New Foodcorp Holdings (Pty) Ltd v Minister of Agriculture, Forestry and Fisheries

Foodcorp (Pty) Ltd and its holding company held long-term commercial fishing rights under the Marine Living Resources Act 18 of 1998 (MLRA). Those rights were originally allocated in 2005 with significant emphasis on black ownership and transformation credentials. In March 2010 Foodcorp underwent a corporate restructuring in which all its shares were transferred to New Foodcorp Holdings (Pty) Ltd, resulting in a change of control and a substantial dilution of black ownership after the exit of its black majority shareholder, Pamodzi. A foreign investor acquired a large stake in the holding company. The restructuring significantly reduced transformation levels compared to those at the time of allocation of fishing rights. The Department required ministerial approval under the ‘Policy for the Transfer of Commercial Fishing Rights’ (TP), specifically paragraphs 6.2 and 6.3, which require approval where a sale of shares results in a change of control or reduced transformation. Foodcorp applied for approval but simultaneously challenged the legality and constitutionality of the policy provisions, arguing that they were ultra vires, vague, irrational, and unenforceable. The Western Cape High Court dismissed the challenge, and the appellants appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel.

The case confirms that transformation in the fishing industry is an ongoing constitutional and statutory imperative, not limited to the initial allocation of rights. It affirms a purposive interpretation of the MLRA, allowing the Minister to require approval for share transactions that result in changes of control and reduced transformation. The judgment strengthens the ability of the state to prevent circumvention of transformation objectives through corporate restructuring and clarifies the legal status and enforceability of ministerial policy in the fisheries context.