ATC110118 :Report on Oversight Visit to West Coast, dated 18 January 2011

Agriculture, Forestry and Fisheries

Report of the Portfolio Committee on Agriculture, Forestry and Fisheries on Oversight Visit to West Coast, dated 18 January 2011

 

The Portfolio Committee on Agriculture, Forestry and Fisheries, having undertaken an oversight visit to St Helena Bay and Saldanha Bay on the West Coast on 10 September 2010, reports as follows:

 

1. Introduction

 

The reconfiguration of government departments in 2009 brought together all the functions of food security under the department of Agriculture, Forestry and Fisheries. The fisheries sector is one of the key pillars which underpin the country’s food security strategy. It also offers opportunities for the recognition of a developmental state, which has to address the unequal distribution of resources.

The committee understands the importance of the fisheries sector to the economy of the country, and therefore undertook an oversight visit to St Helena Bay and Saldanha Bay on the West Coast on 10 September 2010.

 

The delegation comprised the following members and staff:

Mr ML Johnson (ANC) Chairperson of the Portfolio Committee on Agriculture, Forestry and Fisheries, Ms MN Phaliso (ANC), Ms RE Nyalungu (ANC), Ms ME Pilusa-Mosoane (ANC), Ms L Moss (ANC)*1, Mr ND du Toit (DA), Mr LB Gaehler (UDM), Mr A Syme: Committee Secretary, Ms N Mafani: Executive Secretary to the Committee Chairperson, Ms N Mgxashe: Committee Researcher, Ms S Prinsloo: Research Intern, Ms B Shandu: Research Intern.

 

2. Terms of reference

 

The main objective was to engage with stakeholders in the small scale and commercial sectors to obtain a better understanding of the challenges confronting the fisheries sector and to assess the extent to which policy processes, dwindling resources and the economic reality of reinvestment have impacted on transformation in the sector.

 

3. Findings

 

3.1 Oceana Group Ltd, St Helena Bay

The Oceana Group, which is listed on the Johannesburg Stock Exchange (JSE), is mostly involved in pelagic fishery (e.g. pilchards, anchovies, etc.). It comprises Tiger Brands Limited, Khula Trust and Brimstone Investment Corporation Limited, which collectively owns a 59,5% share in the company with the remaining 40,5% being owned by other shareholders. 

 

In terms of its transformation credentials, the company concluded its first empowerment transaction in 1994 and has achieved a Level 4 broad-based Black Economic Empowerment (B-B BEE) status in 2009. The company aims to achieve a level 3 status by 2011.

The company spends approximately 57% (approximately R573 million) of its total procurement on BEE suppliers. A key challenge is that some of the commodities cannot be procured locally, particularly the company’s main procurement product, that is, cans. The company has spent R3.2 million on skills development for black employees. In response to a question on the focus areas for training, the company indicated that training focuses on all levels, particularly on leadership and management programmes. Four black Africans are part of the company’s management division. For Corporate Social Investment (CSI), the company spent R3 million on education and health projects. The company also indicated that the Department of Labour had expressed satisfaction with company initiatives on skills development during its review of the company’s skills development plan.

 

A critical challenge identified by the company is that it is almost impossible to re-invest capital. This is aggravated by the fact that the factory is largely under-utilised due to the lower quantities caught as a result of lower quotas which makes it extremely difficult for the company to retain employees. Employee share trust scheme - The Ocean Group has made a loan to Khula Trust to buy company shares on behalf of its (Oceana Group) employees. The loan is to be repaid in full by 2017 through dividends paid out by the company. This therefore means that the Trust does not ensure any benefit to workers until 2017 when the loan amount is paid in full, after which the employees will get their share certificates. In addressing concerns around whether employees are fully aware of the implications, the company explained that it has released DVDs explaining how the Trust works. Occupational Health and Safety (OHS) - In response to the concerns raised by the committee over the health and safety of employees in the canning factory and on the boats, the company noted that it has two full-time Health and Safety Practitioners. In addition, each department also has their own health and safety structure and this arrangement includes the company’s fleet of boats.

 

3.2 Engagement with community (Laingville)

The chairperson indicated that the committee regards food security as critically important. The reconfiguration of departments brings together all functions relating to food security under the Department of Agriculture, Forestry and Fisheries. The intention is to make coastal communities self-sufficient and self-reliant. The Mayor of the Saldanha Bay Local Municipality gave an overview of the challenges confronting the local fishing community. Among these is the laying off of permanent staff by fishing companies and the lack of any safety net for those working on boats. In many instances, these workers are at the mercy of skippers, and there are limited opportunities for people other than white males to become skippers. The rate of unemployment is high as some fishing factories have closed down. The 1 500 interim fishing permits for line fishing are insufficient, although it is an increase from the previous year. He called on the community to be part of processes to deal with challenges facing fisheries.The committee informed the community that the meeting is a listening forum. Members of Parliament are elected by the people and must represent the people irrespective of political party affiliation. Their role is to listen to the community’s concern in order to understand how they can influence policy and legislation to benefit the community.

