BUSINESSMAN John Reed, who represents a group of businesses that fish horse mackerel, has accused fishing company Oceana of sabotaging new role-players in South Africa's fishing industry, through their subsidiary, for control of the horse mackerel sector, which has allegedly resulted in more than R1 million worth of losses for his company.
About 18 businesses had in 2020 gathered to discuss challenges in the sector and had taken Oceana and its subsidiary to court along with the Department of Forestry, Fisheries, and Environment (DFFE) over the unfair distribution of horse mackerel rights.
While Oceana's fishing and production activities are conducted through four operating divisions, including the Blue Continent Products (BCP), DFFE's communications director Zolile Nqayi confirmed: “Oceana is not a current rights holder in the horse mackerel fishery, it does, however, benefit indirectly from the sector, through its subsidiary, BCP.”
Reed said while most companies had backed out of the court matter due to it being costly, his company Korana Fishing remained to fight the matter in court.
Reed, who received horse mackerel rights in 2019, said he wants to fight for the rights of new role-players, and for the value and distribution of horse mackerel to the local market, but upon speaking up he was labelled as a “disrupter” by Oceana. Reed said 13 out of 14 companies in the sector were dominated by one midwater trawl vessel Desert Diamond owned by Oceana.
Oceana's website also confirms that they conduct their horse mackerel fishing business through two strategically located subsidiaries, one of which include BCP which harvests its fishing rights with the Desert Diamond.
“The vessel's shareholding has a 10 percent Sea Harvest and 90 percent Oceana shareholder, the only two role-players in the horse mackerel industry, with only one association controlling the sector, run by members of the two companies,” said Reed.
Reed received his horse mackerel rights in 2019 and had immediately activated it, signing up with the Oceana.
“I lost a lot of money in doing tasks which Oceana was supposed to do to activate my services … Being a new company and an indigenous person coming into the industry, I was severely sabotaged and attorneys have cost hundreds and thousands of rand in this matter.”
He said everything transpired during a time of appeals by the previous minister of DFFE, where big companies allegedly lodged a court case against new players in the industry, that they shouldn't have rights, as they were not happy to share the resources.
Reed said while Oceana was solely designing themselves to be the only distributor and marketer of this sector in South Africa, Oceana also previously had a policy on the Desert Diamond to catch their fish first and whoever still needed to catch their fish would do so thereafter.
“This was wrong and then they decided to deploy a new system afterwards of catching one month for themselves first and the next month for other right holders. Due to that type of operation, it cost my company more than R1 million.”
Responding on behalf of Oceana, Dario Milo, a partner at Webber Wentzel, said his client's view at the outset was that the allegations were baseless, unfounded, defamatory and false.
“Oceana is scrupulously ethical in its participation in applications for any fishing rights, which as you know is done in accordance with applicable laws, policies, and processes published through national government and DFFE.
“On November 8, 2019, BCP, Sea Harvest, and Irvin & Johnson Limited launched a review application in the Western Cape High Court.
“The court's findings on the allocation of horse mackerel fishing rights are a matter of public record.
“The party mentioned in your enquiry was a respondent in this court process.
“Given that our client had an agreement with the party you mention, subject to confidentiality, neither party is at liberty to disclose any terms relating to this agreement.
“Our client, as a responsible corporate citizen, will always aim to enhance and develop newcomers in the industry.
“Newcomers are welcome across the fishing industry and our client has always worked with them to responsibly harvest, process, market, and distribute fish in compliance with applicable laws. All our client's rights are in any event reserved,” said Milo.
On the anti-competition practices, Nqayi said the department had no knowledge of Reed's allegations, and while they were aware that commercial contracts were negotiated between the parties without knowledge or involvement from the DFFE, should Oceana or any of its subsidiaries be involved in anti-competitive behaviour this should be reported to the relevant authorities.
“The Competition Commission … is the competent authority with a mandate to investigate, control and evaluate restrictive business practices, abuse of dominant positions and anti-competition matters and accordingly any restrictive practice ought to be referred to such a body,” said Nqayi.
Nqayi confirmed that the Western Cape High Court had granted an order in December last year in the matter of BCP and others v Minister of Environment, Forestry and Fisheries and others, for the setting aside and reconsideration of the decision of the former minister, and in so far as latter allowed 30 new entrants into the sector.
Oceana's 2019 sustainability report stated that the vessel lands on average about 70 percent of the horse mackerel Precautionary Upper Catch Limit (PUCL), fishing in partnership with other rights holders, catching 50 000 a year while the small pelagic fishery catches 10 000. Their report for 2020 showed a 5 percent increase in horse mackerel PUCL.
Sea Harvest had not responded by the time of publication.
Investigations Unit – [email protected]
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