[Senate Hearing 106-1087]
[From the U.S. Government Publishing Office]
S. Hrg. 106-1087
REAUTHORIZATION OF THE MAGNUSON-STEVENS FISHERY CONSERVATION AND
MANAGEMENT ACT
=======================================================================
FIELD HEARING
before the
SUBCOMMITTEE ON OCEANS AND FISHERIES
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
JANUARY 18, 2000
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington JOHN D. ROCKEFELLER IV, West
TRENT LOTT, Mississippi Virginia
KAY BAILEY HUTCHISON, Texas JOHN F. KERRY, Massachusetts
OLYMPIA J. SNOWE, Maine JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan RON WYDEN, Oregon
SAM BROWNBACK, Kansas MAX CLELAND, Georgia
Mark Buse, Staff Director
Martha P. Allbright, General Counsel
Kevin D. Kayes, Democratic Staff Director
Moses Boyd, Democratic Chief Counsel
------
SUBCOMMITTEE ON OCEANS AND FISHERIES
OLYMPIA J. SNOWE, Maine, Chairman
TED STEVENS, Alaska JOHN F. KERRY, Massachusetts
SLADE GORTON, Washington DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas JOHN B. BREAUX, Louisiana
C O N T E N T S
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Page
Hearing held January 18, 2000.................................... 1
Statement of Senator Snowe....................................... 1
Statement of Senator Stevens..................................... 4
Witnesses
Asicksik, Eugene, President and Executive Director, North Sound
Economic Development Corporation, prepared statement........... 128
Benton, Dave, Deputy Director, Alaska Department of Fish and Game 19
Blackburn, Chris, Alaska Groundfish Data Bank.................... 40
Prepared statement........................................... 41
Barrett, Thomas J., Rear Admiral, Commander, Seventeenth Coast
Guard District................................................. 22
Prepared statement........................................... 24
Burch, Al, Executive Director, Alaska Draggers Association....... 109
Prepared statement........................................... 110
Bush, Jeff, Deputy Commissioner, Department of Community and
Economic Development, Alaska................................... 76
Christiansen, Freddie, Chairman, Gulf of Alaska Coastal
Communities
Coalition...................................................... 78
Prepared statement........................................... 80
Cotter, Larry, CEO, Aleutian Pribilof Island Community
Development
Association.................................................... 69
Prepared statement........................................... 72
Crow, Morgan, Coastal Villages................................... 121
Dalton, Penelope, Assistant Administrator, National Marine
Fisheries Service, National Oceanic and Atmospheric
Administrator, Accompanied by Steve Pennoyer, Alaska Regional
Administrator.................................................. 6
Prepared statement........................................... 8
Gauvin, John, Director, Groundfish Forum......................... 120
Hyde, Michael, President, Pollock Conservation Cooperative....... 53
Prepared statement........................................... 56
Iani, John, Vice President, Unisea, Inc.......................... 50
Prepared statement........................................... 52
Lauber, Richard B., Chairman, North Pacific Fishery Management
Council........................................................ 14
Prepared statement........................................... 16
Lloyd, Mark, Executive Director, Alaska Sea Life Center.......... 125
McGee, Charles, Commercial Fisherman, Anchorage, Alaska.......... 124
Nelson, Hazel, Vice President, Bristol Bay Economic Development
Corporation.................................................... 117
O'Leary, Kevin B., Member, North Pacific Fishery Management
Council........................................................ 42
Prepared statement........................................... 45
Phelps, Jack E., Executive Director, Alaska Forest Association... 87
Prepared statement........................................... 89
Schrader, Tammy, small boat halibut fishman...................... 126
Seaton, Paul, Member, Board of Directors, Alaska Marine
Conservation
Council........................................................ 98
Prepared statement........................................... 99
Smith, Thorn, North Pacific Longline Association................. 122
Prepared statement........................................... 123
Stern, Jack, Attorney, Trustees for Alaska....................... 127
Stewart, Beth, Director, Natural Resources Department, Aleutians
East
Borough........................................................ 47
Prepared statement........................................... 49
Thomson, Arni, Executive Director, Alaska Crab Coalition......... 118
Prepared statement........................................... 119
Appendix
Bristol Bay Economic Development Corporation, prepared statement. 135
Poulsen, Kris, Owner and Manager, three crab vessels, prepared
statement...................................................... 135
Letters written to Hon. Olympia J. Snowe and Hon. Ted Stevens:
Chuck Greene................................................. 139
Gordon Ito................................................... 138
Fred K. Phillip.............................................. 140
Pete Schaeffer............................................... 138
Dennis J. Tiepelman.......................................... 139
Response to written questions by Hon. Olympia J. Snowe to:
Rear Admiral Thomas Barrett.................................. 141
Dave Benton.................................................. 151
Chris Blackburn.............................................. 149
Al Burch..................................................... 143
Jeffrey W. Bush.............................................. 143
Freddie Christensen.......................................... 153
Larry Cotter................................................. 153
Penelope Dalton.............................................. 150
Michael J. Hyde.............................................. 155
John Iani.................................................... 152
Richard Lauber............................................... 144
Kevin B. O'Leary............................................. 148
Jack Phelps.................................................. 153
Paul Seaton.................................................. 144
Beth Stewart................................................. 151
Response to written questions by Hon. John F. Kerry to:
Kevin B. O'Leary............................................. 155
REAUTHORIZATION OF THE MAGNUSON-
STEVENS FISHERY CONSERVATION AND MANAGEMENT ACT
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TUESDAY, JANUARY 18, 2000
U.S. Senate,
Subcommittee on Oceans and Fisheries,
Committee on Commerce, Science, and Transportation,
Anchorage, AK.
The Subcommittee met, pursuant to notice, at 9:04 a.m. at
Anchorage Museum of History & Art, 121 West Seventh Avenue,
Auditorium, Anchorage, Alaska, Hon. Olympia Snowe, Chairman,
presiding.
Staff members assigned to this hearing: Sloan Rappoport,
Republican Counsel; Stephanie Bailenson, Republican
Professional Staff; and Margaret Spring, Democratic Senior
Counsel.
OPENING STATEMENT OF HON. OLYMPIA SNOWE,
U.S. SENATOR FROM MAINE
Senator Snowe. Good morning. The hearing will now come to
order. First of all, I want to thank Senator Stevens for
inviting me and the Subcommittee to Anchorage to discuss the
future of our Nation's fisheries, and specifically those off
the coast of Alaska.
Senator Stevens was kind enough to bring this Subcommittee
to my home State of Maine back in 1995, when we were discussing
these very issues in a reauthorization process, so I thought it
was only fair to reciprocate by coming to your beautiful State,
Senator Stevens. I felt right at home when I came in last
night. In fact, it was warmer here than it was in Maine when I
left yesterday morning.
I think it is appropriate that we hold this field hearing
here in Anchorage. When it comes to the issues that we will be
discussing, Senator Stevens quite literally helped write the
book. As one of the driving forces behind the Magnuson-Stevens
Act in the first year of this Subcommittee, his institutional
knowledge about our fisheries is unparalleled in the Congress.
Indeed, there is no one among our colleagues who has had
such a meaningful and profound impact on our fisheries policy
in this country. As chairman of the Appropriations Committee,
he has brought a strong, able, and a no-nonsense approach to
the allocation of more than $500 trillion. You are very
fortunate to have such an able voice in the U.S. Senate, and
along with Senator Murkowski I can tell you they never forget
the people of Alaska, and they never let us forget the people
of Alaska, either.
I also want to welcome our witnesses who have taken the
time to express their views on this very important issue. This
the most significant issue to come before the Subcommittee in
this Congress. It affects you directly, and your feedback is
essential to the decisionmaking process, as we consider changes
to the act.
We are here to get your answers to some very important
questions: what has worked, what has not worked, what requires
improvements, what are your concerns? You are the people on the
front lines, and so it is important to understand exactly how
the changes in the act have impacted you over the last few
years.
As you all know, the Magnuson-Stevens Act is the major and
principal act governing our fisheries in America. It is
administered by the National Marine Fisheries Service and the
eight regional management councils, which establish the rules
under which the fishing industry operates. They determine the
harvest quota, season length, gear restrictions, and license
limitations. These are decisions which have serious
implications for those of you who fish and work in Alaska. That
is why the difficult management decisions cannot be made in a
vacuum. You are the ones whose livelihood is at stake. Your
voices must be heard in this process, and as such it is
critical that all sectors of the fishing community receive fair
and balanced representation.
In July, in Washington, we held a kick-off hearing to
examine a broad array of fisheries management issues. Mr. Rick
Lauber, chairman of the Northern Pacific Fishery Management
Council, provided us with an overview of the topics that we
will discuss here today, and I am pleased he will also be part
of the panel this morning.
The Subcommittee also held hearings in my state of Maine,
in New Orleans, and tomorrow the Subcommittee will be in
Seattle. It is my hope and my intention that we hear from as
many people as possible, to develop a broad consensus on how to
ensure healthy fisheries for the future. After all, can there
be any doubt that fisheries are vital to our States and to the
Nation as a whole?
In 1998, commercial landings by U.S. fishermen were over
9.2 billion pounds of fish and shellfish, worth $3.1 billion.
Further, the recreational fishing catch was 195 million pounds.
In Maine, fishing is more than a job, it is a way of life. We
have the second longest sea coast in the country. Alaska, with
33,000 miles bordering the ocean, is the only State where Maine
could suffer from any envy of coastline. All along the rocky
shore are communities with long and rich fishing heritages.
As a result of my work with Senator Stevens on the Commerce
Committee, I know the same can be said of Alaska, which
produces more seafood than any other State. In fact, Alaska is
responsible for one-half of the volume and one-third of the
value of the entire U.S. catch.
In 1998, this State had the first and third-ranked ports in
the country. Dutch Harbor is on the top of the list, and last
year's landings exceeded 597 million pounds worth over $110
million. Kodiak, the third largest, increased its total
landings by about 80 million pounds from the year before, and
its value was over $78 million. Of course, the other ports like
Ketchikan, Petersburg, Cordova, and Seward were certainly
providing major sources of revenue and jobs throughout the
entire fishing industry.
While many regions of the country are dependant on
commercial and recreational fisheries that are strong and
robust, others have not fared as well. Their fish stocks have
declined, and fisheries in those regions are feeling the
economic impact. Throughout the reauthorization process we will
examine ways to again bring about healthy fisheries and healthy
fishing communities.
As you know, one of the overall goals of the Magnuson-
Stevens Act was to provide a mechanism to determine the
appropriate level of catch to maximize the benefit to the
Nation, while at the same time protecting the long-term
sustainability of the resource. It is a balancing act, to be
sure, among competing interests.
We will also hear about the need for participation of
nonfishing interests when managing public resources. The
Sustainable Fisheries Act of 1996 reflects significant changes
to the goals of the Magnuson-Stevens Act. Proper implementation
of these provisions is of great concern to many different
groups. Accordingly, there is considerable interest in the
activities of both the regional councils as well as the
National Marine Fisheries Service.
The most substantial change under the act was the mandate
to stop overfishing and restore overfished fish stocks. The
councils were given a timetable to achieve that goal, and
today's witnesses will be giving us first-hand reports about
the level of success the North Pacific Council has had in
meeting that goal.
The councils and the National Marine Fisheries Service were
also told to increase their emphasis on the socioeconomic
impacts that regulations have had on fishing communities.
Clearly, Congress intended to preserve the fishermen as well as
the fish.
The Sustainable Fisheries Act also imposed a moratorium on
the creation of new individual fishing quotas, or IFQ's, in
which a percentage of the annual catch is held privately. As
you well know, IFQ's were a divisive issue in 1996, and I know
from my work with Senator Stevens how much it means to those of
you who fish off the coast of Alaska.
Today's witnesses will offer recommendations to address
IFQ's in the future. We will also hear about community
development quotas, or CDQ's, and how they have worked in
Western Alaska.
The final policy shifts in the Sustainable Fisheries Act
are the provisions to minimize bycatch and protect fish
habitat. Based on concerns that certain fish stocks have
declined due to their loss of surrounding habitat, the act
established a national program to facilitate long-term
protection of essential fish habitat. Many have argued that
these provisions have not been implemented properly, and we
will be discussing this problem as well with our witnesses
today.
During my trips home to Maine, I have had the opportunity
to discuss many of these issues with fishermen and the people
who live in fishing communities. I have heard over and over
again how they have been affected by the law because it has
been implemented improperly, and that--contrary to its
mandate--the best science is not being used in the management
and development of policy.
I know that some of these same concerns will be expressed
by many of the witnesses here today. I am looking forward to
hearing your testimony, because I think we have to develop ways
in this process to make sustainable fishing and good management
the norm and not the exception. The reauthorization of this act
is an opportunity for us to take into account what everybody is
saying all over the country, and to try to craft a sensible and
balanced plan that affects all sides in this most important
debate.
Senator Stevens.
STATEMENT OF HON. TED STEVENS,
U.S. SENATOR FROM ALASKA
Senator Stevens. Well, thank you very much, Senator Snowe.
I am delighted that you have come to Alaska, and I thank you
for coming in the winter time. I tell people that I think our
best friends come and visit us in the winter time, and you are
no stranger to our climate, but you are a stranger to Alaska,
so we are delighted that you have come.
I have always believed that field hearings are the best way
to get into issues such as this, because if we had set this
hearing in Washington, as you know, with the bells ringing and
people coming in from all over the country, Alaska would be
fortunate to have 15 or 20 minutes of a series of hearings.
This way, through your leadership, we are able to have a record
made of the Alaska point of view, and it will be available not
only to us but to anyone who wants to review the record, and
particularly to those who are involved in the regulation of our
fisheries nationally.
And it is nice to see--I think of the old movie, where we
have rounded up the usual cast of suspects here.
[Laughter.]
Senator Stevens. I am particularly pleased that Penny
Dalton is with us. She used to be here on the podium with us
when we held these hearings, and I am glad to see you here,
Penny.
I really think that you have gone through most of the
things that are before us, and I do not see any reason to be
redundant. I do applaud our regional council, which I think is
ahead of most of the councils in its fishery management plans,
and as you say, Chairman Lauber was before us already on this
subject last July. There are people here, too, who believe that
the National Marine Fisheries Service and the councils have not
implemented the 1996 amendments in a timely or appropriate
manner. Some of that delay I think is our own fault in
Congress. The AFA required substantial amounts of time and
effort from the council and from the agencies during the period
that those actions should have been taken, and part of it is
the result of our being unable to prevent the courts from
inserting themselves into these issues.
We know just recently, again, the Stellar sea lion
litigation has come to a focal point, and the agency and the
council now are going to be busy for some time to come. Those
delays really, I think, lead the reasons for the untimely
action, or the fact that we have not had timely action under
the AFA, but as chairman of the Appropriations Committee I hope
you all realize that since 1995 Congress has increased the
Fisheries Service budget by 57 percent, and Congress in my
judgment has never devoted more resources to marine
conservation and fisheries management than it does today, and
we have done that during a period of, a time when Congress was
retrenching in order to balance the budget, so I think it is
safe to say that it is going to be very difficult to continue
the expansion of these programs at that rate, but we will
certainly do our best.
I think the unique issues, particularly those of Stellar
sea lions and the existing programs really need review, and I
am pleased to be able to participate in that review. I do
encourage the National Marine Fisheries Service to think more
about long-term research. I am sure that they are on that
course already, but I hope that the agency plans to continue in
much of the resource that Congress has funded this year. That
is an expansion--that money I talked about is aimed primarily
at increasing our knowledge of the subjects we are trying to
regulate.
And as you say, the IFQ issue is still before us. I hope
these hearings give us additional knowledge as to how to deal
with that. When the moratorium expires I think that is going to
be a central issue for Alaska in terms of the reauthorization,
and we need to know more from the witnesses in terms of their
attitudes there.
We are also, as you said, going to hear about the community
development quotas. I think that program has been very sound,
and I do not know if you know it, but the Norton Sound Group
recently paid $10,000 in dividends to each of the 15
communities in this region as a result of that program, which
is a substantial thing, and the National Science Research
Council found that the CDQ program was successful and should be
continued.
I do have some questions about the whole question of
essential fish habitat. It is a good idea, and I think we need
to get re-involved and get more understanding of what the
agency intends to do under that program. I certainly did not
mean it to become another Endangered Species Act. I do think
that there has to be some sort of a trigger in that before we
decide that every acre of land under salt water in the United
States needs a new Federal process.
I do think there are substantial areas that need that now,
and the actions under the ESA should not be diluted by having
it be applied across the whole spectrum of land that is under
salt water.
But I am not going to prolong my opening statement. I think
I have already. We set 20 minutes for the beginning, and we
have taken that. I thank every one of you for coming. I will
say, last, I thank all of the witnesses who gave us their
statements in advance, because I literally read them all coming
up here yesterday, and that is a luxury that we normally do not
have, is to get the statements far enough in advance that we
can really study them before the hearing, but I look forward to
the hearing, and having you chair it, Senator Snowe.
Senator Snowe. Well, thank you, Senator Stevens.
Senator Stevens. I am glad to be sort of a spectator at
this one.
Senator Snowe. A spectator--yeah.
[Laughter.]
Senator Snowe. Who believes that in this audience?
Well, before I welcome members of the first panel I just
want to introduce our staffs. Sloan Rappoport, Stephanie
Bailenson, and Margaret Spring are here from the Subcommittee
staff in Washington. Dave Russell from Senator Stevens' D.C.
staff, Bill Wolf from Senator Murkowski's office, and Jean
Bumpus from Senator Gorton's staff are also here.
So now I would like to welcome the first panel. Ms. Penny
Dalton is the Assistant Administrator of the National Marine
Fisheries Service. She is accompanied by Mr. Pennoyer, the NMFS
Alaska Regional Administrator. We also have Mr. Rick Lauber,
chairman of the North Pacific Council. Nice to see you again.
The next witness will be Mr. Dave Benton, Deputy Director of
the Alaska Department of Fish & Game, and our final witness
will be Admiral Tom Barrett, who is the commander of the
Seventeenth Coast Guard District. I thank you all. Ms. Dalton,
we will begin with you.
STATEMENT OF PENNY DALTON, ASSISTANT ADMINISTRATOR, NATIONAL
MARINE FISHERIES SERVICE, NATIONAL OCEANIC AND ATMOSPHERIC
ADMINISTRATION, ACCOMPANIED BY STEVE PENNOYER, ALASKA REGIONAL
ADMINISTRATOR
Ms. Dalton. Good morning. I am Penny Dalton, Assistant
Administrator of NOAA Fisheries. It is a pleasure to be here
today to participate in the committee's continuing review of
Senator Stevens' namesake act, the Magnuson-Stevens Act, and to
discuss North Pacific fisheries.
Senator Stevens. : Penny, could you pull the mike forward a
little bit?
Ms. Dalton. Sure.
Senator Stevens. Thank you.
Ms. Dalton. With me is Steve Pennoyer, Alaska Regional
Administrator.
With 34,000 miles of tidal marine coastline and 70 percent
of the U.S. continental shelf, Alaska plays a central role in
our Nation's fishing economy. In 1998, fishermen in Alaska had
landings accounting for 52 percent of total U.S. seafood
catches. The fishing industry is the largest private sector
employer in the State of Alaska, providing 47 percent of basic
employment, ahead of oil and gas production, mining, forest
products, and tourism. Recreational fisheries are also
important. In 1997, anglers spent about 2.6 million days to
catch 22.3 million salmon and 673,000 halibut.
Under the Magnuson-Stevens Act, the North Pacific Council
and NOAA fisheries have implemented five fishery management
plans in Alaska, the Bering Sea, and Aleutian Islands
groundfish, Gulf of Alaska groundfish, Bering Sea crab,
scallops, and Alaska salmon. The council focuses much of its
attention on the two groundfish plans, because routine
management under the other three is done in large part by the
State.
The Alaska region has achieved remarkable success in
preventing overfishing. Relative to other regions, North
Pacific fishermen have enjoyed sustained yield due to good
stock assessments and conservative management measures. None of
the 36 groundfish stocks covered by the groundfish plans is at
or below a level of abundance that is considered to be
overfished. However, three species of Bering Sea crab, Tanner,
Snow, and St. Matthew blue crab are overfished. The council and
the State have completed a rebuilding plan for Tanner crab and
are developing plans for the other two.
With respect to a possible industry buyback program for
this fishery, regulations have been prepared and are under
review by the Department and OMB. We expect an interim final
rule to be published soon.
In recent years, we have placed a high priority on efforts
to reduce fishery impacts on endangered marine species in
Alaska, particularly Stellar sea lions. In 1990, after severe
declines throughout the Gulf and Aleutian Islands regions,
Stellar sea lions were listed as threatened. Since then,
numbers have continued to drop, and the western population was
reclassified as endangered in 1997.
Because the pollack fisheries are likely to compete with
Stellar sea lions for food, NOAA fisheries concluded in a 1998
biological opinion that measures were necessary to prevent
jeopardy to the western population and adverse modification to
critical habitat. Since then, we have worked closely with the
council to develop management measures that disperse the
fisheries in time and space and preclude fishing in critical
rookery areas.
One change in Alaska fisheries over the last decade has
been allocation of the catch among industry sectors, and limits
to fishery access. Pollock and Pacific cod were allocated
between in-shore and off-shore sectors in 1992, along with the
establishment of community development quotas.
In 1995, we implemented council recommendations for
individual fishing quotas for Pacific halibut and sable fish.
These programs have allowed us to obtain the benefits of a
market-based allocation system, protecting interests of small-
scale fishermen and fishing communities, and address regional
concerns in the program design about consolidation,
transferability, and equity.
Among the most challenging issues in recent months is
implementation of the American Fisheries Act that was enacted
in October 1998. This new law is having a profound effect on
the Bering Sea groundfish fisheries, revising in-shore/off-
shore allocations, reducing off-shore fishing capacity through
a buy-out funded in part by fees on in-shore harvests,
establishing fishery co-operatives, increasing monitoring, and
applying the harvesting processing restrictions that are
commonly known as side boards to fishery participants who
receive direct AFA benefits.
The council and NOAA fisheries have worked hard to complete
interim AFA rules for the opening of the fishery this week. The
next task will be to complete final rules. While the work load
has been enormous, we look forward to the fishery management
opportunities that the statute is making available.
Another key element of the groundfish management system is
the North Pacific groundfish observer program. The Alaska
Fishery Science Center, in co-operation with the industry,
administers the program under which private companies contract
directly with fishermen to provide observers. NOAA fisheries
pays for program administration and the industry pays for
direct observer costs. The program annually deploys about 350
observers on over 400 vessels and processing plants, providing
30,000 observer days of real-time data to NOAA fisheries, the
council. and industry, through an extensive electronic
reporting system.
Another Magnuson-Stevens priority is minimizing bycatch.
Despite low bycatch rates, the enormous volume of the
groundfish fisheries produces large bycatch quantities. In
1998, we approved and implemented a full retention requirement
for pollack and Pacific cod, which will be extended in 2003 to
other species.
Biodegradable pinholes are required for pot gear to
minimize ghost fishing. Industry co-operation is essential, and
we are working with groups like the Groundfish Forum to study
new bycatch reduction methods and gear. In addition, the IFQ
and CDQ programs and fishery co-operative are contributing by
slowing the pace of fishing and allowing more selective
practices that reduce capture of unwanted species, increase the
recovery rate, and reduce the amount of lost gear.
Another factor in Alaska management is increased emphasis
on conserving and enhancing fisheries habitat. Large areas of
the North Pacific have been closed to groundfish trawling and
scallop dredging to reduce impacts of these fisheries. Habitat
area closures encompass about 30,000 square miles in the Bering
Sea and an additional 47,000 square miles in the Gulf of
Alaska. Other small closures are Sitka and Cook Inlet.
To address nonfishing activities, NOAA Fisheries has
conducted about 400 consultations in Alaska to date with
Federal agencies whose actions may adversely affect EFH. These
reviews integrate EFH consultations into existing environmental
review processes to minimize impacts on the public.
In closing, NOAA fisheries is still working to implement
the changes made to the Magnuson-Stevens Act in 1996, and would
not propose major changes at this time. However, we have
identified revisions that may improve the management proces and
resolve relatively minor problems. These are summarized in my
written testimony.
We look forward to working with congressional Members on
high priority policy issues such as observer programs,
individual fishing quotas, and funding and fee authorities.
This concludes my testimony. Thank you.
[The prepared statement of Ms. Dalton follow:]
Prepared Statement of Penelope Dalton, Assistant Administrator,
National Marine Fisheries Service, National Oceanic and Atmospheric
Administration
Madame Chair and members of the Subcommittee, thank you for
inviting me to Anchorage to testify on the implementation and
reauthorization of the Magnuson-Stevens Fishery Conservation and
Management Act (Magnuson-Stevens Act), and to speak on issues of
concern to fishermen in the North Pacific Ocean and Bering Sea off
Alaska. I am Penny Dalton, Assistant Administrator for Fisheries for
the National Oceanic and Atmospheric Administration.
building a foundation for sustainable fisheries - alaska fisheries
With 34,000 miles of tidal marine coastline and about 70 percent of
the total U.S. continental shelf area, Alaska is a state where fishing
is a dominant aspect of life. In 1998, for example, commercial
groundfish landings in Alaska totaled about 5 billion pounds with a
wholesale value of about $1.2 billion. These landings accounted for 52
percent of the total commercial landings in the United States. The
commercial fishing industry is the largest private-sector employer in
the State of Alaska, providing 47 percent of basic employment, ahead of
oil and gas production, mining, forest products and tourism.
While the commercial fishing industry dominates the overall use of
living marine resources off Alaska, recreational fisheries also are
important to State residents and visitors alike. In 1997, recreational
fishermen spent about 2.6 million angler days to catch over 2.3 million
salmon and 673,000 halibut.
The North Pacific Fishery Management Council (Council) is primarily
responsible for the development of fishery management plans (FMPs) and
amendments under the jurisdiction of the Magnuson-Stevens Act.
Currently, NOAA Fisheries has five FMPs implemented, one each for
groundfish fisheries in the Bering Sea and Aleutian Islands (BSAI) area
and Gulf of Alaska (GOA), respectively, for the BSAI crab fisheries,
the scallop fisheries and salmon fisheries in the EEZ. The Council
focuses much of its attention on the two groundfish fishery FMPs
because routine management under the other three FMPs has been
undertaken for the most part by the State of Alaska.
None of the 36 groundfish species or species groups covered by the
two groundfish FMPs is at or below a level of abundance that is
considered to be overfished. Three species of crab in the BSAI, Tanner
crab, snow crab, and St. Matthew blue king crab, however, are
overfished. The Council has developed in conjunction with the State a
rebuilding plan for the first species and is developing plans for the
other two species that will facilitate the long-term potential yield of
these highly cyclical species.
Ensuring that our fisheries do not negatively affect species
protected under the Marine Mammal Protection Act and the Endangered
Species Act (ESA) is a high priority for NOAA Fisheries. Here in
Alaska, two species of particular concern are the Stellar sea lion and
the short-tailed albatross. The Stellar sea lion was listed as
threatened in 1990. The listing followed severe declines of the species
throughout the Gulf of Alaska and Aleutian Islands region, which was
the center of its range in the North Pacific. During the 1990s, the
species continued to decline and, since the late 1970s, counts of
Stellar sea lions in this region have dropped by more than 80 percent.
In 1997, NOAA Fisheries recognized that the Stellar sea lion consisted
of two distinct populations, and reclassified the population west of
144 W. longitude as endangered.
A number of factors are either known to have contributed to the
decline, or are suspected of having done so. The leading hypothesis has
been that sea lions have declined due to factors causing nutritional
stress, which adversely affects the growth and condition of animals,
and their probabilities of reproduction and survival. In December 1998,
NOAA Fisheries issued a Biological Opinion that concluded that the
pollock fisheries in the GOA and BSAI were likely to jeopardize the
continued existence of the western population of Stellar sea lions and
modify adversely their critical habitat. To reduce competition between
the pollock fisheries and Stellar sea lions, NOAA Fisheries has worked
closely with the Council to develop management measures that disperse
the fisheries in time and space and preclude fishing from critical
rookery and haulout areas.
We have made similar advances in protecting the short-tailed
albatross from direct interactions with fisheries. This species,
believed to be extinct in 1949, has been slowly increasing in abundance
to approximately 1,200 birds in the world today. In 1997 we issued
rules requiring the GOA and BSAI hook-and-line groundfish fisheries to
use seabird avoidance measures, and in 1998 similar measures were
implemented for the halibut fisheries off Alaska. The Washington Sea
Grant Program and the fishing industry currently are conducting a
Federally funded study to test the efficacy of these new rules. We are
implementing a new rule regarding the use of blue-dyed bait in the
Hawaiian longline pelagic fishery, and perhaps other such innovations
could be employed in Alaska to lessen the attractiveness of bait to
seabirds.
