The US Court of Appeals this week ordered Arnold Bengis, the former managing director of the defunct Hout Bay Fishing Industries, his son David and Jeffrey Noll to pay restitution to the South African government for the overharvesting of south and west coast rock lobster. The fine could top $54 million (R359m).
Marius Diemont, a partner at Webber Wentzel specialising in environmental and fisheries law and who advised the US government on the case, said this was a ground-breaking judgment as it was the first time a court had determined that a person could be liable for damages for the overharvesting of fish stocks. It also set an important international precedent in punishing the overharvesting of natural resources.
This week’s judgment, which overturns the decision of the district court for the southern district of New York denying restitution, means the trio will have to pay between $39.7m and $54.9m to the South African government, depending on which calculation is used.
Restitution will be determined by the district court. Diemont said that based on comments made by the Court of Appeals regarding the methodology for determining the restitution amount, it was possible that restitution of $54.9m could be granted. This is the approximate market value of the overharvested lobster, or kreef.
The Department of Agriculture, Forestry and Fisheries could not be reached for comment this week.
The case, which first hit the headlines in 2001 when South African authorities seized a container carrying rock lobster destined for the US, has already resulted in the company being fined R12m and the seizure of two fishing boats following an investigation by the Scorpions and Marine and Coastal Management. Fourteen fisheries inspectors, who had accepted bribes, were also arrested in connection with this case.
South Africa declined to prosecute Bengis individually after realising his financial assets outside South Africa were beyond their reach.
Previous reports said Bengis and his co-conspirators used various US banks to “funnel millions of dollars of criminal proceeds to themselves and their relatives”, and to bank accounts in the Jersey Islands, Gibraltar and Switzerland.
But the US government did take action, convicting the three under the Lacey Act, a law which allows for the prosecution of US citizens who commit environmental offences outside the US. Bengis and his son David have South African and US citizenship and Noll is American.
In 2004, the three pleaded guilty to various offences under the Lacey Act and have by now served prison sentences of between one and four years and paid fines of about $13.3m for their role in the smuggling from 1987 to 2001.
It was previously reported that the New York office, run by Arnold Bengis and Noll, “served as the brain centre” for the criminal organisation. The financial aspects of the scheme were run from there.
The three acknowledged in their plea agreements that restitution to the South African government might be ordered, but this was deferred to a later date. That time has now come. - Samantha Enslin-Payne