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Fisheries 'forced marriages' fall apart

2021-09-02  Eveline de Klerk

Fisheries 'forced marriages' fall apart
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Eveline de Klerk

WALVIS BAY – Several so-called forced marriages between various joint ventures in the fishing industry are in trouble, as some players want to leave their partners, citing irreconcilable differences.

As a norm, successful right holders are grouped in small companies to form joint ventures that make it easier for them to team up with already established players in the fishing industry. This allows new entrants to also invest in the industry or diversify their businesses.

However, some of the holders are not keen on investing in the industry and rather opt to sell their quotas for quick cash, while the rest want to invest in the industry. This has led to ructions in the industry, as partners feel they are lumped with players with whom they do not share the same vision.

Fisheries minister Derek Klazen yesterday said that his office has received several requests of companies that want to dismantle these arranged marriages. Klazen, who is currently in Swakopmund on a three-day ministerial retreat to iron out challenges of the industry, said the un-coupling is happening in the horse mackerel sector.

“My office has been inundated with numerous disputes regarding companies’ shareholding and requests to uncouple companies from grouped right holding joint ventures, infamously called ‘arranged’ or ‘forced marriages’,” Klazen said.

According to Klazen, he is now tasked to make a thorough and honest analysis of the fishing industry to effect positive changes. Several players in the fishing industry yesterday also indicated they were never consulted before the joint ventures were formed.

“There was no benefit. In fact, the disadvantages were clear cut,” a JV shareholder said yesterday. According to him, it was wrong from the start to bundle them in groups; some of them were new entrants and had different visions. “We all applied for rights based on our own business models,” he said. He added the JV’s simply did not work out well, as some of the shareholders had long-term plans, while their partners might have short-term plans.  

“Some of us wanted to invest and diversify while others just wanted enjoy the profit they made,” he explained. As a result, he said, relationships soured. Simply put, it must be dissolved or other JVs should be formed based on the vision and business proposals submitted to the ministry.  “Imagine, we are five in the JV but if one company in the JV has disagreements, the whole JV suffers and everybody loses,” he explained. Managing director of Erongo Marine Martha Uumati, who frequently deals with JVs, said that they were really a bad initiative, which can be a challenge.

She advised that those in JVs should rather make it a priority to understand how the industry operates. According to Uumati, the industry players do not want to negotiate with every right holder issued a quota, as the process becomes very time-consuming.

“Let’s say every right holder within the joint venture might only have about 600 metric ton quota allocated, which might only be enough for one trip. That is what makes partnering with fishing companies a challenge. However, 20 right holders in a JV will have more bargaining power as they elect a board that represents them all, instead of every right holder negotiating for themselves,” she said.

 

 

 


2021-09-02  Eveline de Klerk

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