Fishing industry requests for allocations of the total allowable
catch (TAC) among industry sectors and for limiting access to the
fishery resources have grown over the past decade. Allocations of
pollock in the BSAI and pollock and Pacific cod in the GOA began in
1992, along with the unique Community Development Quota (CDQ) program.
In 1995, we implemented the Individual Fishing Quota (IFQ) Program
recommended by the Council for the Pacific halibut and sablefish
longline fisheries. Both of these programs are making significant
progress toward their respective goals for Alaskan fisheries. They
provide a useful model for attaining some of the benefits of a market-
based allocation scheme while protecting the interests of small-scale
fishermen and fishing communities, and integrating regional
sensitivities about consolidation, transferability and equity into
program design.
Some of the most challenging TAC allocation issues we have had to
deal with recently are those raised by the American Fisheries Act (AFA)
passed in October 1998. Implementing the AFA has had a profound effect
on the groundfish fisheries in the BSAI and, to a lesser extent, the
groundfish and crab fisheries in the GOA. Basically, the AFA
established a new inshore-offshore allocation scheme for the BSAI
pollock fisheries; reduced fishing capacity through a buyout of nine
pollock catcher/processor vessels; established a fee on the inshore
harvests of pollock to repay a $75 million loan used for the buyout;
and listed vessels or specified criteria for the participation of
fishing vessels and processors in the BSAI pollock fisheries. The Act
also provided for the creation of, and TAC allocation to, fishery co-
operatives; increased observer coverage and scale requirements for
pollock catcher/processors; required harvest restrictions (commonly
known as "sideboards") on fishermen and processors who receive
exclusive harvesting and processing privileges under the AFA; and
directed the Council to develop excessive share harvesting limits for
BSAI pollock processing and the harvesting and processing of other
groundfish. The Council and NOAA Fisheries made implementation of the
AFA a top priority and have worked hard to develop interim AFA rules
that we plan to make effective this week. The next task will be to
complete final implementing rules. We look forward tothe fishery
management opportunities that this statute has made available.
The sophisticated management regime in effect for the BSAI and GOA
groundfish fisheries would not be possible without the North Pacific
Groundfish Observer Program, which is administered by the Alaska
Fisheries Science Center in co-operation with industry. The program has
responsibility for training, debriefing, data management, data
analysis, and observer provider oversight. Observers are procured
through private companies that contract directly with the fishing
industry. NOAA Fisheries pays for program administration while the
industry pays for the direct costs of hiring and deploying observers.
The program annually deploys approximately 350 fisheries observers on
over 400 vessels and processing plants. A variety of fisheries are
observed and data are collected to meet multiple agency needs. The data
are provided to end users in real time through an extensive electronic
reporting system. The result is a system which annually provides over
30,000 observer days of readily available quality data to NOAA
Fisheries, the Council, and industry.
implementation of the sustainable fisheries act (sfa)
As we enter the 21st Century, we are at a crucial point in
fisheries management, with considerable work ahead of us. In the 23
years since the enactment of the Magnuson-Stevens Act, we have seen the
complete Americanization of fisheries in federal waters (most
dramatically in the case of Alaska), the expansion of the domestic
fishing industry, declines in many fishery resources, and the rise of
public interest in fisheries issues. We have seen some successes from
our management actions, including rebuilding of Spanish mackerel, the
initial rebound of a few depleted stocks like Gulf of Mexico red
snapper and Georges Bank haddock, and the continued strong production
of fish stocks off Alaska. However, as of 1999, 11 percent of U.S.
living marine resources are overfished or are approaching overfished,
14 percent are not overfished, and there is another 75 percent whose
status is unknown. In Alaska, about 1 percent of living marine
resources are overfished or are approaching the overfished status, 12
percent are not overfished, and there is another 87 percent whose
status is unknown. We at NOAA Fisheries are working to rebuild fish
stocks to levels that could sustain fisheries of greater economic
value. From a national perspective, scientists estimate that we could
increase U.S. fishery landings up to 6.8 billion pounds by rebuilding
all fisheries and maintaining harvests at optimal yields.
The Magnuson-Stevens Act provides the national framework for
conserving and managing the wealth of fishery resources found within
the 197-mile-wide zone of Federal waters contiguous to the United
States (except for the coastal waters for Texas and the Gulf of Mexico
coast of Florida where state waters extend out to 9 nautical miles). In
1996, Congress ushered in a new era in fisheries management, making
significant revisions to the Magnuson-Stevens Act in the Sustainable
Fisheries Act (SFA). The SFA addresses a number of conservation issues.
First, to prevent overfishing and rebuild depleted fisheries, the SFA
caps fishery harvests at the maximum sustainable level and requires
fishery management plans to rebuild any overfished fishery. NOAA
Fisheries now reports annually on the health of marine fisheries and
identifies fisheries that are overfished or approaching an overfished
condition. Second, the SFA refocused fisheries management by
emphasizing the need to protect fisheries habitat. To enhance this
goal, the SFA requires that management plans identify habitat that is
necessary to fish for spawning, breeding, feeding, or growth to
maturity. The new law also clarifies our existing authority to comment
on Federal actions that affect essential fish habitat. Third, to reduce
bycatch and waste, the SFA adds a new national standard requiring that
conservation and management measures minimize bycatch and the mortality
of bycatch that cannot be avoided. It also calls for management plans
to assess bycatch and to take steps to reduce it.
The most immediate and direct effect of any commercial or
recreational fishery management regulation is on fishermen, their
families and communities. To address this concern, the SFA establishes
a new national standard 8 that requires, consistent with conservation
objectives, that fishery management plans provide for the sustained
participation of fishing communities and minimize adverse impacts to
the extent practicable. In addition, a national standard has been added
to promote the safety of human life at sea. Finally, the SFA provides a
number of new tools for addressing problems relating to the transition
to sustainable fisheries, including amendments to provide for fisheries
disaster relief, fishing capacity reduction programs, vessel financing,
and grants and other financial assistance.
NOAA Fisheries takes seriously its mandates under the SFA. We are
working to ensure that SFA requirements are implemented, and that
conservation and management measures fully protect the resource and
provide for the needs of fishing communities and the Nation. A great
deal of work remains to be done. We are laying a solid foundation for
future fisheries management. The benefits of the changes made by
Congress in 1996, however, will take years, perhaps decades, to
realize. In addition, the management decisions that we face are
becoming ever more complex and contentious, and good solutions are hard
to come by. We need to direct resources and effort to the scientific
and technical aspects of our work. We also must build consensus with
the public and among various stakeholders to facilitate progress in
developing management programs that will move us toward the goal of
healthy and sustainable marine resources.
The SFA imposed a deadline of October 11, 1998, for amendments to
each of the 39 existing fishery management plans to implement its
changes. Despite the Councils' best efforts, there were some proposed
amendments that did not satisfy the requirements, for which the
analyses were inadequate, or that did not minimize socioeconomic or
environmental impacts to the extent possible and achieve management
objectives. NOAA Fisheries disapproved or partially approved those
amendments and is working closely with the Councils to improve them,
particularly in the areas of improving our social and economic
analyses, rebuilding overfished stocks, minimizing bycatch, identifying
and protecting fish habitat, and improving the scientific basis for
management. I will outline some of the work we are doing in each of
these areas:
Social and Economic Analyses: One of NOAA Fisheries' highest
priorities is to improve our social and economic analyses. These
analyses are required by a number of laws in addition to the Magnuson-
Stevens Act, including the Regulatory Flexibility Act, the National
Environmental Policy Act (NEPA), and Executive Order 12866. The
requirement of the Magnuson-Stevens Act to include a fishery impact
statement, and the new standard on fishing communities, also make clear
our mandate to consider the social and economic impacts of any
management program. This consistently has been an important part of the
decision-making process and has affected our choice of fisheries
conservation and management actions. For instance, when we implemented
a full retention requirement for pollock and Pacific cod in 1998, we
delayed the effectiveness of a similar requirement for flatfish until
2003 to allow development of new markets and gear technology that could
minimize the costs of this requirement.
To strengthen our social and economic analysis capabilities, we are
issuing revised Regulatory Flexibility Act guidelines to our employees,
hiring more economists, sociologists, and anthropologists, and working
with other Federal agencies and states to improve our data collection.
As a result, economic, social, and biological considerations will be
better integrated to assist fisheries managers in making the best
possible decisions to balance conservation, the fishing industry, and
community needs.
Rebuilding Overfished Stocks: I would like to point out the
remarkable success that has been achieved in preventing overfishing of
most of the important commercial stocks in the North Pacific. The
conservative and scientifically based TACs that have been used in
recent years have contributed significantly to the continued production
of groundfish stocks. With the exception of the crab species I
previously mentioned, fisheries management by the State of Alaska under
the crab, scallop, and salmon FMPs also has prevented these species
from becoming overfished. Rebuilding plans are being developed for the
three species of crab in the BSAI that have been found to be
overfished. Relative to fishery stocks in other regions: however, those
in the BSAI and the GOA have enjoyed sustained yields due to the
scientifically based stock assessments by the Alaska Fisheries Science
Center and the conservation and management measures recommended by the
Council. On the subject of buybacks, regulations have been prepared and
are under Department of Commerce and Office of Management and Budget
(OMB) review. We expect that an interim final rule will be published
shortly, and that public comment on an additional referendum will be
solicited. We can operate under the interim final rule once OMB has
cleared the regulation.
Minimizing Bycatch: Minimizing bycatch continues to be a very high
priority for NOAA Fisheries in Alaska. Despite low bycatch rates in the
groundfish fisheries, relative to similar fisheries around the world,
the large volume of these fisheries produces a large poundage of
bycatch. Existing prohibited species catch limits and closed areas in
the groundfish fisheries, however, effectively move fisheries out of
areas of high bycatch of non-groundfish species. Improvements in
bycatch control can still be made. We have been working closely with
the Council and industry to make steady progress on reducing bycatch
and discards. In December, we published a proposed plan amendment that
would establish a framework to reduce the annual trawl bycatch limit
for chinook salmon. Also in December, we published another proposed
plan amendment that would prohibit non-pelagic trawling in a directed
pollock fishery. Other potential bycatch reduction actions we are
working on with the Council include development of a halibut mortality
avoidance program. In 1998, we approved and implemented a full
retention requirement for pollock and Pacific cod, which will be
extended to rock sole and yellowfin sole in the BSAI and shallow water
flatfish in the GOA in 2003. Biodegradable panels are required for pot
gear to minimize the unseen bycatch of lost or so-called ghost fishing
gear.
Industry co-operation has been critical in reducing bycatch. We
have issued a number of experimental fishing permits, and are working
with various industry groups, including the Groundfish Forum, to study
new bycatch reduction methods and gear. In addition, the IFQ and CDQ
programs and fishing co-operatives are contributing to bycatch
reduction. Although minimizing bycatch was not their primary purpose,
by slowing the pace of fishing under these regimes, they have allowed
for more selective fishing practices that reduce the capture of
unwanted species, increase the recovery rate and product quality of the
targeted species, and provide for significant reductions in the amount
of fishing gear used and lost. Care in the deployment of fishing gear
is particularly prevalent in the CDQ fisheries in which most all
bycatch of non-target species is counted against a specified CDQ
allocation. This induces CDQ fishermen to focus on maximizing the value
of all species harvested instead of maximizing the volume harvested of
any one species as in non-CDQ fisheries.
Essential Fish Habitat (EFH): The SFA substantially increased the
emphasis in the Magnuson-Stevens Act of conserving and enhancing
fisheries habitat. Off Alaska, we have a long history with the Council
in protecting important areas of bottom habitat. The productivity of
the sea floor habitat has long been recognized as an essential
component of an ecosystem-based fishery management regime and
regulations have been implemented to protect specific areas of
important sea floor habitat. Large areas of the North Pacific have been
closed to groundfish trawling and scallop dredging to reduce impacts of
these fisheries on bottom habitat and protect juvenile crabs. In the
BSAI, habitat area closures encompass about 30,000 square nautical
miles, more than twice the area of Georges Bank off the East Coast of
the United States. The GOA closures encompass an additional 47,000
square nautical miles, but most of this area is off the continental
shelf. In addition, the Council has proposed, and we are reviewing, an
additional closure of about three square miles around the Cape
Edgecumbe pinnacles in the southeastern GOA off Sitka. If approved,
this action would prohibit all fishing activities in this area that is
recognized as habitat particularly important for the spawning, breeding
and growth of a variety of commercially important fish species. An
additional closure to trawling in Cook Inlet also is under
consideration.
To address non-fishing activities, NOAA Fisheries has conducted
close to 2,500 consultations to date with Federal agencies whose
actions may adversely affect EFH, including about 500 in Alaska. These
reviews have been accomplished largely by integrating EFH consultations
into existing environmental review processes as a way to minimize
regulatory impacts on Federal action agencies and the public. We expect
the number of consultations to increase as outreach efforts with
Federal agencies continue to build awareness of the EFH statutory
requirements. However, it is important to remember that even prior to
the designation of EFH, most Federal actions affecting the habitat of
marine and anadromous species were subject to review by NOAA Fisheries
under other legal authorities. EFH has provided more emphasis and
structure to these reviews, and we are working closely with affected
agencies and industries to ensure the EFH consultation process is
efficiently implemented. For example, in Alaska, we have reached
agreement with the Corps of Engineers to combine EFH consultations with
the existing permitting process for dredge and fill activities, and we
are beginning discussions with the U.S. Forest Service to build EFH
consultations into their environmental analyses under the National
Environmental Policy Act.
Improving Scientific Information: NOAA Fisheries is committed to
using the best possible science in the decision-making process, and to
incorporating biological, social, and economic research findings into
fisheries conservation and management measures. Meeting our
responsibilities under the Magnuson-Stevens Act and other applicable
laws requires collecting a considerable amount of data. In the Alaska
Region, NOAA Fisheries is continuing to augment a wide range of data
collection activities. The frequency of groundfish surveys in the BSAI
and GOA is being increased to improve monitoring and prediction of
commercial stock status and distribution. The first new Fisheries
Research Vessel is planned for deployment to Alaska. Coordination and
co-operation with industry, academia and State agencies in a wide range
of fishery-marine mammal interaction research is being expanded and
pilot research on the impacts of fishing is underway in the BSAI and
GOA. The North Pacific Groundfish Observer Program is continuing to
work with industry and the Council to improve the quality and
timeliness of the data it collects. Notwithstanding these exciting
developments, we will continue to support a precautionary approach in
the face of scientific uncertainty.
magnuson-stevens act reauthorization issues
We are still working to understand and effectively implement the
changes to fishery management policies and procedures made by the SFA.
Consequently, we would not propose major changes to the Magnuson-
Stevens Act at this time. However, we have identified some revisions of
existing provisions that may be useful to make the management process
more efficient and to resolve some relatively minor problems. We
currently are reviewing various issues raised by the task force, the
Councils, and some of our stakeholders. Among the issues identified are
the following:
Review process for fishery management plans, amendments and
regulations: The SFA attempted to simplify and tighten the approval
process for management plans and regulations. However, one result of
that effort has been two distinct review and implementation processes -
- one for plans and amendments and another for implementing
regulations. This essentially uncouples the review of plans and
amendments from the process for regulations, and as a result, the
decision to approve or disapprove a plan or amendment may be necessary
before the end of the public comment period on the implementing
regulations. We are considering amendments that would modify the
process to address this issue.
In addition, the Committee may wish to consider reinstating the
initial review of fishery management plans and amendments by the
Secretary. Considerable energy and staff resources are expended on
plans or amendments that are ultimately disapproved because of serious
omissions and other problems. At present, two to three months must
elapse before the Secretary makes his determination, and if the
amendment is then disapproved, it can be months or longer before the
Council can modify and resubmit the plan or amendment. While the
initial review was eliminated by the SFA to shorten the review process,
reinstating Secretarial review may actually provide a mechanism to
shorten the time it takes to get a plan or amendment approved and
implemented.
Restrictions on data collection and confidentiality: The Magnuson-
Stevens Act currently restricts the collection of economic data from
processors. Removal of this restriction could improve the quantity and
quality of information available to meet the requirements of the laws
requiring social and economic analysis. In addition, the SFA changed
the term ``statistics'' to ``information'' in the provisions dealing
with data confidentiality. The change has raised questions about the
intended application of those provisions, particularly with respect to
observer information, and Congressional clarification would be useful.
Coral reef protection: Special management areas, including those
designated to protect coral reefs, hard bottoms, and precious corals,
are important commercial resources and valuable habitats for many
species. Currently, the federal government has the authority to
regulate anchoring and other activities of fishing vessels that affect
fish habitat. However, we remain concerned with threats to those
resources from non-fishing vessels. We intend to work with other
federal agencies to suggest amendments to the Act to clarify,
consolidate, and strengthen the federal government's authority to
regulate the actions of any recreational or commercial vessel that is
directly impacting resources being managed under the Magnuson-Stevens
Act.
Caribbean Council jurisdiction: The current description of the
Caribbean Council limits its jurisdiction to Federal waters off Puerto
Rico and the U.S. Virgin Islands. As a result, the Council cannot
develop fishery management plans governing fishing in Federal waters
around Navassa Island or any other U.S. possession in the Caribbean.
Jurisdiction of the Caribbean Council could be expanded to cover
Navassa Island, by including ``commonwealths, territories, and
possessions of the United States'' within the description of that
Council's authority.
Council meeting notification: To meet the notification requirements
of the Magnuson-Stevens Act, Councils spend tens of thousands of
dollars a year to publish meeting notices in local newspapers in major
and/or affected fishing ports in the region. By contrast, fax networks,
mailings, public service announcements, and notices included with
marine weather forecasts are much less expensive and could be more
effective in reaching fishery participants and stakeholders. The
Committee may wish to consider modifying notification requirements to
allow Council use of any means that will result in wide publicity.
We look forward to working with Congressional members on high-
priority policy issues such as observer programs, individual fishing
quotas, and funding and fee authorities, although, at this time, we
have no specific recommendations for changes in the Magnuson-Stevens
Act to address these issues. We will continue to work closely with the
Alaska delegation, the Council and our various stakeholders to resolve
problems affecting Alaska fisheries.
Madame Chair, this concludes my testimony. Thank you for the
opportunity to discuss the implementation and reauthorization of the
Magnuson-Stevens Act. I am prepared to respond to any questions you and
members of the audience may have.
Senator Snowe. Thank you, Ms. Dalton.
Mr. Lauber.
STATEMENT OF RICHARD B. LAUBER, CHAIRMAN, NORTH PACIFIC FISHERY
MANAGEMENT COUNCIL
Mr. Lauber. Good morning, Senators. Thank you for the
invitation to testify again before this committee. I will cover
additional material, relying on the record for my previous
testimony.
We have all heard that fisheries are doing poorly around
the Nation and the world. For the most part, resource managers
have not received very good marks. From my experience as
council chairman for almost 10 years, and many, many more years
in Alaskan fisheries, I think that we have good, sound,
sustainable fisheries management here in Alaska.
We have put the Magnuson-Stevens Act to use, but to make
the Magnuson-Stevens Act work requires a considerable dose of
political will to restrain the fisheries so the fish can
flourish but still keep industry viable. We have achieved a
balance that maintains Alaska as the United States leader in
fisheries production, as previously mentioned, with over 50
percent of the Nation's landings here. We have limited entry
into our fisheries, and have initiated the largest IFQ
experiment in the United States for our sable fish and halibut
fisheries. We allocate many species by sector, and tightly
control bycatch and waste of nontarget species.
I am proud that our industry has been willing to shoulder
the cost of this highly regulated regime, as well as an
expensive observer program to ensure the long-term
sustainability of our resource.
Now, I want to focus on several key issues that are
currently before the council. The Stellar sea lion protection
has required much of our time since late 1998. Last year alone,
fully 20 percent of our council meeting time was spent on sea
lion protective measures. We responded directly to advice from
the National Marine Fisheries Service in approving many
restrictive measures that will place a severe economic burden
on local fishermen. We need more research and experiments
carried out to help us learn more about the impacts of fishing
and adaptive management. We only hope that our actions will
help the sea lions rebound.
The American Fisheries Act was a groundbreaking piece of
legislation. It has consumed roughly 35 percent of our council
meeting time and 30 percent of our staff time. I sense that in
the long run we will conclude that the AFA provided a very
innovative approach to addressing overcapacity in the pollack
fisheries and its use of co-operatives may provide a good
template for other fisheries as well. It may have many
advantages over the IFQ system.
For the year 2000, the off-shore and in-shore co-operatives
will be up and running, and we have appropriate side boards in
place to limit their impacts on non-AFA fisheries. Groundfish
processor side board caps and excessive shares are up for final
action this April. Our fisheries such as Gulf of Alaska pollack
and Bering Sea crab are considering the use of co-operatives.
we will present a full performance report to you in October.
Restricting halibut charter boat activities is a big issue
that we will address this coming next meeting in February. We
are considering guideline harvest levels not to close the
charter boat fishery, but to trigger future fishing constraints
to keep the overall harvest within the guideline harvest range.
They will apply only to the charter fleet, but I am sure you
will hear from unguided sport fishermen as well and the
commercial fleet no matter what we do.
Overfishing definitions may be considered in the upcoming
reauthorization. I noted earlier that we have generally robust
groundfish stocks. We also realize that individual stocks can
fluctuate wildly over time. Somehow, we must balance the need
for protective overfishing measures with these natural changes
in abundance. Let us be precautionary in our management,
especially when the stock is low, but reasonable in our
approach.
On essential fish habitat we have added descriptions to our
fisheries plans and imposed measures to minimize fishing
impacts on habitat. All in all, we have closed about 30,000
square miles of the Bering Sea to trawling, an area larger than
Maine, and more than twice the size of George's Bank.
We have banned bottom trawling in some areas of the State.
The Gulf of Alaska has closures as well, and I believe Congress
should take a hard look at our habitat requirements and be more
specific about defining essential fish habitat. Let us protect
the habitat that really counts. The broad perspective current
legislation and the NMFS guidelines just opens the door for
wide types of lawsuits and criticisms.
Subsistence has come to the forefront because of the
Federal take-over of fisheries in Alaska, but at the current
time the council is only working with subsistence halibut
issues. We quite likely will become more involved in the
subsistence issue as this evolves.
Last, I want to touch on the Russian fisheries and our
pollack stocks. Our pollack viability may hinge to some extent
on how much is harvested in Russian waters. U.S. stocks mix
with Russian pollack off Cape Naveran, and we are hit hard off
our maritime boundary in the northern Bering Sea. We can expect
even more intense pressure along the boundary, because their
stocks are declining.
The situation further aggravated by the Russian State
Committee on Fisheries licensing vessels from five or six
countries to fish pollack for hefty fees, and recent reports of
factory trawlers moving from Mermansk to the Far East.
We appreciate your support for scientific exchanges of
information and increased patrol activities by the United
States Coast Guard along the boundary and the donut hole. This
problem needs our continued attention and resolution.
Thank you very much.
[The prepared statement of Mr. Lauber follow:]
Prepared Statement of Richard B. Lauber, Chairman, North Pacific
Fishery Management Council
Good morning, Senators. As always, it's an honor for me to appear
before you, particularly with my esteemed colleagues from NMFS, the
State of Alaska, and U.S. Coast Guard. It's a good time to have a
hearing. We all made it through the end of the century, and appear to
be Y2K compliant, and I think now is an appropriate time to take stock
of how we're doing in fisheries management. The really good news to me,
from my vantage point of over a quarter century being involved in
Alaska fisheries, and almost ten years as the Council chairman, is that
I believe we may be onto ``sustainable fisheries management'' for most
of our fisheries up here. That can be a very illusive goal, as we all
know from our collective experience in other regions of the U.S. and
around the world.
For the most part, resource managers have not received very good
marks. And it's not for lack of strong legislation such as the
Magnuson-Stevens Act, which with all its myriad provisions and
amendments, provides a very sound foundation for sustainable
management. Rather, the vital ingredient that seems to be missing in
many areas is a political will to establish effective management
constraints so that fish stocks can flourish, while still allowing for
an economically viable fishing industry.
We have achieved a balance up here that has allowed Alaska to
remain the U.S. leader in fisheries production. Over 50% of the
nation's landings come from Alaska stocks, and we are proud of that. We
have strong support from NMFS and the State of Alaska, in providing
comprehensive stock assessments, and we have constrained harvest levels
through firm season closures once the harvest is taken. Last month our
scientists again informed us that our groundfish stocks continue to be
in good health, with Bering Sea pollock stocks rebounding with a very
strong 1996 year class. That's good news for the industry and hopefully
for the sea lions. Our flatfish stocks seem to have topped out for now
and are cycling downward. Each of our stocks has its own unique cycle
and we cannot keep all of them high all the time. But for the most
part, the fisheries remain healthy off Alaska as we head into this next
decade.
On the fishing capacity side of the equation, the North Pacific
Council over the past ten years has limited entry into every fishery
under its jurisdiction, and moved beyond that for the sablefish and
halibut longline fisheries, to the use of individual fishing quotas,
the largest such experiment in the U.S. to date. Overlaying most of our
fisheries is a complex array of allocations of target species by
industry and gear sector. Additional regulations control bycatch and
waste of non-target species.
This complex management system, of course, comes at a high cost and
is not without burden to industry. I am proud to say that our industry
has been willing to shoulder those costs, as well as an expensive
observer program, to ensure long term sustainability of the resource.
You will be hearing from industry today, and I hope they share my view
that the promise of sustainable fisheries is worth the pain inflicted
by our management system.
When I appeared before Senator Snowe and the Senate Subcommittee
last July, I conveyed various recommendations on amendments to the Act
developed by the eight Council Chairmen at their meeting in June in
Rhode Island. Also, I summarized our Council's progress on implementing
the Sustainable Fisheries Act of 1996. I submitted extensive
documentation on our actions and will not repeat it here today.
Instead, in my remaining remarks, I want to focus briefly on several
key issues that have required considerable attention this past year,
and where we are heading on them.
stellar sea lion protection
The first one that stands out above the rest is the protection of
Stellar sea lions. Even though we've been working on various measures
since 1990 to protect sea lions, our involvement increased by orders of
magnitude when NMFS issued its Biological Opinion in early December
1998, prodded along by the lawsuit filed by several environmental
groups the previous April. We spent significant time on sea lions at
our November and December 1998 meetings, and even more in 1999. In
fact, in our five Council meetings last year, fully 20% of our time was
spent considering sea lion protective measures. In some meetings it was
much more, roughly 47%, for example, at the June 1999 meeting when we
debated and then approved longer term measures for 2000. We certainly
hope that the time spent and the resulting protective measures
facilitate their recovery.
Our Council actions responded directly to advice from NMFS, though
it should be noted that NMFS has added additional protective measures
around rookeries and haulouts near Kodiak that could place a severe
economic burden on local fishermen. I anticipate that you will hear
more about this in the other panels. I believe we have done about all
we can do for the time being, given our state of knowledge to protect
sea lions. We have overlain a very complex management regime with even
more complexity. We would like to see more research conducted on
Stellars and some experiments carried out to help us learn more about
the impacts of fishing and perform adaptive management.
Before leaving this topic, I do want to commend NMFS for including
us in its decision making on measures to protect sea lions. Though we
have never been able to convince NMFS to give us much of a hand in
reviewing their draft biological opinion, they did a good job of
bringing proposed measures to us for approval, mainly at the urging of
the Regional Administrator, Steve Pennoyer. I think we have been very
responsive to their needs, and hope the measures work to rebuild the
sea lion populations and bring them out of jeopardy from any fishery.
american fisheries act
A second big issue is the American Fisheries Act. I know that AFA
is not the focus of this hearing, but it is pretty tough to keep it in
the background. It was a groundbreaking piece of legislation. With all
its trappings, it has posed a tremendous challenge to the Council.
Consider for the moment that we really did not even have it on our
tasking list as we approached the fall of 1998, and yet in 1999 it
consumed roughly 35% of our Council meeting time and 30% of our Council
staff time between meetings. That amounts to almost 3000 hours of staff
time solely on AFA, and I don't even have an estimate of the amounts of
time put in by NMFS and ADFG staff, though I know it is very
significant.