 

Key concerns raised by the community

 

The concerns raised by the community incorporated the following:

 

·                     The extent to which the reconfiguration of the fisheries sector would assist ordinary people.

·                     The alternatives offered by government to ensure that fishing communities also have safety nets, when fishing stocks are low.

·                     How will state institutions assist fishing communities with sourcing loans from commercial banks, as this sector is regarded as high risk?

·                     The social responsibility component by commercial fishing companies is always emphasised when they apply for fishing permits. Once permits are issued however, these plans are shelved. Legislation must be enforced to ensure that companies who receive fishing permits implement their undertakings to create jobs.

·                     Whilst seasonal jobs are created, many working in the sector do not have security of employment because employment levels are dependent on the size of the quotas allocated to companies. As a consequence, poverty and hunger among families are common at different periods of the year.

 

3.3 Sea Harvest, Saldanha Bay

Sea Harvest is a deep sea fishing company and is one of two big South African hake fishing companies who have the capacity to develop value added products for the international market. The company considers it a national priority to ensure that value addition in the fishing industry stays in South Africa. Between 3 889 and 4 597 employment opportunities in the West Coast District are directly associated with Sea Harvest, making it the largest private employer in the Saldanha Bay and the West Coast District.

 

The company has begun empowerment initiatives many years before it became an official requirement and has received a level 3 rating for black empowerment from the economic empowerment rating agency, Empowerdex.

 

A total of 1 539 employees, representing mainly permanent employees, own shares in the company. The implication is that a significant proportion of the company’s dividend payments go to previously disadvantaged South Africans.

 

The company also experiences similar challenges around capital investment. It cannot replace its ageing fleet of ships and equipment because the income generated from reduced quotas will not justify the cost of replacement.

 

Skills development for employees

 

The company has a well established training programme for all its staff members. The company has 95% black employees and all of them are South African. It also focuses on promoting gender representation in an exclusively male domain through its Women-at-Sea Cadet programme. To date, the programme has trained more than 120 female employees and is currently focusing on engineering qualifications. A key challenge is the high drop-out rate of the cadet training programme. Other training programmes are provided by local service providers based in the District. It has seven black Directors, of which two are women.

 

Affirmative procurement

 

A wide range of goods and services are provided by about 197 local suppliers including engineering, painting, transport, catering, crane hire, security, laundry, health services, plumbing and welding. Many of these services are provided by former employees who are supported by the company through tenders, loans or training linked to the West Coast Business Development Centre.

 

A number of local suppliers earn 60% or more of their annual turnover from businesses with the company. Indirect employment is provided by the company’s sale of ‘by-catch’ that is sold to local traders who either sell it or add value by smoking, drying, curing, etc.

 

Social responsibility

 

The company’s social responsibility activities are managed by the Sea Harvest Foundation through an annual grant of R500 000. The Foundation, which was established in 1993, is managed by a Trust which incorporates prominent members of the community. Key areas of focus include a bursary programme, a school improvement programme, HIV and Aids awareness and support to small, medium and micro enterprises (SMMEs).

 

4. Conclusion and resolutions

 

The lack of benefits to fishermen who can no longer work in the sector is a serious problem that needs to be looked at.

 

At the same time the committee is also mindful of the challenges experienced by bigger companies, particularly the impact which reduced quotas will have on their ability to retain high levels of employment.

 

It is important therefore that all opportunities along the entire value chain in the fishing industry are optimally exploited.

 

The committee will have to interact with the whole industry to look at options to deal with the problem of retirement without benefits. One option is to strengthen the economy of the country to ensure that big companies look after their employees in the long term. In view of the fact that a company such as Oceana must import cans from elsewhere, the community should be looking at this as a business opportunity to reduce their reliance on dwindling fishing stock. It was suggested that the community should make use of the surrounding colleges for training, particularly youth, in scarce and required skills in the fishing industry. The committee also noted that the nature of the challenges were more complex and would require a longer period of engagement with the community.

 

The committee therefore, requested the community to utilise community leaders and the Office of the Mayor to draw up a list of issues and forward these to the committee for engagement with the Department of Agriculture, Forestry and Fisheries.

 

Report to be considered.

 

 

1 Co-opted member

 

 

 

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