South Africa is digging in to defend fuel levy rebates for its fishing industry, which is a sticking point in the ratification of the World Trade Organisation (WTO) Phase One agreement, Parliament heard yesterday.
Briefing Parliament’s Portfolio Committee on Trade, Industry and Competition yesterday, Department of Trade Industry and Competition Deputy Director General for Trade and Ambassador to the WTO, Xolelwa Mlumbi-Peters, said South Africa allowed those fishing companies that did not use the road infrastructure to claim rebates from the fuel levy. It had confirmed through legal opinion that the support should not be construed as a subsidy.
The WTO deal aims to eliminate the awarding of subsidies to fishing industries because it encourages overfishing and encroachment on territorial and unregulated waters.
The WTO Agreement on Fisheries Subsidies was adopted at the 12th Ministerial Conference on June 17, 2022, marking a major step for ocean sustainability by prohibiting harmful fisheries subsidies.
So far the agreement has been adopted by only 52 of the 110 countries needed to ratify it, as developed countries baulk against requirements which may result in, amongst others, the European Union and China forfeiting fishing rights in lucrative Caribbean countries.
According to the WTO, for the agreement to become operational, and thus deliver its sustainability results, two-thirds of WTO Members have to deposit their “instruments of acceptance” in the WTO. This means they have to complete their domestic acceptance procedures.
Data from the African Union Commission indicated that the continent loses $2.3 billion (R43.7bn) a year to Illegal Unreported and Unregulated (IUU) fishing.
Mlumbi-Peter yesterday pointed out that South Africa did not really have subsidies for the fishing industry as a subsidy included, not only direct contribution, but foregone revenue by the state.
"As we are negotiating Phase Two, we, as South Africa, are advancing that such subsidies must be carved out. It is not about subsidising the cost of fuel, but because industry is not making use of road. We are not the only country with this subsidy in inverted commas, India and EU have that kind of subsidy and there is debate on how to treat these rebates," Mlungu-Peter said.
Briefing Parliaments Portfolio Committee on Trade, Industry and Competition, Mlumbi-Peter said the country needed to adopt the agreement to preserve its international reputation, and maintain access to global markets.
The agreement prohibits support for illegal, unreported and unregulated fishing, bans support for fishing overfished stocks and subsidies for fishing on the unregulated high seas.
The agreement does not cover inland fishing, aquaculture and government to government payments - where a coastal state feels it does not have enough capacity to fish so grants permits to another country.
The only subsidies allowed are those to rebuild the stock- to allow members to take measures to rebuild to biologically acceptable levels.
"The biggest driver of distant water fishing are the subsidies. This agreement tries to close the tap of vessels going far and wide and accessing water, especially our waters. We need to be in on the international agreement to guard overfishing in our waters," Mlumbi-Peter said.
Responding to questions, she admitted that for South Africa, the agreement was not a silver bullet to curb illegal activity on its waters, but that the agreement tenements, along with the country's enforcement capabilities, could close the gap.
The Parliamentary session comes amid media reports this week that about 12 companies were taking the Minister of Forestry, Fisheries and the Environment, Barbara Creecy to court following the conclusion of the commercial fishing rights appeals process at the end of 2023.
They allege the decisions were unlawful, and that their applications were scored incorrectly.