So, I want you to know that we are very grateful for your
successful efforts to send additional funds our way to defray costs of
these AFA activities. The funds are sorely needed and will be spent
over the coming year or two (if we can get an extension) on contracts
for analysis of AFA amendments, and in developing a comprehensive
benchmark study of the status of Alaska's fishing industry in the year
2000. I would hasten to add that, while the AFA was a huge burden on us
and the industry, I sense that in the long run, we will conclude that
it was a very effective and innovative approach to addressing
overcapacity in the pollock fisheries, and its use of co-operatives may
provide a good template for other fisheries as well. I would also note
that the development of co-operative structures in the pollock
fisheries has somewhat muted the heretofore urgent pleas for IFQs to
rationalize the fisheries. I know that the extension of the IFQ
moratorium may be up for consideration in the next reauthorization of
the Act. I am not sure how important that really is to us off Alaska
for the time being while AFA shakes out, and will be very interested in
what others have to say.
For 2000, the offshore and inshore pollock co-operatives will be up
and running, and we have appropriate sideboards in place to limit their
impacts on non-AFA fisheries. In April, the Council will take final
action on groundfish processor sideboard caps and excessive shares for
pollock processors. Other fisheries, not envisioned within AFA, also
are considering the use of co-operatives. This includes the Gulf of
Alaska pollock and Bering Sea crab sectors. In October, we are
scheduled to provide you with a full performance report on the AFA.
halibut charterboat restrictions
A third big issue, restrictions on halibut charterboat activities,
will be before the Council in February and I can imagine you will be
hearing a lot about it from both sides, regardless of how the chips
fall. The charter catch off Alaska has grown significantly the past few
years, and because it has been taken off the top before the commercial
quota is set, uncontrolled charter growth could take a significant bite
out of the commercial quota, now fished under an IFQ system.
We are considering a proposed Guideline Harvest Level (GHL) for the
charterboat fishery. We have listened closely to that industry and they
do not want to be shut down in season. So the GHL will be designed not
so much to close the fishery, as to trigger restrictive management
measures in future years to bring the charter harvest within the GHL
range. One of the measures our analysis has shown would be most
effective, is to reduce the bag limit from two fish to one fish. The
charter fleet is not happy with this approach, of course, because they
believe their clients would not come for only one fish.
We will take final action next month in Anchorage and I have heard
that there will be well over 300 people there to testify. This is our
Council's first big foray into the classic commercial-recreational
struggle that has played out for years elsewhere in the nation. I'm not
sure what the outcome will be, but whatever restrictions we choose,
will only apply to charter boat fishermen. Unguided sport fishermen
will not be impacted by the restrictions. But I'm sure you'll hear from
everyone.
overfishing
As I noted earlier, we have been very fortunate in the North
Pacific in that our stocks are robust and in good shape. One groundfish
stock, Pacific ocean perch, was depleted by heavy Japanese and Soviet
fisheries in the 1960s and early 1970s. It remained in low abundance
for years despite little in the way of catch. We approved a rebuilding
plan in 1993, and were very fortunate that some good year classes came
along shortly thereafter and the stock has recovered nicely.
Our shellfish resources have not been so lucky. Three stocks,
Bering Sea bairdi and opilio Tanner crab and St. Mathew blue king crab,
have declined sharply despite the best efforts of ADF&G and very sound
science provided by researchers such as Dr. Gordon Kruse. We approved a
rebuilding plan for the bairdi stock last October, and will approve
plans for the other two stocks next June . Its very difficult to
predict if the stocks will come back according to schedule, but we will
be making every effort to protect them.
We will be watching with great interest, any proposed changes to
the Magnuson-Stevens Act concerning overfishing definitions. Somehow we
have to ensure that we balance the need for protective overfishing
measures with the natural tendency of stocks to fluctuate widely over
time. Just because a stock takes a cyclical bounce to low abundance
levels as a result of environmental shifts, does not necessarily mean
that we should drop everything else we are doing to establish a
rebuilding plan right away. I fully agree that we need to be
precautionary and conservative in our management, especially when a
stock is low, but we need to be reasonable and methodical in our
approach, and not shut everything down as some environmental groups
would have us do.
essential fish habitat
A few brief comments on essential fish habitat: Our Council
responded quickly to the SFA amendments of 1996 to add descriptions of
EFH to our fishery management plans. We fully understood that within
the same 24-month timeline for the descriptions, the SFA also called
for concurrent measures to minimize fishing impacts on habitat to the
extent practicable. Because of the workloads involved, we chose a
deliberate two-step approach. First we worked at identifying EFH and
adding those descriptions to our plans by June 1998. Then we
established a process for considering the fishing impacts, and are now
concentrating on identifying habitat areas of particular concern, based
on ecological function and vulnerability to man-made impacts.
This is not to say that we have not acted to protect habitat. We've
closed a unique pinnacle area off Sitka to bottom fishing. We've banned
non-pelagic trawling for Bering Sea pollock. We've closed about 30,000
square nautical miles in the Bering Sea to trawling, an area larger
than Indiana or Maine and more than twice the size of Georges Bank off
the east coast of the U.S. Additional large areas on and off the
continental shelf in the Gulf of Alaska are closed to bottom trawling.
Despite these efforts, a recent lawsuit has placed us and other
councils under the gun to take additional actions to protect habitat. I
am beginning to believe that Congress needs to take a strong, second
look at our habitat requirements and give them more focus on exactly
what is meant by ``essential'' fish habitat, rather than using the
rather broad perspectives in the current legislation and NMFS
guidelines. I believe we need to protect habitat, but the open-ended
definitions now being used just leave too many hooks and handles for
litigation in what is already a very litigious environment. These views
closely parallel similar views raised by other Council chairmen.
subsistence
As you know, Senator Stevens, subsistence management reached a
milestone this past year when it was turned over to the Federal
Government. Our Council has been involved with the issue only
peripherally, mainly with halibut on the Bering Sea coast. I have been
involved with some of the higher level State-Federal planning bodies in
the past year, and we will work closely with the U.S. Department of
Interior, ADF&G, and the Alaska Board of Fisheries to resolve any
management issues. As subsistence management evolves, we will keep you
posted on our involvement.
russia far east fisheries
The last issue I want to briefly touch on, is the potential impact
of Russian fisheries on our pollock stocks. I noted earlier that our
Bering Sea pollock stocks are rebounding. Their long term viability,
however, will depend to some extent on how they are fished on the
Russian side of the maritime boundary in the northern Bering Sea. The
extent of intermingling of our stocks and theirs off Cape Navarin
varies year-to-year. For example, our scientists estimate that eastern
Bering Sea pollock made up from 47-61% of the pollock catch off Cape
Navarin in 1990-1994. More recently, they are estimated to make up only
2-7%. Regardless of the exact amounts, we know that there is
considerable pressure on the pollock resource in the immediate vicinity
of the maritime boundary.
Acoustic surveys have shown heavy concentrations all along the
line. As I am sure the Coast Guard will show you in their presentation,
their patrols detect numerous foreign vessels within 5 nm of the
boundary all summer. These vessels are a mix of Russian fishermen,
Russia-flagged foreign ships, and vessels from Japan, South Korea,
Poland, China and elsewhere, licensed by the Russia State Committee on
Fishing. Pollock stocks in the Western Bering Sea and in the Sea of
Ohkotsk are faltering, so we can expect even more intense pressures
along the boundary.
I have been privy to most negotiations on the boundary and on the
Donut Hole. The moratorium on fishing in the Donut Hole seems to be
durable for the time being, but we have not made much headway along the
boundary. I and others in industry and government appreciate the funds
that were made available to upgrade the hydroacoustic surveying
capabilities of the Professor Kaganovsky a year or two ago, and
certainly our scientists have been working co-operatively with the
Russian biologists. It is apparent, though, that we need to be able to
get our scientific vessels like the Miller Freeman, into their zone to
work alongside the Russian survey vessels to determine the extent of
the intermixing of our pollock.
We also will need to continue the cultivation of our Coast Guard
contacts with enforcement types on their side, so that we do not run
into the types of situations that developed last August when our Coast
Guard cutter HAMILTON was surrounded by 19 Russian factory trawlers to
obstruct the Coast Guard's effort to seize the factory trawler GISSAR
for illegally fishing in the US EEZ. It's my understanding that RADM
Barrett has initiated meetings with high level officers in the
Northeast Region of the Federal Border Service, and that we are now
providing them twice weekly with reports of vessel names, locations and
activities of Russian and other fishing vessels operating within the
1.5 to 5 nm buffer zones along the boundary.
We appreciate your support of our efforts to strike a reasonable
understanding with the Russians on coordinated management of Bering Sea
pollock. Hopefully our efforts will bear fruit in the long term, though
it may take awhile for the political system to settle down on their
side. Certainly your continuing support will be needed, both in terms
of funding for research and enforcement, and for any international
agreement that may result from our efforts to establish a sustainable
fisheries management regime in the northern Bering Sea.
In closing, I want to express my appreciation to you for holding
this hearing up here in Alaska, especially considering that it is not
the best time of year to be outdoors, though it is always beautiful,
snow or sunshine. I would be happy to respond to any questions you
might have, and I look forward to working with you on any forthcoming
changes to the Magnuson-Stevens Act.
Senator Snowe. Thank you, Mr. Lauber.
Mr. Benton.
STATEMENT OF DAVE BENTON, DEPUTY DIRECTOR, ALASKA DEPARTMENT OF
FISH & GAME
Mr. Benton. Thank you, Madam Chair.
Madam Chairman, I would like to welcome you again to the
State of Alaska, and thank you for coming up here, and on
behalf of the State I would like to express our appreciation
for the efforts of yourself and Senator Stevens to understand
the implications of the Magnuson-Stevens Act on our State. I
would like to just touch on a couple of key issues that are
highlighted more fully in my written testimony and answer any
questions you might have.
As we have already heard, the Magnuson-Stevens Act really
represented a major change on national policy from its very
beginning. It instituted a regime that took hold worldwide to
establish the 200-mile zones and led the way for conservation
and management around this country and in many ways throughout
the world, and I think that is a record that the Congress of
the United States should be very proud of.
The amendments in 1996, as you pointed out, constituted a
major policy shift in the act and in the direction that
fisheries management was going in our country. Those amendments
acknowledged the need to be more proactive on conservation
measures and preventing overfishing. It included new standards
to protect fishing communities, and that is something that is
very important in this State, and it is something that is very
important around the country.
The measures for essential fish habitat have caused some
consternation in some quarters. They are overly broad in some
ways. But the council in our part of the world is really just
beginning to try and come to grips with how we are going to
address essential fish habitat.
As Chairman Lauber pointed out, we have a large number of
areas that are protected now. We have spent a lot of time
looking at criteria, and the broad policies that you would use
to identify essential fish habitats, and we have got a lot of
work in front of us. As has been pointed out, we have 34,000
miles of coastline and over two-thirds of the Nation's
continental shelf, and that is a big area and a lot of work,
and in many ways that is true for a lot of the measures in the
1996 amendments to the Magnuson-Stevens Act. We have been
trying to implement that act. It is a very large task, and as
Senator Stevens and yourself pointed out, other events have
overtaken us. Stellar sea lions have taken up a lot of our
time. The American Fisheries Act has taken up a lot of our
time.
A couple of the amendments that I think are important from
the State's perspective for you to think about first off is how
the act has affected State and Federal relations. Section 306
went a long way to answering some problems that this State had
working with the Federal Government on basically who is in
charge of what species or what fisheries, and it was a great
step forward and has solved a number of our problems.
The act has provisions in it that require the States and
the Federal Government to work together on research and
monitoring and fisheries management programs, and I have to say
that from my perspective we have an excellent working
relationship with the National Marine Fisheries Service in
Alaska. That does not mean we always agree. It does not mean it
always goes smooth. We have our bumps in the road, but over all
we have a very good working relationship with the National
Marine Fisheries and NOAA and are very appreciative of that.
Section 401 was one area where we have some differences
this year. It pertains to fishery monitoring and reporting.
National Marine Fisheries Service was under the gun to develop
an electronic reporting system for the fisheries off our coast.
The State of Alaska also has management responsibilities in a
number of those fisheries, and we were working with the
National Marine Fisheries Service to develop what we call the
Alaska Fisheries Information Network, a joint fishery
information program between Federal and State agencies, but
NMFS went off on sort of a tangent with their electronic
recording program and was developing that independently.
After a lot of back-and-forth, sometimes friendly,
sometimes not-so-friendly, we managed to resolve that. We are
working together I think very well now, and I am hopeful that
in the not-too-distant future we will have a combined State-
Federal system that will work and will be of great benefit to
the industry and reduce the cost to both the State and the
Federal Government.
The other section of the act that has been of great help to
us in terms of strengthening State and Federal relations is
section 312, Fisheries Disasters. That has played a big role in
the Western Alaska fishery problems that we have had. It again
showed we are working with National Marine Fisheries Service
and NOAA very closely. The State has been able to address some
unique problems up here, and we are greatly appreciative of
their efforts in working with us on that.
The one problem with that that I would like to call your
attention to is that there is a requirement for a three-to-one
match, which for many of those very small remote rural
communities has caused some difficulties and is something that
we would like to try and work with the Congress to address in
the future.
I would like to mention just one other item, and I will
close, and that is an issue that is coming before the Congress
very quickly, and that is the moratorium on individual fishing
quotas. Alaska has, through our council up here has the largest
IFQ program in this country and possibly the world. It has been
largely a success, but that did not come without great pain,
and it was a program that was in many ways a simplistic
program, in that it is basically two species and one gear type.
At the time that the Congress was considering the
amendments to the 1996 act, we were looking at potentially
putting IFQ's in place for multiple species and multiple gear
types, and fortunately, at least from our perspective, the
Congress did say, take a minute, slow down, let us have the
National Research Council look at IFQ's and provide us with
some advice before we go much further down that road. I think
that was a very wise decision. There were big issues in front
of the country and a lot of big issues in front of our council.
The moratorium will expire in the not-too-distant future.
Many of those very large issues have yet to be addressed,
issues such as consolidation, effects on communities, how much
limitation there should be on ownership, what do you do about
transferability, what happens to small boat fishermen versus
big corporations, and how do you encourage or account for
allowing entrance into a fishery that is closed with an IFQ
program for people that are new entrants, people that want to
get into the fishery, young people that do not really have the
resources yet to buy in a major way.
Those all need to be addressed if we are going to allow IFQ
programs to go forward. I am not saying do not allow them to go
forward, and I am not saying that they are the greatest thing
since sliced bread, but I am saying there are some issues that
need to be addressed, and that allowing the moratorium to
expire is not an insignificant action.
With that, I will close. Thank you very much.
Senator Snowe. Excuse me? What was your final sentence
there?
Mr. Benton. Pardon me?
Senator Snowe. You said, allowing the moratorium to
expire----
Mr. Benton. Is not an insignificant action. In other words,
Madam Chair, if the moratorium is allowed to expire, those
issues and many others are going to surface that will need to
be addressed, and we will need congressional guidance, I
believe, in some of those before we can put an IFQ program in
place. That is really what I am saying.
Senator Snowe. Thank you, Mr. Benton.
Admiral Barrett.
STATEMENT OF REAR ADMIRAL THOMAS J. BARRETT, COMMANDER,
SEVENTEENTH COAST GUARD DISTRICT
Admiral Barrett. Good morning again, Madam Chairman and
Senator Stevens. Thank you for inviting the Coast Guard to
appear before you this morning.
Let me begin with an update on Coast Guard operations this
morning. We have two cutters, the STORIS and the JARVIS on
patrol in the Bering Sea. They were originally positioned to
provide search and rescue response for vessels in the State
Opilio crab fishery, the most dangerous in the United States.
However, the State recently delayed this fishery until April
because of advancing ice. However, this month we still have
major pollock and cod fisheries going on. Indeed, the Bering
Sea pollock fishery is one of the largest commercial fisheries
in the world.
Coast Guard personnel are also conducting voluntary
commercial fishing vessel safety exams in Western Alaska, and
providing training to fishers on stability and damage control.
A third cutter, the ACUSHNET, is en route to the Aleutians to
monitor the active mackerel fishery and enforce no-fishing
areas around 37 Stellar sea lion rookeries.
Air Station Kodiak is assisting the cutters with C-130
overflights to locate the fleets, identify boarding contacts,
and assist with the closed area enforcement.
All of these units are positioned and prepared to respond
to any type of search and rescue case that may arise, which is
particularly critical in winter, when bitter cold temperatures
and frequent heavy weather dramatically reduce survival times
even for those with exposure suits.
The Coast Guard's primary role in fisheries management is
to enforce the regulations that make the various management
plans work. We have traditionally provided at-sea enforcement
in the form of cutter and aircraft patrols, and at-sea
boardings. Our fisheries enforcement operations in Alaska
emphasize four areas. First, we patrol the North Pacific beyond
our EEZ, protecting U.S. salmon stocks from illegal high seas
driftnet operations.
Because of the great distances involved, this is a mission
suitable only for our largest cutters and most capable
aircraft. It involves a co-operative international effort,
under the auspices of the North Pacific Anadromous Fish
Commission, with the countries of Japan, Russia, and Canada. In
1999, this international team detected 10 illegal vessels and
apprehended three. We will be out there again this spring.
Our most resource-intensive mission is the U.S.-Russia
maritime boundary in the Bering Sea. This past year we saw an
aggressive Russian fleet pushing the line with more vessels for
longer periods of time. Coast Guard flights in August detected
over 170 foreign factory trawlers within 50 miles of our
boundary, and over 100 of those vessels within 5 miles of the
line.
This pressure required a nearly constant presence of high
endurance cutters and C-130 flights. Although pollock is the
target, the issue is also one of sovereignty and the security
of our maritime boundaries.
The Russian Border Service has tried to help us by
enforcing a so-called ``buffer zone'' on their side of the
line. However, I understand that recently a Russian court
dismissed penalties assessed by Russian authorities, and this
will only exacerbate the situation on the maritime boundary,
and will be a concern for the 2000 season.
Concerning domestic enforcement, we monitor over 200 time,
area, and species openings and closings. The Coast Guard
ensures vessels are fishing where they ought to be, when they
ought to be, and that federally required observers are free to
collect their data.
The IFQ fishery is perhaps the largest IFQ in the world.
Providing enforcement presence requires more resources for us
than what was required under the old Derby system. On the plus
side, IFQs let fishermen better take weather conditions into
account, something not possible under the old regime.
Finally, we provide surveillance of extensive rookery and
no-trawl areas created in response to the decline of the
endangered Stellar sea lions.
Overall, I think Federal fisheries management under the Act
is working well in Alaska. Stocks are healthy, there is a
commitment to the resource, and a culture of science and
conservation guides the North Pacific Council and resource
stakeholders.
The Act provided nonvoting council seats to the Coast
Guard. I take that responsibility very seriously, and am
pleased to report, in my view, the process works very well in
the North Pacific. The Coast Guard is a partner in Council
actions. Our input is often solicited and very carefully
considered.
Fishing regulations are also increasingly complex. Though
not a direct action under the Act, the resources that Congress
with the support Senator Stevens and others provided to
establish Coast Guard Regional Fisheries Training Centers has
been critically important in helping our personnel stay abreast
of the regulations. One of the largest of these facilities,
which is in Kodiak, last year trained over 1,100 Coast Guard
personnel.
Commercial fishermen help us review course content, speak
to classes, and help our people better understand the industry
we regulate. This dialog has gone a long way in improving our
credibility and our effectiveness. With regard to the Act, I
have no suggested improvements to improve the effectiveness or
the efficiency of the Coast Guard's law enforcement mission.
Although not a direct subject of this hearing, I also want
to briefly comment on Coast Guard readiness, a challenge
complicated by the extreme weather and distances that are a
part of life in this great State in the North Pacific.
Throughout the area of responsibility of the Coast Guard's
Pacific Area command, we are stretched thin to meet the
challenge posed by growth missions in counternarcotics, migrant
interdiction, as well as fisheries. I am feeling the impact in
Alaska, and am trying my best to respond by ensuring our
resources are directed at our most serious problem.
To the extent that our services are important to the proper
stewardship of our Nation's fisheries resources, Madam
Chairman, the area within your oversight, I ask your continued
support for the Coast Guard. In Alaska, operational excellence
in the air, in our ports, and on the water define what we are
about. We are committed to providing the public with the best
Coast Guard services possible. We will respond to search and
rescue cases. We will enforce our fisheries laws, protect our
natural resources, and prevent and respond to pollution
incidents, and with continued effective partnership and your
committee's support, we will continue to be successful.
Thank you, and with your permission I will submit my
written statement for the record.
[The prepared statement of Admiral Barrett follow:]
Prepared Statement of Rear Admiral Thomas J. Barrett, Commander,
Seventeenth Coast Guard District
Good morning, Madam Chairman and distinguished members of the
Subcommittee. I am Rear Admiral Thomas Barrett, Commander of the
Seventeenth Coast Guard District. On behalf of the Commandant, thank
you for the opportunity to appear before you today to discuss the Coast
Guard's efforts with regards to the Magnuson-Stevens Fishery
Conservation and Management Act (MSFCMA).
The Coast Guard is firmly committed to providing at-sea enforcement
in support of the MSFCMA. The Coast Guard recognizes that the economic
and biological health of our fisheries is of significant national
concern. Our fisheries provide a livelihood for the commercial
harvesting industry, a product for consumption by the American public,
and enjoyment for millions of recreational fishing enthusiasts. The
MSFCMA embodies the principle that we all have a collective
responsibility to exercise good stewardship over these valuable
resources.
The Coast Guard's role goes beyond enforcing fishery management
regulations to minimizing the loss of life from fishing. In Alaska's
harsh environment, this is a major challenge. Seventeen Alaska fishers
lost their lives in 1999. We are working hard to ensure the vessels
engaged in Alaska fisheries are safe, and that our cutters, aircraft,
and crews are ready to assist should fishers get in distress. Our
ultimate goal is for all fishers to operate their vessels safely and in
compliance with the fisheries management regulations. The Commercial
Fishing Vessel Safety Act and other safety initiatives have helped
reduce the loss of life from commercial fishing by almost 50 percent
over the last 10 years (from losing an average of 34 persons annually
in Alaska in the 1980's to 16 in the 1990's). However, fishing in
Alaska is still the most dangerous occupation in the United States. We
have strategically positioned our cutters and helicopters during
openings of the most hazardous fisheries to improve our search and
rescue readiness posture. We are also expanding our fishing vessel
safety program and focusing at-sea boardings and dockside exams on
vessels engaged in high-risk fisheries. For example, we recently
initiated Operation ``Ready for Sea,'' a fishing vessel safety program
focused on the top ten safety items designed to mitigate known risks
and help ensure a vessel's safe return to port. If these vessels are
truly ``Ready for Sea,'' they should be able to survive the heavy
weather we routinely face in Alaska.
Coast Guard Living Marine Resource Enforcement
We are deeply committed to the stewardship of living marine
resources through an effective law enforcement program. We have
developed a long-range strategy called OCEAN GUARDIAN to provide
effective enforcement in support of the national goals for fisheries
resource management and conservation. This strategy includes four key
objectives:
Prevent illegal encroachments of the U.S. Exclusive
Economic Zone (EEZ) and territorial waters by foreign fishing
vessels.
Ensure compliance with domestic living marine resource
laws and regulations within the U.S. EEZ by U.S. fishers.
Ensure compliance with international agreements for
the management of living marine resources.
Ensure the development of viable enforcement schemes
designed to protect, conserve, and manage living marine
resources.
To prevent illegal encroachments of the U.S. EEZ, Coast Guard
cutters and aircraft in Alaska patrol both the U.S./Russian Maritime
Boundary in the Bering Sea and the U.S./Canadian Maritime Boundary in
Dixon Entrance. Both borders call for near full-time Coast Guard
presence during peak activity periods that may last several months. Of
the two boundaries, the U.S./Russian Maritime Boundary is significantly
more resource-intensive to enforce due to its remote location, extreme
weather conditions, and high levels of activity. As many as 120 vessels
from many different nations routinely operate within 50 nautical miles
of the boundary from May through December. In 1999, this foreign fleet
became very aggressive in "pushing the line" and in one case
intentionally obstructed Coast Guard enforcement efforts. The number of
detected illegal encroachments increased from the previous annual
average of 12 to more than 90 encroachments in 1999. In response to
this increased activity, the Coast Guard diverted cutters from other
missions to provide nearly constant high endurance cutter presence and
almost daily HC-130 flights. During the higher threat periods, the
Coast Guard had two high endurance cutters patrolling the line. This
mission is not just about protecting pollock, but also one of national
sovereignty and the security of our maritime boundaries.
In Alaska there are over 300 Federal time, area, and species
openings and closings in a given year. The Coast Guard ensures vessels
are fishing where they ought to, when they ought to, and how they ought
to. The Coast Guard in Alaska also enforces the largest Individual
Fishing Quota (IFQ) fishery in the world. In 1995, halibut and
sablefish management shifted to an IFQ system, and individual fishers
were each given their own annual quota that could be taken at a time of
their choosing during the season. The halibut season went from two 24-
hour openings to an 8-month long season. The Coast Guard is committed
to providing a law enforcement presence throughout the 8-month season
both to ensure compliance with regulations and to be in position to
respond to vessels in distress. IFQs allow fishers the opportunity to
make their own choices as to when they fish, allowing them to take
weather conditions into account without economic penalties, something
not possible under the previous derby system. Another large part of
domestic enforcement is patrolling rookery and no-trawl areas created
to protect endangered Stellar sea lions. Rookeries and haulouts, and
the closed areas that protect them, are spread throughout the Alaska
region and are often found adjacent to historical fishing grounds. The
Coast Guard patrols these closed areas with cutters and aircraft.
Coast Guard cutters and aircraft also patrol areas outside the U.S.
EEZ to monitor compliance with international agreements for the
management of marine resources by both U.S. and foreign fishing fleets.
Important examples include monitoring the Central Bering Sea (commonly
referred to as the ``Donut Hole'') to protect U.S. straddling stocks,
and patrolling the North Pacific Ocean in support of the United
Nations' moratorium on large-scale high seas pelagic drift net (HSDN)
fishing. HSDN vessels targeting salmon in the North Pacific are of
particular concern, especially in light of the importance of the salmon
fishery to the state of Alaska. The Coast Guard works closely with the
North Pacific Anadromous Fish Commission (NPAFC) to coordinate
international enforcement efforts throughout the HSDN high-threat area
in the northwest corner of the Pacific Ocean. Due to the remote
location of this vast area, only our largest cutters and long-range
aircraft can patrol it effectively. In 1999, Coast Guard and Canadian
aircraft detected ten vessels using large-scale drift nets in this
area. A Coast Guard cutter, with the assistance of a People's Republic
of China (PRC) shiprider, later boarded three of these vessels. Two
vessels were identified as Russian and were turned over to a Russian
Federal Border Service vessel for prosecution. The PRC government
refuted the third vessel's claim to PRC registry, and the vessel was
assimilated to statelessness, seized, and brought into the port of
Adak. Analysis conducted by National Marine Fisheries Service (NMFS)
indicated that many of the salmon that were seized from this vessel
came from Alaska stocks. The Coast Guard is currently working with the
NPAFC to coordinate enforcement plans for 2000.
Effective living marine resource management and enforcement
requires a team effort. In Alaska, the Coast Guard has an excellent
relationship with the North Pacific Fishery Management Council (NPFMC),
NMFS, National Oceanic and Atmospheric Administration, the United
States Attorney, Alaska Board of Fish, Alaska Department of Fish and
Game, and the fishing industry. To improve foreign fishing vessel
compliance with U.S. and international regulations, the Coast Guard has
developed good working relationships with NPAFC, Northeast Border
District of the Russian Federal Border Service, Fisheries Agency of
Japan, Canadian Department of Fisheries and Oceans, and the PRC Bureau
of Fisheries. These international relationships, developed in
partnership with the Department of State, help improve the Coast
Guard's effectiveness on the fishing grounds.
MSFCMA
From the Coast Guard's perspective, the fisheries management system
is working well in Alaska. Federally managed stocks appear to be
healthy, and there is a commitment to the resource by all stakeholders.
The Fishery Management Councils develop plans to conserve and manage
fisheries resources, and a growing part of this process involves
allocation. The Coast Guard needs to remain neutral to allocation
issues and to specific conservation and economic objectives. Our role,
rather, is to aid fisheries managers in choosing among various
management alternatives by providing them expert advice on the
operational realities of at sea-law enforcement and vessel safety.
