Business

Something fishy this way comes

Chantelle Benjamin

The public protector says SA's valuable marine resources are being put at risk.

Quay complaint: The public protector says the department is failing its mandate. (David Harrison, M&G)

South Africans got a look into the state of the country's fishing industry this week from a report by the public protector. And the picture, which deals with the awarding of a tender to a company within the Sekunjalo group, is not pretty.

The company, Sekunjalo Marine Services Consortium, is a subsidiary of Sekunjalo Investment Holdings, which has the controlling stake in Independent News and Media.

In her report public protector Thuli Madon­sela says Sekunjalo, which submitted four separate bids under different companies' names for the R800-million tender, was guilty of a conflict of interest.

She also says Sekanjalo submitted a false statement, namely a certificate that under­takes to prevent any form of bid rigging, and did not comply with broad-based black economic empowerment (BBBEE) requirements, as it did not possess a certificate.

She stops short of accusing Seku-njalo of collusion but recommends that the Competition Com­mission determine whether collusion took place.

The conflict of interest relates to the fact that Sekunjalo Marine Services was employed to police marine stocks even though one of its subsidiaries, Premier Fishing, has fishing rights, mainly for rock lobster.

Public Protector criticises Joemat-Pettersson
Madonsela criticises Agricul­ture, Forestry and Fisheries Minister Tina Joemat-Pettersson for her handling of the issue and describes her handling of the tender as "reckless".

The tender is crucial to the sound management of South Africa's fishing stocks. But Madonsela says it has led to a "loss of confidence in the fisheries industry" and has contributed to the "alleged decimation of fisheries resources in South Africa and delayed quota allocations due to lack of appropriate research".

She calls for disciplinary action to be taken against the minister.

Awarding the tender to Sekunjalo provoked a storm of controversy. Critics asked how a company with no quay or dock rights managed to score higher than another bidder, Smit Amandla Marine.

Also questioned was the number of submissions made by Sekunjalo and linked companies. Calls were made for the scoring process to be made public and it was alleged that Sekunjalo had an advantage because it had knowledge of four of the bids.

As a result of the protest by the Democratic Alliance and Smit Ama-n­dla Marine, the tender was withdrawn and the management of South Africa's fishing waters fell into disarray, putting export orders valued at about R2-billion — half of it for hake — in jeopardy.

Avoid losing certification
To avoid the possibility of losing certification by the international evaluation body — the Marine Stewardship Council, which is required to sell hake overseas — the South African Deep Sea Trawler Industry Asso­ciation paid for eight observers to go out with fishing vessels to collect data and draw up surveys required by the council after it became clear that the department's research vessel, the SAS Afrikaner, was inoperable.

The secretary of the association, Roy Bross, said that as a result only one of three hake surveys was missed last year. In a statement issued through the JSE in March last year, Sekunjalo defended its decision to submit four bids and said it was transparent about the links between the companies when it made its submission.

"Each [was] structured on a different economic model, which provided the opportunity for the department to choose the model which best suited its requirements and those of the national treasury," it stated.

"Each of these bids was fully and transparently disclosed and supported by presentations as part of the bid adjudication process."

Sekunjalo did not respond to requests for comment by the time of going to print.

Madonsela says in her report that the bid problems had far-reaching consequences: "[The department's] failure to re-advertise the tender means that it is currently unable to fulfil its mandate to do scientific research, anti-poaching patrols and inspections of fishing trawlers for illegal activities."

Experts' concern over SA's marine resources
"This failure seriously jeopardises the research and protection of our country's fishing resources and has far-reaching economic consequences," she says.

Experts are concerned that South Africa's marine resources continue to decline while poaching and pirate fishing are on the increase, both locally and worldwide.

It does not help that for the past 20 months South Africa has been unable to patrol its coastline or for the department to carry out research after the Sekunjalo tender was withdrawn and the investigation was launched.

Shaheen Moolla, a former department of fisheries head and the director of the advisory firm Feike, said the reduction in patrols has been going on for years because funding cuts have left South African waters "and its trillions of rands worth of marine resources wide open for poachers and illegal fishing".

