B-BBEE: Validity of B-BBEE requirements in Fisheries regulations

The allocation of fishing licences has been numerous headlines of late and litigation is currently pending regarding the Department of Agriculture, Forestry and Fisheries’ (“DAFF”) decision not to grant licences to many aggrieved line-fishermen. What has not made the headlines is that the transformation requirements contained in the licensing regulations may very well be unlawful in their current form once the B-BBEE Amendment Act comes into effect.

The DAFF’s Policy on the Allocation and Management of Fishing Rights which was published on 17 July 2013 contain a number of transformation requirements akin to those stipulated in the B-BBEE Codes of Good Practice promulgated in terms of the B-BBEE Act, but which explicitly deviate from the Codes in several respects, while at the same time not purporting to be an actual B-BBEE Sector Code in its own right. This will become highly problematic once the B-BBEE Amendment Act comes into effect (the Act has already been signed into law by the President, but its effective date will be determined by later proclamation). This is because the B-BBEE Amendment Act states in no uncertain terms that organs of state (such as the DAFF) must apply “any relevant code of good practice” in a number of situations of which one is specifically “determining qualification criteria for the issuing of licences, concessions or other authorisations in respect of economic activity in terms of any law.” The Amendment Act also makes it clear that Codes of Good Practice can only be promulgated in terms of the B-BBEE Act and under the auspices of the Department of Trade and Industry (“the DTI”), unless the DTI permits an organ of state to deviate from the provisions of the Act or to exempt it from complying altogether.

The amendments to the B-BBEE Act were made with good reason – to date there have been a number of industries (such as mining and oil and gas) who have had their own transformation agendas not properly aligned with the general B-BBEE programme. This has led to great confusion, especially since role-players in these industries have demanded that their suppliers develop scorecards based on their own charters instead of the B-BBEE Codes. These charters are generally vague and of very poor quality, which negatively affects transformation. The DAFF, in adopting the 2013 Policy, seems to be under the misapprehension that this scheme will continue, whereas the DTI has made it clear that there should be substantial alignment to the B-BBEE Codes in all sectors.

If the B-BBEE Amendment Act became effective today, the transformation provisions of the DAFF Policy would be rendered unlawful. This is because the DAFF policy does not purport to be a B-BBEE Sector Code and has not been gazetted in terms of Section 9 of the B-BBEE Act. Furthermore, to our knowledge, the DAFF does not have the DTI’s permission to deviate from the Codes, nor has it been granted an exemption. It also cannot rely on the argument that it gets its transformation provisions from national legislation (in the form of the Marine Living Resources Act of 1998) which supersedes the B-BBEE Act, as the B-BBEE Amendment Act specifically states that its own provisions will prevail in the event of any conflicting provisions with another piece of legislation that relates specifically to B-BBEE issues.

It would therefore seem that, unless the DAFF revisits the manner in which it has dealt with issues of transformation in its licencing Policy, unsuccessful applicants for fishing licences may have additional grounds to overturn the DAFF’s decisions not to grant licences in the near future.

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