Nevertheless, the Coast Guard can and does influence the development of
regulations we are asked to enforce. Our participation as a nonvoting
member on Fishery Management Councils is critical and is one of the
foundations of effective enforcement.
The original MSFCMA wisely recognized that enforcement is needed
for effective management; the Coast Guard and NMFS were tasked to
provide that enforcement. The Coast Guard is dedicated to ensuring that
enforcement is impartial, fair, consistent, and effective, and is also
perceived as such. By necessity, fisheries regulations are increasingly
complex, so in 1993 the Coast Guard conducted a comprehensive study on
fisheries enforcement, the trends in the fisheries and fisheries
management, and Coast Guard requirements to meet the challenges of this
complex task. As a result of that study and implementing actions: (1)
we have increased the training and expertise of our enforcement
personnel; (2) we have developed a closer relationship with the fishing
industry and other stakeholders; (3) we have provided higher quality
information to the regional fisheries management councils; and (4) we
have improved co-operation and coordination with the National Marine
Fisheries Service and state enforcement agencies.
Although not a direct action under the MSFCMA, the resources
appropriated during fiscal year 1994 to establish five regional
fisheries training centers has been critically important in ensuring
Coast Guard enforcement personnel remain professional and stay current
with the ever-changing and complex nature of fisheries regulations. One
of the largest of these centers is located in Kodiak, where over 1,100
Coast Guard people were trained last year. One of the reasons training
is so effective is because commercial fishermen and fishery resource
managers are included in the operation of the school. They make
important contributions by participating as guest speakers and
reviewing course materials. The net result is boarding teams that more
effectively enforce regulations because they have a better
understanding of the fishing industry they regulate and the
conservation goals of the fishery management plans.
Enforcement Challenges
The Coast Guard sees several challenges to effective fisheries
enforcement now and in the future. As foreign fisheries continue to
decline, there will be an increase in the threat to fisheries over
which the United States has jurisdiction. As pollock stocks continue to
fall in the Sea of Okhotsk, more and more foreign vessels will look
towards the fishery along the U.S./Russian Maritime Boundary. Illegal
HSDN activity in the North Pacific has increased in recent years, and
although fleet sizes are nowhere near the size of fleets that legally
fished prior to the moratorium, the Coast Guard will need to continue
our enforcement efforts in this area. Also, if pollock stocks recover
sufficiently to open up the ``Donut Hole'' in the Central Bering Sea,
the Coast Guard will again be called on to ensure the integrity of our
maritime boundaries surrounding this area.
With the enactment of the Sustainable Fisheries Act (SFA), the 1996
reauthorization of the MSFCMA, an increased emphasis has been placed on
the conservation and sustainability of fish stocks. New mandates
regarding essential fish habitat, bycatch, and overfishing have led to
a significant increase in the number of fisheries regulations that
require Coast Guard enforcement. In many cases these new mandates have
prompted the establishment of closed areas, marine protected areas, and
other management regimes requiring additional at-sea presence. In
addition, fisheries managers, resource users, and others expect the
Coast Guard's knowledge, expertise, and effectiveness in fisheries
enforcement to keep pace with the rapid changes in regulatory regimes.
The Coast Guard, as a multimission service, is required to meet
many national mandates and to counter an array of threats to national
security. In the Coast Guard's Pacific Area there has been a
significant increase in drug smuggling activity and illegal alien
migration. Some of the assets used to respond to these threats also
help to execute our living marine resource mission in the North
Pacific. The environment in which our cutters and aircraft operate in
the Pacific is also particularly daunting. Vast distances between
operating areas means cutters may need to transit for more than ten
days just to be in position to respond to these threats. Add to this
the harsh weather conditions common to the North Pacific, and we find
that our cutters and aircraft are pushed to the limits of their
endurance. Another challenge of note in Alaska is the limited number of
ports and airports where our units can resupply. As a consequence, we
are constantly challenged to apply our resources against the most
critical threats in support of national policy objectives.
To meet some of these challenges, we need to incorporate the use of
new technologies, such as improved sensors on our cutters and aircraft,
and Vessel Monitoring Systems (VMS), to help us be more effective and
efficient in applying our cutter and aircraft resources. Although VMS
will greatly assist in the monitoring of closed areas, it is not a
panacea. VMS does not ensure compliance with many other management
measures such as gear and catch restrictions and, therefore, cannot
replace the need for at-sea boardings. It also cannot replace an
enforcement platform that is available to respond to incursions or to
conduct critical search and rescue.
We must also focus on Coast Guard readiness. We, like all of the
military services, face significant readiness challenges and these
challenges are impacting our ability to meet all mission requirements.
I cannot allow my people to go in harm's way, as they do with
regularity in the harsh Alaskan environment, without ensuring they have
the proper training and that the equipment they use is properly
maintained. In the past, the Coast Guard has been able to mitigate the
impacts of some of these readiness challenges by leveraging
flexibility, managing increased risk, and, quite frankly, by asking our
people to work ever harder. We have reached the point that these
problems can no longer be addressed this way. The Coast Guard is
focused on maintaining our ability to respond to the most emergent
needs of this nation.
In Alaska, this means taking the steps necessary to ensure first
and foremost that we are able to answer the call when fishing vessels
find themselves in distress. Why must we do this? There are numerous
reasons and many examples, but none tells the story better than the
readiness problems we are facing with our HC-130 aircraft. The HC-130
is the long-range ``workhorse'' in Alaska that is used to protect our
fishing fleet and provide coverage of the U.S./Russian Maritime
Boundary, the ``Donut Hole,'' and HSDN areas. HC-130 availability is at
an all-time low. We have older aircraft, we have worked them extremely
hard, we have dwindling supplies of spare parts, and we have a less
experienced team of mechanics. Unfortunately, most of these issues
cannot be fixed overnight and we are taking steps to better understand
these types of problems and develop the right long-term fixes.
Readiness is the foundation of all Coast Guard operations and we
must ensure we remain ``Always Ready,'' not only in the near term, but
in the future as well. People are the backbone of the Coast Guard and
we must be able to recruit, train, and retain those people who we ask
on a regular basis to go into the ``storm'' or to endure the brutal
conditions of the Bering Sea protecting our fisheries resources and
those that rely on these fisheries for their livelihood. We must be
able to maintain the equipment and facilities required to meet national
objectives and we must give our people the right equipment to do their
jobs safely and effectively. The fiscal year 2000 budget provides
nearly $50 million in additional funds to improve readiness.
Modernization concerns are being addressed by the Coast Guard through
an innovative Deepwater Capability Replacement Project. This project is
designed to ensure timely acquisition of a system of assets that will
leverage technology to meet the demanding mission needs in the offshore
environment, such as the large and sometimes very harsh North Pacific.
Conclusion
Protecting and sustaining this nation's fisheries resources and the
marine environment is critical, and the Coast Guard plays a vital role
in this process. The Coast Guard is unique in that it is the only U.S.
agency with the expertise, assets, flexibility, and law enforcement
authority to meet the nation's offshore needs for the protection of
living marine resources. The Coast Guard believes that the Magnuson-
Stevens Fishery Conservation and Management Act contains the elements
and authorities necessary for effective enforcement. The Coast Guard's
fisheries enforcement mission, more than any other, crosses several
critical national policy concerns: economic, environmental, and
sovereignty. We remain challenged to respond to a growing number of
maritime threats and national policy demands, including fisheries
protection. Finally, our recently developed strategic plan, OCEAN
GUARDIAN, lays out the framework for us to meet national goals for
living marine resource conservation and management for the next 5 to 10
years.
Thank you for your continued leadership and support of the Coast
Guard, and for providing the opportunity to discuss these important
fisheries issues with you today. I will be happy to answer any
questions you may have.
Senator Snowe. Thank you. All of your statements will be
included in the record.
Thank you all very much for your testimony here this
morning. Let us start off with the IFQ's, because obviously
that is going to be one of the areas that we will be focusing
on in the Subcommittee. I heard the same in the testimony that
was received in Louisiana, in the hearing that was held in
December.
Ms. Dalton, I would like to hear from you in terms of the
IFQ's. Now, the National Academy of Science did a study
examining all the issues relating to IFQ's. The National
Research Council recommended lifting the moratorium on the
IFQ's and giving the regional councils the flexibility to
tailor a program on a fishery-by-fishery basis. What would your
recommendation be with respect to the IFQ's, especially because
the National Research Council did do an analysis. Obviously,
you talked about the numerous advantages and said that there
are some issues that should be addressed in the event that we
do lift the moratorium, sort of what Mr. Benton was talking
about. It may be more complex than just lifting the moratorium.
Should we establish standards for conservation monitoring?
Eliminate the accumulation rights in terms of excessive shares.
What about taxing issues because it is a public resource? There
are a number of recommendations made by the council in
conjunction with lifting the moratorium.
Ms. Dalton. I believe we would like to work on a process to
get answers to the problems. What happened in 1996 was that we
had a great deal of information coming in. We could not quite
work out what the ground rules for IFQ's should be as a matter
of legislation.
We certainly have supported IFQ's as a tool. The issue now
is, we have this large academy report that has a great deal of
information in it. The question is, what needs to go into the
statute in terms of guidance, what can be done as a matter of
national policy, and what should be done at that council level,
and one of the things that we have talked about internally is
doing some sort of an announcement or proposed rulemaking, or
beginning some sort of public hearing process to try to go
through and begin to sort out those issues. What we would like
to do is work with you to develop them in conjunction with the
reauthorization process.
Other than feeling that IFQ's should be a tool that is in
the fishery, we have not taken a position on exactly how they
should be implemented.
Senator Snowe. Do you think they have been effective?
Ms. Dalton. Yes. I think they have been implemented with
greater and less ease in different fisheries, and there are
different issues that you have in them. A fishery like the rec
fish fishery in the Southeast was very, very easy to do.
Halibut and sable fish is very complicated. There also are
issues of funding, consolidation issues, ownership limitation
issues, the role of the processors in this, that we really have
not addressed to this point, and the councils have struggled
with it to greater and lesser success in developing them.
Senator Snowe. Mr. Lauber.
Mr. Lauber. Yes. I was a member of the North Pacific
Council when we labored through the halibut/sable fish IFQ
program, and I have a button that I wear occasionally that
irritates a number of people and, of course, other people
cheer, and it says, Don't blame me, I voted no on IFQ's. It is
probably the vote I lost but the vote I am most proud of on the
council, certainly one of those I am most proud of.
The reason for that--well, I do not deny that IFQ's have
been beneficial in some areas, and in some ways have made
management easier, some ways more difficult, and the law of
unintended consequences, of course, is alive and well, but the
thing that I objected to was, not the management of the
resource so much as the harm that it did to people, and it was
significant harm.
We hear a lot about windfall profits. I was disappointed in
the fact that IFQ's oftentimes went to people who had not been
in the fishery for years, but the way it was set up in
qualifying years they got quota shares, yet people who had been
fishing for 6 or 7 years received far less than what they had
normally caught in previous years.
The people out of the fishery living in Maui opened an
envelope and found that they had 50,000 pounds of halibut quota
shares, while a person that was currently fishing likewise
found that he had 50,000 pounds of quota shares, while a person
that was recently fishing was catching 100,000 pounds.
Now, the person that has the 50,000 pound quota, that they
need 100,000, had to go out and buy the additional 50,000
pounds. That cost them upwards or close to a $\1/2\ million,
$500,000 in some cases, yet the person in Maui can sell that.
That was wrong. We hurt a lot of people in the way we did it.
I think that Mr. Benton's comments are very appropriate.
Before we open this up, I suggest that there be some guidelines
for the councils that are laid down so that these types of
things are minimized. Note in my experiment--I mean, in my
testimony, that I use the term experiment. And by the way, that
I almost choked before I said IFQ's, that really did not have
anything to do with my opposition. It just--my throat was dry.
Senator Snowe. Just for emphasis?
[Laughter.]
Mr. Lauber. But it truly is an experiment, and I would hope
that Congress would take our experiment, the benefit as well as
the wrongs and the harms that we did, into consideration.
I do not know that under the current Magnuson-Stevens Act,
the requirement that coastal communities be taken into
consideration, that we could have passed, or what we had passed
been approved by NOAA and the Department of Commerce. That
would be--I think we did a tremendous amount of harm to some
coastal communities as well as individuals, obviously, living
in those communities.
So I think you should take a look. As a member of the
council chairman's group, the group suggested lifting the
moratorium. I was representing the council, and I felt at the
time it probably--the balance would be people wanting the
moratorium lifted. Had it been my own personal opinion, I would
not say that it should be lifted until there are some
guidelines established by Congress that would prevent other
councils from making the same mistakes that we made.
Senator Snowe. Do you think the fear of consolidation of
this industry into the hands of a few large companies is a real
possibility?
Mr. Lauber. Well, certainly it is a possibility. The whole
idea of IFQ's, those proponents, particularly those with any
kind of an economist background, that is the ideal for them. If
you recall, in one of our fisheries they wanted to go in place
of the ideal would be from--going from, I do not know,
hundreds, if not a thousand vessels, down to 55, so you are
obviously going to have consolidation.
Now, the economists have the luxury of efficiency without
taking into consideration the harm that is done. A person that
supports IFQ's reminds me of a friend of mine who had a
beautiful Cape Hatteras boat, with twin 671 diesel engines in
it, and he asked me and my wife to go out one evening to roast
some hamburgers in a cove, and so we did, and this boat would
send up a wake that made the Alaska ferry system look like it
was a row boat, and he was merrily, on a beautiful evening on a
flying bridge, sailing along and passing by fishing boats and
small craft and so forth, looking straight ahead and having a
wonderful time, and meanwhile I am looking back and people are
hanging on and banging around, and he is swamping boats and so
forth.
I liken that to IFQ's. As long as you just look ahead and
say, look, this is making our management easier, and it is
wonderful and so forth--IFQ's are wonderful, but if you ever
look back at the people that you have ruined, you are not proud
of that.
Senator Snowe. Thank you.
Mr. Benton.
Mr. Benton. Well now, that is a hard act to follow, isn't
it?
[Laughter.]
Mr. Benton. It is always the case, though. Well, Madam
Chair, I highlighted a number of the matters that I think have
to be dealt with. When the council was considering IFQ's, first
the council did the halibut and sable fish program and, as I
said, that is a complex program, but it was relatively simple
in that you had two species and one gear type, and a fairly
designed cast of players.
After that, the council was moving in a direction to put
IFQ's on all the rest of the fisheries in the North Pacific,
and that is an extraordinarily complex task.
Currently, we are as a matter of the American Fisheries Act
we are trying to establish and implement the side board
provisions in that act that are designed to sort of protect all
the players and the other fisheries from the economic benefits
that are going to come out of the co-op structures for the
pollack fishery, and that requires a level of management and
precision that I think the National Marine Fisheries Service is
finding difficult, and believe me, I think implementing a
multi-species, multi-gear type IFQ program in Alaska is going
to be even more difficult, because there, under the AFA, it is
basically an aggregate cap. You have a group of vessels and you
say, OK, you can only catch up to so much, and you monitor that
on an aggregate, and that is a tough job, but when you are also
monitoring a catch vessel by vessel, and it has contractual and
financial implications on a vessel-by-vessel basis, that is
going to be a very complicated and costly program, and I think
we need to think about how that unfolds.
The kinds of issues that we were dealing with then, were
issues of foreign ownership, consolidation, the impacts on
coastal communities, and I note that in testimony I think you
may get in Seattle from someone who was involved with helping
put together the IFQ program for halibut and sable fish, that
person cites the CDQ program as being the way that coastal
communities were addressed, and I would just point out that the
CDQ program met a lot of opposition from a lot of those folks
during the creation of the IFQ program and before that, when
the CDQ program was initially put together on pollack, in that
even though it was implemented, it only covers one part of our
State, and there are a lot of communities in the gulf that the
halibut and sable fish program had a big impact on.
You do not hear from a lot of those people now that back
then were very upset about that IFQ program. They have moved on
in life. They have had to. The crew that were displaced, and
skippers that did not have any employment any longer, they are
gone. They are off doing other things, and that is the way that
program was supposed to work.
But it is just--the only point being that allowing the
moratorium to lift without addressing these kinds of issues I
think is going to cause a lot of problems, and really I think
it is not making the best use of the period of time that
Congress afforded us to look at the nature of IFQ's and to pick
up on a lot of the suggestions in the NRC report. They said
lift it. They also had a lot of issues in there that needed to
be addressed, and I think we should take the time to do that.
One other thing I want to point out, and you mentioned it,
is the issue of taxes and rents. It is a public resource, and
it is worth a lot of money. It is going to cost a lot of money
to implement a program to manage an IFQ regime. In halibut and
sable fish we are just now getting around to implementing, I
think, the fee program, even though it was put into statute in
the 1996 amendments.
I recall--and I was sitting in the audience at the time. I
was not sitting at the counsel table. Mr. Lauber was, and he
may have a better memory about this than I do, but I recall a
lot of statements being made about how the IFQ fishermen were
going to pay their own way, and pay for the program, and there
would be no extra burden on the U.S. Treasury and the taxpayer,
and the fact of the matter is, we have not implemented a fee
program. It is just now coming about. I think it will go into
place, I think this year, and it is not projected to cover all
the costs, so it is something that I think, again, that will
require legislation, and the Congress really needs to deal
with.
Is it a useful tool? It can be. It is not the only tool,
and it is certainly not a panacea for all the problems facing
our fisheries.
Senator Snowe. Thank you.
Admiral Barrett, you mentioned in your statement that you
intend to reduce some routine operations because of limited
funding. Could you elaborate on that reduction and how it will
affect your enforcement ability, especially as illegal
encroachments have skyrocketed over this last year?
Admiral Barrett. Yes, ma'am. I think that is an issue we
constantly face, measuring the risk and allocating our
resources against the highest perceived threats that we face.
For example, this past year, to meet the situation on the
maritime boundary we dropped our domestic enforcement boarding
efforts substantially, because we moved the platforms out to
the Bering, and I would see that type of allocation and
emphasis continuing if we have to confront that type of
situation, so we are going to always move against what we
perceive is the highest threat with the assets we have.
Senator Snowe. Can you explain why foreign fishing
encroachment has increased significantly this last year?
Admiral Barrett. I think Chairman Lauber alluded to that,
too. I think the Russian fishing is poor. They have had
closures on their side. The catch rates that we were seeing on
the Russian side were as low as one-tenth the rates in the U.S.
areas, so I think they are moving as close as they can to where
the fish are, and that is going to continue pressure on that
boundary because of the nature of the stocks.
Senator Snowe. You have mentioned that the foreign vessels
have been far more aggressive--in and around that boundary?
Admiral Barrett: Yes. And I think it is because of the
fish.
Senator Snowe. Is that comparatively speaking? Is it worse
now than in the past? How would you compare it to previous
years?
Admiral Barrett. Certainly historically we have seen more
vessels up there more aggressively pushing the boundary. We had
a situation this past summer with one of our cutters, the
HAMILTON, the fishing vessel GISSAR, and some Russian factory
trawlers, which was really unprecedented, and so I think we are
going to see continued pressure there, but it is clearly a
level of activity and a level of aggressiveness that we had not
encountered before up there.
Senator Snowe. Are these increased demands one of the
reasons you are reducing routine operations?
Admiral Barrett. Yes, ma'am. We are shifting the effort to
areas such as the maritime boundary.
Senator Snowe. Senator Stevens.
Senator Stevens. Well, thank you very much. I am going to
limit my questions in the hopes that we will be able to hear
more people here, and I do hope I will be able to submit some
questions to get answers in writing for the record on some
specifics that I would like to deal with.
But Ms. Dalton, as I indicated in the opening, I think the
essential fish habitat problem is one that worries me most.
Could you tell me, do you think that the act that created that
program is specific enough to limit the scope of that activity
to those areas that are actually threatened, as opposed to
being just a broad coverage of all of the marine areas of the
United States?
Ms. Dalton. I think this is another evolutionary process.
The definition in the act is very broad, and it has been
interpreted by the agency fairly broadly, too, so we do have
large areas identified.
There are two things that are going on, though, that I
think mitigates that. One is that we are identifying habitat
areas of particular concern in many fisheries, and those are
where the attention is being focused in terms of comments and
consultations. So I think as we work through this, there is no
way that we can deal with it from an agency standpoint if we
are talking about the entire coastline of the United States. As
we learn more and get better information, then we are focusing
more on the areas that I think we expected to be identified
when we did the law.
Senator Stevens. I should not repeat history, because I
would not like to see it repeated, because on the Endangered
Species Act, I worked with Senator Jackson on that act, and we
fully intended that the action required of the Federal
decisionmakers would be based upon advice that was received
from other entities. The courts subsequently held, you know,
that it was an absolute condition, and imposed severe
restrictions upon the policymakers' decisionmaking capability.
It seems to me that this broad coverage of the essential
fish habitat statute by the agency so far is inviting the
courts to come into that area and make the determination in the
first instance that there is something that has to be
protected. I think there should be a trigger in there somehow,
as I indicated, for action under the essential fish habitat
legislation, and that the broad coverage of that act, as
interpreted by your regulations, means that the protection that
we intended is going to be diluted by having the agency
everywhere looking for problems, rather than addressing the
specifics, where there are problems.
Now, I do not know how we are going to work that out, but I
do not believe we should have another situation where the
courts of the United States are getting involved in every
single possible claim of danger. It has to be triggered by some
specific finding of danger, or requirement for protection, as
far as the agency is concerned.
How that is going to be worked out, I do not know, but I do
not believe it is--for a series of industries that are so
oppressed, as they are right now, to have these industries face
another series of hurdles that get ever and ever higher based
upon court interpretations and misinterpretations of the
statute, I think would be wrong.
Ms. Dalton. But if you look at the clear face of the law,
the section 7 process is very, very different from the
essential fish habitat provisions. There you have a jeopardy
finding that is binding on the Federal agencies. What we have
in the Magnuson-Stevens Act is a consultation requirement, and
there is no further obligation on the part of the Federal
agency than to try to work with us whenever there is problem.
Senator Stevens. I invite you to look at the original
Endangered Species Act. That is what was in there, too. There
was no requirement for absolute control by that process over
the decisionmaking. Today, it is absolute. Once there is an
indication, as interpreted by the courts, that there is a
species that is endangered, that is it, and the courts make
those determinations much more than the agencies do.
I do not think this is the time to debate it, but I do
think we ought to make that statute specific, and not allow a
court decision to come along and turn it into an Endangered
Species Act concept.
Ms. Dalton. Just to let you know, we have done about 400
consultations in Alaska now, and have not had any problems, at
least that I have been told about or am aware of. We have done
about 2,500 Nation-wide.
So the process right now does not seem to be creating major
problems, and it is done as part of other consultation
requirements under the Fish & Wildlife Coordination Act, under
the Endangered Species Act, under NEPA. So what we have tried
very hard to do is to not increase the burden on the entities
that are required to have permits by these Federal acts.
Senator Stevens. Do not misunderstand me, I think the fish
habitat that is essential should be protected. That is the
basis of our statute. But to have the courts deciding what area
requires protection, in my judgment, is wrong. For an area that
has 80 percent of the outer continental shelf, and the off-
shore mining activities that we have going on right now, I
think it is not the fisheries that in jeopardy right now, I
think it is the off-shore mining that is in jeopardy, and if
there is a conflict between fish habitat and that off-shore
mining, I believe the agency should protect the fish habitat,
but I do not think we should see off-shore mining put in
suspension while the courts determine whether that is the case,
so I hope we can work together.
Ms. Dalton. We will be happy to work with you.
Senator Stevens. On the IFQ's, I really believe the
difficulty is, if that expires there is going to be a period of
a race to IFQ's that we just cannot countenance. We have got to
find some way, if IFQ's--the moratorium is to be terminated, to
put in place some mechanism whereby we restore the power of the
councils to determine what types of organizations, whatever you
want to say, whether co-operatives or IFQ's, or whether there's
really areas where the old Derby system should be allowed to
function.
I believe that the councils should have that discretion,
but under the situation if that moratorium expires, I do not
think it would be fair to councils, who have already so many
burdens, to be forced to turn and look at the merit of IFQ's
that they are going to face.
I do hope that you will help us by coming up with some
suggestions, and I think our State has that responsibility,
particularly in our area, since we have such a vast portion of
this coastline, as to how you would like to see that come into
effect, and Rick, I think your council should give us some
guidance how much time it should take before that authority of
the council should be suspended in the period after the
moratorium expires, and whether or not the council does have
the discretion to use other tactics and decide not to put into
effect IFQ's in any particular fishery.
So I hope that you can give us some guidance. Would you do
that?
Mr. Lauber. Yes, sir.
Senator Stevens: And Admiral, I am disturbed that we do
have this reduction in effort on the domestic side because of
the pressures from the international side, and I do not know
that we have got an answer to that specifically.
I know that one Member of Congress told me once that the
person opposed Federal expenditures to protect the fisheries,
other than from foreign intrusion, so you have both a domestic
law enforcement area, and you have really a protection under
the essential fish habitat concept now, and you have, of
course, the law enforcement activities beyond that.
I think somehow or other we have to get some understanding
of, if there are to be fees that come along from the IFQ's and
other such activities, how that money is funneled into the area
that has--your service that has the greatest burden from the
laws we passed, so I would like to work with you to see if we
can do that.
We have been earmarking other funds as they come in lately,
and although chairmen of Appropriations Committees do not like
to see funds earmarked and set up in funds, I think in this
instance, when they are coming from the ocean activities, they
should at least have the priority of being expended for the
type of activities that you handle. I think you ought to help
us on that one, too, and see what we can work out.
Admiral Barrett. Thank you, Senator. Certainly, we will.
The other comment which you are certainly familiar with, and
Senator Snowe is, too, what makes it a little more difficult
here is simply the distances. In order to operate successfully
out there we have got to have the large platforms, we have got
to have the capable aircraft. Getting out there can take us 3
or 4 days sometimes, just to move the asset from one place to
another, so the resource, the fact that we are stretched thin
everywhere in the Pacific is even more of a problem than it is
in some other areas because of the distances involved.
Senator Stevens. Lastly, Mr. Chairman, can you give us
anything--I am not asking for it right now--that would document
this looking back theory of yours? I think the trouble is we do
listen to the economists, who tell us how great it is going to
be if we have IFQ's, and no one is really looking at the impact
upon the people and the communities involved.
I am particularly worried, as I stated once before in
hearings, about future generations' ability to enter these
fisheries once the IFQ goes into effect, because they have to
get a permit, they have to get a boat, and now they would also
have to buy a portion of the IFQ, so there is an additional
capital requirement for the coming generations to get involved
in fisheries that did not exist back in the Derby days.
Now, I understand the economists say that that is no
problem, but I do think some of the things you indicated ought
to be in the record so that people here can see what really did
happen in those areas where the IFQ's went into effect.
Mr. Lauber. Senator Stevens, the State of Alaska soon after
the implementation--the first year, I believe--did a study.
However, it was somewhat limited, particularly in the area I
believe you are specifically talking about, where it impacts on
individuals, but it did verify the information, for instance,
that I mentioned regarding fishermen who received quota shares
who had not been recent participants in the fishery, receiving
windfalls, and in fact some cases I recall it was upwards in
some areas close to, or about 50 percent.
But most of the information that we have received as to the
harm and so forth quite frankly has either come from private
conversations, and much of it has come to the council through
public testimony, maybe even on other subject matters, where
people have indicated that they are in distress, and why they
need some relief and so forth, because of IFQ's and the impacts
that it had. It had significant impacts in coastal areas,
coastal communities. There is a group in the Gulf of Alaska
that one of the main problems was created by that.
I know of no overall study that was done. I personally and
the council collectively have received information through
public testimony, but the most that we really have done was
that early study. After, I believe, the first year, the State
did a study, and we could make that available to the committee,
but we have no plans to do any.
The thing that this, like so many things, and why I think
it is important that we move throughout the United States as
well as Alaska cautiously with IFQ's, once they are there, they
are there forever, for all practical matters, because, as Mr.
Benton mentioned, the people that were displaced have moved on.
I mean, you are not going to ever hear from them. They may
be in other fisheries, but they may be working in a tire plant
in Dayton, Ohio, or tending bar in Phoenix, Arizona, or
whatever. They are gone, and they are no longer in
organizations, and now you have IFQ's. We are hard at work
trying to make our IFQ program work. It is the will of the
council, it is in law, and we are trying to make it work, and
it currently is working very well. I am saying--I am looking
ahead, and we are doing a very good job. Looking back, I can
see the havoc that we wreaked on people.
