SOUTH AFRICA’S BLUE ECONOMY

By Trudie Nichols Monday, December 07, 2015
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The South African coastline stretches from the Namibian border on the west coast to the Mozambique border on the east coast.

South Africa exercises jurisdiction over:

  • Its internal waters which include all harbours;
  • Its territorial waters which include the sea within a distance of 12 nautical miles from the baseline established in terms of the maritime zones act 15 of 1994;
  • Its contiguous zone, including its marine cultural zone which includes the sea beyond the territorial waters but within a distance of 24 nautical miles from the baseline;
  • Its exclusive economic zone (EEZ) which includes the sea beyond the territorial waters but within a distance of 200 nautical miles from the baseline; and
  • Its continental shelf as defined in article 76 of the United Nations convention on the law of the sea. South Africa has applied for the extension of its continental shelf claim and this claim is currently being adjudicated.

Within the EEZ states have the right to exploit, develop, manage and conserve all resources to be found in the water, on the ocean floor and the subsoil, including fish, minerals, oil and gas.

The physical environment of the current systems adjacent to South Africa presents it with several economic opportunities such as mining, fishing, shipping and tourism, collectively called the Blue Economy.

The national and global significance of the southern African ocean further serves as a focus for national and international scientific research programmes which provides an opportunity for South Africa to increase national competencies in a range of specialised ocean and coastal research and management applications.

South Africa has eight commercial ports which handles cargoes such as mineral bulk, break bulk, agricultural, containers, automotive and oil and gas.

Notwithstanding some of our key advantages we also face particular challenges such as monopolies and lack of competition; poor and sometimes non-existent infrastructure; maintenance, operational efficiencies, congestion and turnaround time, our poor ship register, a lack of skills and expertise; a lack of funding and a poor regulatory framework.

Particular South African Initiatives Within The Blue Economy

The National Development Plan 2030

The NDP is regarded as being a plan for the country to eliminate poverty and reduce inequality by 2030 through uniting south Africans, unleashing the energies of its citizens, growing an inclusive economy, building capabilities, enhancing the capability of the state and leaders working together to solve complex problems.

The NDP recognised the potential for developing South Africa’s ocean economy by acknowledging that South Africa is a maritime nation with over 3000km of coastline straddling a major strategic shipping route. Since close to 80% of trade is by sea, South Africa is suitably placed to exploit this.

The NDP identified the ocean economy as one of the key drivers to eliminate poverty and reduce inequality in South Africa by 2030.

The White Paper on the National Environmental Management of the Ocean (NEMO) published in May 2014

The white paper on NEMO is an additional initiative which recognised that the ocean represents a significant asset for the current and future generations of South Africans and that the various marine resources in our ocean space provided significant potential for the unlocking of further economic development opportunities.

It identified six ocean governance objectives namely:

  • Co-ordinating and supporting the implementation of the relevant statutory and institutional frameworks;
  • Establishing mechanisms for sectoral data collection and sharing;
  • Creating and maintaining a shared national knowledge base on the human activities, status and functioning of the ocean;
  • Establishing integrated ocean sustainable development and conservation ocean plans by the undertaking of strategic environmental impact assessments and the use of spatial planning tools;
  • Enhancing national human and technical capacity to better understand and utilise ocean resources and opportunities and
  • Pursuing regional and international cooperation and governance mechanisms.

Operation Phakisa

Phakisa, which is Sesotho for “hurry up”, is a programme which is modelled on the Malaysian government’s big fast results programme and which entails convening laboratories to bring together specific role players to develop detailed practical plans which include setting targets or key performance indicators and monitoring progress.

The programme is intended to deal with the development challenges highlighted in government’s NDP.

Operation Phakisa
The oceans economy is the first of possibly many sector-based Phakisa programmes initiated by government and others already being implemented include those covering HealthMining, and ICT in Education. The oceans economy was launched in July 2014 and implementation of the lab initiatives was announced in October 2014.

Growth Areas Within Oceans Economy

Four priority potential growth areas were identified within the oceans economy, namely:

  • Marine transport and manufacturing;
  • Offshore oil and gas exploration;
  • Aquaculture
  • Marine protection services and ocean governance

Two additional further growth areas were subsequently added, namely

  • Small harbours development; and
  • Coastal and marine tourism. Tourism was also recognised by the 2050 Africa’s integrated maritime (AIM) strategy as promising but underappreciated notwithstanding the tremendous power and potential that tourism can unlock. Tourism creates jobs and opportunities for entrepreneurship, reduces poverty, promotes stability, and preserves heritage and culture and build global connections. Tourism is estimated to contribute over 9% to South Africa’s GDP and this sector supports 1.4 million job opportunities in the country.

