Fish quota auction; what is the best alternative solution?

THE Ministry of Fisheries and Marine Resources recently decided to publicly auction its governmental objective quota to the highest bidder/s. This decision sparked intense public debate in most of the local newspaper media for or against the auction. The complaints were among others that the current fishing quota system benefits only a few well connected individuals and/or it is the breeding ground for corruption and it deprives government from earning significantly more. It was suggested that the annual quota fish of all species (the total allowable catch, TAC) including all governmental objective quota, should be sold to the highest bidder/s. This writing contributes the background perspectives on the original purpose and role of the quota fish in the establishment and developmental of the current land-based value-addition factories, jobs and infrastructure we see on shore today.

Before independence many of the fishing vessels were foreign factory vessels that did not land their catches on shore for processing. The little employment from pilchard and crayfish/lobsters in Walvis Bay and Luderitz was seasonal and counted in hundreds. The apartheid policy did not allow black people to operate and own fish land-based facilities. The fish stock, in particular hake, was nearly depleted.

Historical Perspectives and Purpose of the Fishing Quota System

After independence the Sea Fisheries Act number 29 of 1992, was enacted. This Act and the related Ministerial policy regulations operated on the basis of the quota system. This system brought about three fundamental changes to the fishing industry at that time: the harvesting and management of all fish stock along the Namibian coast on sustainable basis; the use of fish resources to create land-based factories and jobs; and to economically empower the previously disadvantaged Namibians (mainly black Namibians) to be able to get a head-start into the industry. The World Food Agricultural Organization, FAO assisted the ministry to set up the current quota based fisheries policies and management system. The Namibia’s fish stock management was modelled on the Norwegian fisheries system as the world’s best practice in this field. Every year Namibian fisheries scientists assess fish stock and recommend the total tonnage amount, the TAC, that the industry can sustainably catch for that particular year. Each company who was granted the fishing rights is given a license each year to catch, from the TAC, a certain amount of tonnage of a particular fish species. The annual amount of tonnage that the Ministry gives to each right holder company is called a quota.

The second policy changes were made to establish fish processing factories and related support services on shore, at Luderitz and Walvis Bay. The factories on land generate direct employment-creating opportunities, such as logistics, licensing, inventories, maintenance and repairs, marketing, etc. The fish support services include among others: procurement, technology development, HR services, finance/accounting, management services, quality assurance and municipal infrastructure development.

Holistically, the primary fish processing activities and support services activities are the ones that keep the economies of communities and towns like Walvis Bay and Luderitz alive.  On the other hand, it also means that, the more the fish value chain is enhanced locally, the more the economic activities will grow and the more job opportunities will be created locally.

The third policy change introduced was to facilitate the black people to enter the fishing industry. This is called the Namibianisation of the fishing industry. The other leg of the Namibianisation policy was to put the control and ownership of the means of fisheries production in the hands of Namibians.

Impact of the Fishing Quota System Policy

The impact of the quota system was immediate and significant. In 1990 the total allowable catch (TAC) was estimated at 260 000 metric tons (MT). Two years later the TAC more than doubled to 630 000 MT. The employment figures in the industry also doubled from 5,000 in 1990 to 13,000 in 1995. By 2015 through to 2019 the fish export revenues earned grew from 7,9billion N$ and 10,2bnN$ respectively. During the same period the number of people employed grew from 15,000 in 2015 to 17,000 in 2019. By 1989, immediately before independence, no more that 10% of all vessels operating in Walvis Bay were registered locally. By 1992 all vessels operating in Namibian waters were paying fees to the Namibian government and 60% were locally owned. The hake fish stock, which brings in 70% of the country’s foreign exchange revenue earnings, recovered over 100% between 1989 and 1992 because of the quota system policy. Thanks to the quota system policy, the economic activities (GDP) and the population of Walvis Bay tripled to 63,000 people between 1990 and 2015 to become the country’s second biggest town after Windhoek.

Implications of Wholesale Quota-Auction

If the current quota system is summarily abolished and all fish earmarked for commercial harvesting were to be sold to the highest bidder, as it is being suggested, “this will mean a big catastrophe for the economy and employment creation”. So said the Deputy Minister of Fisheries in recent interviews on nbc TV. The quota policy insures that most fish is landed and processed onshore. The current direct employment and supporting services to the fishing activities will fall away if no fish will be landed in line with this policy. Walvis Bay and Luderitz will cease to exist as fishing hubs.

I also observed and noted with equal concern that there is corruption taking place within the administration of the current system of fish quota allocation. But when we fight the scourge of corruption, we should not ‘through away the baby with the dirty bath water’. The problem is not the quota system but the low moral threshold for the implementation and enforcements of social justice administrative procedures, among, many of us Namibians, tasked with the responsibilities to manage and distribute the public resources. We can change the current quota system, but I am afraid that the corrupt practices will not go away if the threshold and will to do what is fair remains low. Namibia recently changed and re-branded the Tender Board to a new Procurement System, did it stop corruption? You know better!

Further there seemed to be confusion between the total allowable catch (TAC) and the governmental objective quota (GOQ). Two years ago the Fisheries Act was amended to enable the minister of fisheries to allocate a portion of the TAC in direct support of specified government needs. The purpose of this quota was a noble one, to create a fallback funding mechanism to pay for unexpected government expenses. Since this quota is disposed off without value addition, its market value is normally equal to the royalty usage value, called the quota usage fees. GOQ tonnage is kept small to allow more fish for value addition and more employment creation on land. When the GOQ is sold government was not supposed to get less than the current market rate at that time. If it happens, there should be a strong suspicion that the people administering the government quota sale process have corruptly managed the government quota for their own interests.

Going Forward

Namibia has derived immense direct economic and employment creation benefits from the implementation of the quota system policy. This policy has also worked well in countries like Norway. Corruption is a scourge and we must fight it. However, there is no point to regulate and legislate it if managers and administrators tasked with the implementations of public resources lack the moral high ground and necessary will-power to do what is fair and just. The quota system enabled the Namibian fish stock to recover sufficiently after independence. Through the current quota system, a sustainable fishery management practice was established which made Namibia an envy of many coastal states. Through this system a number of Namibians were empowered. Do not lay blame on empowerment for corruption in the fishing sector. Blame and act decisively against those misusing their trust in the administration of public resources.

Thirty years after independence, there are very few black Namibians with middle and higher professional skill levels in the industry who can run and manage the fishing factories across the fishing value chain of trawling, processing and marketing of fish on shore. This is a fundamental problem to be addressed urgently, if the policy of promoting the participation of Black Namibians in higher management levels of the fishing industry were to be realized. Firm quantifiable and time bound capacity building and technology transfer schemes need to be instituted and linked to the allocation of the quota. The current scorecard system does not go far enough. There are some few previously advantaged facility owners who are willing to participate in such capacity building schemes, but they require support incentives. Namibianising the industry is not only limited to quota ownership. It also means the staffing of the quota-owning companies with fisheries management expertise in order for these companies to understand their roles and perform as per expectations of the ministry. Currently many of these companies see their roles no more than quota royalty agents. Who can blame?

Hina MuAshekele is a retired research professor in Engineering Technology and Innovation Management, focusing on the development of alternative appropriate production techniques and systems with special applications across sectors of civil engineering, fisheries, renewable energy and IKS technologies. He served on the Cabinet Technical Committee on Fisheries Innovation and Value Addition: 2008-2012.

He can be reached at: muashekele@gmail.com