Senator Stevens. Well, that is true, but I joined others on
putting a moratorium on it so you could not create any new
ones, and I thought that the study that we mandated would cover
both the effects of the IFQ on those that were harmed and the
beneficial effects on the fisheries, or on the management
plans. I think the council, research council's report covers
the latter but did not touch the former, and we really do not
know what the impact was.
Penny, do you disagree?
Ms. Dalton. I think the NRC report does cover some of it.
We also have some information that we would be happy to work
with you on, to look at it retrospectively as well.
Senator Stevens. Well, I will go back and look again. I did
not think the council had really covered the impact of these
two that we had in effect here in terms of what happened to the
people that did not get any ability to participate in the
fishery after the IFQ went into effect.
Steve, do you disagree?
Mr. Pennoyer. Mr. Chairman, no, not completely, because as
Chairman Lauber said, there is a difficulty in knowing exactly
what happened to people who did not get IFQ's. We, I think,
know who was fishing, we know who is now fishing, and we know
what the changes have been over the years. We actually had
funded a study to at least track the data on what has happened
in the fishery, the amount of consolidation.
Senator Stevens. Is there one undergoing now? Have you got
one going now?
Mr. Pennoyer. Yes, we do.
Senator Stevens. When will that be finished?
Mr. Pennoyer. Well, it has been an annual process of
reporting the data. It is not consolidated anywhere, and the
analysis part that the chairman is referring to has not
actually been undertaken. We have not done an overall analysis
of it, but we have been monitoring the data annually. It is
available, and we will try to bring together what we can for
you for your consideration.
Senator Stevens. Well, as much--I am from the school that
sort of agrees with the chairman here, Mr. Lauber, about IFQ's,
but they are here now, and they are coming more, and I think
the pressure is going to be great on us to allow them to come
into effect in some areas and with some conditions at least.
I do believe we ought to have the advantage of some
analysis of that so that by the time we do permit the councils
to start using this as a management tool, but at their
discretion, we have some standards for how that authority can
be used, or at least some--I like that word hurdle, hurdle that
they have to go over to show that it is justified to use this
tactic, the IFQ approach, in spite of what the impact would be
upon those who might be harmed by the process, but I do not see
that, unless we take some action.
Mr. Pennoyer. Mr. Chairman, I guess I agree with that. I
think the IFQ system unfortunately has been viewed as a
monolith, and I do not think it is. I think the word has
generated what Chairman Lauber envisioned as the economist's
nirvana, which I do not think anybody really is trying to get
to, ultimate consolidation, the ultimate whatever it happens to
be.
There are social concerns that have to be taken into
account, and right now in your area we are doing everything
from co-ops to the IFQ system, so there is a broad range of
things that could be looked at and used, and I believe that
most of us probably do hopefully learn from the mistakes we
made, and the halibut-sable fish IFQ I think was, in comparison
to the system that was in place at the time, a vast
improvement, but there are obviously ways we could have chosen
initial participants differently, cash history credits, a lot
of things that could have been done.
We will help the National Marine Fisheries Service put
together what we have on this fishery and present that for your
use. We have tried to update the data annually, and I think we
do have a pretty good feeling for how the permits have flowed,
consolidation, whether they have left communities, small
communities going to large communities--for example, most of
them, a far greater proportion has remained in Alaska that went
outside.
Alaska has benefited overall, but the benefits have
actually migrated somewhat to larger communities from smaller
communities, and those are the type of things I think we can
give you the examples of, and we would be pleased to do that.
Senator Stevens. Well, it is just a statement. I do not
know whether under the Constitution we could do it, but I think
the IFQ ownership should be limited to those who are actually
participating in the fishery, and not end up on Wall Street,
and the investor-owned concept without any connection with the
fishery I think, in the long run, would be very harmful for the
fishery.
People have to have some knowledge of their impact on, if
nothing else, on the reproductive capability of the fish they
are involved in, in terms of making decisions as to utilization
of the IFQ's, and it is going to be a very difficult thing to
do constitutionally, or even getting approval, even if it is
constitutional, to put limits on investor activities, but I
clearly think this is one of the areas where the national
interest is in assuring the reproductive capability of these
fisheries ahead of assuring of the full transferability of
investment in a portion of the IFQ.
Now, somewhere there is an answer that will give us the
ability to use the management tools at the discretion of the
councils, but with some restrictions from Congress as to when
those tools can be used in a particular fishery by setting some
conditions, not the least of which is the protection for the
traditional fishery community.
You mentioned that, and I think that protection has got to
be in the forefront, because, as the chairman has mentioned, in
terms of the two IFQ's that we put into effect, damage to some
communities can occur. I feel the net result of the IFQ's,
unless there are conditions and hurdles, will just be the
consolidation of IFQ's through the investor activity. As a
result, the council's ability to regulate those fisheries will
be diluted to a great extent.
So a key provision to me is the essential habitat problem
as far as the reauthorization of this bill.
Ms. Dalton. Rick characterized the halibut-sable fish IFQ
as an experiment. We are doing another experiment right now,
and that is with the implementation of the American Fisheries
Act, and I guess part of the thing that we are discovering from
that is that there are alternatives to IFQ's, and if we look at
it as one in a series of alternatives rather than the ultimate
goal of every fishery in the United States, I think it may be
easier to meet your goal of trying to come up with criteria to
select which particular way of managing the fisheries is
appropriate.
Senator Stevens. Well, I agree with you, but respectfully I
say that decision ought to be made by the councils, and not be
made in Washington.
The utilization of these tools ought to be done by the
people who are most familiar with the area, and are going to
have the continued oversight responsibility on a day-to-day
basis.
You have one thing left. I had better quiet down here.
Mr. Benton. Thank you, Senator.
The relationship between the moratorium on IFQ's and the
implementation of the American Fisheries Act is something we
really have not touched on here, but I think it is something
that does need to be highlighted a bit, and that is that if the
moratorium on IFQ's were to expire absent guidance from
Congress on how to implement IFQ's and deal with some of the
issues we are discussing, that would happen right at the time
that the American Fisheries Act co-ops are just really getting
up and running.
And I, for one, think that--and it's oftentimes difficult
and certainly not wise to make predictions, but I have some
concerns that what would happen is that attention would
immediately shift from trying to make the co-op structures
work, which, as has been pointed out here, may be a good
alternative to a full-blown IFQ program.
Attention would shift from that to, how can I ensure that I
am going to get my IFQ, in terms of the individual involved in
the fishery, and a lot of effort and a lot of energy that has
been put toward making the co-ops work will then be diverted
off into pursuing the possibilities of getting individual
quota, and that could have some unpleasant and unintended
consequences as well, and it is something I think we need to
think about. That is why I think that allowing the IFQ
moratorium to expire or go away without some guidance from the
Congress would be an error in our part of the world, at least.
Senator Stevens. Well, I do not know. My last comment would
be, I am not sure I would like to see the co-operative
management tool be transitioned into IFQ's without some real
requirement of a substantial, overwhelming consensus among
those who are participating in the co-operative, and vice
versa, but that is going to be up to the councils to figure out
how to do that.
But I do not think we ought to be able to shift from one
generation of IFQ's to another generation of co-operatives and
then shift back. That is sort of like going from apartments to
condos and then going back to apartments again. There is a lot
of tax consequences to that, and that again would come to the
point where the fishery would be driven by tax consequences,
rather than being driven by what is in the best interest of
fisheries.
Thank you very much.
Senator Snowe. Thank you, Senator Stevens. It is clear that
we are racing against the clock on this moratorium, which
expires in October. Either we do it by default, or we take a
proactive stance in trying to define an approach with respect
to IFQ's. Clearly we have our work cut out for us, and Mr.
Lauber, you make a very good point. We need to address those
who have been left in the wake of the IFQ decisionmaking
process.
The National Research Council took a couple of years to
respond to Senator Stevens' request for a study of IFQ's. We
now have a short period of time in which to address the
implications and the impact of this whole process, before we
make any final decision.
In Louisiana we heard testimony in favor of lifting the
moratorium. The red snapper industry, for example, would like
to have an IFQ. They designed one prior to the moratorium and
are anxious to have one. So we have a lot of competing
interests around the country, and this is going to be a major
issue.
Ms. Dalton, essential fish habitat is a critical issue
which Senator Stevens raised. As you know, after attending all
the hearings, the concerns we hear are either too broad or too
narrow. In your testimony last month, you said the three
regional councils--the Gulf, South Atlantic, and Caribbean--did
an excellent job using available scientific information to
identify areas that proved to be extremely important habitat or
represent resources that are unique to or critical to
sustaining the production of fisheries.
Aren't those words--``unique, critical, and important''--
the words that should have been used to describe essential fish
habitat? Yet you used those words to describe habitat areas of
particular concern. That is why I think we have a problem here
with overly broad implementation.
It is questionable whether or not nonfishing interests
should have been involved in this whole effort, and whether or
not they are affected by the essential fish habitat
decisionmaking and consultation processes triggered by your
agency. Nevertheless, if it is having an impact, then we are
getting into the Endangered Species Act spiral once again. Our
State is facing this situation due to a listing of the Atlantic
salmon on the Endangered Species List, and we are facing that
whole catastrophic process over the next few months.
So, I am concerned that you are looking at this issue in
very broad terms when the original intent was to have a more
narrow and precise implementation of what is ``essential
habitat''.
Ms. Dalton. And we are very happy to work with you to look
at that issue.
Senator Snowe. Well, OK, we will. Thank you all very much.
We would like to welcome our next panel: Ms. Chris
Blackburn, Alaska Groundfish Data Bank; Mr. Kevin O'Leary,
member of the North Pacific Council; Ms. Beth Stewart, National
Resources Director of the Aleutians East Borough; Mike Hyde,
president of American Seafoods; and Mr. John Iani, who will be
the final witness on this panel. Ms. Blackburn, we will start
with you.
STATEMENT OF CHRIS BLACKBURN, ALASKA GROUNDFISH DATA BANK
Ms. Blackburn. Thank you, Senator Snowe and Senator
Stevens. I appreciate the invitation to testify here. I have
been in business as a consultant for trawl vessels in the Gulf
of Alaska and Bering Sea and also processors for the last 15
years.
For this presentation, I am representing what we call now
the Greater Kodiak Area of Alaska, and it takes in the areas
that are fished by Kodiak fishermen in the gulf, and I want to
point out that Kodiak fishermen fish not only in the gulf, live
in the gulf, many of them also have a history in the Bering
Sea, and ever since the American Fisheries Act I have been
working with some of the vessels in the Bering Sea helping them
get their catch history ready for this year, and in the gulf
everybody is very anxious to have some equal consideration.
It seems to us so very simple that the Gulf of Alaska
fishermen should also have the same right, or ability, as the
Bering Sea fishermen to co-op.
Coops, we have been informed by NMFS, are like IFQ's, so
that we have to wait for a moratorium, but in our mind they are
much better than IFQ's. They do not give away their resource.
They let you use it each year on your history based on how the
co-op decides to work. There is not this huge, who-gets-what.
Once you qualify for a co-op, you have your history, and the
co-op decides within itself how people will fish, and where
they will fish.
The council has done a wonderful job with our fish. NMFS
has done a wonderful job helping us with our fish. I cannot
praise them enough for what they have done. But we are doing a
lousy job managing our industry itself. The processors, I think
they could process 10 times the fish that we have, just because
they have to get bigger, faster, in order to get their share.
The boats are rushing harder to get their share, and it is an
endless cycle.
I think we are at the point where we really do not just say
we think that we are going to have bankruptcies. I think we are
seeing them, just simply because the smaller you are, the less
you can compete, and the independent fishermen, the resident
fishermen is the one who is in trouble.
I would like to see us have the ability to co-op. You get
to use it for a year, your history. It does not lock you in.
You do not sell it. You might lease it for that year, and it
allows you to rationalize the fishery.
There are many things that we want to do with our
fisheries, and are trying to do. Reduce bycatch. How can you
reduce bycatch if you have got a 4-day season and you are
racing against 50 boats, and I can remember times when boats
have called me and said, can we not have NMFS delay this
opening? The halibut have not moved out yet. The answer is no,
they cannot delay the opening, and the boats cannot stop
fishing because they will lose their share.
We have been very happy to hear that in the Bering Sea, the
factory trawlers actually had a 20-percent increase in their
recovery because they could slow down.
I will stop there. I see my time is up, but I hope that you
look to the co-op arrangement and to letting the gulf have the
same abilities to co-op that the Bering Sea has, the same
ability to limit processors, because too many processors are
just as bad as too many boats.
[The prepared statement of Ms. Blackburn follows:]
Prepared Statement of Chris Blackburn, Alaska Groundfish Data Bank
I appreciate the opportunity to testify to this committee. I am
Chris Blackburn, sole proprietor of the consulting firm Alaska
Groundfish Data Bank which represents trawl vessels and processing
plants in the Gulf of Alaska and Bering Sea.
In this presentation I am representing the portion of the Greater
Kodiak Area of Alaska east of 157 degrees longitude west to 140
longitude degrees west as shown on the map in your packet. For
simplicity's sake I refer to this area as the Greater Kodiak Area. Beth
Stewart who is also speaking today represents the East Aleutian Borough
which is west of the Greater Kodiak Area. We support the East Aleutians
Borough's proposal. It meets their unique circumstances which are
different from the Greater Kodiak Area.
During the fifteen years Alaska Groundfish Data Bank has been in
business the harvesting of Alaska's marine resources has constantly
changed. I remember when the foreign fleets caught Alaska's pollock and
cod and flatfish, when U.S. vessels caught Alaska's marine resources
and sold the fish to foreign processors, and the jubilation when all of
Alaska's fisheries were harvested by U.S. vessels and processed within
Alaska. Senator Ted Stevens helped with, if not initiated, each step in
the evolution of Alaska's fisheries.
Alaska is blessed with tremendous marine resources which have been
well managed by the North Pacific Fishery Management Council. Alaska's
fishing industry, as most fisheries in the U.S., is, with a few
exceptions, an open access fishery. Open access is a polite name for
``race for fish''. Alaska's fisherman take to heart need for
sustainable fisheries, need to protect habitat, reduce bycatch, protect
sea lions and bring to the dock or the deck of a factory trawler or
mothership quality product.
Fishing open access is totally at odds with sustainable fishing,
with reducing bycatch, and producing quality products. Open access
results in an ever tightening spiral in the race for fish and the
evaporation of profits. For example, processors have had to freeze
whole Pacific cod and send it to Asian markets for processing, simply
because more cod was delivered than the processor could handle. Less
than optimal fish may be delivered because the race for fish does not
allow waiting until the fish school up or recover from spawning.
As the race for fish intensifies, the fishing seasons shorten and
small vessels, considered the most ecologically sound, are left waiting
weather and perhaps losing the entire season for a species.
The best science possible is used in managing Alaska's fish, but
the management of the fishing fleet effort has remained Neolithic. The
American Fisheries Act was a brilliant solution for rationalizing the
Alaska pollock fishery. It allows the Bering Sea pollock fishermen to
opt out of the race for pollock. The At Sea trawlers who fished as a
pollock co-op in 1999 increased recovery (the amount of the fish used)
by 20%.
The benefits of co-ops are obvious. Unlike IFQ's co-ops do not
privatize a national resource nor is a fisherman who wants to continue
fishing open access have to co-op. Those who do choose to co-op receive
the benefit of having their own quota as contractually arranged in the
co-op so that they may fish at the times that are most suitable for the
vessel and the processor.
GULF EXCLUDED FROM THE AMERICAN FISHERIES ACT
The Greater Kodiak Area pollock fishery was not included in the
final draft of the American Fisheries Act. The Greater Kodiak Area
processors and fisherman request that this oversight be remedied.
We ask that the Greater Kodiak Area pollock processors be limited
as they were in the Bering Sea. This requires a Congressional Bill.
Currently there are seven processors in Kodiak--Alaska Fresh Seafoods,
Alaska Pacific Seafoods, Western Alaska Seafoods, Trident Seafoods,
Ocean Beauty (aka Kodiak King Crab), International Seafoods, and Cook
Inlet Seafoods. Outside of Kodiak the Cook Inlet Seafoods plant in
Seward and the North Pacific Processors Cordova plant also process
pollock.
We also ask that the bill allow that co-ops be formed if 80% of a
processors fleet (the vessels which fished for that processor in 1999)
vote to co-op as was done in the Bering Sea.
Because of the great diversity in vessel size and fishing patterns
in the Greater Kodiak Area we ask that the qualifying years for vessels
be 1995 thru 1999. To qualify as a Greater Kodiak Area co-op vessel,
the vessel must have made at least one landing in each of two years.
Catch history for the eligible vessels is proposed as the average of
the three best years within 1995 thru 1999. Pollock discarded at sea or
sent whole to a meal plant cannot be counted in a vessel's catch
history. There are no tonnage or landing criteria.
Vessels that are Bering Sea American Fisheries Act vessels may also
qualify to co-op in the Greater Kodiak Area of Alaska.
Processors need to be part of the co-op structure. This need was
recognized in the American Fisheries Act which named the Bering Sea
shorebased plants, motherships and factory trawlers eligible for co-
ops. If the processors are not limited they will continue to be
overcapitalized which means less profit for the plant and for the
vessels. The inevitable outcome will be fewer processors due to mergers
or bankruptcy. Hardest hurt will be the small companies and family
owned businesses.
If diversity of processors, vessels and product forms are to be
maintained in the Alaska coastal communities pollock co-ops must be
available for all pollock processors and vessels. If the ability to
develop co-ops in the Greater Kodiak Area is granted as we propose the
coastal communities will have the economic stability necessary to
survive.
Senator Snowe. Thank you, Ms. Blackburn.
Mr. O'Leary.
STATEMENT OF KEVIN B. O'LEARY, MEMBER, NORTH PACIFIC FISHERY
MANAGEMENT COUNCIL
Mr. O'Leary. Yes. Madam Chair, Senator Stevens, my name is
Kevin O'Leary, and I would like to thank the Commerce Committee
for inviting me to present testimony today. I am a commercial
fisherman from Kodiak, Alaska, and I have resided in Kodiak for
over 25 years. I came here in the summer of 1975.
I began as a crew member, a captain of a vessel, and now I
am a multiple vessel owner in Kodiak. I currently am a member
of the North Pacific Fishing Management Council and am
beginning my fifth year of service on the council.
I have been asked to focus my testimony on two issues
related to the Magnuson-Stevens Act. Both issues I have been
asked to address have a fisheries rationalization at the core,
and I would like to tell you of my evolution of my thoughts in
regard to rationalization of the fisheries. I was an opponent
of attempts to rationalize the fisheries in the 1980's for
halibut and sable fish. I believed, as many believed and still
do in Kodiak, that as long as the fisheries are managed with
the best scientific data available in a TAC-setting process for
each year's harvest and the fish are prosecuted within those
limits, that the health of our fisheries would be adequately
ensured.
The fundamental fears with rationalization, I guses the
fear of the unknown, concerns over the equity of initial
allocations, the effect of large-scale consolidation on
fishery-dependent communities, and the efficacy and cost of
management enforcement, are some of the important reasons why I
was initially opposed and very skeptical of IFQ's in
particular.
Since the implementation of the halibut and sable fish
program, the program is working for the participants in the
fishery and working quite well. We have seen a significant drop
in loss of life and injury at sea in those fisheries. We have
seen a substantial rise in the ex-vessel value of the product,
we have seen product quality substantially improved, and now
there is nearly year-round availability of fresh halibut in the
marketplace.
The key element of the program--and I cannot stress this
enough. The key element of the program, of any rationalization
program, is the end of the race for fish between users.
Stakeholders, once that takes place, can then refocus their
efforts on safety, on conservation of the resource, and on
product quality. With fishermen having spent millions of
dollars since the implementation of the program to basically
pay for their particular share of the fishery, they have a real
incentive to be concerned with the long-term health of the
resource.
No longer competing for a share of the resource, while
prosecuting the fishery, allows the Government the kind of
flexibility they need to avoid nontarget species, avoid high
bycatch. They also have the time and the flexibility to alter
their fishing practices and their gear type so that they can
minimize their impact, say, on the benthic community without
fears of losing their particular share of the resource in the
process.
This refocusing of effort and concern is really the key to
the future of our being able to meet the demands of things like
the Endangered Species Act and habitat issues. If we do not, if
we do not move in this sort of direction, our hands are
essentially tied because we are competing with each other and
all those other concerns that really we are getting hit over
the head with as an industry by--and legitimate concerns by
people with regard to public resource, and wise use of public
resource. We are not going to have the tools we need.
The North Pacific Council continues to have substantial
challenge in managing our fisheries in the North Pacific,
reducing impacts of commercial fishing on benthic habitat,
bycatch reduction, and as our scientific knowledge grows,
movement toward an ecosystem-based approach to fisheries
management, these are goals we are currently working toward.
If we are to achieve them, we will need the management
regimes that provide flexibility for the managers and fishermen
to respond to the challenges we face. Our experience in the
halibut-sable fish IFQ program provides an empirical example of
how this form of rationalization can make a significant
contribution to management goals.
The next iteration of Magnuson as you work toward
reauthorization, I would urge you to provide your managers in
the North Pacific Council and National Management Fisheries
Service all the management tools that could be available to
them. Certainly there are social and economic concerns, and we
in the previous panel heard those voiced, and I, certainly as a
former opponent, am appreciative of the wake that these kinds
of programs create, but I feel we need to move forward.
I will skip here and just say with regard to, our current
circumstances in the crab fisheries in the Bering Sea are dire,
and the future of most crab fisheries are in doubt. Bristol Bay
Red King crab fishery, which in the 1970's and eighties was
healthy, and the most lucrative crab fishery in the North
Pacific, crashed, and the stocks have never recovered to the
historical highs of that period. The Bairdi Tanner crab fishery
has also been on a continual downward trend, with only modest
periods of recovery in the early nineties.
The North Pacific Council has worked to develop rebuilding
plans for Bairdi and Tanner crab resource. In the mid-1980's,
with large declines in King and Tanner crab fisheries, and the
robust state of the Opilio stocks, the Bering Sea crab fleet
became increasingly dependent on the Opilio fishery. Opilio
Tanner crab became the mainstay that underpinned the economic
viability of the crab fleet.
Current projections indicate a severely curtailed fishery
with the Opilio crab because of recent stock assessments that
indicate severe declines. Causes of the decline in the
fisheries are complex and commercial fishing is a component,
although oceanographic conditions are the likely main reason,
and we are going to face continued low abundance in crabs until
we get some kind of a regime shift in the ocean with regard to
the status of oceanographic conditions. These circumstances
have prompted the crab industry to come forward and ask the
North Pacific Council for help in facilitating discussions to
develop co-op arrangements similar to those provided by the
American Fisheries Act. Dr. Dave Fluharty and myself have been
involved in this effort. Dr. Fluharty is a member of the North
Pacific Council from Washington State.
The current prohibition on the implementation of IFQ
programs or quota-like share programs prevents the council from
directly developing the kind of solution many members of the
crab industry want. The very fact that the industry members are
calling for this sort of solution is an indication that
fishermen are coming to grips with the reality of
overcapitalization and are seeking meaningful solutions to
their problems.
The formation of co-ops similar to those developed as a
result of the American Fisheries Act is another valuable form
of fisheries rationalization and capital reduction. Currently,
formation of such co-ops are restricted by the Fisherman's Act
of 1934, and the crab industry would need the direct help of
Congress in order to act expeditiously and move forward to
resolve its problems. Moreover, the excess of capital in the
crab industry is so great that a direct reduction of capital
through a buyback is likely necessary to facilitate the
formation of co-ops.
As you move forward in the process of reorganization I
would ask that you provide the councils with the ability to
consider and implement a variety of management options in order
to fully rationalize the crab and ground fisheries of the North
Pacific. Thank you.
[The prepared statement of Mr. O'Leary follows:]
Prepared Statement of Kevin B. O'Leary, Member, North Pacific Fishery
Management Council
Madam Chair, My name is Kevin B. O'Leary. I would like to thank the
committee for inviting me to present testimony today. I am a commercial
fisherman from Kodiak, Alaska. I have resided in Kodiak for over
twenty-five years working in the commercial fisheries as a crewmember,
captain, and vessel owner. I currently am a member of the North Pacific
Fishery Management Council and am beginning my fifth year of service on
the Council. I have been asked to focus my testimony on two issues
related to the Magnuson-Stevens Act; my experience in the halibut and
sablefish IFQ program and the need for prompt rationalization of the
Bering Sea crab fisheries by the formation of co-ops using the American
Fisheries Act as a model.
Both issues I have been asked to address are related because they
have fishery rationalization at their core. I would like to tell you of
the evolution of my thoughts on fishery rationalization. I was an
opponent of the attempts to rationalize the halibut and sablefish
fisheries in the 1980's. I believed as many did and still do in Kodiak
that as long as the fisheries are managed with the best available
scientific data in setting Total Allowable Catch (TAC), for each year's
harvest and fisheries are prosecuted within those limits, that the
health of our fisheries would be adequately insured. Fears of the
unknown, concerns over the equity of initial allocations, the effect of
large scale consolidation on fishery dependant communities, the
efficacy and cost of management and enforcement are some of the most
important reasons for my initial skepticism and opposition to IFQ's.
Since the implementation of the halibut and sablefish IFQ program, the
program is working and working well. Loss of life and injury at sea are
down significantly, ex-vessel value of product is up substantially,
product quality is much improved, and there is now nearly year-round
availability of fresh product.
The key element of the program that allows for all these
improvements is the end of the race for fish between users. Stake
holders can now refocus their efforts on safety, conservation of the
resource, and product quality. With fishermen having spent millions of
dollars paying for their particular share of the resource since the
implementation of IFQ's, there is a tremendous economic incentive for
them to be very concerned with sustainable resource management. No
longer competing for a share of the resource while prosecuting the
fishery allows them the time to move from areas of high by-catch of
non-target species. They also now have the flexibility to alter fishing
practices and modify gear to address conservation concerns without fear
of losing their share of the fishery.
The North Pacific Council continues to have substantial challenges
in responsibly managing all of our fishery resources in the North
Pacific. Reducing the impacts of commercial fishing on benthic habitat,
by-catch reduction of non-target species, and as our scientific
knowledge grows, movement toward a more ecosystem based approach to
fishery management are three goals we are currently working toward in
the North Pacific. If we are to achieve them we will need to have
management regimes that provide flexibility for both the managers and
fisherman to respond to the challenges we face. Ending the race for
fish is fundamental to providing the needed flexibility. Our experience
in the halibut and sablefish IFQ program provides a empirical example
of how this form of rationalization can make a significant contribution
to achieving our fishery management goals.
In the next iteration of the Magnuson-Stevens Act as you work
toward reauthorization, I urge you to provide your managers at the
North Pacific Council and at the National Marine Fisheries Service all
the management tools that could be available to them. Certainly there
are social and economic issues with regard to IFQ programs that are
difficult to resolve. The current halibut and sablefish program is a
good and successful first attempt at addressing them. What has been
learned by all the participants in the public process through the
development and implementation of the halibut and sablefish IfQ program
is invaluable in the development of any future programs for other
fisheries. The Council forum created by the Magnuson-Stevens Act is the
best place to resolve these issues.
There was more than just over-capitalization and the problems
created by the race for fish that led the pollock industry to seek a
legislative solution for their problems. To the extent that the North
Pacific Council did not have all the rationalization tools at its'
disposal, the industry had to have a legislative solution to solve the
capitalization portion of it's problems. It is the timely
rationalization of the pollock fishery through the formation of at- sea
processor and shore based delivery co-ops as provided for in the
American Fisheries Act, that has given both the management and fishery
flexibility necessary to have a pollock fishery in the Bering Sea in
2000 in the face of the Stellar sea lion situation and the exigencies
of the Endangered Species Act. The lack of both management and fishery
flexibility that rationalization could provide in the Gulf of Alaska
makes responding to the Stellar sea lion situation much more difficult
and the impact of the management measures potentially devastating to
the Gulf communities.
The current circumstances of the crab fisheries in the Bering Sea
are dire and the future of most crab fisheries is in doubt. The Bristol
Bay red king crab fishery, which through the 1970's and early 1980's
was both healthy and the most lucrative crab fishery in the North
Pacific, crashed and the stocks have never recovered to their
historical norms for that period. The bairdi tanner crab fishery has
also been on a continual downward stock trend with only a modest and
brief period of recovery in the early 1990's. The North Pacific Council
has worked to develop rebuilding plans for the bairdi tanner crab
resource. In the mid 1980's with the large declines in king and bairdi
tanner crab fisheries and the robust state of opilio tanner crab
stocks, the Bering Sea crab fleet became increasingly dependant on
opilio tanner crab as it's most lucrative fishery. Opilio tanner crab
became the mainstay that underpinned the economic viability of the crab
fleet and crab processors from the mid 1980's until now. This summer's
survey work confirmed a tremendous decline in the biomass of opilio
crab and that resource has now been declared overfished. Current
projections indicate a severely curtailed fishery this year with the
fishery likely being closed to commercial fishing in the year 2001. The
causes of the decline of the crab fisheries are complex and commercial
fishing is a component of the decline, although oceanographic
conditions appear be the fundamental reason for crab stock declines.
