Big stink over R9bn Coega prawn farm

A R9-billion marine farming project in the Coega industrial development zone (IDZ) — announced with much fanfare in December — has a fraud convict as its international business associate.

A Mail & Guardian investigation has also established that the American company involved in the prawn­farming project, SeaArk Holdings, does not appear on the database of the United States Securities and Exchange Commission, the official US company register.

In 1995, SeaArk president David Wills was sacked as vice-president of one of the world’s largest animal rights organisation, the Washington-based Humane Society of the US, after being accused of fraud and sexual harassment. In 1999, he was sentenced to six months in jail and fined $67 800 for embezzlement. Prosecutors alleged Wills used the money to enrich himself and gamble in Las Vegas.

Wills is currently running the pilot in Coega. Questioned about his past in a telephone interview this week, he exclaimed: ”It’s not me! Knock yourself out; write whatever you want!” and rang off.

The project, touted as a huge job creator in the Eastern Cape and the world’s first environmentally friendly prawn farm, has sparked furious objections from local environmentalists, including South African National Parks (SANParks).

Despite this, and Wills’s history, it is being driven vigorously by the Eastern Cape government. Allegations are flying that this is because of the African National Congress connections of the South African empowerment partner in the project, Bosasa Operations. Bosasa CEO Gavin Watson is a member of the Eastern Cape’s influential Watson family, heavy-hitters in the ruling party.

In addition, the ANC’s Nelson Mandela Bay secretary, Mthiwabo Ndube, is on the board of SeaArk Africa, the local company in which Bosasa and the US SeaArk Holdings were equal shareholders.

According to Bosasa spokesperson Papa Leshabane, the company has, subsequent to the finalisation of the pilot phase, acquired 100% of SeaArk Africa ”and retained the services of a company of which David Wills is a member/employee”.

Asked whether Wills is regarded as a suitable associate on such an environmentally sensitive project, Leshabane said: ”[Wills] is considered by many as one of, if not the US’s most knowledgeable authority on all aspects of aquaculture.”

Also on the SeaArk Africa board is Mamisa Chabula, a medical doctor and former acting head of the Eastern Cape health department. Chabula is close to President Thabo Mbeki’s family, having cared for Mbeki’s father, Govan, from his release from Robben Island in 1987 until his death in 2001.

”The political connections of the project were something to make you scared,” said an official in the Eastern Cape’s environmental affairs department. ”The pressure to authorise SeaArk [the pilot project] was outrageous. SANParks had real concerns about what was going on, but their appeal was dismissed, as expected.”

Initiated this month, the environmental impact assessment (EIA) for the rollout phase is to be completed at breakneck speed, by June. A Bosasa official at the plant told the M&G that the EIA had been fast-tracked ”without breaking any laws”.

The department declined to comment on whether pressure was being put on it to approve the EIA.

Bosasa has a chequered history. In 2005, its contract with the Department of Home Affairs to run the Lindela detention centre was controversially renewed at a cost of R282-million. The company is also under investigation by the special investigating unit in connection with the alleged rigging of correctional services tenders worth millions.

Another connection

The M&G has established that Wills and Watson have a further connection. They are ”governors” of a shadowy non-profit organisation named the International Foundation for the Conservation of National Resources (IFCNR), which has been widely attacked by the green movement for opposing the humane treatment of animals.

The IFCNR’s main donors, exposed by Washington’s Centre for Public Integrity in 2005, include the National Trappers’ Association, the Japan Whaling Association, the International Fur Trade Association and controversial agriculture multinational Monsanto.

Its biggest backer is the world’s largest restaurant group, Darden Restaurants, which owns the US’s Red Lobster chain — a voracious consumer of prawns and another target of the green movement.

Darden did not respond to the M&G‘s questions.

The IFCNR ”strives to maintain equilibrium, respect and fairness in caring for the Earth’s resources”. However, the website carries numerous articles attacking animal protection groups and defending donors such as Darden and Monsanto. It also extensively promotes prawn farming.

Its true character came to light when the Centre for Public Integrity revealed that it had flown California Republican Richard Pombo to New Zealand and Japan. Pombo later sponsored legislation critics claim ”gutted” the Endangered Species Act. In 2006, he lost his seat in the US House of Representatives amid corruption allegations.

The IFCNR’s board of governors is a brew of pro-hunting and pro-gun lobbyists. They include Steve Fausel, owner of the Fausel group, which owns SeaArk Holdings and allegedly invited Watson to the IFCNR; Dick Monroe, SeaArk’s chief operating officer and a former Darden Restaurants executive; and gun lobbyist John Aquilino.

Watson and Wills shook hands in Colorado after a four-day meeting in 2005 that resulted in Bosasa buying the development rights for the prawn farm. The Coega project was announced by SeaArk Africa in a blaze of publicity on December 11 last year.

Claiming it had perfected the world’s first closed biosecure farming system, which could grow prawns two or three times faster than its competitors, the company said the 1 200ha high-tech facility would employ 11 000 people. The story featured prominently in the media after a press junket.

The M&G is in possession of SANParks’s appeal against the pilot project, brushed aside by the Eastern Cape government.

