Report of the Portfolio Committee on Agriculture,
Forestry and Fisheries on Oversight Visit to West Coast, dated 18 January 2011
The Portfolio
Committee on Agriculture, Forestry and Fisheries, having undertaken an
oversight visit to
1. Introduction
The reconfiguration of government departments in 2009
brought together all the functions of food security under the department of
Agriculture, Forestry and Fisheries. The fisheries sector is one of the key
pillars which underpin the country’s food security strategy. It also offers
opportunities for the recognition of a developmental state, which has to
address the unequal distribution of resources.
The committee understands the importance of the
fisheries sector to the economy of the country, and therefore undertook an
oversight visit to
The delegation comprised the following members and
staff:
Mr ML Johnson (ANC)
Chairperson of the Portfolio Committee on Agriculture, Forestry and Fisheries,
Ms MN Phaliso (ANC), Ms RE Nyalungu
(ANC), Ms ME Pilusa-Mosoane (ANC), Ms L Moss (ANC)*1, Mr ND du Toit (DA), Mr LB Gaehler (UDM), Mr A Syme: Committee Secretary, Ms N Mafani: Executive
Secretary to the Committee Chairperson, Ms N Mgxashe:
Committee Researcher, Ms S Prinsloo: Research Intern, Ms B Shandu: Research Intern.
2. Terms of reference
The main objective was to engage with stakeholders in
the small scale and commercial sectors to obtain a better understanding of the
challenges confronting the fisheries sector and to assess the extent to which
policy processes, dwindling resources and the economic reality of reinvestment
have impacted on transformation in the sector.
3. Findings
3.1 Oceana Group Ltd,
The Oceana Group, which is
listed on the Johannesburg Stock Exchange (JSE), is mostly involved in pelagic
fishery (e.g. pilchards, anchovies, etc.). It comprises Tiger Brands Limited, Khula Trust and Brimstone Investment Corporation Limited,
which collectively owns a 59,5% share in the company with the remaining 40,5%
being owned by other shareholders.
In terms of its transformation credentials, the
company concluded its first empowerment transaction in 1994 and has achieved a
Level 4 broad-based Black Economic Empowerment (B-B BEE) status in 2009. The
company aims to achieve a level 3 status by 2011.
The company spends approximately 57% (approximately
R573 million) of its total procurement on BEE suppliers. A key challenge is
that some of the commodities cannot be procured locally, particularly the
company’s main procurement product, that is, cans. The company has spent R3.2
million on skills development for black employees. In response to a question on
the focus areas for training, the company indicated that training focuses on
all levels, particularly on leadership and management programmes. Four black
Africans are part of the company’s management division. For Corporate Social
Investment (CSI), the company spent R3 million on education and health
projects. The company also indicated that the Department of Labour had
expressed satisfaction with company initiatives on skills development during
its review of the company’s skills development plan.
A critical challenge identified by the company is that
it is almost impossible to re-invest capital. This is aggravated by the fact
that the factory is largely under-utilised due to the lower quantities caught
as a result of lower quotas which makes it extremely difficult for the company
to retain employees. Employee share trust scheme - The Ocean Group has made a loan to Khula Trust
to buy company shares on behalf of its (Oceana Group)
employees. The loan is to be repaid in full by 2017 through dividends paid out
by the company. This therefore means that the Trust does not ensure any benefit
to workers until 2017 when the loan amount is paid in full, after which the
employees will get their share certificates. In addressing concerns around
whether employees are fully aware of the implications, the company explained
that it has released DVDs explaining how the Trust works. Occupational Health
and Safety (OHS) - In response to the concerns raised by the committee over the
health and safety of employees in the canning factory and on the boats, the
company noted that it has two full-time Health and Safety Practitioners. In
addition, each department also has their own health and safety structure and
this arrangement includes the company’s fleet of boats.
3.2 Engagement with community (Laingville)
The chairperson indicated that the committee regards
food security as critically important. The reconfiguration of departments
brings together all functions relating to food security under the Department of
Agriculture, Forestry and Fisheries. The intention is to make coastal communities
self-sufficient and self-reliant. The Mayor of the
Key concerns raised by the community
The concerns raised by the community incorporated the
following:
·
The extent to which
the reconfiguration of the fisheries sector would assist ordinary people.