Until we get an oceanographic regime shift to conditions more conducive
for crab we are likely facing continued low levels of crab abundance.
Given the current status of the stocks in the crab fisheries we are at
disastrously high levels of over-capitalization in both crab fleet and
crab processing industry. This level of capitalization exacerbates the
effort to manage the crab fleet effectively and promote recovery of the
crab resource. These circumstances have prompted the crab industry to
come forward and ask the North Pacific Council to help facilitate
industry discussions to develop co-op arrangements which are similar to
those provided by the American Fisheries Act. Dr. Dave Fluharty, a
North Pacific Council member from Washington State and myself, have
been involved in this effort.
The current prohibition on implementation of IFQ programs or quota
share-like programs prevents the North Pacific Council from directly
developing the kind of solution many crab industry members want. The
very fact that it is industry members calling for this sort of solution
is an indication fishermen are coming to grips with the reality of
over-capitalization and are seeking meaningful solutions to their
problems. The formation of co-ops similar to those developed as a
result of the American Fisheries Act is another viable form of fishery
rationalization and capital reduction. Currently formation of such co-
ops is restricted by the Fisherman's Act of 1934 and the crab industry
would need the direct help of Congress to act expeditiously to move
forward to solve its' problems. Moreover the excess of capital in the
crab industry is so great that a direct reduction of capital through a
buyback is likely necessary to facilitate the formation of co-ops.
As you move forward in the process of the Magnuson-Stevens Act
reauthorization, I would ask that you provide the Councils with the
ability to consider and implement a variety of management options in
order to fully rationalize the crab and groundfish fisheries of the
North Pacific.
Let me thank you again for allowing me the opportunity to present
my views.
Senator Snowe. Thank you, Mr. O'Leary.
Ms. Stewart.
STATEMENT OF BETH STEWART, DIRECTOR, NATURAL RESOURCES
DEPARTMENT, ALEUTIANS EAST BOROUGH
Ms. Stewart. Madam Chairman, Senator Stevens, I would like
to thank you for the opportunity to testify today. My name is
Beth Stewart, and I am Director of the Natural Resources
Department for the Aleutians East Borough. The Aleutians East
Borough includes the communities of Akotan, Cold Bay, Falls
Pass, King Cove, Nelson Lagoon, and Sand Point.
With the exception of Cold Bay, all of these communities
are Eastern Aleut villages that depend entirely on commercial
fishing to maintain local communities. Falls Pass, Akotan and
Nelson Lagoon are on the Bering Sea side and participate in the
CDQ program. Sand Point and King Cover fishermen are on the
gulf side and have extensive histories of both State and
Federal groundfish fisheries.
The vessels owned and operated by local fishermen are
almost all under 60 feet in length, and are built to
participate in salmon, herring, halibut, crab, cod, and pollack
fisheries. Local residents learned long ago that they must be
able to remain diversified in order to maintain their families
and their homes in this remote region.
Although a few local fishermen did receive enough halibut
IFQ to maintain their participation in the halibut fishery,
most did not. Although halibut remains an important component
of most fishermen's slate of possible fisheries, local people
are now being forced to purchase quota to retain needed
flexibility.
The vast majority of local residents oppose IFQ's,
sometimes referred to as ITQ's. They view IFQ's as a management
tool that encourages single fishery dependency by rewarding
those who have focused on a single fishery and making it more
expensive, sometimes prohibitively expensive, to maintain a
full suite of fishing options which will allow the vessel owner
and crew to shift fisheries as stocks and markets fluctuate.
Residents are also deeply concerned that IFQ's and the co-
op structure provided for under the AFA will result in the
consolidation of quota on fewer and fewer vessels. Such
consolidation has extremely negative impacts on crew
employment. Crew jobs are a critical source of income,
particularly during winter months. This is a fear expressed by
the vessel owners who would be involved in receiving either IFQ
or AFA benefit. It would be unwise for them to continue to fish
all the vessels, and if they did that, they know they would be
giving up jobs in the local communities.
The recent formation of co-operatives under the AFA has
created additional challenges for the small boat, diversified
fishery-dependent locals. Aleutians East Borough is home to two
shore-based processors, with plants in Akutan, King Cove, and
Sand Point. From time to time, floaters have come into the area
and our market competition has improved so that prices
automatically went up.
Local fishermen also desired the ability to establish
additional markets for species for which the shore-based plants
may not be able to provide a market. The idea of limiting entry
for processors within the Aleutians East Borough is adamantly
opposed by the local fleet. As mentioned above, the co-op model
developed for the Bering Sea Aleutian Islands pollack fishery
is viewed as unworkable by the local fleet.
However, in the course of facing the reconstruction of the
pollock fishery, in response to the current situation with
Stellar sea lions, Aleutians East Borough proposed that NMFS
set aside that portion of the pollack TAC taken by vessels
under 60 feet in the Western Gulf of Alaska, area 610, and in
that portion of area 620 in the Central Gulf east of 157, so
that the small boat fleet could continue to fish in the haul-
outs around Sea Lion Rocks and Mitrofania Spitz Island. These
are the only safe areas for the small boat fleet to fish during
the extremely dangerous weather that occurs during the pollack
fishery.
We propose that NMFS establish a fishing schedule that
would slow down the harvest and ensure that localized depletion
of pollack was avoided in these areas. The Service is
interested in pursuing this idea, and has come to think of it
as a type of co-op.
Aleutians East Borough views this type of management tool
as being more like territorial user rights fishery Turf than a
co-op. Individual vessel allocations are not made. Instead, the
small boat fishery is managed in a way that does not require
these vessels to participate in the race for fish against
larger vessels. It stabilizes the amount of quota available to
local fishermen and provides the necessary flexibility to
maintain a diversified fishery portfolio and to find local
solutions to local problems and retains a healthy environment
for local employment.
We realize that our situation is in many respects unique.
Unlike Kodiak and some other gulf communities, we do not have
access to a wide variety of processors. We are on the path
between the Gulf of Alaska and the Bering Sea Aleutian Islands.
We must maintain healthy local fisheries for the small vessels
that are the most suitable vessels for our region and our
economy. While we have no desire to dictate solutions for other
components of the fishery, we believe that solutions developed
for other areas are not necessarily suitable for our area.
I had an interesting experience just after Christmas. I
acquired a border collie. Now, this is a fine dog if you
actually have cattle, but I have no cattle, and instead I am
being forced to accommodate my life to create a job for this
border collie so that he does not become destructive. We think
that IFQ's may be the border collie for some fisheries, but we
do not need a border collie in the Aleutians East Borough.
Although most residents do not like any form of limited
entry, the need to maintain a local fishing economy must
accommodate its inevitability. Giving the North Pacific Fishery
Management Council the tools to establish turf fisheries in the
Western and that portion of the Central Gulf East of 157 would
provide the most desirable alternative for these Native
fishermen. Therefore, the Aleutians East Borough ask that this
authority be established for the North Pacific Fishery
Management Council.
[The prepared statement of Ms. Stewart follows:]
Prepared Statement of Beth Stewart, Director, Natural Resources
Department, Aleutians East Borough
The Aleutians East Borough includes the communities of Akutan, Cold
Bay, False Pass, King Cove, Nelson Lagoon, and Sand Point. With the
exception of Cold Bay all of the communities are Eastern Aleut villages
that depend entirely on commercial fishing to maintain local
economies.False Pass, Akutan and Nelson Lagoon participate in the CDQ
program. Sand Point and King Cove fishermen have extensive histories in
both the state and federal groundfish fisheries. The vessels owned and
operated by local fishermen are almost all under 60, in length, and are
built to participate in salmon, herring, halibut, crab, cod and pollock
fisheries. Local residents know that they must be able to remain
diversified in order to maintain their families and homes in this
remote region.
Although a few local fishermen did receive enough halibut IFQ to
maintain their participation in the halibut fishery, most did not.
Although halibut remains an important component of most fishermen's
slate of possible fisheries, local people are now forced to purchase
quota to retain the needed flexibility.
The vast majority of local residents oppose Individual Fishing
Quotas (IFQ's), sometimes referred to as Individual Transferable Quotas
(ITQ's). They view IFQ's as a management tool that encourages single
fishery dependency by rewarding those who focus on a single fishery and
making it more expensive, sometimes prohibitively expensive, to
maintain a full suite of fishing options which allow the vessel owner
and crew to shift fisheries as stocks and markets fluctuate.
Residents are also deeply concerned that IFQ's and the co-operative
structure provided for under the American Fisheries Act (AFA) will
result in the consolidation of quota on fewer and fewer vessels. Such
consolidation has extremely negative on crew employment. Crew jobs are
a critical source of income, particularly during the winter months.
The recent formation of co-operatives under the AFA has created
additional challenges for small boat diversified fishery dependent
locals. Aleutians East Borough is home to two shore-based processors
with plants in Akutan, King Cove, and Sand Point. From time to time
floaters come into the area and the market competition improves prices
for local fishermen. Local fishermen also desire the ability to
establish additional markets for species for which the shore-based
plants may not be able to provide a market.
The idea of limiting entry for processors within the Aleutians East
Borough is adamantly opposed by the local fleet. As mentioned above,
the co-op model developed for the Bering Sea/Aleutian Islands pollock
fishery is viewed as unworkable by the local fleet.
However, in the course of facing the reconstruction of the pollock
fishery in response to the current situation with Stellar sea lions,
Aleutians East Borough proposed that NMFS set aside that portion of the
pollock TAC taken by vessels under 60, in the Western Gulf of Alaska
(area 610) and in that portion of the Central Gulf east of 157 degrees,
so that the small boat fleet can continue to fish in the haulouts
around Sea Lion Rocks and Mitrofania/Spitz Island. These are the only
safe areas for the small boat fleet to fish during the extremely
dangerous weather that occurs during the pollock fishery.
We proposed that NMFS establish a fishing schedule that would slow
down the harvest and insure that localized depletion of pollock was
avoided in these areas. The service is interested in pursuing this
idea, and has come to think of it as a type of co-op.
Aleutians East Borough views this type of management tool as being
more like a Territorial User Rights Fishery (TURF) than a co-op.
Individual vessel allocations are not made. Instead the small boat
fishery is managed in a way that does not require these vessels to
participate in the race for fish against larger vessels. It stabilizes
the amount of quota available to local fishermen, and provides the
necessary flexibility to maintain a diversified fishery portofolio and
to find local solutions to local problems, and retains a healthy
environment for local employment.
We realize that our situation is, in many respects, unique. Unlike
Kodiak and other Gulf communities, we do not have access to a wide
variety of processors. We are on the path between the Gulf of Alaska
and the Bering Sea/Aleutian Islands. We must maintain healthy local
fisheries for the small vessels that are the most suitable vessels for
our region and economy. While we have no desire to dictate solutions
for other components of the fishery, we believe that solutions
developed for other areas are not suitable in our area.
Although most residents do not like any form of limited entry, the
need to maintain a local fishing economy must accommodate its
inevitability. Giving the North Pacific Fishery Management Council the
tools to establish TURF fisheries in the Western and Central Gulf (east
of 157 degrees) would provide the most desirable alternative for these
native fishermen.
Therefore, the Aleutians East Borough asks that this authority be
established for the North Pacific Fishery Management Council.
Senator Snowe. Thank you very much.
Mr. Iani.
STATEMENT OF JOHN IANI, VICE PRESIDENT, UNISEA, INC.
Mr. Iani. Thank you, Senator Snowe and Senator Stevens. For
the record, my name is John Iani, and I am a vice president
with UniSea, Inc. We are a seafood processing company that has
been operating in Alaska for over 25 years. We operate a plant,
Senator Snowe, about 800 miles west of here out at the Aleutian
chain, and we certainly hope that on your next trip to Alaska
you can get out there. In fact, I think if you found yourself
out there a while, you cannot get to Maine from there, but on a
clear day I think you can see Maine from there.
I want to thank both you and Senator Stevens for giving us
an opportunity to testify before you, and I would like to limit
my testimony, or narrow my testimony to explain the dilemma
that Mr. O'Leary touched upon regarding the Alaska crab
industry.
UniSea, like many other companies, in 1973 began as one of
the pioneer crab processors operating in the Bering Sea and
Aleutian Islands, and in partnership with some very courageous
independent crab fishermen from Alaska, Washington, and Oregon,
one of them being Senator Stevens' youngest son, we have been
part of the development of the Bering Sea crab fishery into a
dynamic and vibrant sector of the North Pacific seafood
industry.
Heretofore, the crab industry has been sort of the silent
minority operating out in the Bering Sea, quietly sustaining
storms and economic downturns, and always remaining viable.
Crab products from Alaska, the Bering Sea, are sold and
consumed in all 50 States, and virtually every corner of the
globe. Unfortunately, our ability to continue quietly is
seriously threatened by natural, ecological shifts in the
Bering Sea that nobody was able to foresee.
The backbone of our industry has been the Opilio or Snow
crab fishery. This fishery developed as the mainstay of our
fisheries on the sudden collapse of the King crab fishery 20
years ago. The crab fleet, processors, coastal communities,
have become dependent upon this winter fishery. The crab
fishery employs thousands of fishermen, thousands of processing
employees, and contributes an important component to the tax
base of many Alaskan communities.
Unfortunately for us, though, the new millennium has proven
disastrous. Attached to my testimony and for the record is an
announcement from the Alaska Department of Fish & Game stating
that the Opilio quota had to be slashed in the year 2000 by 85
percent, and putting the industry on notice that for the year
2001 the chances of a fishery are very doubtful.
Not only is that quote 85 percent reduction from the year
before, but it represents almost a 93-percent reduction from
its recent historical high. The reasons that the ADF&G had to
cut the quota was not a case of overharvesting. It was simply
that they were following the regulations promulgated by the
National Marine Fisheries Service under the Magnuson-Stevens
Act to protect stocks in a situation where their optimum yield
had dropped below a certain level.
NMFS interpreted the new congressional language extremely
conservatively, as they should have, and in the final rules
promulgated by NMFS the term, overfish, came out with two
meanings. First, the common meaning of any stock that has been
subjected to a defined rate of fishing mortality, or simply if
we have overfished it, but second, as in the case of our Opilio
fishery, the term is used to describe any stock or stock
complex whose size is sufficiently small that a change in
management practices is required. That is the case of what
happened. When they surveyed the Opilio stocks they found the
stocks to be at a certain level, that they had to act
conservatively, and so they have decided to take the prudent
course, and that is to cut the fishery down to nothing in a
year from now.
Unfortunately, many of us in the crab industry, harvesters
or processors and communities, are facing extremely difficult
economic decisions. Our own company had to shut down a
processing operation for the foreseeable future, and will
require the elimination of hundreds of jobs. You do not have to
look any further than today's paper, Senator Snowe, to find out
that one of our communities in Alaska is already facing
emergency decisions regarding their budget, the city of St.
Paul, out in the Bering Sea, because of the loss of revenue
from the Opilio crab fishery.
Because we are reeling from these recent events, we find
ourselves on a dangerous death spiral. The crab stocks are
simply not sufficient enough to provide an economic basis for
the industry to rationalize itself through buyback. There is
simply too much capital in the fishery for the economics to
support the current number of participants.
But the size of the crab harvest now and to be projected is
so small that there is insufficient income to finance any sort
of effective fleet reduction program as envisioned by the
Magnuson-Stevens Act, so the Fishery Management Council system
is the proper forum to design and maintain the rationalization
plan, and the Alaskan crab fishery is no exception. The council
system, however, lacks the ability to provide the necessary
financial resources to reduce capacity. That help can only be
provided by you and your colleagues in Congress.
As was seen in the American Fisheries Act, the vision that
was provided by the Senate and the House in allowing for a
direct appropriation and a long-term loan has helped that
fishery rationalize itself, and the council is now overseeing
the co-operative structure and making sure that any unintended
consequences are taken care of.
So we believe that with your assistance in providing
capital, coupled with the long-term industry obligation, we can
help provide the stabilization the industry needs.
Senator Snowe, since your long service in the House, and
Senator Stevens, you have time and time again come to the aid
of the fishing industry, and without your support, there is no
question we would be truly lost. Like the farmers in the
Nation's heartland, we in the fishing industry take pride in
our role in providing food for our Nation's consumers. We are
asking for your support once again.
We are grateful for the opportunity to testify and look
forward to working with this Subcommittee to solve this
critical problem. I would be happy to answer any questions.
Thank you.
[The prepared statement of Mr. Iani follows:]
Prepared Statement of John Iani, Vice President, UNISEA, INC.
Senator Snowe, Senator Stevens, and members of the Subcommittee, my
name is John Iani. I am a vice-president for UniSea, Inc. We are a
Seattle-based seafood processing company that has been purchasing and
processing Alaska fish products for over 25 years. We are a component
of the most dynamic fisheries in the United States. UniSea purchases a
wide variety of fish species harvested by fishing vessels of every size
and gear type.
First, I want to thank you for giving me the opportunity to appear
before you today. We have many important issues facing us as we begin
the year 2000, but the one which I would like to focus on today
involves the commercial crab fisheries of Alaska. My main purpose in
today's testimony will be to explain the dilemma confronting this
sector of Alaska's seafood industry, and to seek whatever help Congress
and the Administration might be able to offer.
UniSea began, in 1973, as one of the pioneer crab processors
operating in the Bering Sea and Aleutian Islands. In partnership with
some very courageous and independent crab fishermen from Alaska,
Washington, and Oregon, UniSea has been part of the development of the
Bering Sea crab fishery into a dynamic and vibrant sector of the
overall North Pacific seafood industry.
The crab industry has weathered many extreme challenges during its
history, but has always managed to survive economic downturns to
continue as a profitable fishery. Crab products from Alaska's Bering
Sea are sold and consumed in all 50 states and virtually every corner
of the globe. Unfortunately, our ability to continue to supply the huge
market we have developed is now threatened by natural ecological
changes that no one was able to foresee.
The backbone of the crab industry since the early 1980's has been
the opilio or snow crab fishery. This fishery developed as a mainstay
of Alaskan fisheries after the sudden collapse of the king crab fishery
twenty years ago. The crab fleet, processors, and coastal communities
have become highly dependent on this winter fishery. The opilio crab
fishery each year employs thousands of fishermen, thousands of
processing employees and contributes an important component of the tax
base of many Alaskan communities.
Unfortunately, the new millennium is proving to be disastrous to
the crab industry. Attached to my testimony is an announcement by the
Alaska Department of Fish and Game announcing that the opilio quota for
the year 2000 season is being slashed by 85 percent. In addition, the
Department has put the industry and dependent communities on notice
that in the year 2001 no commercial opilio fishery is likely to be
allowed.
The announced quota for 2000 represents a 92 percent reduction from
its recent historical high and the projection for the year 2001 speaks
for itself.
The reasons that the Alaska Department of Fish and Game, in
conjunction with the National Marine Fisheries Service, took such
drastic actions are complex and necessary to understand.
This is not a case of the industry overharvesting the resource to
the point where fishery managers had to act. The managers and
biologists agree that this downturn results from natural causes that
the current state of ocean science was simply unable to predict.
The Magnuson-Stevens Act has always stated that fishery management
plans must prevent overfishing. National Standard 1 states that
``conservation and management measures shall prevent overfishing while
achieving on a continuing basis the optimum yield from each fishery for
the United States fishing industry.'' The balance between overfishing
and optimum yield contained in that National Standard was altered with
the passage of the Sustainable Fisheries Act when language was added to
require that all fishery management plans contain measures to
immediately end any overfishing which is occurring and to rebuild
overfished fisheries as quickly as possible, but in not more than ten
years.
NMFS has interpreted the new congressional language extremely
conservatively. In the final rules promulgated by NMFS the term
``overfished'' has two meanings. First, the term describes any stock
that is subjected to a defined rate or level of fishing mortality.
Second, as is the case in the opilio fishery, the term is used to
describe any stock or stock complex whose size is sufficiently small
that a change in management practices is required in order to achieve
an appropriate level and rate of rebuilding. The second description
really has nothing to do with harvesting at all. Any number of causes,
such as regime shifts, environmental changes, or others will trigger
conservative management measures.
Faced with these new federal regulations and with the extreme
uncertainty regarding the opilio stocks based on the best available
survey information, the Alaska Department of Fish and Game really had
no choice but to be extremely cautious in setting opilio quotas for the
foreseeable future.
The crab industry is reeling from these recent events and we now
find ourselves on the brink of a dangerous death spiral. The crab
stocks are not sufficient to provide an economic base for the industry
to rationalize itself through buybacks and co-operative efforts.
There is simply too much capital in the fishery for the economics
to support the current number of participants, but the size of the crab
harvest is now so small that there is insufficient income to finance
any sort of effective fleet reduction program. In short, we need help.
There are two major phases necessary to bring the crab industry in
line with these new restrictive management measures. The first, and
most important, is a capacity reduction effort. The Magnuson-Stevens
Act contains specific language to create a Fishing Capacity Reduction
Program in section 312(b). That section establishes a system for an
industry funded buyback of capacity in the industry. The problem with
utilizing this helpful tool is that the future of the opilio fishery
will not allow the industry to underwrite such a buyback.
Unfortunately, many of us in the crab industry; harvesters,
processors, and communities are facing extremely difficult economic
decisions as a result of this opilio disaster. Our own company must
shut down a processing operation for the foreseeable future that will
force the elimination of hundreds of jobs.
Many of the crab vessels will have major difficulties meeting their
financial obligations and their futures are extremely uncertain. The
communities of St. Paul and Unalaska are heavily dependent on the
revenue provided by the opilio fishery and are faced with very
difficult questions and decisions regarding their future city budgets
and their ability to maintain their infrastructure. Simply put, the
industry is in no position to fund the amount necessary to effectively
reduce capacity.
The fishery management council system that you have created is the
proper forum to design and maintain the rationalization plans for each
of the nation's unique fisheries. The Alaskan crab fishery is no
exception. The Council system, however, lacks the ability to provide
the necessary financial resources to reduce capacity. You and your
colleagues in Congress can only provide that succor.
We believe that your assistance in providing seed capital, coupled
with a long-term industry loan obligation, can provide the help the
industry needs to move to a more stable and rational crab industry.
This committee and its members have long been strong supporters of this
nation's fishing industry and for that support we are extremely
grateful. Like the farmers of the nation's heartland, we in the fishing
industry take pride of our role in providing food for our nation's
consumers. Senator Snowe and Senator Stevens, you have time and again
come to the aid of our fishing industry and without your support we
would truly be lost. We are asking for that support once again.
As we have seen in other fisheries, Congressional assistance in
capacity reduction has literally saved the participants from the brink
of ruin. As a result, those fisheries are on the road to
rationalization and long term stability. We in the crab industry are
certain that the same result can be achieved in the North Pacific.
We are grateful for the opportunity to testify and look forward to
working with the Subcommittee to solve this critical problem. At this
point I would be pleased to answer any questions you may have.
Senator Snowe. Thank you very much.
Mr. Hyde.
STATEMENT OF MICHAEL HYDE, PRESIDENT, POLLOCK CONSERVATION
COOPERATIVE
Mr. Hyde. Thank you, Senator Snowe, Senator Stevens, for
the opportunity to be here today. My name is Mike Hyde, and I
am the president of American Seafoods Company. I am testifying
today on behalf of the Pollock Conservation Cooperative, a fish
harvesting co-operative that was established as a result of the
American Fisheries Act in the catcher-processor sector of the
Bering Sea pollock fishery.
The PCC, which was created in December 1998, complements
many of the policies and objectives of the Sustainable
Fisheries Act, particularly those sections relating to reducing
fishing capacity, improving management of marine resources, and
providing economic and social stability for fishing
communities.
In light of the promising results to date of the PCC and
the anticipated benefits of the newly formed in-shore pollock
co-operatives, Congress should consider what legislative
action, if any, is needed to expand co-op opportunities in
other fisheries.
What I would like to do today is provide a little bit of
background on the Pollock Conservation Cooperative, and then
highlight some of the benefits that we saw in the first year of
operation.
Eight companies operating 19 U.S. flag pollock catcher-
processor vessels comprise the PCC. The PCC was formed to end
the ``race for fish'' which had resulted in overcapitalization
and a failure to optimize utilization of the Bering Sea pollock
resource. Like the catcher-processor co-operative in the West
Coast Pacific whiting fishery, the purpose of the PCC is simply
to apportion shares of the Bering Sea catcher-processor pollock
quota among the eligible participants in the fishery. By
agreeing among themselves to limit their individual catches to
a specific percentage of the annual TAC, the fishery can be
conducted at a more deliberate, rational pace. The PCC is not
involved in matters relating to pricing or marketing of
products.
Participation in the co-operative is absolutely voluntary.
However, it is unlikely that it could succeed without 100
percent participation by the eligible participants in the
catcher-processor sector. If a single, qualified entrant
continued to engage in a race for fish, it would likely
undermine collective efforts by the remaining fishing companies
to rationalize their fishing practices.
While the American Fisheries Act did not provide statutory
authority for formation of a catcher-processor co-operative,
the AFA made two key changes to the Bering Sea pollock
management structure that facilitated formation of a co-
operative. First, the AFA created a three-sector allocation of
the Bering Sea pollock fishery, providing a certain percentage
of the overall directed pollock catch to the catcher-
processors, the mother ships, and the in-shore processing
sector.
Second, the AFA specified eligible participants in the
catcher-processor sector. A co-op of current participants in a
fully subscribed fishery would not be viable if nonpollock
fishermen were free to enter or leave the fishery at will.
We now have 1 year of operations under our belt, and we
have provided a draft report to the North Pacific council on
the success of those operations. That document highlights some
of the benefits that can be achieved in a co-operative, and I
would like to touch just briefly on a few of those benefits. In
large part you will see that they are very consistent with the
goals that were enunciated in the Sustainable Fisheries Act.
The first was the goal of reducing overcapitalization in
the fishery. The American Fisheries Act as a first step removed
nine of the 29 vessels that had been participating in the
pollock fishery, reducing the number of vessels that are
allowed to participate to 20. Once we formed the co-op, we were
able to further reduce the overcapitalization of the fishery by
taking out excess capacity in each of our companies.
If you look back at 1999 you will see that in the spring
season, only 16 of the 20 eligible vessels fished, and by the
fall season there were only 14 of the 20 eligible vessels that
fished.
Maybe more dramatically than that simple statistic is, if
you look at what each of the companies has done in the past we
were constantly pouring more money into each of our vessels to
make ourselves more competitive in the ability to catch and
process fish as fast as we can. Nobody makes those investments
any more. Every investment that the companies make now, are
investments to diversify our processing ability, to increase
the recovery that we get from the fish, and to make a better
quality product. We now have a means to extract a higher amount
of value from each pound of fish that we catch.
In addition, the co-operative did a variety of things that
are very helpful from a management perspective. The first thing
it did was spread out our fishery. Something that we have heard
over and over again today, is how compressed our fisheries have
become in the olympic fishery. That creates a variety of
problems, from safety problems, to lack of utilization, to
inability to avoid bycatch, and other things.
If you look at the simple statistics of how our fishery was
conducted last year, you will see that we lengthened our
fishery by more than double for the relative amount of pollock
that we were catching. This provided benefits for sea lions, it
provided management benefits to the National Marine Fisheries
Service and its ability to monitor our catch, and it also
provided a variety of other benefits such as reduction of
bycatch, increased utilization of our product, and stability
for our vessel crews.
I see the red light is on. I will hurry quickly to the last
topic that I wanted to mention, which is the social stability
that is brought about by the co-operatives. We have had a lot
of focus today on some of the initial adverse impacts any time
you limit entry to a fishery, and I think the comments that
were talked about today are particularly true in an IFQ
fishery, but they probably are true in any fishery in which you
limit access. If you have a program like we have now got, a
license limitation program, if you do not have a license, you
have got to buy a license to buy in. There is no difference in
an IFQ fishery as far as I am concerned.
