FRAP 2015/2016 ~ START YOUR ENGINES


On 16 November 2015 the Minister of Agriculture, Forestry and Fisheries published the final Sector Specific Policies for the Allocation of Rights in the Abalone, Fish Processing Establishment, Hake Inshore-Trawl, Horse Mackerel, Kwazulu-Natal Sardine, Beach-Seine, Large Pelagic Longline, Net Fish, Patagonian Toothfish, Seaweed, West Coast Rock Lobster Nearshore and the West Coast Rock Lobster Offshore Fishery Sectors together with the generic Application Form and the schedule of fees payable in respect of applications.

 

With the publication of these sector policies it is apparent that the Minister and the Department of Agriculture, Forestry and Fisheries (“DAFF”) will be pushing through with their undertaking to run the Fishing Rights Allocation Process 2015/2016 (“FRAP 2015/2016”) as promised. It is quite apparent that the initial proposed timeline has not been achieved and that somewhere along the line they have lost approximately 30 days and as such the pressure will be on applicants to complete the application forms and submit them timeously and on DAFF and the Minister to get decisions out by the promised deadline of 29 February 2016.

 

Application forms were made available for collection from 23 November until 11 December 2015 and while the application forms make no mention of a hand in date a document published on the DAFF website dealing with “Frequently Asked Questions“ suggests that receipting of applications will take place from 11 January 2016 until 22 January 2016. No further details have been provided in this regard. Effectively this provides applicants a minimum period of 31 days to complete their application forms and submit them with a maximum period of 60 days if they made use of the full time allotted.

 

What is immediately apparent from the generic application form for commercial fishing rights appearing in the Minister’s Government Gazette of 16 November 2015 is that the application forms have changed substantially from the drafts that were circulated earlier in the year for comment. The final application forms require far more work and require far more detail to be inserted. A perusal of the application form also raises similar questions to those that arose in FRAP 2013 regarding the assessment of applicants, particularly with respect to the issue of employment. In the 2005 Rights Allocation Process applicants were permitted to represent themselves in economic units in order to take into account the fact that employment and investment did not necessarily appear in the applicant itself but in entities in which it had invested. The simplest scenario in this regard is where 2 Right Holder applicants hold quotas which are in themselves not viable enough to sustain investment in a vessel but come together and form a joint venture entity in which they both have shareholding to own that vessel. In 2005 the applicants would have been able to claim the employment created through the joint venture entity (rightly so in our opinion) as it was employment created directly by the applicants. In the FRAP 2013 Process, however, DAFF chose to ignore economic units and stated on record that applicants could only rely on employment created if the employees were in the name of the applicant. This means that jobs created in the joint venture company (in the scenario above) although created directly by 2 applicants would never be counted in the application process and could not be relied on upon by the applicants thereby prejudicing their applications and chance of being allocated a right. The big question is how will DAFF approach this in FRAP 2015/2016? A number of parties went on record in the FRAP 2013 process stating that this was an obvious incongruency in the process and resulted in some applicants being preferred over others in an inequitable manner. That being said if this was the high water mark of the problems with the FRAP 2013 process I think the fishing industry would have been able to accept it.

 

That being said FRAP 2015/2016 is a new Rights Allocation Process and after the controversy surrounding FRAP 2013 it is hoped that DAFF will approach FRAP 2015/2016 in a more logical and transparent manner. As it is, applicants will be hard pressed to complete their applications on time and the administrative requirements of having to have all documents certified as true copies as well as having the application form initialled by a Commissioner of Oaths on all pages will place additional time pressure on applicants.

 

Of course it is not only the FRAP 2015/2016 process and the completing of application forms that is likely to cause prospective applicants stress but the looming spectre of the implementation of the Small Scale Fisheries Sector is also likely to raise blood pressure levels in the commercial fisheries sectors. On Wednesday 25 November 2015 a meeting was held in Cape Town to discuss the proposed TAC/TAE apportionments between sectors relating to the Small Scale Fisheries Sector. At first glance it would appear that the traditional offshore commercial sectors will not be shedding effort or tonnage to the Small Scale Fishery and that the traditional inshore fisheries will be called upon to subsidise the introduction of the new sector. In particular Abalone appears destined to be exclusively a Small Scale Fisheries Sector. Why, one must ask, is there then a policy for the allocation of rights in the sector which advises applicants that they will be granted rights for a period of 15 years? In addition to the Abalone Sector it appears that the KZN Beach Seine Sector along with the Nett Fish and Seaweed Sectors will be split equally between the traditionally commercial rights holders and the Small Scale Sector. The Traditional Linefish Sector will see an increased portion of its effort allocated to the Small Scale Fishing Sector while the Commercial West Coast Rock Lobster Operators all shed an additional 27% of the TAC to the Small Scale Fisheries. White Mussels will also become the exclusive domain of the Small Scale Fisheries Sector and no commercial rights holders will be entitled to operate in the sector.

 

It is quite apparent that the 2016 year being the year in which rights will be allocated and the Small Scale Fisheries Sector will (possibly?) be enacted and allocated its first rights is going to be a big year for the South African Fishing Industry. It is clearly apparent that the introduction of the Small Scale Fishery Sector will weigh heavily on the decisions that the Minister takes in allocating rights as the traditional commercial rights pie gets smaller and smaller not only due to decreasing TAC’s but also due to the requirement to effectively implement DAFF’s vision of a productive Small Scale Fisheries Sector.

 

All prospective applicants are to approach the FRAP 2015/2016 process with prudent caution and to ensure that applicants are not excluded due to the failure to follow the very basic and simple rules. It is presumed that the Minister will look to exclude any non-compliant applicants as this will be the easiest way to minimize the impact on other rights holders and to try to ensure that allocations remain viable. Make sure that you follow all the instructions and all the rules in the completion of your application form. Make sure that if you have any questions that you submit them in writing to DAFF and that you get a response to be kept on record for later use if necessary. Make sure you have your application form and make sure your application form is submitted on time. Take note of the exclusionary criteria as well as the requirements for lodgement and what issues will make your application materially defective. All that being said I wish all applicants in the FRAP 2015/2016 Process the best of luck and (hopefully) a prosperous 2016.