·
The alternatives
offered by government to ensure that fishing communities also have safety nets,
when fishing stocks are low.
·
How will state
institutions assist fishing communities with sourcing loans from commercial
banks, as this sector is regarded as high risk?
·
The social
responsibility component by commercial fishing companies is always emphasised
when they apply for fishing permits. Once permits are issued however, these
plans are shelved. Legislation must be enforced to ensure that companies who
receive fishing permits implement their undertakings to create jobs.
·
Whilst seasonal
jobs are created, many working in the sector do not have security of employment
because employment levels are dependent on the size of the quotas allocated to
companies. As a consequence, poverty and hunger among families are common at
different periods of the year.
3.3 Sea Harvest,
Sea Harvest is a deep sea fishing company and is one
of two big South African hake fishing companies who have the capacity to
develop value added products for the international market. The company
considers it a national priority to ensure that value addition in the fishing
industry stays in
The company has begun empowerment initiatives many
years before it became an official requirement and has received a level 3
rating for black empowerment from the economic empowerment rating agency, Empowerdex.
A total of 1 539 employees, representing mainly
permanent employees, own shares in the company. The implication is that a
significant proportion of the company’s dividend payments go to previously
disadvantaged South Africans.
The company also experiences similar challenges around
capital investment. It cannot replace its ageing fleet of ships and equipment
because the income generated from reduced quotas will not justify the cost of
replacement.
Skills development for employees
The company has a well established training programme
for all its staff members. The company has 95% black employees and all of them
are South African. It also focuses on
promoting gender representation in an exclusively male domain through its
Women-at-Sea Cadet programme. To date, the programme has trained more than 120
female employees and is currently focusing on engineering qualifications. A key
challenge is the high drop-out rate of the cadet training programme. Other
training programmes are provided by local service providers based in the
District. It has seven black Directors, of which two are women.
Affirmative procurement
A wide range of goods and services are provided by
about 197 local suppliers including engineering, painting, transport, catering,
crane hire, security, laundry, health services, plumbing and welding. Many of
these services are provided by former employees who are supported by the
company through tenders, loans or training linked to the West Coast Business
Development Centre.
A number of local suppliers earn 60% or more of their
annual turnover from businesses with the company. Indirect employment is
provided by the company’s sale of ‘by-catch’ that is sold to local traders who
either sell it or add value by smoking, drying, curing, etc.
Social responsibility
The company’s social responsibility activities are
managed by the Sea Harvest Foundation through an annual grant of R500 000. The
Foundation, which was established in 1993, is managed by a Trust which
incorporates prominent members of the community. Key areas of focus include a
bursary programme, a school improvement programme, HIV and Aids awareness and
support to small, medium and micro enterprises (SMMEs).
4. Conclusion and resolutions
The lack of benefits to fishermen who can no longer
work in the sector is a serious problem that needs to be looked at.
At the same time the committee is also mindful of the
challenges experienced by bigger companies, particularly the impact which
reduced quotas will have on their ability to retain high levels of employment.
It is important therefore that all opportunities along
the entire value chain in the fishing industry are optimally exploited.
The committee will have to interact with the whole
industry to look at options to deal with the problem of retirement without
benefits. One option is to strengthen the economy of the country to ensure that
big companies look after their employees in the long term. In view of the fact
that a company such as Oceana must import cans from
elsewhere, the community should be looking at this as a business opportunity to
reduce their reliance on dwindling fishing stock. It was suggested that the
community should make use of the surrounding colleges for training,
particularly youth, in scarce and required skills in the fishing industry. The
committee also noted that the nature of the challenges were more complex and
would require a longer period of engagement with the community.
The committee therefore, requested the community to
utilise community leaders and the Office of the Mayor to draw up a list of
issues and forward these to the committee for engagement with the Department of
Agriculture, Forestry and Fisheries.
Report to be considered.
1 Co-opted member