But what limiting entry has done is to greatly stabilize
the life of the people that remain in the fishery. We had to
reduce the size of our crews and our company substantially when
nine of our vessels were taken out of the fishery, but if you
talk to any of our crew members that are left in the fishery,
the ability to predict what their lifestyle is going to be, the
type of wages they can make each year, when they are going to
be fishing, when they are not going to be fishing, has added a
tremendous amount of predictability to their lives.
We are now able to recruit in Alaskan villages, tell the
people when they can fish, the kind of money they can make,
provide good job opportunities for them, at a wage that will
make this a lifestyle choice for a lot of the people here, so I
think there is no doubt there are significant challenges to
deciding how we can rationalize this fishery and move toward
IFQ's or adopt more co-ops. There are tremendous allocation
issues to be addressed, but there is no question that the
system itself, once it is in place, is a benefit to management
of the fishery as a whole.
Thank you for listening today.
[The prepared statement of Mr. Hyde follows:]
Prepared Statement of Michael Hyde, President,
Pollock Conservation Cooperative
Thank you, Madam Chairman and Members of the Oceans and Fisheries
Subcommittee for the opportunity to testify on the effect of the
Sustainable Fisheries Act (SFA) on the Bering Sea pollock fishery and
on reauthorization of the Magnuson/Stevens Fishery Conservation and
Management Act.
My name is Mike Hyde and I am the president of American Seafoods
Company. I am testifying today on behalf of the Pollock Conservation
Cooperative (PCC), a fish harvesting co-operative. The PCC, which was
created in December 1998, complements many of the policies and
objectives of the SFA, particularly sections relating to reducing
fishing capacity, improving management of marine resources, and
providing economic and social stability for fishing communities. In
light of the promising results to date of the PCC and the anticipated
benefits of the newly formed inshore pollock co-operatives, Congress
should consider what legislative action, if any, is needed to encourage
expanding co-op opportunities in other fisheries.
1. Background on the Pollock Conservation Cooperative (PCC).
Eight companies, operating 19 U.S.-flag catcher/processor vessels,
comprise the PCC. The PCC was formed to end the ``race for fish,''
which resulted in overcapitalization and a failure to optimize
utilization of the Bering Sea pollock resource. Like the catcher/
processor co-operative in the West Coast Pacific whiting fishery, the
purpose of the PCC is simply to apportion shares of the Bering Sea
catcher/processor pollock quota among eligible participants in the
fishery. By agreeing among themselves to limit their individual catches
to a specific percentage of the annual quota, or total allowable catch
(TAC), that is allocated to their sector, the fishery can be conducted
at a more deliberate, rational pace. Once the apportionment is set, the
PCC does allow for transfers of pollock quota among member companies.
The PCC is not involved in matters relating to pricing or marketing of
pollock products.
Participation in the PCC is voluntary; however, it is unlikely that
it could succeed without 100 percent participation by eligible
participants in the catcher/processor sector. If a single, qualified
entrant continued to engage in a race for fish, it would likely
undermine collective efforts by the remaining fishing companies to
rationalize fishing practices. It is instructive that the eight PCC
members, which include both large and small companies, recognize that
it is in their individual and collective best interests to eliminate
the race for fish.
While the PCC was not formed under any specific legislative
authority, there is a strong precedent for formation of the co-
operative. In 1997, four catcher/processor companies requested a
business review letter from the Department of Justice's Antitrust
Division prior to forming the Pacific Whiting Conservation Cooperative
(PWCC). In its business review letter, the Department of Justice noted
that fish harvesting co-operatives could be expected to benefit
consumers. The Antitrust Division's letter of May 20, 1997 to the PWCC
stated, ``To the extent that the proposed agreement allows for more
efficient processing that increases the usable yield (output) of the
processed Pacific Whiting and/or reduces the inadvertent catching of
other fish species whose preservation is also a matter of regulatory
concern, it could have pro-competitive effects.'' The PCC has also
requested a business review letter from the Justice Department and a
response is expected soon.
While the American Fisheries Act (AFA) did not provide statutory
authority for formation of a catcher/processor co-operative, the AFA
made two key changes to the Bering Sea pollock management structure
that facilitated formation of a co-operative. First, the AFA created a
three-sector allocation in the Bering Sea pollock fishery, providing a
certain percentage of the overall quota to the catcher/processor,
mothership and inshore sectors. The 1997 Justice Department opinion
cited above made clear that existing law allowed a sector composed of
vertically integrated harvesting and processing components to form a
harvest co-operative. Second, the AFA specified eligible participants
in the catcher/processor sector. A co-op of current participants in a
fully subscribed fishery would not be viable if non-pollock fishermen
were free to enter the fishery. The new participants would either race
to catch fish, undermining efforts by co-op members to rationalize the
fishery, or demand catch allowances in a fishery in which they had not
previously participated.
2. The PCC--Reducing Fishing Capacity and Fishing Effort.
Recognizing the chronic problem of over capacity in the Nation's
fisheries, the SFA included a provision designed to ``achieve the
maximum sustained reduction in fishing capacity...in a minimum amount
of time.'' Patterned after the SFA provision on capacity reduction, the
American Fisheries Act took the first meaningful step to addressing
chronic overcapitalization in the pollock fishery. The AFA, which
reallocated a substantial portion of the pollock quota away from the
catcher/processor sector and to the inshore sector, established a fee
on the inshore pollock sector to pay most of the cost of retiring nine
catcher/processors from the fishery. (Consistent with U.S. government
policies to promote sustainable fisheries by addressing the root
problem of overcapitalization in many world fisheries, the AFA required
the scrapping of eight of the nine catcher/processors being bought
out.)
Implementation of the co-operative was a vital next step for
achieving further reductions in harvesting and processing capacity. By
ending the race for fish, the co-op eliminates the incentive to employ
fishing and processing capacity beyond what is needed to take the
available harvest. As a result, in the winter/spring pollock seasons,
16 of the 20 eligible catcher/processors fished. In the summer/fall
fishing seasons, only 14 of the 20 pollock catcher/processors
participated in the fishery. By and large, the idle vessels are owned
and operated by multi-vessel companies that can catch their assigned
quota without fishing all of their vessels. It is difficult for multi-
vessel companies to permanently retire the idled vessels since the
allocation regime expires in 2004 and there is no assurance that a race
for fish will not return. However, one of the 20 AFA-eligible catcher/
processors is being permanently retired from U.S. fisheries. Alaska
Trawl Fisheries, which operates the F/T Endurance, recently announced
that the vessel is leaving the fisheries and under the AFA is not
permitted to regain its fishery endorsement. The vessel's assigned
quota is being purchased, and will be distributed on a pro rata basis
among the remaining PCC members.
In addition to helping reduce the number of vessels actively
fishing, formation of the PCC resulted in operational changes by
participating vessels to slow fishing effort on a daily basis. A head-
to-head comparison of the daily catch rates of the 16 PCC vessels that
fished the 1999 winter/spring pollock fishery with the same vessels'
daily catch rates under the open access system from 1995-1998 shows a
60 percent reduction in daily catch rates for the 16 PCC vessels. The
16 PCC vessels made fewer tows per day and harvested fewer fish per tow
than they did under the race for fish. Slowing the pace of the pollock
fishery doubled the length of the catcher/processors' season from 75
days in 1998 to 151 days in 1999.
According to NMFS, slowing down harvesting activity by co-operative
fishing provides an important conservation benefit. In 1999, the agency
promulgated regulations to spread the pollock fishery out over a longer
period of time to avoid any potential competition between pollock
fishers and populations of Stellar sea lions foraging for pollock. A
recent NMFS report summarizing the agency's actions to protect sea
lions credits the PCC for significantly reducing fishing effort and
furthering the agency's objective of temporally dispersing the pollock
fishery.
3. The PCC--Improving Fisheries Management, Reducing Bycatch,
Increasing Utilization and Conserving Marine Resources.
The SFA included a section titled, ``North Pacific Fisheries
Conservation,'' that directed regional fishery managers to take certain
actions to improve catch measurement, reduce bycatch, and increase
utilization of fishery resources. The North Pacific Fishery Management
Council (the Council) and NMFS responded to Congress' mandate by
developing and implementing regulations requiring certain vessels,
including all pollock catcher/processors, to be equipped with flow
scales to weigh all harvested fish. To reduce the incidental harvest of
non-target species, the Council passed and NMFS approved a prohibition
on bottom trawling for pollock. Vessels in the directed pollock fishery
now use only mid-water trawl fishing gear. Finally, fishers must retain
all pollock and cod harvested regardless of the target fishery in which
they are participating. Historically, large amounts of pollock and cod
were discarded by fishers who were targeting other groundfish species.
It is important to point out that, notwithstanding specific SFA
provisions intended to enhance conservation of the North Pacific
groundfish fishery, it is a widely held view that the North Pacific
groundfish fisheries are well managed. In particular, the Bering Sea
pollock stock is healthy and abundant. Scientists estimate the Bering
Sea pollock biomass at 7.7 million metric tons. Harvests of pollock,
and other groundfish species, are strictly regulated by a system of
quotas, and fisheries scientists and managers are conservative in
determining the annual catch limits. A NMFS report recently stated
that, ``Over the past 20 years, harvest rates could have been 20% or
more higher if Alaska pollock stocks were managed using less
conservative but acceptable harvest rates comparable to those currently
used to manage similar gadid stocks elsewhere in the world.'' A
comprehensive federal fishery observer program that includes 100%
coverage on all vessels 125 feet in length and larger enhances in-
season management capabilities. (PCC member vessels carry two federal
fishery observers at all times. In 1999, federal fishery observers
sampled 4,704 of 4,797 pollock catcher/processor hauls, or 98% of all
hauls.)
a. Improving Fisheries Management.
Monitoring and enforcement is a critical element of the PCC
program. NMFS, of course, continues to tally total harvests by catcher/
processors in order to ensure fleet-wide compliance with sector
allocations. However, the PCC contracts with a private sector firm,
SeaState, to track daily NMFS' observer catch data to ensure that each
PCC member stays within its agreed upon harvest limits. The PCC imposes
significant financial penalties on any company that exceeds its
assigned quota. In 1999, there were no enforcement actions taken
against any PCC members. As noted above, catch measurement is precise
because vessels are equipped with flow scales, which weigh the fish as
it moves along conveyor belts in the factory. Another important facet
of co-operative fishing is that SeaState also monitors NMFS' observer
data on incidental catch. SeaState identifies for all PCC members
fishing areas to be avoided, if vessel reports indicate that high
levels of non-target species catch are being encountered.
b. Reducing Bycatch/Economic and Regulatory Discards.
The SFA defines bycatch as fish that are caught but not kept,
including economic and regulatory discards. Because pollock swim in
enormous, dense schools and generally congregate off the ocean floor,
there is little incidental catch of non-pollock species in the fishery.
In 1999, approximately 99% of the PCC members' catch in the pollock
fishery were pollock. With the new increased retention requirements for
pollock and cod and the advent of a co-operative that allows fishers to
fish more carefully, we estimate that in 1999 our fleet's economic
discard rate was less than three-quarters of one percent. In contrast,
the United Nations Food and Agricultural Organization estimates that
worldwide fishing fleet discard over 25% of their harvested catch. The
overall discard rate in the Bering Sea groundfish fishery is just under
10%.
c. Increasing Utilization of Fishery Resources.
Preliminary data comparing catcher/processors operating in both
1998 and 1999 indicate that the amount of product made by PCC members
from a given amount of pollock increased by more than 20 percent in
1999. By ending the race for fish, the co-operative allows fishers to
make smaller tow sizes that reduce bruising and damage to harvested
fish, fostering increased utilization. The rational pace of fishing
also allows vessel captains additional time to locate schools of
larger-sized fish and fishers can use fishing nets with larger meshes
that enable more, smaller-sized fish to escape. From a fish processing
standpoint, the co-operative allows for more exacting processing
techniques. The slower pace in the fish processing factory can help
ensure more precise cuts and provide for other, more labor-intensive
activities that increase utilization.
In 1999, the rational pace of fishing also enhanced opportunities
to make higher-value products and higher-grade products. PCC members
significantly increased the proportion of high-valued ``deep-skin''
pollock fillets produced and there was a proportional decline of lower-
valued mince and fillet-block products. The fleet's ability to produce
the high-grade fillet products for the domestic market, as well as
surimi and roe products for export, boosts the U.S. industry's
competitiveness in the world commodity market for whitefish products.
d. Conserving Marine Resources.
The PCC agreement includes a commitment to develop and fund
research programs to promote conservation and management of marine
resources. The PCC expects to spend $300,000 per year on marine
research, including contributing $100,000 annually in 1999-2001 to the
North Pacific Universities Marine Mammal Research Consortium. The
Consortium conducts scientific research that seeks to determine the
cause of the decline of Stellar sea lion populations and to discern
what measures, if any, can be taken to aid in the recovery of the
species. Furthermore, the PCC has contributed $25,000 to support marine
mammal research projects at the Alaska Sealife Center in Seward, Alaska
and has funded a project to catalogue research findings on the impacts
of trawl fishing.
4. The PCC Provides Economic Stability in Fishing Communities,
including the Western Alaska Community Development Quota (CDQ) Groups.
Since the Bering Sea pollock fishery was fully Americanized in
1989, the race for fish among domestic harvesters and processors
spurred continued investments in capacity. By 1998, there existed three
times more capacity than was needed to catch the available quota.
Overcapitalization, and the attendant economic pressures of increased
costs without increased benefits, sparked allocation disputes among
sectors. Economic problems were exacerbated when the pollock biomass,
which peaked in the late 1980's and early 1990's, declined and the TAC
was lowered accordingly to ensure sustainable fishing levels. Revenue
declined because production dropped and because a nearly decade-long
recession in Japan resulted in steep price declines for surimi. Between
1994 and 1998, half of the pollock catcher/processor vessels
experienced financial difficulties that either resulted in bankruptcy
or forced the sale of the vessel.
The SFA emphasizes the importance of providing economic and social
stability for fishing communities in the management of fishery
resources. The PCC is helping achieve the SFA's goals by playing a key
role in restoring economic opportunity for fishing companies as well as
the 3,000 men and women employed in the pollock catcher/processor
sector. Prior to 1999, employment opportunities were limited as the
industry struggled with chronic overcapitalization, other economic
inefficiencies caused by the race for fish, and low commodity prices.
As a result of rationalizing the fishery under the co-op, crewmember
compensation, often computed as a percentage of the value of the
vessel's catch, has stabilized, if not increased. Increased
utilization, combined with the flexibility to respond better to market
demands, adds value to fish products and those gains are reflected in
crewmember wages.
The economic stability offered by co-operative fishing extends to
Western Alaska Community Development Quota (CDQ) groups. The CDQ
program, which was created in 1992, was established as a permanent
program in the SFA. The co-op has enhanced Western Alaska CDQ groups'
investments in PCC member companies and vessels. Presently, the Norton
Sound Economic Development Corporation owns 50% of Glacier Fish Co.,
which operates two pollock catcher/processors. The Bristol Bay Economic
Development Corporation and the Aleutian Pribilof Island Community
Development Association own 20% of the F/T Arctic Fjord and the F/T
Starbound, respectively. CDQ groups are also considering investing in
American Seafoods Company, which operates seven catcher/processors.
In summary, the PCC is proving to be an innovative and successful
private sector initiative that is consistent with, and complementary
to, many of the important goals and objectives of the Sustainable
Fisheries Act. As the Oceans and Fisheries Subcommittee moves ahead in
reauthorizing the Magnuson/Stevens Act, we are pleased to work with
Members and staff to share our experiences and to promote the
development of fish harvesting co-operatives in other fisheries.
That concludes my testimony, Madam Chairman. I am pleased to answer
any questions that Members might have.
Senator Snowe. Thank you all very much.
It is obvious that you have diverse views on these issues
concerning IFQ's and co-operatives. I would like to ask each of
you to give your perspective on exactly what we should focus on
when we consider changes to the management options that are
currently available.
I know, Mr. O'Leary, you are saying that Congress should
provide an array of management options to enhance the
flexibility of the councils. I would agree. What kind of
guidance should be provided?
We have heard diverse views here on co-ops, for example.
Ms. Blackburn, you were saying you favor co-ops because it
means you do not have to race for the fish. Ms. Stewart, you
were mentioning you do not really like co-ops because it pits
smaller boats against larger boats in a fight for fish. So how
do we approach this? Do we give the options to the councils to
make these kinds of decisions?
We have seen the effectiveness of the co-operatives with
respect to the pollock industry. Some would like similar
treatment for the crab industry. Can they have a co-op, which
works effectively without a buyback program?
I would like to have you address that, Mr. Iani, if you
think you can answer that question, and then I would like to
have each of you address your various perspectives on what we
should do to focus on these issues. It is a question of whether
or not we lift the moratorium, take additional action on co-ops
in other fisheries, or give that tool to the councils to make
that decision.
Mr. Iani. Thank you, Senator Snowe. To answer your initial
question, in our particular Alaska crab fishery I do not think
co-ops will work without some sort of decapitalization of the
fishery. There are simply too many boats and processing
entities around to allow for, given the small stocks that are
available to us, to make a co-operative work, so that is why I
think we need some help from Congress to get that initial cut
made, and the councils certainly do not have the tools to do
that in terms of appropriations or loan programs.
But to answer your second question, I join Senator Stevens
in feeling very cautious about future ITQ's, because the ITQ
system is a permanent one, and once the toothpaste is out of
the tube it is very difficult to get it back. However, allowing
the councils to put together, I guess experiments are the words
I would use, and these co-operatives, as Mr. Hyde has described
to you, is an experiment, and so far the results have been
good. But they are not permanent. The councils have a lot of
say as to how these co-operatives are operating.
In the shoreside sector, where we participate, the councils
literally are going to be setting up a regulatory framework to
make sure that, for example, in the pollock fishery that our
boats participate in do not step on the toes of the cod fishery
or the flatfish fishery, or the crab fishery, and literally, on
a meeting-by-meeting basis, they are getting new and different
information so that they can make changes.
If an ITQ program had been put in place in pollack, the
chances of making changes would be very difficult because of
the amount of money that had changed hands, and the permanent
nature of these rights, so my guess is that the Congress ought
to be conservative and, as they allow the councils to
rationalize fisheries, they need to be careful about the tools
that they allow them to have, but I think the co-operative
system, or like it, is an experiment that the councils can work
with and, at least in the North Pacific's case, they are
becoming rapidly familiar with how they work.
Senator Snowe. Ms. Stewart.
Ms. Stewart. Yes, Madam Chairman. I chaired the West Coast
IFQ Advisory Panel and then chaired our joint meetings with the
East Coast panel so got a lot of information from a lot of
people around the country about IFQ's, and I think--it occurs
to me that in some situations IFQ's may be the perfect
situation, the right solution, and there is no reason why those
folks should not be able to implement the solution that works
for them.
I think our concerns about IFQ's started several years ago,
when under a previous administration National Marine Fisheries
Service was actively campaigning to implement IFQ's as some
kind of overall solution to everybody's problems, and hence by
border collie analogy.
Now, the Humane Society of America, not just the part that
runs the shelters, has a little test for you to take before you
get a dog, you know. Is this the right dog for you? Do you have
small children, do you live in an apartment, do you have cattle
for this dog to work with. These are the kinds of questions I
think Congress needs to ask NMFS to use when they decide what
kind of a tool they are going to adopt.
IFQ's are not a perfect solution for every fishery. In
Alaska, our fishery has multiple components. We have an
industrial off-shore fishing fleet, and what works for them is
probably different than what is going to work for Native
village fishermen in King Cove and Sand Point, and we have no
interest in dictating what is good for that side of the table.
We do not want them to dictate likewise what is good for us.
I think what we are very concerned about is the steamroller
effect that any of these new tools seems to have. You know, it
comes in, and all of a sudden the thinking changes, and OK,
well, I had better start behaving this way because that is what
they are going to do next, and we have a lot of people who fish
for regulations at this point, people who are not fishing in an
economically rational way any more because they are
anticipating what the next regulatory regime might be.
The halibut example is a good one for our area. People used
to fish halibut and salmon. It was a good combination. But as
halibut stocks decreased and the number of halibut fishermen
increased, one of the first steps the Halibut Commission made
was to make seasons simultaneous with salmon and halibut, so
you had to choose.
Well, in our area, if you were smart, you chose salmon
because the price was better, but you knew that it would not
always be that way, and you felt like at least you had halibut
to go back to when salmon went down.
Well, then IFQ's for halibut came in, and your earlier
history did not count, and your most recent history, because
you had had this problem with salmon and you had started
fishing halibut again, which was economically the way you
should behave, locked you out of doing that again, and now
people are starting to think, OK, I had better go fishing for
cod, and I had better go fishing for this, and I had better go
fishing for that, even if I am not going to make a dime, even
if it is a stupid thing to do, because I know, as a small boat
fisherman in the Aleutians East Borough, I have to preserve my
ability to be involved in any fishery for which there is a
market, and for which I have the vessel I can use to fish for
it.
This is our current dilemma. We are behaving in foolish
ways in anticipation of whatever regulatory system comes down
the pike, but it is important for us to be able to maintain a
stake in any fishery for which a market develops.
I mean, there was a time when I was a kid that people used
Tanner crab for bait. It was not something that you ate. It was
not something that you sold to somebody. We would not have
guessed back in the sixties that anybody was going to be
interested in Tanner crab. Hell, now it is a big deal, and
people are going bankrupt because it is running on down.
Well, the Aleuts have been out in this region long enough
to know that that happens all the time. The Eastern Aleut word
for cod is roughly translated into the fish that are not there.
They have been through this before.
I guess we are asking that whatever you do, you insist that
NMFS take a look at multiple solutions that address
respectfully and appropriately the multiple layers of
participants in these fisheries. We do not believe there is a
one-size-fits-all formula that should be applied to everybody,
because that is where you see people get hurt.
Senator Snowe. Thank you.
Mr. O'Leary and Ms. Blackburn, does anyone care to comment?
Mr. O'Leary. Yes. I would just say, respectful of Beth's
comments, that we are facing some tremendous challenges in
terms of fisheries and fisheries management, and we have
overcapitalization, and we have got to address it, and we need
all the tools that we can possibly muster in doing that.
I will come out and say to you that I believe that once the
next iteration of Magnuson is passed by Congress, that there
should be a lifting of the ban, of the moratorium on IFQ's.
That having been said, I am not--I am mindful of the comments
of Chairman Lauber and Mr. Benton.
I think as you go through this process we need very sort of
specific integration in the next iteration of Magnuson that
specifically identifies, when these programs are considered and
move forward, what criteria you use to address these social and
economic consequences.
I do not want to waste your time going into why certain
people were hurt in certain ways, but we have learned an awful
lot with the implementation of the halibut and sable fish
program in the North Pacific. There are many aspects of it that
are very, very beneficial, and certainly it is beneficial to
the people, as Mike Hyde would point out, in his current
program, or beneficial to those that remain.
The fact is that we do have an overcapitalization problem.
Reducing capital means that certain numbers of people are going
to leave a fishery. How we do that in a way that is mindful of
the impacts on them I think is very, very appropriate, but we
also have issues in terms of fisheries management that we are
not going to adequately address unless we further move down
this road, because we are not going to get to the issues of
habitat impacts and being able to mitigate habitat impacts and
being able to mitigate problems with bycatch unless we have a
more rational fisheries program.
Senator Snowe. And you were previously opposed to IFQ's, is
that correct?
Mr. O'Leary. I was, yes.
Senator Snowe. OK. Ms. Blackburn.
Ms. Blackburn. Yes. Because I do not fish, I just help do
our regulatory things, I watched the IFQ program go together,
and frankly I could see it was hurting lots of people--it would
hurt a lot of people. I do not think a lot of them recognized
it when it happened.
Our community really was split, and there were a lot of
problems socially. We made it through that. It is done. It is
gone. But--and it may not be a method that many people would
want to use, or at least in our area. The co-op idea is
terrific for them, particularly if it concludes the plans.
Senator Stevens. Turn the mike around, Chris.
Ms. Blackburn. I am sorry. The co-op idea, in the way we
see it working in the Bering Sea, is very appealing. It does
not say you have to buy this. This is your history, you can
fish it, and it is just for the year, and next year everybody
could say we do not want a co-op. It does not even force people
to co-op, and if there is enough of them who want to fish open
acces, they can fish open access on their share of the quota.
The problem today is that there is no ability to do
anything except open access, unless you have an IFQ, or unless
you are in the Bering Sea, and for everybody else it is the
dumping ground, for everybody who missed the Bering Sea, and we
have already had overcapitalization problems, to the point, as
I have testified earlier, that our small boats are really in
danger of survival because they are small and because the
seasons are short, and because the weather is bad, and I know
how their shares have gone down over these years, and yet there
is nothing they can do.
If you have salmon come in through our area, and this has
happened, we look at the National Marine Fisheries Service, can
we close the season right now? We have got salmon running
through on their migration, wherever. No, you cannot do that
because it is in the regulation. With a co-op kind of thing,
you could do that. You could agree.
And so for all the reasons and things that we have worked
for, for taking care of our fish, for taking care of our
fishermen, all apply to having some way that they have some
control over when they fish, where they fish, and how they
fish, and no longer be lumped in like some mad long distance
runners, and the last one standing wins.
Senator Snowe. Thank you. Mr. Hyde.
Mr. Hyde. I think I agree with what everybody on this panel
has said, and what everyone on the panel before me said.
There is no doubt that co-ops and IFQ's are probably
variants of a similar animal that provide an ability to do
things that you just can never do in an open access fishery,
but it is tough to get there, and it is interesting hearing
this discussion today. I hear certain words being used, and the
words describe to some extent the same thing, but when one word
is used it is in a negative context, when another word is used,
it is in a positive context.
One example of that is the phrase, reduction of
overcapitalization. We think that is a good thing. The
flipside, though, is, we use the word consolidation. Well, you
simply cannot reduce overcapitalization without some degree of
consolidation, so what that highlights to me is that we have
got some real difficult issues in how we get to achieve some of
the things that we think are positive without achieving the
things that are probably negative in a lot of people's minds.
What is important from my perspective is to make sure that
the councils have the tools to do that, because if we are going
to do the things like bycatch reduction, increase utilization
of the fish, things like that, any fishery that is a race for
fish is not going to be as effective as a co-op or an ITQ type
fishery. What we need to do is make sure that whatever the
tools are that the council needs within the framework that
Congress thinks is important to make sure that they do not step
so far out of line that they get these negative things that
everybody agrees are concerns, that is the type of legislation
I think we have got to look for going forward in the next
session.
Senator Snowe. Thank you. Senator Stevens.
Senator Stevens. You know, my mind was going back to the
times -- I see Trevor McCabe back there, and some of you were
in our Appropriations Committee conference room when the
overall agreement on the co-operative was worked out. My memory
is, it took about 150 hours in that room to work out that
agreement.
Now, if we get to the point where we are going to use co-
operatives through council action, how is that going to come
about? The IFQ's, as questionable as they are in my opinion,
they are a mathematical formula that comes about. You set a
series of criteria, and then you divide what the limit is going
to be, and it is a fact.
I like the co-oprative, but you guys tell me, how are you
going to bring about what all of that hard negotiation brought
about as to who was going to remain in the fishery, and what
were going to be the basic terms that you would have to agree
to if you became a member of the co-op? How is that going to
happen on these individual fisheries that--cod, or whatever it
might be, in the future.
Go ahead, Chris.
Ms. Blackburn. Well, I think a great deal of the
negotiations back in D.C. had to do with the different sectors
of pollock and how much they were going to get, how much did
the mother ships get, how much did the factory trawlers----
Senator Stevens. Yes, that was very complicated.
Ms. Blackburn. Right. When we look at the gulf, (1) we had
in-shore, off-shore, and the off-shore is off-shore, it is not
in our area, so we do not have but one group of fishermen,
which our shore-based fishermen, fishing our pollock, fishing
cod, fishing flatfish, and we have two groups of rockfish. We
have always worked together well.
Senator Stevens. Yes, but if I can interrupt you, that
means you are going to imply that the council could decide what
the limits of on-shore, off-shore are, and what the allocation
is between--if there is any overlap in terms of the species,
right?
Ms. Blackburn. Right. The council could do this, right, but
I do not think--it cannot do a co-op now. It cannot do--unless
there is 100 percent of the fishermen agree, and that will
never happen in Alaska.
Senator Snowe. Or any place, for that matter.
Ms. Blackburn. Yes. But we can do it through the council.
Our group in Kodiak has sat down for the last year and actually
come up with a proposal, dates, the criteria dates. They really
consider everyone.
