Oceana Group Limited (Oceana), the only JSE listed black owned fishing company, has learnt with great disappointment about the Supreme Court of Appeal’s (SCA) decision to dismiss its challenge against the Policy for the Transfer of Commercial Fishing Rights (the transfer policy).
The Appeal Court hearing was held on the 1st March 2012 following a Western Cape High Court decision handed down on the 2nd June 2011. The respondents were the Ministers of Agriculture Forestry and Fisheries, Water and Environmental Affairs, Trade and Industry and the Director General: Marine and Coastal Management.
The transfer policy details the qualification criteria and guidelines in relation to the transfer of commercial fishing rights.
The primary challenge by Oceana was that the policy is inconsistent with the B-BBEE Act and Codes of Good Practice, and that the Minister of Agriculture Forestry and Fisheries (the Minster) and the Department are legally obliged to apply the Codes when determining qualification criteria for the transfer of commercial fishing rights. The policy requires anarrow assessment of transformation focused only on ownership and management control, which was challenged by Oceana.
Argument at the SCA hearing focused mainly on whether the Codes were a relevant Code within the meaning of Section 10 of the Act, and whether Oceana was a measurable entity under the Codes.
The SCA adopted a very narrow interpretation of the Codes and found that –
- Only certain specified entities and enterprises that undertake business with organs of state or public entities would be regarded as measurable entities to which the Codes apply. The nature of the business undertaken is taken to mean commercial interactions only;
- If the Codes had been intended to apply to the issuing of licences, concessions or other statutory authorizations such as the granting of fishing rights, the Court found that this would have been stated specifically and that
- No relevant Codes have been issued that apply to the granting of licences, concessions or other statutory authorizations.
Oceana believes that the B-BBEE Act and Codes were promulgated to provide certainty to the country and the economy regarding the measure to be applied to measure broad-based transformation. Oceana has implemented a broad-based approach to implementing transformation within the group and has done so since 2004. This approach has led to Oceana being rated independently as a black owned and controlled (55.9%) Level 2 B-BBEE contributor with a score of 93.96 out of 100 points, with a recognition rating of 125% for procurement in terms of the DTI B-BBEE Scorecard.
During 2011 Oceana was selected as a finalist in the 2011 Metropolitan Awards for outstanding achievement as a top empowered company in its sector and for outstanding contribution to the growth and sustainability of the South African economy. It was also ranked 17th on the Financial Mail’s list of Top JSE listed companies.
In conclusion, Oceana CEO, Francois Kuttel, says, “We acknowledge and respect the Court’s ruling. However, the ruling does impact on our ability to conduct and grow our business through acquisitions in the South African fishing sector. The implications of this judgment are similarly significant for all business sectors in which the state exercises control of commercial activity through the issuing of licences, rights, concessions and authorizations within the economy. The judgment allows each Minister and department within government to determine the appropriate measure of transformation, which may or may not be a broad-based approach.
Whilst we do not intend to challenge this matter in the Constitutional Court, we hope that the Department of Trade and Industry brings clarity to this debate through the planned amendments to the B-BBEE Act and the Codes as soon as possible.”
For more information, kindly contact OGL Communications Manager, Anthea Abraham: email@example.com.