Marine Living Resources Fund ANNUAL REPORT 2016-2017 2016-2017 Annual Report MARINE LIVING RESOURCES FUND Department of Agriculture, Forestry and Fisheries Private Bag X350, Pretoria, 0001 Tel: 012 319 6000 www.daff.gov.za Cape Town Offce Private Bag X2, Vlaeberg, 8018 Tel: 021 402 3911 Fax: +27 21 402 3364 www.daff.gov.za Design and Layout: Directorate Communications (Fisheries Branch, Cape Town) Photographs courtesy of: Department of Agriculture, Forestry and Fisheries (DAFF), Rob Tarr Front cover: Small-Scale Fisher with his catch ISBN: 978-0-621-45738-4 RP 258/2017 Minister of Agriculture, Forestry and Fisheries Annual Report 2016/17 In terms of section 55(3) of the Public Finance Management Act (PFMA), 1999, the Accounting Authority of a Public Entity must submit the annual report with audited fnancial statements, for tabling in Parliament, to the relevant Executive Authority. The Marine Living Resources Fund (MLRF) is proud to present an unqualifed audit report. In my capacity as both the Accounting Authority of the Marine Living Resources Fund (MLRF) and the Accounting Offcer of the Department of Agriculture, Forestry and Fisheries as the designated department, I hereby formally submit to you, as Executive Authority, the Annual Report with audit fnancial statements and performance information for the MLRF for the 2016/17 fnancial year. Mooketsa Ramasodi Acting Director-General Department of Agriculture, Forestry and Fisheries Date: 29 July 2017 CONTENTS Page Executive summary ................................................................................ 2 – 3 Statement of Responsibility ................................................................. 6 – 7 Report of the Audit Committee ......................................................... 11 – 13 Report of the Auditor-General to Parliament on the Marine Living Resources Fund ................................................ 16 – 21 Report of the Accounting Authority ................................................. 24 – 32 Performance Information for the Marine Living Resource Fund... ............................................................................... 26 – 32 Annual Service Delivery Improvement Plan Part A: Covering Letter .............................................................. 36 – 39 Part C: Issuing of Permits and Fishing Vessel License Service ............................................................................. 40 – 53 Annual Financial Statements.................................................................. 55 – 95 Statement of Financial Position. 57 Statement of Financial Performance. 58 Statement of changes in Net Assets .............................................. 59 Cash Flow Statement. 60 Statement of Comparison of Budget and Actual Information 61 Notes to the Annual Financial Statements......................................... 62 - 93 Detailed Statement of Financial Performance............................. 94 - 95 Executive Summary Marine Living Resources Fund EXECUTIVE SUMMARY OF THE ANNUAL REPORT This Executive Summary provides an overview of the achievements of the Marine Living Resources Fund (MLRF) against its published annual targets as contained in the Annual Performance Plan (APP) of the Entity. In this regard, it must be borne in mind that the Entity carries out and achieves many more core activities than those contained in the APP. This report will therefore focus on progress against those strategic priorities for the 2016/17 fnancial year that were singled out for inclusion in the APP. The Marine Living Resources Fund fnances the operations of the Fisheries Branch of the Department of Agriculture, Forestry and Fisheries. The Fisheries Branch is responsible for managing the development, management, monitoring and sustainable uses of marine living resources, to protect the integrity and quality of the marine ecosystem, and to ensure the growth of the aquaculture sector. The MLRF covers the operational costs four Chief Directorates, as well as the operational and administrative costs of a number of support components as follows: • Aquaculture and Economic Development which promotes the growth of the aquaculture sector by providing public support and an integrated platform for the management of aquaculture. The Chief Directorate also facilitates the development of alternative livelihoods for coastal communities and the management of the 12 proclaimed fshing harbours. • Fisheries Research and Development which promotes the sustainable development of fsheries resources and ecosystems by conducting and supporting appropriate research; • Marine Resource Management which fosters the sustainable use and the equitable and orderly access to marine living