first time the Council had been able to issue its transformation report, which was done by an independent service provider in consultation with stakeholders and endorsed by the Council, and the Minister had received the report. Therefore, it was safe to say the Council had an average score of 61, which indicated that the sector was a Level 5 contributor. The sector was performing very well on enterprise development and socio-economic development.

The challenges for the Council were poor performance on management control and skills development but they were optimistic that the levels would improve because big companies such as Sappi and Mondi were Level 3 contributors, and those scores were weighted.

Mr Dyani noted that the Council had submitted the report to the Minister, President and BBBEE Advisory Council to ensure accountability. They had finalised the verification manual under the sector code, their website based reporting systems were in place, and they had an updated database of forest enterprises. They review, tabulate and implement changes required to ensure effective implementation of the Charter scorecard and undertakings. The Council was embarking on a programme to publicise and inform stakeholders about the benefits and opportunities that were there in the industry. They wanted the programme to be attractive to people in terms of outreach, finalisation of the user guide which served as a supporting document for easy understanding of the Charter, reviewing financial models in the companion document, and opening call centres and helpline. It was very important that communities were taken on board so that they could be able to access information about the Council programmes and what was happening in the industry. They were in negotiations with the furniture industry for inclusion in the Charter. They were in an ongoing programme to organise the charcoal sub-sector with the intention to assist with raw material.

Discussion
Mr D Worth (DA, Free State) noted that given the shocking levels of mismanagement, the lack of institutional knowledge of officials and increased unhappiness in the industry from both big and small fishers, with the fisheries branch and the Minister, the Democratic Alliance believed the only way to arrest the terminal decline of fisheries management in the country was to invoke section 78 of the Marine Living Resources Act. Section 78 made an exclusive provision for the management of ministerial powers to be given to the Provincial MECs. The Minister should assign the management and powers of fisheries in the territorial waters of the Western Cape to the Provincial MEC of the Western Cape. That proposal would seek to protect the valuable resource of the province from complete collapse which was where they were heading. Fish resources were relevant to the socio-economic well being of the Western Cape, and 80% of fishing activity was happening in the Western Cape.

Mr O De Beer (COPE, Western Cape) noted that the Deputy DG raised the issue of challenges in the aquaculture sector. He did not get a sense of putting resolutions in place to solve the problem. The one he noted was the unskilled people in the sector. Secondly, aquaculture was a relatively new sector but transformation in the sector did not relate to benefits and there were many industries that had closed on the West Coast.

In terms of the subsidy schemes for fishing storage facilities to benefit small-scale fisheries, he asked the department to give a breakdown in terms of numbers for provinces. There had been a huge outcry from fishers about too much exploitation on the ground since most of them had no storage facilities. He asked the department to provide more details about the current and immediate capacity building support that was provided to small-scale fisheries through the Expanded Public Works Programme (EPWP) in terms of skills development.

Mr G Mokgoro (ANC, Northern Cape) asked about plans for small-scale fisheries that had fishing licences but did not have vessels for fishing, and was there anything that had been done to help them?

The Chairperson asked about the timeframes for the development of the fisheries transformation charter. She asked which provinces were allocated aquaculture funds. She asked about the funding model of the Forest Sector Charter Council, from where was the money coming? She asked which mechanisms were in place for addressing skills development and management control, and what impact the FSCC had had on in increasing small growers in the forestry sector.

Mr De Beer asked if the fishing sector was over-regulated.

Mr Sebola responded that in terms of the management of fisheries and powers assigned to provincial MECs by the Act, the department regarded fisheries as a national competency. They were developing policies because when one reads the Marine Living Resources Act there were gaps and they had no way of addressing them except in revising some sections of the Act and coming up with policies like the one that addressed the needs of small scale fisheries. Therefore, the department intended through its efforts, although economic activities were concentrated in the Western Cape, to make the fishing economic resource a national activity. They would expand it to other coastal areas right across provinces. This was why they were coming up with aquaculture in inland provinces to promote fishing activities as a way of addressing food security throughout the country.

On capacity building, they intended to partner with the Department of Public Works. Currently they had a fisheries project that was funded by Department of Public Works. As they were developing small-scale fisheries, they realised the challenges they encountered led to high failure rates for small-scale fisher folk.  To be successful, they required various skills. They needed to partner with government departments and have the involvement of SETAs so they could ensure the training was comprehensive from community to community depending on what skills were required. As they finalised the policy on small-scale fisheries, they would have firm programmes with capacity development mechanisms to ensure a high success rate for the new entrants in fisheries.

