Long-term

Fishing Rights Allocations

Presentation outline

• State of the fish resources

• Socio – and economic context

• Rights allocations post 1994

• Rights allocations – medium term (2001-2005)

• Rights allocations - Long term (8-15years)

• Summary

• Where to from here?

Context - environment

• Catches are at a historical low

• Increased demand and technological advances

• Shifts in distribution – environmental factors

• To show examples – 3 major fisheries

Hake

M. paradoxus M. capensis

Spaw

ning b

iomass

('000

mt)

0

200

400

600

800

1000

1200

1400

0

100

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700

0.00

200.00

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1400.00

1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959

0.00

100.00

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400.00

500.00

600.00

1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959

0.00

100.00

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700.00

1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

0.00

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500.00

1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

0

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160

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

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1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2024

0

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0

5

10

15

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25

30

35

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45

Deepwater hake (M. paradoxus)

West Coast Rock LobsterWest Coast rock lobster landed catch (tons whole mass) and area-aggregated standardized trap CPUE normalized to the mean, 1891-2004.

0

2000

4000

6000

8000

10000

12000

140001

89

1

19

01

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11

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31

19

41

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51

19

61

19

70

19

80

19

90

20

00

Cat

ch (

t who

le m

ass)

0

0.5

1

1.5

2

2.5

CP

UE

(kg

/trap

)

Catch

CPUE

West Coast Rock Lobster

Approx. 70% caught 30 yrs ago

Now 90% caught- Dassen Is & Cape P

Worse – traditional fishermen

Pilchard

Namibia

South Africa

Pilchard

0

20

40

60

80

100

120

1994 2005

% o

f ann

ual c

atch

es

SouthEast

West Coast

Socio – and economic context

• Lower catches – fewer jobs

• Shifts in distribution – mismatch - infrastructure and catches

• Trucking fish - extra cost - to R80m – R750m p/a

• Industry sources – additional costs - profits

• Factories relocated - WCRL and plans to relocate Pilchard

• Economic activity due to fishing – diminished West Coast

• Unemployment rife – last resort – fishing right

• Large proportion of fish workers non-permanent

Employment

0

10

20

30

40

50

60

70

80

Hake WCRL Pilchard

% E

mpl

oym

ent

Permanent Jobs

Non-permanent Jobs

Allocations post 1994

• The Marine Living Resources Act (1998) provides framework to

change pre 1994 profile

• Few quota holders, one group dominant

• High expectations, and resistance to change by established

industry

Allocation post 1994 cont…

Allocations of Hake 1990 - 2000

0

10

20

30

40

50

60

70

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Year

% T

AC Black Controlled TAC

No of entities

Rights allocation post 1994 cont…

• Significant increase in number of participants 16-53Significant increase in number of participants 16-53

• Rights allocations small < 1000 tons eachRights allocations small < 1000 tons each

• Lead to complaints of non-viable allocationsLead to complaints of non-viable allocations

- 2500 -3000 tons – independent operation- 2500 -3000 tons – independent operation

Medium-term rights - 2001

• In 2001 first multiple-year rights allocation (4 years)In 2001 first multiple-year rights allocation (4 years)

• The MTRA was a step towards the LTRA (15 years)The MTRA was a step towards the LTRA (15 years)

• Experiment with micro-business on high value species e.g. Experiment with micro-business on high value species e.g.

WCRL – 200kg – 1,5tWCRL – 200kg – 1,5t

• Project management, legal advice and applications Project management, legal advice and applications

assessment – Rights Allocation Unitassessment – Rights Allocation Unit

• Verification – Rights Verification UnitVerification – Rights Verification Unit

• Transparency – compliance with PAIA & PAJATransparency – compliance with PAIA & PAJA

Medium-term rights - outcomes

• Increase no. of rights holders 400- 3069, largely micro-Increase no. of rights holders 400- 3069, largely micro-

businessbusiness

• Redistribution of rights major commercial resources Redistribution of rights major commercial resources

• WCRL - 20% of TAC micro businessWCRL - 20% of TAC micro business

• Genuine micro businesses were created Genuine micro businesses were created

• But - paper quota holdersBut - paper quota holders

Long-term rights - 2005

Policy Objectives

• Job creationJob creation

• InvestmentInvestment

• TransformationTransformation

• SustainabilitySustainability

• Build viable small businessesBuild viable small businesses

• Reserve all inshore rights <40m for micro-Reserve all inshore rights <40m for micro-

businessesbusinesses

Process

• Policy Development process (2004-5)Policy Development process (2004-5)

• Lessons learnt from MTRA – policy adjustmentsLessons learnt from MTRA – policy adjustments

• Consultation ProcessConsultation Process

– Draft policies and application feesDraft policies and application fees

– Public consultative meetingsPublic consultative meetings

– Comment periodComment period

– Final policies and application forms and feesFinal policies and application forms and fees

– Cabinet approval (May 2005)Cabinet approval (May 2005)

Process (cont)

• Distributing and ReceiptingDistributing and Receipting Registration to obtain application forms and policies (distribution)Registration to obtain application forms and policies (distribution)

Application periodApplication period

Receipting of Application formsReceipting of Application forms

Staggered (Cluster A, B. C & E; linefish)Staggered (Cluster A, B. C & E; linefish)