SANParks spokesperson Megan Taplin said the prawn farm posed a threat to the marine area adjacent to Coega, which is earmarked for inclusion in a 120 000ha marine protected area in Algoa Bay.

”Also, the proposed prawn species is not indigenous to the Indian Ocean region and presents a risk of invasion,” Taplin said.

Meanwhile, Coega has confirmed reporting SeaArk Africa to the provincial authorities for the alleged unauthorised mining of dunes in the Coega IDZ — a violation of its EIA conditions.

The investigation is still under way.

Watson reacts

In a telephone interview, the M&G asked Bosasa’s Watson about Wills’s criminal record, his links with the IFCNR and possible conflicts of interest.

On Wills:

”It is not so [his criminal record]. You got it on the internet, didn’t you? We’ve gone through everything; I’ve done my own investigations. He [Wills] is a paid employee. I’ve been through all of those allegations. I employed him because he is a prawn specialist. I’ve been to America myself; surely I know what I am doing?

”You [the M&G] never see the positive things; it’s time to take you head-on … I employ the guy. I pay him a salary. He is not a partner. Sure, there was some stuff he was involved in, but that was a long time ago. He is only one of a team of guys we employ; he is renowned in the prawn industry.

On the IFCNR’s relationship with SeaArk:

”There is no relationship whatsoever.”

On his involvement with the IFCNR and Darden Restaurants:

”What has it got to do with you? It is my business. I was appointed on to the board. It’s irrelevant to you. This programme has got nothing to do with Darden. Darden approached us to buy the product — they are a retailer. They approached us.”

On announcing the project before the EIA was finalised:

”You are talking nonsense now. This thing has gone through every proper legal process there is within the department. There are regulations by government. We will not throw out the law.”

On the apparent conflict of representing both the IFCNR and SeaArk:

”You can’t be serious. Are you living in the real world? There is no conflict.”

On local high-up Mthiwabo Ndube’s membership of SeaArk Africa’s board:

”There is no conflict whatsoever. Do me a favour and do what you usually do. Go and write negative articles again — You are part of the white racists. I’ve done my own investigations on you.”

Who is Gavin Watson?

The CEO of Bosasa and SeaArk Africa, Watson is a member of the well-known Port Elizabeth family who won credibility in the 1980s by joining the political resistance, at a cost to its business interests.

Two brothers, Valence and Ronnie, are best known for their involvement in ANC underground structures, while Cheeky, a Springbok rugby prospect, chose to play in the townships.

During the 1980s, they befriended senior ANC members now in government positions, including Sports and Recreation Minister Makhenkesi Stofile and former prisons boss Linda Mti.

Watson has made shrewd use of his political connections in the post-1994 period, projecting Bosasa as a black economic empowerment concern and landing state contracts worth billions of rands.

In addition to the Lindela contract, won by its wholly owned subsidiary Leading Prospect Trading 111, Bosasa Operations landed state contracts worth almost R1-billion between 2004 and 2006, three of them for the Correctional Services Department.

In addition, an affiliated company, Bosasa Security, won a security contract from the Airports Company South Africa, while two other affiliates, Kgwerano Asset Finance and Phezulu Fencing, won contracts worth a total of close to R600-million from the transport and correctional services departments respectively.

With Mbeki’s political adviser Titus Mafolo and former Strategic Fuel Fund boss Seth Phalatse, Watson is also a shareholder in Sondolo IT, which has benefited richly from state business. In 2005 and 2006, it won three contracts from the Correctional Services Department with a combined value of more than R700-million.

The M&G reported last year that the special investigating unit had been asked to probe corruption in the awarding of correctional service contracts, including those awarded to the Bosasa group. Beeld revealed in 2006 that Sondolo wrote large portions of a correctional services tender that it later won.

Greed vs green

Aquaculture is seen as an environmentally friendly solution to over-fishing, and the government is pushing it hard. But existing methods — particularly of prawn farming — are controversial. As in most areas, greed tends to override green. Prawn-farming worldwide is worth about R70-billion a year.

Some of the biggest concerns are the destruction of mangrove swamps to create ponds; the discharge of nutrient-rich effluents into the environment, disrupting ecological balances; and the release of waste water containing chemical fertilisers, pesticides and antibiotics.

The pacific white shrimp — which SeaArk will farm — and giant tiger prawns account for about 80% of the crustaceans under cultivation. The former is highly susceptible to viral infections, which have wiped out populations and can be transmitted to indigenous prawn species.

During a tour of SeaArk’s Coega pilot facility last week, Wills insisted his methods eliminate such concerns. He said his company uses computerised control systems to regulate water temperatures and quality and to control the amount and type of algae present.

”The technologies are not new,” said Wills. ”It was simply taking a host of factors and integrating them to create the finished project. But without one of the factors such as water quality the whole house of cards collapses.”

Wills said the Coega prawns will be organically farmed without antibiotics, and that he keeps the prawns healthy by ”eliminating” factors that spread the disease. ”It would take a criminal act to sabotage my farm,” he said.

SeaArk Africa has, since December, also signed deals with Chinese company China Direct to provide it with mariculture technology and the Saudi Arabian shrimp farming group Al Faulk for a pilot plant. Bosasa companies Sondolo IT and BuildAll have been contracted to provide technology and construction for these projects.