6. EXCLUSIONARY CRITERIA The following exclusionary criteria will apply to all applications for a right in each of the fisheries. 6.1 Improper Lodgment Criteria Improperly lodged applications as referred to in 6.1.1 and 6.1.2 may be excluded, whereas improperly lodged applications referred to in 6.1.3 – 6.1.8 will be excluded. The Delegated Authority has no discretion to condone applications not compliant with 6.1.3 – 6.1.8. An application will be considered improperly lodged and will be excluded if – 6.1.1 an applicant submits his or her or its application after the set due date and time for submission of the application; 6.1.2 an applicant did not pay the prescribed application fee in full and on time; 6.1.3 an applicant submits his or her or its application without using the prescribed application form and lodges his or her or its application contrary to the instructions of the Department i.e. such as by fax, email, or post; 6.1.4 an applicant is not a South African person;

6.1.5 an application is submitted by a deregistered juristic person; 6.1.6 the applicant is not Tax Compliant; 6.1.7 an application is not submitted by the applicant or his or her or its authorized representative; and

6.1.8 an individual applicant is under the age of 18. 6.2 Criteria for materially defective applications Materially defective applications will be excluded. The Delegated Authority has no discretion to condone the inclusion of materially defective applications.

An application will be considered materially defective and will be excluded if – 6.2.1 an applicant or the applicant’s authorized representative did not sign the application form; 6.2.2 the applicant submits more than one application for a right in the same fishing sector; 6.2.3 the applicant submits false and/or misleading information or false documentation; 6.2.4 the applicant fails to disclose material information for the purposes of evaluating his or her or its application; and

6.3 Criteria for non-compliant applications An application may further be excluded if –

6.3.1 an applicant or any of its authorized personnel / representative(s) attempt to improperly influence the Delegated Authority or Minister with regard to its application (e.g. an applicant attempts to communicate directly with the Minister or Delegated Authority with regards to the application). 6.3.2 an applicant or any of its Directors, Trustees, Senior Management, Shareholders or Members (where such shareholding or members interest exceeds 10%) or Skippers has entered into a plea bargain in terms of section 105A of the Criminal Procedure Act, Act 51 of 1977, for a contravention of the MLRA, the regulations, or permit conditions and subjected to sentencing of imprisonment without the option of a fine. The details of the period of exclusion will be indicated in the Fishery Sector Specific Policies; 6.3.3 an applicant or any of its Directors, Trustees, Senior Management, Shareholders or Members (where such shareholding or members interest exceeds 10%) or Skippers has been convicted in terms of the MLRA or its regulations or permit conditions since the period determined in the Fishery Sector Specific Policies (e.g. an applicant or any of its Directors, Trustees, Senior Management, Shareholders or Members (where such shareholding or members interest exceeds 10%) or Skippers has been convicted with more than two contraventions and subjected to sentencing exceeding R5000 or imprisonment without an option of the fine); 6.3.4 an applicant had an asset forfeited to the State for a violation of a provision of the MLRA2

6.3.5 an applicant had a fishing right or permit cancelled or revoked for a period defined in the Fishery Sector Specific Policies. In the event a fishing right or permit has been cancelled or revoked, the decision of the Minister or the Delegated Authority is suspended pending the outcome the appeal. 6.4 Paper Quota Risks

6.4.1 An applicant will be considered to be a paper quota risk and may be excluded if they- a) fail to present the following:

i) Bank statements and/or proof of bank accounts ii) Financial Statements iii) Applicants' list of productive assets relevant to the fishing industry iv) Proof of insurance cover held by the Applicant v) List of and details of employees employed by the Applicant vi) Export Permits held by the Applicant vii) Detailed business plan including fishing plan for Applicant’s fishing business.

2 The Delegated Authority will determine whether the applicant was ordered by a court of law to forfeit an asset. Only in cases of a court ordered forfeiture of an asset will an applicant be penalized under this scoring criterion b) Have not been directly involved in the catching, processing or marketing of their fish during the period which they held a right in the sector they are applying for. c) Did not apply for a catch permit during the period which they held a right in the sector they are applying for; d) Did not land any fish during the period which they held a right in the sector they are applying for; e) Will not catch and land any fish. (It is important to note that applicants are only required to submit the above-mentioned information where such information / documentation applies to them). If, for example, an applicant does not export fish, the applicant is not required to submit an export permit.

6.4.2 an applicant will be considered to present a paper quota risk by the Delegated Authority as defined by the 2021: General Fisheries Policy if -

a) it appears from the application that the right holder applicant fails to demonstrate a substantive interest in the exploitation, processing and/or marketing the fishing right held or to be allocated. In determining whether the right holder applicant poses a paper quota risk, the following will be considered: (i) Cumulative conduct of the right holder applicant over the period of the right allocated. (ii) Right holder applicants who have failed to invest in jobs, the harvesting of their fishing right(s), the processing and beneficiation of fish and/or the marketing and sale of their fish.

b) it appears from the application that the right holder applicant has no serious intention to share the risk of fully participating in the sector, especially if a danger exists that an applicant has not applied in order to enter the industry but to gain some financial benefit without direct involvement in the main activities associated with exploiting the right that may be granted. In determining whether an applicant poses such a paper quota risk, the applicant’s assets and access to capital and its financial and business planning and commitments will be considered. The Delegated Authority must endeavor to prevent paper quota applicants from entering the fishing industry because paper quotas undermine and circumvent the objectives of the commercial fishing rights allocation process. 6.4.3 The Delegated Authority must take all reasonable steps to remove paper quota applicants that may have been granted commercial fishing rights. The Delegated Authority may consider as paper quotas, applicants that have been granted commercial fishing rights but who are reflecting weak or non-existent performance records combined with no investment or direct involvement in fishing industry.

