What does it take to win a slice of the valuable long-term fishing rights that the Department of Environment Affairs and Tourism is about to allocate?
Officially, it takes a matrix of biological, economic and transformation criteria, a consideration of the applicant’s capacity and track-record in the industry. Unofficially, it seems numerous companies are relying on a hefty dose of political influence.
The air in Cape Town is thick with rumours about which of the traditional white fishing companies has the most influential empowerment partners and which of the newer, more thoroughly empowered companies has the best connected leaders.
Fishing, like mining and telecommunications, is a heavily regulated industry, and companies depend on decisions by officials in the department’s Marine and Coastal Management (MCM) division for their livelihood.
Like mining and telecoms firms, many seem to be betting that bringing on board senior ANC figures is the most reliable way to ensure they are favourably treated in this process.
Smuts Ngonyama, members of his family and other ruling party figures from the Eastern Cape are involved in Bato Star, a joint venture with the Fernandes family, who own the Lusitania group of fishing, fish processing, and marketing companies.
Minister of Minerals and Energy Lindiwe Hendricks, according to the parliamentary register of members’ interests, holds shares in two fishing companies, Phambili and Vuna. Her husband, Andrew Hendricks, is a director of SeaVuna, a joint venture between Vuna and Sea Harvest. Hendricks even has a trawler named after her: the R120-million Harvest Lindiwe, which she launched in Mossel Bay.
There’s smaller scale involvement too: the Mail & Guardian has reported on the fallout from the botched plans of a group of ANC figures centring on former Western Cape party leader Chris Nissen and financed by Brett Kebble’s JCI, to fish tuna off the West Coast.
“Everyone feels they have to have someone well connected on their side,” one senior industry executive complained, echoing the sentiments of others in offices all around Cape Town’s waterfront.
There has been constant sniping at the department over how empowerment considerations affect the allocation of quotas. After the 2001 process, in which medium-term rights were awarded, Phambili and Bato Star took the then-minister of environmental affairs, Mohammed Valli Moosa, and Marine and Coastal Management chief Horst Kleinschmidt to court, alleging that they had not sufficiently considered empowerment criteria and had left too much quota in the hands of established companies.
The case reached the Supreme Court of Appeal, which, in 2003 decided Moosa and Kleinschmidt had balanced the need for stability in the industry with environmental and transformation concerns.
Stability, the court found, is crucial for protecting jobs and investment in the industry’s capital-intensive sectors, while significant transformation had taken place at established companies such as I&J and Oceana.
In fact, the big “pioneer companies” say they and their empowerment partners have lost out substantially in the reallocation of rights.
“The redistribution of deep-sea hake rights since 1996 has cost the industry a net 1Â 000 jobs,” argues an industry player sympathetic to the bigger firms.
In 1992, only 21 white-owned and controlled companies had rights to exploit the deep-sea hake resource. By 2002, 53 companies had rights, 74% classified as historically disadvantaged.
Speaking at the Cape Town Press Club on Wednesday, Kleinschmidt, now of long-term commercial rights allocations at MCM, said: “The current process asked detailed questions to those who received quotas in 2001, what they have done with them. Some companies have paid huge dividends [after selling their quotas], but had no employees or signs of life until it was time to apply for rights again.
“We need to test what they have done with the right in the preceding four years,” he said. “It’s important to get rid of those who are free riders.”
And it did not matter whether free riders were black-fronted white companies or those that “applied as black, were black, but were also just in for the free ride”. “There have been strong players … who’ve shown their mettle and there are those who haven’t.”
In a thinly veiled reference to Namibia, Kleinschmidt pointed to “a neighbouring country” where there are close links between empowerment and foreign ownership.
South Africa’s negotiators fought a tough battle in free trade negotiations with the European Union to keep EU fleets out of local waters, and the pressure was likely to be renewed in upcoming talks with the bloc, he warned.
MCM may be careful to keep quota applications “blind” to prevent officials from being influenced by big names. Whether the same will be true of the trade arena remains to be seen. — Additional reporting by Marianne Merten