FISHING INDUSTRY NEWS ARTICLE – ITAC MAY 2021


ITAC PROHIBITION ON THE PURCHASE AND IMPORT OF SECONDHAND/USED FISHING VESSELS INTO SOUTH AFRICA

Section 6 (1) (b) of the Act reads as follows:

 “(6) 1 the Minister, may by  notice in the gazette, prescribe that no goods of a specified class or kind, or no goods other than goods of a specified class or kind, may be:

Over the last few years, it has become apparent that the International Trade Administration Commission (ITAC) is refusing to allow the import of used fishing vessels into South Africa.

ITAC is the state agency appointed under the International Trade Administration Act of 2002 (the Act) to process and decide on applications for import permits which are required for the import of used/secondhand goods into South African.

… (b) imported into the Republic expect under the authority of and in accordance with the conditions stated in a permit issued by the commission;…”

Furthermore, sections 26 1 (1) (a) of the Act reads as follows:

            “26 (1) – A person may in the prescribed manner and form apply to the commission for…

(a)an import or export control permit, ….in terms of part B of this chapter and the regulations;.”

Then, Section 27 (1) (a) and (b) of the Act reads as follows:

“27 (1) (a) – The commission must, after evaluating an application made in terms of section 26 (1) (a) or (b):

            (I) Refuse the application;

            (II) Approve the application in whole or in part and with or without conditions.”

Furthermore, regulations published on 10 February 2012 in terms of section 6 of the Act provides for the requirement that second hand/ used goods require such an import permit and reads as follows:

“……..  (b) All secondhand or used goods, including waste and scrap of whatever nature, excluding goods referred to in scheduled 4, shall not    be imported into the Republic of South Africa except by virtue of an import permit issued in terms of section 6 of the said International Trade Administration Act, 2002, and in which such goods are specifically described;”

With such wide ranging and draconian powers regarding the import of used/secondhand goods, one would expect a detailed policy which had gone through a proper public consultation process. However, there is no such policy. When enquiring with ITAC with regard to applications, only after numerous requests is one presented with an internal guideline document which has been developed internally within ITAC and without public participation.

The internal document is headed “International Trade Administration Commission of South Africa Import Control. It is a 17-page document with part 1 having introductory comments and part 2 containing the import control policy. At part 2 section C the document sets out the types of goods which require an import permit. Section C 2 in turn deals with the specific sub-categories of used goods such as tyres, motor vehicles, engines, spares for trucks etc. There is nothing whatsoever dealing directly with used/secondhand fishing vessels.

The only part of this document that could be relevant to dealing with applications for import permits for used fishing vessels is the introductory comments at paragraph 2.1 and it is these general statements that are almost always quoted in decision letters received from ITAC when applications are submitted for import permits for used fishing vessels. The relevant paragraphs from the introduction reads as follows:

“The importation of used and secondhand goods, waste and scrap is controlled for environmental reasons, health reasons and safety and quality compliance reasons. Control is also maintained to support sustainable industrialization and international competitiveness”.

“And it is a general rule that the importation of used and secondhand goods is not allowed in the event or similar or substitute new goods being available from local manufacturers. These measures are necessary and are applied as most used goods are available from affluent societies at very low prices and the uncontrol importation of such goods could have a devasting effect on local manufacturing activities and job creation.”

Recent experience has shown that using these general principles and a very basic confirmation from a local shipyard that they are able to build steel fishing vessels (but still at international rates), ITAC are refusing applications from all sectors of the fishing industry for the importation of secondhand steel fishing vessels.

These decisions are being made by ITAC despite:

Substantive representations from the applicants, fishing sector associations and FISHSA, and in certain cases even support from the Department of Environment, Forestry and Fisheries;

  • The relevant fishing sectors not having the financial strength/economies of scale to afford such a high value brand new steel vessels;
  • Current vessels becoming older and from a safety and efficiency point of view requiring replacement;
  • Imported used vessels are often required to be refitted and refurbished by local ship repairers and suppliers with resulting job creation and turnover for local industries in South Africa.
  • The legislative imperative to empower the fishing industry by promoting investment in vessels by new entrants so as to compete with established industry players;
  • New build vessels from abroad do not require an import permit from ITAC, so if an applicant could afford a new vessel, they would most likely place an order with a more experienced ship builder abroad, who would most likely also complete the build in a shorter period of time.
  • Many glass fibre vessels are built locally for the fishing industry in any event.
  • It is not a common occurrence for the import of a secondhand steel vessel from abroad, and the granting of an import permit for a secondhand fishing vessel will unlikely cause a flood of new secondhand fishing vessels being brought into South Africa. Previously, import permits have readily been granted by ITAC for the import of secondhand fishing vessels.

In summary, it is submitted that the refusal to grant such an import permit will only lead to local fishing companies being prejudiced in terms of safety, efficiency, investment, empowerment and international competitiveness. On the other hand, there will be no benefit to local shipyards and ship repairers as fishing companies (if they could afford to) would likely only order a new steel vessel from foreign ship yards at a similar cost.) In fact, local shipyards will lose out because there will be no refurbishment or repairing of secondhand vessels which are imported into the country.

Going forward, it is submitted that the answer lies in urgent high level consultations between the Minister of Environment, Forestry and Fisheries, and the Minister of Trade and Industry together with industry stakeholders. This should be sooner rather than later to prevent an aging steel fleet from being irreplaceable due to this current change in policy by ITAC (without any proper consultation with the industry at large).