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Zuma places ocean economy in crosshairs as Operation Phakisa launched

Zuma places ocean economy in crosshairs as Operation Phakisa launched
Photo by Bloomberg

15th October 2014

By: Natalie Greve
Creamer Media Contributing Editor Online

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Marking South Africa’s first large-scale effort towards harnessing the up to R177-billion economic potential of its coastline, President Jacob Zuma has officially launched Operation Phakisa – an initiative adapted from Malaysia’s Big Fast Results Methodology that aims to exploit the country’s vast, but as yet untapped, ocean resources.

Connecting teams from government, labour, business, academia and other sectors, the initiative would see experts working in experimental laboratories to explore ocean-related economic opportunities, which government believed had the potential to create over one-million jobs by 2033.

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Outlining the focus of the initiative, Zuma said at the launch in Durban on Wednesday that Operation Phakisa would concentrate on four “critical” areas: marine transport and manufacturing, offshore oil and gas exploration, aquaculture as well as marine protection services and ocean governance.

MARINE TRANSPORT AND MANUFACTURING
The workstream on marine transport and manufacturing was anchored on the premise that the country had not adequately exploited its strategic location, infrastructure and skills base to accelerate the growth of the sector. 

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“The teams have highlighted a concern that South Africa currently has no registered ships. This is in spite of the fact that each year 300-million tons of cargo moves through our ports in imports and exports.

“In addition, 1.2-million tons of liquid fuels move along our coast, while the rapidly expanding offshore oil and gas activities require a supporting fleet of vessels,” Zuma outlined.

South Africa was also well positioned to serve the East-West cargo traffic and the booming African offshore oil and gas industry through marine manufacturing, which included ship and rig repair, refurbishment and boatbuilding.

Despite this competitive advantage, Zuma explained that the country currently captured only 1% of the global ship repair and refurbishment market, noting that, of the 80 oil rigs estimated to be in the range of the Western Cape, only four rigs a year were serviced.

“As a solution, the marine transport workstream has developed 18 initiatives across three categories – infrastructure and operations, skills and capacity building as well as market growth – to accelerate sector growth. 

“These will expand South African port capacity for repair work for oil ships and oil rigs,” he asserted.

Among the initial targets for this sector was an increase in local manufacturing capacity by lifting the increase in the use of local components for boat and ship building by 10%, an increase in the ship repair capacity in Richards Bay and the creation of a dedicated occupational team for the sector within the Department of Higher Education and Training to drive alignment between theoretical and workplace learning.

Operation Phakisa would further aim to increase the amount of minerals exported on South African ships, which Zuma said was believed would create over 4 000 direct jobs.

“Some progress has already been made, including the start of a process to establish a national shipping company in partnership with South Korea,” he commented.

OFFSHORE EXPLORATION
The initiative’s second workstream, offshore oil and gas exploration, would meanwhile look to exploit the estimated nine-billion barrels of oil located off South Africa's coast and in adjoining waters.

“This is equivalent to 40 years of South African oil consumption. We also have 11-billion barrels of oil-equivalent natural gas, which is equal to 375 years of South African gas consumption,” Zuma noted, while acknowledging that there remained significant uncertainty about the extent of these resources. 

Eleven initiatives had been outlined to further develop the potential of South Africa’s offshore energy industry, including the setting of an “ambitious” target of drilling 30 exploration wells in ten years. Government believed this work could lead to the production of 370 000 barrels of oil and gas a day over the next 20 years.

“This is around 80% of current oil and gas imports. The result would be 130 000 jobs and a contribution of $2.2-billion to gross domestic product,” Zuma pointed out.

Government would also work towards the creation of a stable, clear legislative framework governing offshore oil and gas as well as the formation of a "one-stop shop” within the Department of Mineral Resources to streamline and regulate the licensing process for offshore exploration and production.

Operation Phakisa would also look to make the International Oil Pollution and Compensation Fund operational and would exploit research opportunities presented by offshore explorations to unlock data on ecosystems, marine resources, and ocean-related renewable energy.

AQUACULTURE
Further building the country’s offshore potential, the operation’s aquaculture workstream had underlined the high growth potential of South Africa's aquaculture sector, owing to increasing demand for fish.

While aquaculture contributed to almost half of the global fish supply, it contributed less than 1% of South Africa's fish supply.

Zuma said this sector offered significant potential for rural development, especially for marginalised coastal communities, and the workstream had, thus far, identified eight initiatives to spur the growth of the sector.

One such initiative would address the selection and implementation of 24 projects across South Africa by 2019, which were expected to grow the aquaculture sector's revenue from about R500-million to almost R1.4-billion.

Three further aquaculture initiatives would relate to the creation of an enabling regulatory environment, including the establishment of an Interdepartmental Authorisations Committee to coordinate aquaculture applications and approvals and reduce processing time from 890 days to 240 days.

Other initiatives would focus on funding support, increasing the skills pool, awareness and improving access to markets.

“This stream has also identified a number of initial targets, recommending the implementation of nine projects in the Eastern Cape, North West, KwaZulu-Natal and Western Cape.

“It also proposes the establishment of the Aquaculture Development Fund, consolidating around R50-million of government funds from five departments into one pot,” Zuma commented.

The team had further advocated the creation of a South African industry body that would establish relationships between local retailers and food service companies, creating a comprehensive market database covering South Africa’s aquaculture production base.

MARINE PROTECTION AND GOVERNANCE
The marine protection services and ocean governance workstream would investigate South Africa's jurisdiction over “a very large” exclusive economic zone that spanned 1.5-million square kilometres.

With such a large ocean jurisdiction, Zuma said effective governance was critical but would be challenging, given the size and complexity of the country’s oceans.

“The team undertook the task of developing an overarching, integrated ocean governance framework for the sustainable growth of the ocean economy, identifying ten initiatives to be implemented by 2019.

“These include the development and implementation of an overarching governance plan by March next year that protects the ocean environment from all illegal activities and promotes its multiple socioeconomic benefits.

“Moreover, there is already progress on working towards an Oceans Act, which will provide a clear foundation for marine spatial planning. We hope to have a draft Oceans Bill ready next year,” he stated.

OVERSIGHT
Zuma further outlined that delivery units had been established in the lead departments that would drive the implementation of each of the four workstream’s detailed delivery plans, while weekly progress would be monitored by the Department of Planning, Monitoring and Evaluation.

Delivery plans would also be released to the public once the relevant departments had completed their exploratory phase.

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