resources through improved management and regulation. • Monitoring, Control and Surveillance which ensures the protection and promotion of sustainable use of marine living resources by intensifying enforcement and compliance efforts. The MLRF also covers the operational and administrative costs of the Chief Director: Fisheries Operations Support, the Chief Directorate Financial Management for the MLRF and the support components of Communications, Human Resources, Information Technology, Legal Services; International Relations; Stakeholder Relations; and Customer Services. The MLRF had 10 annual targets in its 2016-2017 Annual Performance Plan and one target falling under the Working for Fisheries Programme. In addition to over-achieving the Working for Fisheries target of creating 600 Full-time Equivalent Jobs (FTEs), the MLRF was able to successfully achieve seven (7) of its 10 annual deliverables as follows: • 16 Operation Phakisa aquaculture projects for Phase 1, 2 and 3 were supported during the fnancial year. • Two (2) new aquaculture research projects on new candidate species were conducted on grunter and selected ornamental fsh. • Recovery plans for two (2) prioritised fsh stocks, namely Abalone and West Coast Rock Lobster, were compiled. • Research reports to indicate fsh stock levels were compiled for West Coast Rock Lobster, Deep-Water Hake and Abalone. • The MLRF over-achieved on its target of conducting 30 joint operations with partners through Operation Phakisa (Initiative 5 of the Oceans Economy). The MLRF managed to achieve 63 joint operations. The over - achievement by 33 operations was as a result of the success obtained under Initiative 5 of Operation 2 3 Marine Living Resources Fund Marine Living Resources Fund EXECUTIVE SUMMARY OF THE ANNUAL REPORT (Continued) Phakisa (Oceans Economy) in ensuring that all law enforcement partners work in an integrated manner. • The MLRF was able to exceed its target of implementing 2 900 compliance and enforcement measures in the 6 prioritised fsheries sectors (hake, abalone, rock lobster, linefsh, pelagic and squid). • The MLRF/Fisheries Branch conducted 276 investigations into rights holders as part of Operation Phakisa Initiative 5 of the Oceans Economy. The Fisheries Branch/MLRF was able to partially achieve its target of allocating and managing commercial fshing rights in nine new fshing sectors. The MLRF was able to issue long term fshing rights under the Fishing Rights Allocation Process (FRAP) 2015-2016 in the following fshing sectors: 1. Large Pelagics Longline (Tuna and Swordfsh); 2. Kwazulu-Natal Beach Seine; 3. Netfsh; 4. Seaweed; 5. Horse Mackerel, and 6. Patagonian Tooth Fish. In progress are 7. West Coast Rock Lobster and 8. Abalone and 9. Hake Inshore Trawl. Rights were also allocated in the Hake Inshore Trawl sector, but as a result of a court interdict, the issuing of permits was put on hold pending the outcome of the Court case. The MLRF did not achieve its objective of approving the Aquaculture Bill due to a request from NEDLAC for an extension of the consultation period. This deliverable will be carried over into the 2017/18 fnancial year. Although the MLRF was not able to achieve its target of allocating fshing rights to registered Small-scale fsheries co-operatives, progress has been made in concluding the Expression of Interest process in the four (4) coastal provinces; the publication of the provisional lists of successful fshers in the Eastern Cape, Northern Cape and Western Cape, as well as the evaluation of appeals in the Northern and Western Cape. This target will be carried over into the 2017/18 fnancial year. In terms of governance issues, the MLRF has an independent and fully functioning External Audit and Risk Committee, and an outsourced Internal Audit service. The MLRF has conducted risk assessments and updated its risk registers. The Audit Committee provides an independent oversight of the MLRF’s Enterprise and Strategic risks. The Marine Living Resource Fund received an unqualifed audit report with fndings. While the Entity is pleased with the outcome of the audit report, the Entity has noted that some areas require attention and improvement and will ensure that management measures are put in place to address the audit fndings, and will pay particular heed to the repeat audit fndings. The Entity will also give special attention to the Auditor-General’s view on emerging risks and will put plans in place to mitigate these risks. The Management of the Entity would like to acknowledge and appreciate the work and guidance provided by the staff of the Auditor-General of South Africa and National Treasury, as well as the oversight role played by the External Auditors of the MLRF. 3