A lack of research capacity is also taking its toll. Hake contributes about half of the R5-billion income of the fishing industry, which employs over 6 000 people permanently.

Concern about South Africa losing its certification led to the fishing industry volunteering to fund its own research.

Fishing rights to expire soon
An expert close to the department said: "[But] you do not want a industry to do its own evaluation. It's not ideal. They can't be both enforcer and participant."

The fishing rights relating to a number of industries will expire soon, which will mean that, technically, those sectors will no longer be able to operate.

But the deputy director general of fisheries, Desmond Stevens, said this week the department expects to release these rights by the end of December, or as close to then as possible.

The public protector's report has drawn public attention to the department, but there has long been concern about missed deadlines and the control of marine stocks.

The chairperson of the parliamentary portfolio committee on agriculture, forestry and fisheries, Mlungisi Johnson, in April this year took the unusual step of making a particularly strong comment, saying that fisheries management is "clearly in the wrong hands".

This was after he received a parliamentary research document about mismanaged ships, missed targets, a lack of research planning and a controversial decision to reduce catching rights allocated to small commercial fisheries, of which about 60% are black owned.

Joemat-Pett­ersson "ignored" NDP's warning
The research allegedly said Joemat-Pett­ersson ignored the National Develop­ment Plan's warning that reducing these catching rights and handing them instead to small, medium and micro enterprises (SMMEs) would lead to job losses.

That report also allegedly accused the minister of making the decision "once again in a defiant mode".

The department said it did have a plan to rebuild fish stocks by 10% but Johann Augustyn, chief director of fisheries research and development for the department, said that how stocks would respond would be difficult to predict.

The department has had some successes, such as good figures for deep-sea hake, Cape horse mackerel and the slow recovery of some line-fish species, but the problem for both Parliament and marine experts is the inconsistency of research data.

Stocks decline, illegal fishing goes unchecked
There is a "general trend of deterioration" of resources, according to the department of agriculture, forestry and fisheries' 2012 report, Status of the South African Marine Fisheries Resource.

But the deputy director general of fisheries, Desmond Stevens, said that every country is having to deal with decreasing fish stocks and that the role of most fishery departments has been to "arrest the decline and put in place plans to recover stock".

He said, in South Africa, "rock lobster and abalone stocks have seen the biggest and most serious decline, but deep-water hake and line fish are seeing a steady recovery".

The recovery of line fish has taken a few years to show. It is the result of a decision by former environment minister Valli Moosa to radically reduce the number of vessels given permission to fish this stock.

The deep-water hake figures appear to be the result of a reduction in the total allowable catch allocation by the department.

Stevens rejected criticism that the department was not conducting the required research.

Department can't provide data
"The department has never stopped conducting research. There is not one survey that is supposed to have been done that has not been done."

But the department says in its report that it cannot provide data on the extent of the harvesting of white mussels or oyster resources and the status of the Patagonian toothfish remains unknown.

A discussion document by Statistics South Africa on the fishing sector lacks economic data on it, making it hard to assess the true value of the sector and to estimate the true size of the fishing market.

The department's annual report for the 2012-2013 financial year quotes figures on exports from 2008, which were then worth about R3.1-billion, but this figure differs depending on who you talk to.

Stevens admitted that more economic data is needed and said a report would be commissioned in January to look not only into the economic but also the ecological value of the sector.

He added that two ships have returned to patrol duty in the past two months, and that the department is hoping the rest will be operational soon. There are also small vessels patrolling near to shore.

Patrolling sea hours reduced
Asked why the condition of the vessels were allowed to deteriorate, he said it was one of the reasons why the patrol and research tender was reviewed.

"You cannot have a small company with an exclusive contract to maintain vessels, which was the case for 10 years," he said.

Shaheen Moolla, a former head of the department, said the patrolling sea hours have been reduced since he worked in the department and it is hard to estimate how much South Africa is losing to illegal fishing.

But the country was recently awarded R294-million in restitution for lobster illegally fished off its coast and then sold in the United States.

"We have an exclusive economic zone of 1.5 million km2 [of ocean], excluding the exclusive economic zones [around Prince Edward and Marion islands in the Southern Ocean], and rich marine resources that are not being patrolled and are being plundered daily."

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