On whether the fishing sector was over-regulated, Mr Sebola responded that the marine living resource was not an infinite resource and as per the Act they needed to periodically assess stocks so that they could be responsible in their management efforts to ensure they did not deplete the resources but ensured sustainable use for future generations. Therefore they needed to balance regulations with the need to have access.

Mr Motseki Hlatshwayo, Acting Deputy Director General: Fisheries Management, DAFF, said he wanted to raise a very important issue they were supposed to start with before their presentation. Fisheries in DAFF came from a past where it was not even called Fisheries but Marine and Coastal Management (in the Department of Environmental Affairs). The emphasis then as evident in the legislation was more on conservation. He thought it was a wise move by the President in 2009 to recognise such a sector as a fully-fledged economic sector. Now they were grappling with issues of integrating fisheries fully into the bigger economic sector.

The Marine Living Resources Act had a very narrow mandate that ended at the Coast and went to the marine space and it became difficult to start looking at alternatives outside the marine environment for issues raised by inland fisheries and aquaculture. But there was a current process of reviewing the Act to try to expand its mandate to include the new mandate given by the President to fisheries. The current review was trying to expand from marine to include inland fisheries and aquaculture to augment and plug the gaps. That would address why some of the aquaculture farms had failed and corrective measures were not mentioned. They did have corrective measures and had identified some of the challenges that led especially black entrepreneurs to fail at aquaculture. This was because of poor support given to them in the past. It should be noted that not long ago aquaculture was not a regulated sector but currently it was. Requirements for getting rights and permits required certain things to be in place. Government should come in and give that support. For example, in the Eastern Cape, they had identified land that would be suitable for aquaculture. Individuals needed to have access to approved land and capital. The department was taking care of that process to ensure HDI companies could have a smooth process in the sector. They were trying to identify such space in other provinces. They were in discussions with the province of KwaZulu-Natal for a space in the area of Amatikulu where they had identified an aquaculture zone. The department would put in the basic infrastructure for the project in terms of roads, water and electricity.

Mr Madime Mokoena, Director: BBBEE, DAFF, responded that in terms of the timeframe for the development of the fishing charter they were previous charters that had been developed because it took three to four years to develop a charter and the fishing charter was late because it only started this year. They had started the processes of developing the charter but this did not stop stakeholders in fisheries to comply with codes of practice that had been developed. Past information could be used whilst they were still developing the sector specific codes.

Mr Dyani responded about funding and skills development, saying their annual budget was R3.54m and that was simply because of the size of their office with three employees, and 60% of their funding came from government and 40% from industry. Skills development was the worrying factor. When the report came the Council agreed that they needed a strategic session to correct what was wrong in their strategic plan. On 19 and 20 July they would have a strategic session with stakeholders to talk to that particular issue and have a timeframe for correcting the situation.

Dr Shibu Rampedi, Deputy Director-General: Forestry, DAFF, stated they would like the Committee to note generally when it came to funding for the sector including the business development of forestry, forestry transaction were very costly and were mainly funded by the Independent Development Corporation. Most of the transformation agreements signed with forestry were done from 2001-2005 with the assistance of IDC.

In terms of developing small growers and how they supported them, the expectation was for sector growth mainly the Eastern Cape and KZN where there had been significant growth of small growers on communal land. The targets of the sector charter where they had agreed with industry that for the next ten years retrospectively from 2008 they should see forestation of up to 100 000 ha. The expectation was that it would be for small growers in development initiatives. They funded the environmental impact assessment that was a requirement for small growers to be able to obtain licences for planting trees and that would highlight the fact that forestry was over-regulated. They had taken away the regulatory burden from the small growers and together with the Department of Trade and Industry, DAFF had been cooperating with the Department of Water Affairs to deal with aforestation so they could move forward.

Ms N Magadla (ANC) asked if the small-scale fisheries were budgeted in the current budget of the department.

Mr Sebola responded that they were finalising their process and full implementation of the programme would be budgeted for in the 2011/12 financial year.

The Chairperson thanked the delegation from the department for the informative presentation and informed the Committee the DAFF Budget Vote would be debated the following day.

Consideration and Adoption of Nominations to Board of Land Bank
The Chairperson informed the Members that there were three nominations received and submitted by both Ms N Ntwanambi and Ms B Mabe which needed to be approved by the Committee.

Mr De Beer proposed that the Committee should consider the nominations as one proposed by the Committee to the Ministry. Mr Worth seconded the proposal.

The Committee adopted the nominations.

Adoption of Minutes
The Committee adopted the minutes of 7 June.

The meeting was adjourned.

[Apologies were received from Ms N Ntwanambi and Mr M Mokgobi].