• Allocations CriteriaAllocations Criteria Performance (50%) – Investment and jobs (MLRA 2dPerformance (50%) – Investment and jobs (MLRA 2d))

Transformation (50%) - BBBEE Framework-core Transformation (50%) - BBBEE Framework-core

components (MLRA 2j)components (MLRA 2j)

Process (cont)

• Decision-makingDecision-making Receipting and verification of application forms (Consultancy: Deloitte)Receipting and verification of application forms (Consultancy: Deloitte)

Data capturing and creation of database of applications (consultancy)Data capturing and creation of database of applications (consultancy)

Analysis of database (Delegated Authority)Analysis of database (Delegated Authority)

Development of Criteria and scoring (Delegated Authority) Consultancy 2 Development of Criteria and scoring (Delegated Authority) Consultancy 2

– Resolve; Consultancy 3 – F&A– Resolve; Consultancy 3 – F&A

Establishment of Advisory Committee by DA and briefing criteriaEstablishment of Advisory Committee by DA and briefing criteria

Assessment of applications by DA & Advisory Committee (DA; Assessment of applications by DA & Advisory Committee (DA;

Committee 2 & 3 legal)Committee 2 & 3 legal)

Production of Assessment and Scoresheets (Consultancy 2)Production of Assessment and Scoresheets (Consultancy 2)

Process (cont)

• Decision-making (cont)Decision-making (cont)

Ranking of applications (DA/AdCom)Ranking of applications (DA/AdCom)

Consultation of Quantum mechanisms (DA)Consultation of Quantum mechanisms (DA)

Final decisionsFinal decisions

Publication of decisions and release of notification lettersPublication of decisions and release of notification letters

Development of GPR (DA; Consultancy 2 & 3)Development of GPR (DA; Consultancy 2 & 3)

Process (cont)

AppealsAppeals

• Access to Information requests from applicantsAccess to Information requests from applicants

• Appeal periodAppeal period

• Assessment of Appeals (DA; Appeals Committee) & scoringAssessment of Appeals (DA; Appeals Committee) & scoring

• Recommendations to Minister (from Da) (R5(3) Reports)Recommendations to Minister (from Da) (R5(3) Reports)

• Appeal Decisions by MinisterAppeal Decisions by Minister

• Publication of decisions and release of notification lettersPublication of decisions and release of notification letters

• Development of GPR (Minister; DA; Consultancy 2)Development of GPR (Minister; DA; Consultancy 2)

Challenges

• Resource constraints – Hake, pilchards, WCRL Resource constraints – Hake, pilchards, WCRL

• Large no. of applications – 8000Large no. of applications – 8000

- WCRL = 4000 - WCRL = 4000

• Business vs. social considerations in WCRLBusiness vs. social considerations in WCRL

- 200kg not viable – community support – 750-1t- 200kg not viable – community support – 750-1t

- 200kg became paper quota – 750kg – 4 to 5 employees- 200kg became paper quota – 750kg – 4 to 5 employees

- 2001 had 900 small scale – maximum 2005 = 600- 2001 had 900 small scale – maximum 2005 = 600

- 600 rights – 4000 applicants (+3000 appellants)- 600 rights – 4000 applicants (+3000 appellants)

Preliminary resultsSectorSector Black controlled TAC Black controlled TAC Black shareholder Black shareholder

TACTAC

20012001 20052005 20012001 20052005

HakeHake 14%14% 27%*27%* 38%38% 43% 43% (Average (Average = 35%)= 35%)

HakeLong HakeLong LineLine

-- 9191 -- 91% 91% (Average (Average = 91%)= 91%)

Trad. Line Trad. Line fishfish

4444 66%66% 66%66% 68% 68% (Average (Average = 67%)= 67%)

WCRLWCRL 51%51% 62%62% 58%58% 64% 64% (Average (Average = 63%)= 63%)

SCRLSCRL -- 71%71% -- 45% 45% (Average (Average = 58%)= 58%)

Where are we now?

• Concluded the appeals process Concluded the appeals process

• Initiated criteria development for Performance ReviewInitiated criteria development for Performance Review

• Accelerate development of draft subsistence fisheries policyAccelerate development of draft subsistence fisheries policy

Currently conducting public consultation meetingsCurrently conducting public consultation meetings

• Accelerated development of aquaculture policyAccelerated development of aquaculture policy

Currently conducting public consultation meetingsCurrently conducting public consultation meetings

Initiated process of determining economic opportunities in fishing Initiated process of determining economic opportunities in fishing

harboursharbours

Where to from here?

• Conduct analysis of Fishing Rights Allocation process Conduct analysis of Fishing Rights Allocation process

• Undertake a socio-economic studyUndertake a socio-economic study

• Accelerate development of draft subsistence fisheries policyAccelerate development of draft subsistence fisheries policy

• Promote and explore expansion of Non-consumptive resource usePromote and explore expansion of Non-consumptive resource use

• Boat-based Whale WatchingBoat-based Whale Watching

• White Shark Cage DivingWhite Shark Cage Diving

• Facilitate inter-governmental interventionsFacilitate inter-governmental interventions

THANK YOU