6.4.4 The Delegated Authority will also exclude as “paper quota risk” applicants considered to be “fronts” for other beneficiaries. Fronting occurs when, in order to circumvent a policy objective, an application is submitted through another compliant entity. This commonly involves reliance on data or claims of compliance based on misrepresentations of facts, whether made by the party claiming compliance or by any other person. An example is an application made by an ostensibly transformed entity with the intention that the main benefits will flow to an untransformed entity or individuals that are not designated persons. Another example is when a foreign entity or individual collude with the South African person by not declaring the actual owner(s) of the vessel, which the applicant has indicated to be his or her or its vessel whilst submitting the application for a right thereby subverting the rights allocation process. 6.4.5 The Department will ultimately institute section 28 proceedings in terms of the MLRA against right holders who turn out to be paper quota holders or fronts. 6.4.6 The Department may revoke commercial fishing rights held by right holders who fail to utilise their rights in the first two years after being granted their rights. 6.4.7 An applicant failed to utilise any of his or her or its fishing right, in the same fishing sector for which a right is applied, during the duration of the commercial fishing right which was granted to him or her or its in LTRAMP2005 and FRAP 2013.

local fishing vessel means any fishing vessel registered in the Republic which is- (a) wholly owned and controlled by one or more South African persons; (b) wholly owned by the State; (c) wholly owned and controlled by any body corporate, society or other association of persons incorporated or established under the laws of the Republic and in which the majority of the shares and the voting rights are held and controlled by South African persons; or (d) wholly owned by a body corporate designated as an authorised body corporate by the Minister;

(1) No person shall undertake commercial fishing or subsistence fishing, engage in mariculture or operate a fish processing establishment unless a right to undertake or engage in such an activity or to operate such an establishment has been granted to such a person by the Minister. (2) An application for any right referred to in subsection (1) shall be submitted to the Minister in the manner that the Minister may determine. (3) The Minister may require an environmental impact assessment report to be submitted by the applicant. (4) Unless otherwise determined by the Minister in relation to the holders of existing rights, only South African persons shall acquire or hold rights in terms of this section. (5) In granting any right referred to in subsection (1), the Minister shall, in order to achieve the objectives contemplated in section 2, have particular regard to the need to permit new entrants, particularly those from historically disadvantaged sectors of society. (6) All rights granted in terms of this section shall be valid for the period determined by the Minister, which period shall not exceed 15 years, whereafter it shall automatically terminate and revert back to the State to be reallocated in terms of the provisions of this Act relating to the allocation of such rights. (6A)(a) If the Minister has granted a right contemplated in subsection (6) to a person for a period not exceeding three years, the Minister may once only, at the expiration of such period, extend the period of validity of the right for a further period not exceeding two years on such terms and conditions as he or she may impose. (b) The Minister may extend the period of validity of the right in whole or in part, but must have regard to any change in the total allowable catch, the total applied effort determined in terms of section 14 or to both such change and effort. (7) The Minister may determine sustainable conservation and management measures, including the use of a particular type of vessel or gear, or area of fishing, to which a right may be subject.

(1) No person shall use a fishing vessel or any other vessel to exercise any right of access unless a local fishing vessel licence has been issued to such person. (2) An application for a local fishing vessel licence shall be submitted to the Minister in the manner that the Minister may determine.

(1) If a holder of any right, licence or permit in terms of this Act- (a) has furnished information in the application for that right, licence or permit, or has submitted any other information required in terms of this Act, which is not true or complete; (b) contravenes or fails to comply with a condition imposed in the right, licence or permit; (c) contravenes or fails to comply with a provision of this Act; (d) is convicted of an offense in terms of this Act; or (e) fails to effectively utilise that right, licence or permit, the Director-General may by written notice delivered to such holder, or sent by registered post to the said holder's last known address, request the holder to show cause in writing, within a period of 21 days from the date of the notice, why the right, licence or permit should not be revoked, suspended, cancelled, altered or reduced, as the case may be. (2) The Director-General shall after expiry of the period referred to in subsection (1) refer the matter, together with any reason furnished by the holder in question, to the Minister for the Minister's decision. (3) When a matter is referred to the Minister in terms of subsection (2), the Minister may- (a) revoke the right, licence or permit; (b) suspend the right, licence or pen-nit for a period determined by the Minister; (c) cancel the right, licence or permit from a date determined by the Minister; (d) alter the terms or conditions of the right, licence or permit; or (e) decide not to revoke, suspend, cancel, alter or reduce the right, licence or permit. (4) Notwithstanding the provisions of subsections (1), (2) and (3), the Minister may, whenever he or she is of the opinion that it is in the interests of the promotion, protection or utilisation on a sustainable basis of a particular marine living resource, at any time by written notice to the holder of a right, licence or permit, revoke, suspend, cancel or reduce that right, licence or permit.

There is no requirement under the MLRA for the Fisheries Management Branch/Minister to pre-approve the registration of a fishing vessel in the national register of ships.