Marine Transport And Manufacturing

South Africa is ideally positioned to serve the east-west cargo traffic and African offshore oil and gas industry, through marine manufacturing, which includes ship and rig repair, refurbishment and boat building.

Plans for unlocking economic potential include:

  • Oil and gas port infrastructure;
  • Maintaining and refurbishing existing port and ship repair facilities;
  • Fast tracking decisions on the issuing of licences
  • Reforming port tariff structure
  • Port facilities for boat, ship repair and rig repair;
  • Establishing a supporting funding model for infrastructure development in ports
  • Skills and capacity building.

Offshore Oil And Gas Exploration

The aim is to create a more enabling environment in order to increase the number of exploration wells drilled while maximising the value captured for South Africa. Offshore oil and gas exploration has indicated that South Africa’s coast and adjoining waters have possible resources of approximately nine million barrels of oil, which is the equivalent of 40 years of South African oil consumption.

Aquaculture

Aquaculture is relatively underdeveloped in South Africa, despite being an increasingly important contributor to food security globally. This sector offers significant potential for rural development, especially for marginalised coastal communities.

The plans for this lab included:

  • Finalising legislative reform;
  • Addressing access to land and sea or port infrastructure, including leases;
  • Streamlining authorisations through the establishment of an inter departmental authorisations committee;
  • Addressing funding arrangements and market access;
  • Initiating implementation of 24 prioritised aquaculture projects
  • Initiating the process to proclaim 28 new harbours by mid-2016.

Marine Protection Services And Ocean Governance

The South African government has recognised the need to continuously balance the economic exploitation of the oceans with the maintenance of their environmental integrity. The aim is that the involvement of stakeholders will ensure that conservation targets are met while allowing key industrial sectors like oil & gas, aquaculture and maritime industries to grow.

This includes plans to:

  • Address ocean governance through the development of overarching, integrated ocean governance framework for the sustainable growth of the ocean economy;
  • Establishing an enhanced and co-ordinated programme to protect our ocean and coastal resources as well as our sovereignty.
  • Embark on marine spatial planning to designate special use zones within the ocean space; and
  • Implement science platforms for the monitoring and surveillance.

Report Back On Operation Phakisa In General

Marine Transport And Manufacturing

Marine Transport and Manufacturing Plans have been announced for unlocking economic potential and they include:

  • Oil & gas port infrastructure;
  • Maintaining and refurbishing existing port and ship repair facilities;
  • Fast-tracking decisions on issuing of licences;
  • Reforming the port tariff structure;
  • Port facilities for boat, ship repair and rig repair;
  • Establishing a supporting funding model for infrastructure development in ports.

Off Shore Oil And Gas

Industry and other stakeholders have identified legislative and regulatory uncertainty as a major stumbling block to this sector’s progress. Some of the problem stems from the proposed changes in an amendment bill to the Mineral and Petroleum Resources Development Act (MPRDA).

Many oil and gas industry players and stakeholders have lobbied extensively for the sector to be legislated separately from mining. These processes will have serious implications for operation Phakisa and the extent to which it can hasten the development of this sector.

Current market conditions are also a challenge for this sector. The plummeting oil and gas price limits the likelihood of further investment in this sector by oil companies.

Aquaculture
Aquaculture is relatively underdeveloped in South Africa despite being an increasingly important contributor to food security globally. Plans announced for unlocking economic potential include:

  • finalising legislative reform (draft Bill already prepared) to promote aquaculture development;
  • addressing access to land and sea/port infrastructure, including leases;
  • streamlining authorisations through the establishment of an inter-departmental authorisations committee;
  • addressing funding arrangements and market access;
  • initiating implementation of 24 prioritised Aquaculture projects (twelve proclaimed small harbours to be functional by June 2015); and
  • initiating the process to proclaim 28 new harbours by mid-2016.

Marine Protection Services And Ocean Governance
The South African government has recognized the need to continuously balance the economic exploitation of the oceans with the maintenance of their environmental integrity. Plans announced for unlocking economic potential include:

  • Addressing ocean governance through the development of overarching, integrated ocean governance framework for the sustainable growth of the ocean economy;
  • establishing an enhanced and coordinated programme to protect South Africa’s
  • ocean and coastal resources as well as our sovereignty;
  • embarking on Marine Spatial Panning to designate special use zones within the ocean space; and
  • Implement Science Platforms for Monitoring and Surveillance.

In keeping with the Operation Phakisa objective of fast results, President Zuma provided a report on progress in August 2015, less than one year after the implementation of Operation Phakisa.