Fishing “forced marriages” collapse
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.
Typically, successful rights holders are grouped together in small businesses 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 to diversify their activities.
However, some of the holders are unwilling to invest in the industry and instead choose to sell their allowances for cash quickly, while the others wish to invest in the industry. This has led to turbulence in the industry, as the partners feel they are grouped together with players with whom they do not share the same vision.
Fisheries Minister Derek Klazen said yesterday his office had received several requests from companies wanting to dismantle these arranged marriages. Klazen, who is currently in Swakopmund for a three-day ministerial retreat to iron out industry challenges, said decoupling was happening in the horse mackerel sector.
“My office has been inundated with numerous disputes over corporate shareholding and requests to dissociate companies from pooled rights-holding joint ventures, infamously known as ‘arranged marriages’ or ‘forced marriages,'” Klazen said.
According to Klazen, he is now tasked with doing a thorough and honest analysis of the fishing industry to effect positive change. Several players in the fishing industry also said yesterday that they had never been consulted before the formation of the joint ventures.
“There was no advantage. In fact, the downsides were obvious, ”a JV shareholder said yesterday. According to him, it was wrong from the start to group them into groups; some of them were new entrants and had different visions. “We all asked for rights based on our own business models,” he said. He added that the joint ventures simply did not work 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 to take advantage of the profits we made,” he explained. As a result, he said, relations deteriorated. Simply put, it should be dissolved or other joint ventures should be formed based on the vision and business proposals submitted to the ministry. “Imagine, there are five of us in the JV but if one JV company has disagreements, the whole JV suffers and everyone loses,” he explained. Erongo Marine Managing Director Martha Uumati, who frequently deals with joint ventures, said it was really a bad move, which can be a challenge.
She advised members of joint ventures to make it a priority to understand how the industry works. According to Uumati, industry players do not want to negotiate with every rights holder who has issued a quota because the process becomes very time consuming.
“Let’s say each rights holder in the joint venture might only have a quota of about 600 metric tonnes, which might be enough for a single trip. This is what makes it difficult to partner with fishing companies. However, 20 rights holders in a joint venture will have more bargaining power because they elect a board that represents them all, instead of each rights holder negotiating for themselves, ”she said.