FISHING INDUSTRY LEGAL REVIEW – JANUARY 2020


The beginning of this 2020 “fishing season” is an opportune time to gaze into the crystal ball to see what potential legal issues may impact on the industry in the near to medium future.

 

HORSE MACKEREL AND OTHER REVIEWS

 

On the immediate horizon, is the Horse mackerel review by Category A rights holders which I have reported on previously. If the opposition to such application continues, it will be heard by the court during the course of this year. Amongst the key policy issues at stake, is whether the Minister can continue to rely on the “rectifying of historical imbalances” objective set out in Section 2(j) of the Marine Living Resources Act (MLRA) read together with Section 18(5) of the MLRA in order to admit new entrants on a substantial scale.

 

There are also a number of other “peripheral” reviews in the Hake Inshore Trawl,  Horse Mackerel and Large Pelagic sectors that I am aware of. These relate mainly to point scoring,/quantum issues or whether or not an applicant should have been granted a fishing right. Although limited to particular applicants’ issues, they nevertheless need to be dealt with by the Minister in order that these sectors which were part of FRAP 2015/2016 can be finally settled so that the rights holders can proceed with their operations without the threat of further challenges.

 

THE DELAY OF FRAP 2020

 

The Minister has already announced that FRAP 2020 will be delayed and most likely will in fact be FRAP 2021. This delay is due to a previous backlog and due to the fact that the Minister needs to first consult on and finalise a general and sector specific policies as well as application forms as the basis of FRAP 2020/21. The question now is, how will the current fishing rights be extended.

Will it be an extension of the current rights so that the existing rights holders will still be rights holders per say, or will it be exemptions which are granted to existing rights holders in terms of section 81 of the MLRA. This has relevance with regard to the transfer of rights in terms of section 21.

If the rights expire and merely exemptions are granted, then during the exemption period, there are no rights which can be transferred. This in turn means that parties could restructure their affairs with changes of shareholding without requiring approval in terms of Section 21 of the MLRA.

However, if rights are extended and the rights holders remain as rights holders, then if parties wish to change shareholding or transfer rights, this can be done but only with the approval of the department – in this regard we anticipate that there will be a moratorium in any event for the transfer of rights which will apply from the latter half of this year.

 

CONSULTATIVE ADVISORY FORUM (CAF)

 

I have commented in a number of previous articles about the fact that Ministers have over the last approximately 15 years failed to comply with the MLRA in that a CAF has not been established in terms of Section 5 of the MLRA.

 

After taking office last year, the new Minister has invited nominations to the CAF. This process has not been finalised and the CAF has not as yet been announced. The first point regarding the CAF is that the Minister is obliged to appoint a CAF that is “broadly representative and multi-disciplinary, with members qualified to make a substantial contribution towards the proper functioning of the forum”. As such – in line with legislation – it is hoped that a representative and well qualified CAF is appointed to assist and advise the Minister.

 

Secondly, once formed, there are statutory obligations on the Minister to consult the CAF on various issues and in particular issues in respect of the objectives and principals referred to Section 2 of the MLRA. The CAF in turn has an obligation to consult / consider information submitted to it by industrial bodies.

 

In summary, the establishment of the CAF will add an entire new layer to the consultation process which if utilised correctly could be a positive development by the Minister, but if not properly utilised by the Minister, could in fact be a challengeable flaw in any decisions taken by the Minster or the Department.

 

POLICIES

 

As mentioned previously, prior to FRAP 2020/2021 sector policies and most likely a new general policy will have to be formulated after a proper consultation process. The nature of the consultation process will of course be paramount and also whether or not the Minister conducts socio-economic studies for each sector prior to developing such policies. It is hoped that the “cut and paste” policies of the past Fraps are not simply repeated, and the Minister uses this opportunity to put in place up-to-date and informed policies which balance out the objectives of the MLRA whilst taking into account the current state of the various sectors.

In turn, once the policies have been finalised, application forms which properly reflect the policy requirements need to be formulated (again after consultation).

 

SMALL SCALE SECTOR

 

While all the above is happening, there is also the small scale sector which the department is in the throws of commencing. It may be called the small scale sector but due to the large number of registered small scale fishers, it is anticipated that the department will require large scale administration to properly run the sector and this will be a challenge especially in light of the low value fishing rights to which the sector is restricted .

 

An important aspect which may have legal ramifications is how the small scale will overlap (if at all) with the commercial sector(s).

 

ENVIRONMENTAL AND BIODIVERSITY ISSUES

 

We have seen recently the creation of various MPA’s along our coast and it remains to be seen whether there will be any challenges to the restrictions placed on the fishing industry by such MPA’s.

 

Environmental authorisations and exploratory rights granted in the oil and gas sector seismic surveys may also come under the legal spot light as there is a growing body arguing that such surveys are having a negative impact on fish stocks and their availability.

 

There is also the real possibility that biodiversity management plans may provide for restricted fishing in particular areas in order to preserve other marine species. The legal veracity of such restrictions may also be tested.

 

SARS DIESEL REFUNDS

 

In the pipeline is a new diesel refund system which is meant to streamline the process and address certain anomalies in the current system. Whether SARS manage to get this off the ground during 2020 remains to be seen.

 

However it would appear that the number of audits and queries arising therefrom has declined – possibly due to SARS now having a better understanding of the industry and on the other hand,  industry providing custom made logbooks which correlate diesel purchases and usage in a more user friendly format.

 

CONCLUSION

 

Hopefully by this time next year, there will be answers to many of the legal questions raised in this summary. We will be keeping a watchful eye on developments and I am sure further discussions will take place in the not too distant future.