WALVIS BAY - A bidding proposal by four fishing companies who formed a consortium and are now trying to sell 12 357 metric tonnes of horse mackerel to the highest bidder to the tune of up to N$43 million has sent tongues wagging in the local industry.
The Namibian Competition Commission (NaCC) has since lodged an investigation into the offer to determine its legality. The document reveals that Epango Fishing (Pty) Ltd, Mack Fishing (Pty)Ltd, Sinco Fishing (Pty) Ltd and Yukor Fishing (Pty) Ltd formed a Namibian Horse Mackerel Joint Venture Consortium (HMJV) in a bid to sell off a chunk of their allocated quota.
Each of them are made up of five horse mackerel right holding companies and were allocated 17 653, 66 metric tonnes of horse mackerel among them by the ministry of fisheries. New Era understands that this is their first allocation for the new fishing season as another allocation is only scheduled for later this year.
‘Available quota for purchase’ is the freezer portion of the quota, representing 12 357 metric tonnes of horse mackerel and 5 296 metric tonnes are available for value add quota, the joint venture stated in an offer seen by New Era.
The offer to purchase must not be less than N$3500 per ton and should also include 50 percent of the bycatch available to the consortium and was extended to all vessel-operating companies and other players in the industry.
The buyer should make an offer to catch and process the value-add quota. The terms of this quota are separate from the quota for purchase and should be negotiated with each joint venture company separately on their respective portions, the company further says.
Defending their decision yesterday, the chairperson of the consortium Mino Gariseb denied that their proposition violated any statutes.
He says the four companies joined forces and formed the consortium with a strategic intent to explore funding options for the long-term sustainability of the consortium.
He added that the document was highly confidential and was not have been shared publicly.
“We came together to combine resources and form a 100 percent Namibian-owned fishing business that will actively explore to participate in the complete value chain. Our intent at this point is to explore funding options to be able to fund our business plan in the short to medium term, as we are in this long-term,” Gariseb explained.
According to Gariseb many Namibian quota holders do not intend to sell their quota, as this is illegal, but intend to enter into a cost effective beneficial catch agreements to both parties as allowed by the ministry.
“We want to get maximum benefits from our individual allocations. The industry offered N$800 per ton during 2012-2013 and this taught us that we can obtain even more value per ton. Our situation is no different and we hope that operators will let go of their historic prejudice toward the new right-holders,” he said.
Gariseb indicated that they will meet today to further review and deliberate on the consortium.
“It is time that the business model changes in the fishing industry. We do not always need to partner foreign-owned or controlled vessels with little to no participation in the value chain, but as Namibians we can collectively make the industry truly Namibian owned. If this initiative succeeds, it will be the biggest cooperation amongst Namibian right-holders in the industry,” he said.
Interestingly, Epango Fishing, Sinco Fishing and Yukor fishing last year bought into a trawler vessel Heinaste, for which they paid N$100 million. When asked on Tuesday why they cannot utilise their own vessel to catch the quota, Gariseb elected not to respond to that.
Chairperson of the Midwater Trawlers Association, Dr Martha Uumati, also told New Era yesterday that selling of allocated quota remains a norm in the industry, especially where right-holders need to raise capital for investment.
“However what is of concern for the super joint venture consortium is the colliding, which is illegal as per our Namibian Competition Act,” she said.
Chairperson of the Namibian Fishing Association Matti Amukwa in his response to the matter also said that selling of quotas is definitely not allowed and has always been the stance of the ministry.
“These right-holders are however in a better position to clarify the situation,” he said.
The Ministry of Fisheries and Marine Resources Permanent Secretary, Dr Moses Maurihungirire, yesterday also confirmed yesterday that the Marine Act, especially its Section 42 (2), is clear on selling quotas.
“It is cleary stipulated that no quota for any marine resource, except a quota held by a person nominated under Section 35 (2), may be transferred to the holder of a right valid for the same resource, except with the approval of the minister,” he said.
Director of enforcement, exemptions & cartels at NaCC, Nangosora Ashley Tjipitua said they will carefully scrutinise the document detailing the consortium’s offer to sell.
“We have, for this reason, assigned a small team of investigators to look into the offer for purposes of ascertaining whether it raises competition concerns or not,” she said.
Tjipitua explained that as a general competition law principle, the coming together of competitors is problematic as it may lead to collusion amongst competitors.
“It may, for example, result in competitors fixing prices, which conduct is specifically prohibited under the provisions of Section 23 of the Competition Act,” she said.