We are just about ready to launch it for everybody else's
criticism who is involved, and I think that we can do this, and
this is what--which vessel got how much in the Bering Sea, it
was the vessel's history, and it was within the co-ops. The co-
op did the who got how much within that co-op and within that
co-op's history. I do not see it as a big--as a problem,
probably easier in a co-op than IFQ's.
Senator Stevens. Do you all agree with that? Go ahead.
Ms. Stewart. Mr. Chairman, I think what took us 150 hours,
and it seemed longer to me sometimes, in Appropriations was not
specifically co-ops. It was the bigger issues that were being
dealt with, limited entry for shoreside processors or not, how
many of the American Seafood boats were going, what could
happen to them when they left. There were huge, huge issues
there.
The nice thing, and Chris pointed this out about co-ops, is
the council does not have to make the internal rules for the
co-op. They have to make very few rules compared to the kinds
of things they have to do with IFQ's. They do not have to spell
out who gets what in the co-op, or how the co-op decides to
pass things out, and in the co-op we are talking about, we are
not even going to the individual level.
We are just saying, here is the block of fish, these are
the eligible fishermen, which to some extent has already been
decided by the LLP program and some, perhaps, past
participation criteria. The council could say, well, you would
have had to have fished sometime in the most recent 4 years or
3 years or something, but after that, it really is the co-op's
job.
And I think that is kind of nice for the council. They do
not have to sit down with Mike Hyde and the eight boats he has.
He has to do that, and they work out whatever it is they are
going to do, and they provide that information to the council,
and that is it, which I think appeals to the fishermen in our
area because it provides the opportunity for local control for
local problems. It does not try to fit a one-size-fits-all mass
solution to everybody.
Senator Stevens. Kevin.
Mr. O'Leary: There are a couple of issues I would like to
address. Obviously, the Fisherman's Act of 1934 would have to
be superseded by what you do in Magnuson in order to allow for
formation of subgroups. Right now, as I understand that--and I
am not an attorney, but the 1934 law, 100 percent of the
participants in the fishery have to agree to join a co-op in
order for the co-op to be formed, and that is not realistic,
and it is one of the things you addressed in your actions with
regard to the American Fisheries Act, so that is one specific
issue.
Senator Stevens. We can deal with that, too, in this one
fairly easy, giving the council some ability to determine, as
an amendment to the 1934 act.
Mr. O'Leary. Also, one of the other issues with regard to
the American Fisheries Act that I think is starting to get more
rounded discussion at the council level, and yet as I recall
the council process and hearing the discussion about it I have
heard a comment that it really was not provided for in the
current--well, with the moratorium it is a moot issue, but in
the previous iteration of Magnuson-Stevens, what do you do
about processors, you know, the two-pie system discussion.
I think we probably need some--you, certainly, in the
American Fisheries Act, recognized shore-based industry. I
think we need some direction from you in the next iteration of
Magnuson-Stevens how we are going to address that issue. You
know, you did it, you handled it specifically in a way, under
the American Fisheries Act. That is something that I think in
this list of things, the criteria for developing this kind of
rationalization, probably ought to be addressed head-on by you
to give us some direction as to how we should proceed.
Other issues, the social and economic impacts to local
communities, I had not heard Beth's particular proposal before
in terms of co-op formation, and when I say rationalization, I
am--when I say lifting the ban on ITQ's, I mean lifting the ban
on ITQ-like programs. I also think the co-operatives may be a
more appropriate or elegant solution in some cases, so I am
speaking generically about that form of rationalization
program.
Specifically, with dealing with the wake that is created by
these things, direction in terms of how to mitigate those
impacts and how to look after long-term interest of fishermen.
One of the other potential solutions I see in terms of entry
level fishermen would be some modification to the capital
construction fund program, specifically with an eye toward
allowing the use of capital construction fund moneys for entry-
level people. I think that could have some help.
That does not mean--you know, we have got a capital
construction fund program where quite honestly people that are
successful in industry have tax-deferred, or taken tax benefits
on moneys and have built up these great war chests. It is not
going to do the little guy any good to allow these guys with
huge capital construction funds to then go in and buy up the
rest of ITQ's, or buy up the rest of another boat's co-
operative rights. However, that program might be tweaked in
such a way that smaller individual operators could build funds
and use those funds for entry-level participation in some kind
of rationalized fishery.
I mean, if you are asking for specific ideas as to things,
approaches we need to take, that would be another one that I
would suggest, but those are the things that occur to me right
now.
Senator Stevens. Good. I hope others have some suggestions.
That is a good idea about capital construction funds. John.
Mr. Iani. Yes.
Senator Stevens. Let me put on the other hat. How much
money do you need?
[Laughter.]
Mr. Iani. Well, I am not sure, Senator Stevens. I think
that in the American Fisheries Act you and the committee
provided for a loan program that the industry could access up
to $100 million, in a pure loan program to be paid by the
industry.
I think that total figure would be the number that would
help the crab industry rationalize itself down to a point where
it could form a co-operative or a subset of co-operatives, but
the industry itself is in no position to fund that much of a
loan program without some sort of appropriation from Congress
to kick-start it, and that was I think what helped the American
Fisheries Act get off the ground, was that the catcher-
processors that Mike described were literally bought out by the
remainders of the industry, in part through an appropriation
from the Congress, and in part from a long-term loan obligation
which we will start to pay back this year.
So I think that number is probably the right number you put
in the act for the crab industry, but I do not think that the
industry is in a position to fund it themselves.
Senator Stevens. It is not quite the same industry, though,
because that was a situation with enormous vessels and enormous
processing plants. You are dealing with a great many more
boats.
Mr. Iani. Correct.
Senator Stevens. And you are dealing with fewer processors.
Mr. Iani. Correct.
Senator Stevens. So that you--I do not know how you are
going to have the standing to really qualify for that kind of a
loan.
Mr. Iani. Well, the number of vessels that need to be
purchased, or bought out, are substantially higher, but the
vessels themselves are not as capital-intensive as a large
factory trawler.
Senator Stevens. What I am saying is, the remaining fleet,
if you have got that kind of reduction, will not have the
capacity to pay off a loan to take 80 percent of the fleet out
of existence.
Mr. Iani. That is correct. I do not think you need to take
80 percent out, but I think that the remaining industry, if we
are able to rationalize ourselves, should be able to finance
that kind of loan package if there is enough in the front end
to get the boats to leave, and that is going to be the real
trick, and the difficult task for you in Congress to do, I
think.
Senator Stevens. Well, my memory is, when we had the crash
in crab before we found out that for some reason they had gone
way out off the end of the shelf and stayed there for a while,
predators, whatever it might be.
Now, we do not know what has caused this Opilio crash.
Mr. Iani. No, we do not.
Senator Stevens. Or near crash. We are trying to prevent
it, and I do not have any real--from what you said, I guess you
do not have any real criticism either, of what Penny and Steve
have done.
Mr. Iani. I think they have to act conservatively.
Senator Stevens.But beyond that, the problem here is
whether there is an future for the Opilio, and I hate to
mention it, Madam Chairman, but it sounds to me like what you
are really suggesting in part is that we go back to the concept
we used to have in agriculture and we would pay some people not
to fish for a while.I
Mr. Iani. Well, I did not say it, Senator, but yes, I think
that is probably the case.
Senator Stevens. Some people would have to be bought out,
and some people would have to be paid not to fish for a while.
That is a program that would be harder than hell to get through
Congress right now.
Mr. Iani. Right, I understand that, and the difference
between what is happening now and what happened when the King
crab fishery crashed was, the boats did not go away, Senator.
They simply went into bankruptcy and the banks sort of sold
them for 5 cents on the dollar. There used to be a joke around
Seattle that, you know, with your new checking account you
could get a crab boat instead of a toaster, and I think that is
what happened, and what would happen here is, if a vessel gets
bought out, that vessel leaves the fisheries for good and
forever, and does not come back in.
Senator Stevens. Well, that is the two things we put in the
American Fisheries Act.
Mr. Iani. Correct.
Senator Stevens. But you have not suggested it.
Mr. Iani. Correct.
Senator Stevens. But as a practical matter, having
bankruptcies does not solve the capitalization. It just reduces
the cost of getting in.
Mr. Iani. That is right.
Senator Stevens. I have to explore that. I have got one
last question. I have got to retire my side here. But Mike,
what has happened to those boats that came out? Were they
really retired? Did the equipment come off those boats and get
used in other boats? I wonder sometimes, we ought to have a
little oversight what happened to those boats.
[Laughter.]
Mr. Hyde. Senator, if you remember, early on in the
discussions, the Government was going to buy those boats and
take responsibility for them. We then said that was a great
idea if the government pays the right price. The government
changed its mind and said no, we want you to keep those boats,
you have got to scrap the hold and the superstructure, but
anything you want to do with the equipment you can do to help
mitigate the loss that you are taking here.
All those boats that need to be scrapped--there are eight
of them--are in the process. They are under contract to be
scrapped. Seven of them, I believe, are in Hunter's Point, I
think it is called, a naval shipyard down in Oakland. The other
one is on its way to Portland right now under contract with a
different party.
The only thing we removed from those vessels before we sold
them to the scrappers was the core processing equipment, the
Baader machinery, and that is back in the industry somewhere.
About half of it we kept for ourselves. Several of the
machines, I think three of the machines are in John Iani's
plant.
One of the concerns of the American Fisheries Act was that
with this much more fish going on-shore, that we would lose a
lot of fillet production, so the shore plants were very
interested in getting our fillet machines to be able to put
into their operations.
Three of them are on other pollock co-operative member
vessels.
So I think that is--they are spread around into the
industry somewhere.
Senator Stevens. OK. That answers me. I think that we
anticipated some of that would happen, but if we looked at
these other smaller boats, when we start taking them out of the
fleet, it is going to be pretty hard to prevent them not become
a pressure on the fisheries somewhere else in the United
States. That is what we have got to find a way to deal with,
and I do not know how to deal with that yet, and we constantly
face requests for special acts to allow boats to come back in
the fisheries. We are going to have to find some way to really
put down a block against any that are bought out ever being
used for fishing anywhere.
Mr. Iani. I think the industry would agree to that.
Senator Stevens. I just do not know how we can do that. The
Constitution, again, there may be some barrier there. I will
have to work that out.
Senator Snowe. Mr. Chairman.
Senator Stevens. Yes. I appreciate that, and I am through.
Senator Snowe. In the New England groundfish industry we
had a small vessel buyback program. It included a prohibition
that they could not use the equipment to go into another
fishery.
Senator Stevens. Yes. Thank you very much.
Mr. Iani. Thank you.
Senator Snowe. Thank you.
We are going to take a 10-minute break and begin the next
panel at 11:50. Thank you.
[Recess.]
Senator Snowe. All right. Our first witness will be Mr.
Larry Cotter, the CEO of APICDA Joint Ventures. Our next
witness will be Mr. Jeff Bush, Deputy Commissioner, Alaska
Department of Commerce and Economic Development. Our final
witness for this panel will be Mr. Freddie Christianson,
chairman of the Gulf of Alaska Community Coalition.
Mr. Cotter, we will begin with you.
STATEMENT OF LARRY COTTER, CEO, ALEUTIAN PRIBILOF ISLAND
COMMUNITY DEVELOPMENT ASSOCIATION
Mr. Cotter. Thank you, Madam Chair. I would like to thank
you and the members of your committee for inviting me to
testify today. I would also like to thank the six CDQ
organizations for allowing me to represent them in this
hearing. It is an honor and a privilege.
During the past decade, I have been fortunate to witness
and participate in the community development quota program from
its inception as a concept in the 1980's to its present state.
When the program was first articulated, I was a member of the
North Pacific Fishery Management Council. I was present during
the deliberations and subsequent adoption of the program. After
concluding my tenure on the council, I assisted several Aleut
villages in forming a CDQ organization and establishing their
program, and ultimately I became the CEO of the Aleutian and
Pribilof Island Community Development Corporation, a position I
hold today.
The premise of the CDQ program is that communities and
their residents should have a reasonable opportunity to benefit
from the use of common property resources adjacent to their
geographic location. In the Bering Sea Aleutian Islands, this
was not the case prior to the establishment of the program in
1992.
Of the 65 eligible CDQ communities immediately adjacent to
the Bering Sea in 1991 only two derived any measurable social
or economic benefit from the utilization of our fishery
resources in the EEZ. In the remaining villages and
communities, unemployment was chronic, and social problems,
including substance abuse and suicide, were rampant.
A decade ago, the villages and their residents lacked the
capital to invest in the industry. It is different today. The
CDQ program has enabled Western Alaska villages and their
residents to directly participate in the commercial fishing
industry. On an annual basis, the CDQ program provides
approximately 1,000 jobs for local residents. Over $30 million
in wages have been generated, and millions more have been spent
providing training and scholarships for vocational and higher
education. Both the number of annual jobs and accompanying
payroll are increasing each year.
The six CDQ organizations have in excess of $100 million in
assets. They serve as owners or joint venture partners in
shore-side seafood processing facilities, at-sea catcher-
processing vessels, large and small, shoreside catcher vessels,
seafood marketing companies, and a host of other businesses
directly related to the commercial fishing industry. In many
instances, these investments are located at the village level,
where they generate local employment and wages and stimulate
the local economy.
The CDQ program is highly regulated. Each CDQ corporation
must develop a comprehensive community development plan that
outlines its entire program for the next several years.
Detailed annual budgets must be submitted, proposed investments
must conform to investment policies and procedures, quarterly
reports must be submitted, comprehensive annual audits of each
CDQ corporation are required.
The CDQ corporations are prohibited from making investments
outside the fishing industry, or ones that do not provide a
measurable return to the CDQ communities. Virtually all
activities of the CDQ corporations must be approved in one form
or another by the State of Alaska and the Secretary of Commerce
acting through the NMFS Regional Director. Any deviation of
significance from the CDP or the annual budget must be approved
in advance.
The regulations can be troublesome, and they have generated
some friction and concern in the past. A frequent complaint to
the CDQ corporations is that we are hampered by the bureaucracy
from acting as normal private sector companies. For example, if
a CDQ corporation identifies an excellent business opportunity,
and that business opportunity was not foreseen in advance and
contained in the CDP, we have to go through an amendment
process before we can take advantage of the opportunity. The
amendment process may take as long as 30 days or longer, by
which time the opportunity may have disappeared.
Another example is limitation on our budgets. If we are
going to deviate from our budget by $100,000 or more we have to
do a substantial amendment, again taking 30 days or longer.
This gets to be a problem, particularly when a CDQ group has
invested in another company, where we own 50 percent or more of
that company, and at that point in time we have to go through
that amendment process before we can spend the money, which may
make it impossible for the company to move forward and carry
out its business functions as it needs to in order to remain
competitive.
The regulations all relate to the oversight of the CDQ
program, which reflects the North Pacific Fishery Management
Council's original intent that the program be closely monitored
to ensure compliance.
An issue of significance to at least one of the six CDQ
groups involves so-called CDQ dollars. When, if ever, does a
dollar of CDQ royalty stop being a CDQ dollar?
The red light--Madam Chair, if the----
Senator Snowe. That is all right. You can finish your
statement.
Mr. Cotter. Thank you.
Senator Snowe. Go right ahead.
Mr. Cotter. Clearly, when a CDQ dollar is derived from a
royalty, it falls within the scope of the program. If the CDQ
dollar is used to invest in a business, and the business
generates a profit, is that dollar a CDQ dollar? If it is, and
the CDQ Corporation owns 50 percent or more of that company,
then all actions by that company are subject to the dictate of
the CDQ program, which begins to generate some difficulty for
that company, potentially.
The six CDQ corporations compete against each other for
allocations of the CDQ species. The allocation process
generates controversy between the six organizations because the
amount of the allocation will largely determine the amount of
revenue available to each CDQ group. Making allocations, the
State oversight team applies comprehensive list of criteria.
Some of the criteria is objective, some of it is subjective.
The allocation process is difficult for all involved. Some
CDQ groups feel that they have been unfairly treated in the
allocation process, and/or that the allocation process is used
as a threat if they fail to adhere to State desires. A few
alternatives have been suggested, but none have garnered
significant support.
To the extent that there is controversy between the CDQ
corporations themselves, or the CDQ corporations in the State,
they are really limited to the scope of the regulations, the
allocation process, and State oversight. There has been a
suggestion that the Federal Government take over the oversight
and allocation responsibilities of the program. This is opposed
by five of the six CDQ organizations.
On issues of significance to the Magnuson-Stevens Act, all
six organizations have the following comments. The last
reauthorization contained a provision allowing a fee of up to 3
percent of the value of CDQ allocations to be levied against
the CDQ corporations to recover the oversight cost of State and
Federal Government. The six CDQ groups have recently reached
conceptual agreement with the State of Alaska to support
legislation assessing a fee on our corporations to pay for
State oversight expenses. We have approached NMFS with the same
concept, and hope the Magnuson-Stevens Act will be amended to
reflect our proposal.
American Fishery Act ownership side boards. We have some
concerns regarding the proposal that any company that owns 10
percent or more of an AFA processor be limited in terms of
their scope of operation. Three of the CDQ groups currently are
invested in AFA processors. The other three are contemplating
that. If that rule moves forward and includes CDQ's, it would
have a significant adverse impact on our other investments.
Federal loan funds. The AFA set aside $25 million for loans
in fiscal year 1999 to assist CDQ corporations to acquire AFA
vessels and processors. We would like to see this loan program
extended and expanded to include other fisheries. This would be
of great benefit to us.
A couple of other issues of concern, and I will conclude.
We have had fairly continuous problems with the observer
requirements for CDQ fisheries. The current rules require that
there be two observers on all catcher-processor vessels,
regardless of size. These observers need to be specially
trained. The same rules now apply to all the FAA vessels.
There simply are not enough observers trained today to meet
our individual CDQ or collective CDQ and AFA needs. This past
summer, many of our CDQ organizations experienced a lot of
trouble finding observers. In fact, one company went 45 days
without finding an observer. As a result, they could not fish
during that 45 days.
Madam Chair, I think that I will conclude my comments by
saying that despite touching on some of the problems that we
have with the program, the program overall has worked
wonderfully. In 7 years, the CDQ groups have evolved and grown
from nothing to fairly significant corporations. There has been
a very significant return to the villages and the residents.
They have ownership in the industry now, and they participate
in the industry, and they have a future.
I would like to thank you for allowing me to testify----
Senator Snowe. Thank you.
Mr. Cotter. --and I am sorry I went over.
[The prepared statement of Mr. Cotter follows:]
Prepared Statement of Larry Cotter, Ceo, Aleutian Pribilof Island
Community Development Association
Madam Chair:
I would like to thank you and the members of your committee for
inviting me to testify today. I would also like to thank the six CDQ
organizations for allowing me to represent them in this hearing. It is
an honor and a privilege.
During the past decade, I have been fortunate to witness and
participate in the community development quota program from its
inception as a concept in the 1980s to its present state. When the
program was first articulated, I was a member of the North Pacific
Fishery Management Council. I was present during the deliberations and
subsequent adoption of the program. After concluding my tenure on the
Council, I assisted several Aleut villages in forming their CDQ
organization and establishing their program. Ultimately, I became the
Chief Executive Officer of the Aleutian Pribilof Island Community
Development Association (APICDA), a position I hold today.
The premise of the CDQ program is that communities and their
residents should have a reasonable opportunity to benefit from the use
of common property resources adjacent to their geographic location. In
the Bering Sea/Aleutian Islands, this was not the case prior to
establishment of the program in 1992. Of the 65 eligible CDQ
communities immediately adjacent to the Bering Sea and Aleutian Islands
in 1991, only two derived any measurable social or economic benefit
from the utilization of our fishery resources within our North Pacific
EEZ. In the remaining villages and communities, unemployment was
chronic and social problems--including substance abuse and suicide--
were rampant. The federal and state governments provided a variety of
grants and other funding mechanisms to combat these problems, but they
could not bridge the gap between the imposition of opportunity and the
actual ownership of opportunity. That is a huge difference.
A decade ago, the BSAI villages and their residents lacked the
capital to invest in the industry. In many cases, the commercial
fishing vessels were easily visible operating just offshore:
harvesting, processing, and reaping the economic benefits of our world
class groundfish, halibut and crab fisheries. It is different today.
The CDQ program has enabled western Alaska villages and their
residents to directly participate in the commercial fishing industry,
either individually or through their CDQ organization. On an annual
basis, the CDQ program provides approximately 1,000 jobs for local
residents. Over $30 million in wages have been generated, and millions
more have been spent providing training and scholarships for vocational
and higher education. Both the number of annual jobs and accompanying
payroll are increasing each year.
The six CDQ organizations have in excess of $100 million in assets.
They serve as owners or joint venture partners in shoreside seafood
processing facilities, at-sea catcher processor vessels, large and
small shoreside catcher vessels, seafood marketing companies, and a
host of other businesses directly related to the commercial fishing
industry. In many instances, these investments are located at the
village level, where they generate local employment and wages, and
stimulate the local economy. To the extent that investments are outside
of the village, they generate revenue to the CDQ company for overall
use within the program, serve to stabilize the CDQ corporation by
diversifying investments, and are a key component in reaching long term
self-sufficiency. They also provide significant employment and career
path opportunities for local residents.
The CDQ program is not race based. The program includes all
residents of the eligible villages and communities, regardless of race.
This is an important distinction.
The CDQ program is highly regulated. Each CDQ corporation must
develop a comprehensive community development plan (CDP) that outlines
its entire program for the next several years. Detailed annual budgets
must be submitted. Proposed investments must conform to each
corporation's investment policies and procedures. Quarterly reports
from each corporation, including a progress report on each project and
milestone, must be submitted. Comprehensive, annual audits of each CDQ
corporation are required. The CDQ corporations are prohibited from
making investments outside the fishing industry, or ones that do not
provide a measurable return to the CDQ communities. Virtually all
activities of the CDQ corporations must be approved in one form or
another by the state of Alaska and the Secretary of Commerce (acting
through the NMFS Regional Director). Any deviation of significance from
the CDP or the annual budget must be approved in advance.
The regulations can be troublesome, and have generated friction and
concern. A frequent complaint is that the CDQ corporations are hampered
by the bureaucracy from acting as normal private sector companies. For
example, if a CDQ corporation identifies an excellent investment
opportunity at bargain basement prices, it must go through a
substantial amendment process requiring approval from both the state
and NMFS before it can take advantage of the opportunity--if the
proposed investment was not foreseen in advance and included in the
community development plan. The amendment process, including the time
necessary to develop the accompanying paperwork, frequently requires
thirty or more days. By that time, the opportunity may have disappeared
because a CDQ corporation cannot commit to the opportunity without
prior approval.
Another example is the requirement that any deviation in a budget
by more than $100,000 must be approved in advance by the state and
NMFS. If, as is the current state definition, a CDQ ``project''
includes any investment in which a CDQ corporation owns a controlling
interest (50% or more), a major corporation in which a CDQ corporation
is an equal owner must foresee in advance all of their budget needs for
the next year, or wait for approval from the state and NMFS before
spending $100,000 in excess of their approved budget. This presents a
major problem since companies cannot see with crystal clarity into the
future and must, by competitive necessity, have the ability to operate
their business.
The state CDQ team and the six groups have been working this past
year to address these and other similar issues. Most of the CDQ
organizations believe these problems can and will be resolved without
federal government intervention.
The regulations all relate to oversight of the CDQ program, which
reflects the North Pacific Fishery Management Council's original intent
that the program be closely monitored to ensure compliance.
Unfortunately, the laudable goal of oversight and compliance can
conflict with the reality of the business world. A happy medium needs
to be identified. Failure to positively address these issues will have
a long term negative impact upon the CDQ corporations. Most potential
partner companies will not accept CDQ corporations as equal investors
because of the impact of the regulations on their ability to be
flexible, thereby relegating CDQ corporations to minority owner status.
In those cases where a CDQ group, or a combination of CDQ groups, own a
controlling interest in a business, the business will operate at a
competitive disadvantage until these issues are resolved.
An issue of great significance to at least one of the six groups
involves so called ``CDQ dollars.'' When, if ever, does a dollar of CDQ
royalty stop being a CDQ dollar? For example, a royalty dollar
generated from the lease of pollock CDQ is spent on a business
investment within the scope of the program. Clearly, the royalty dollar
was subject to the oversight provisions of the program. But what about
the dollar in earnings generated by the business investment, the so
called ``second generation'' dollars? If the dollar is returned to the
CDQ group as profit sharing, is it a CDQ dollar again and subject to
the program? If the dollar is spent by the business on a new investment
instead of returned as profit sharing, is the dollar spent a CDQ
dollar? If so, the new investment may be subject to the rules and
regulations of the CDQ program. The current definition maintains that
second generation dollars are CDQ dollars and subject to the scope of
the program.
This issue is particularly important when a CDQ corporation or
corporations have a controlling interest in a business investment. If
the dollar generated by the business is a CDQ dollar, the business
would not be allowed to invest in any entity outside the scope of the
CDQ program. The concern by the particular CDQ corporation is that
their business investment(s) is not allowed to diversify and strengthen
the corporation. In the meantime, the corporation remains subject to
the scrutiny and potentially stifling regulations of the program.
The contrary concern is that revenues generated by the CDQ program
must be used to the maximum extent possible for the development of
stable local economies in the CDQ communities: if second generation CDQ
revenues fall outside the scope of the program, several CDQ groups fear
that they may be spent on investments that provide little or no return
at the village level. In such a case, these groups fear the program
itself may be threatened.
Four of the six CDQ corporations support the current definition
regarding the use of second generation dollars. One corporation appears
undecided. One corporation strongly supports a definition that limits
the scope of the program to first generation dollars only.
The six CDQ corporations compete against each other for allocations
of the CDQ species. The allocation process generates controversy
between the six organizations because the amount of the allocation will
largely determine (absent returns from investments) the amount of
revenue available to each CDQ corporation. Currently, approximately $30
million a year in royalties are generated from the lease of CDQ
allocations. The allocation process is managed by the state of Alaska.
For the past several years, there has been at least one major
allocation each year. Each allocation requires submission of a
comprehensive community development program by each CDQ organization,
and requires a substantial amount of work. We understand we are now
moving to a longer allocation cycle.
In making allocations, the state CDQ oversight team applies a
comprehensive list of criteria when evaluating each CDQ corporation and
their allocation request. The criteria--in no order of priority--
includes the proposed program, past performance, management expertise,
contractual relationships with partners, population, compliance with
CDQ rules and regulations, co-operation with other CDQ corporations,
the extent to which proposed fishing plans conform with conservation
objectives, and other factors. Some of the criteria is based on fact,
while some is subjective.
The allocation process is difficult for all involved. Obviously the
allocation decisions themselves are subject to praise or ridicule,
depending upon what a corporation receives. I do not think anyone is
really happy with the process. Some CDQ groups believe they have been
unfairly treated in the allocation process, and/or that the allocation
process is used as a threat if they fail to adhere to state desires. A
few alternatives have been suggested, but none have garnered
significant support. It is interesting to note that the North Pacific
Fishery Management Council consciously delegated the primary allocation
responsibility to the state after contemplating the potential political
nightmare associated with making allocations.
To the extent that there is controversy between the CDQ
corporations themselves, or the CDQ corporations and the state, they
are limited to the scope of regulations, the allocation process, and
state oversight. There has been a suggestion that the federal
government take over the oversight and allocation responsibilities.
This is opposed by five of the CDQ organizations. Despite intimations
to the contrary, the majority of the CDQ corporations are generally
pleased with the job being done by the state and believe the problems
that do exist can and will be positively addressed in the near future.
On issues of significance to the Magnuson-Stevens Act, all six
organizations have the following comments:
Fees: The last reauthorization of the Magnuson-Stevens Act
contained a provision allowing a fee of up to three percent of the
value of CDQ allocations to be levied against the CDQ corporation to
recover the oversight costs of the state and federal governments. The
six organizations have recently reached conceptual agreement with the
state of Alaska to support state legislation assessing a tax on our
corporations to pay for state oversight expenses. We have approached
NMFS with the same concept, and hope the Magnuson-Stevens Act will be
amended to reflect our proposals.
American Fisheries Act Ownership Side Boards: The North Pacific
Fishery Management Council is currently developing regulations that
define which business entities will be subject to AFA side boards. One
of the alternatives would include any company, and their affiliates,
who own ten percent of more of an AFA processor. Three of the CDQ
groups currently own ten percent of more of AFA processors, and the
other three are contemplating such an investment. Inclusion of the CDQ
corporations in this rule would have a significant adverse impact on
the other investments made by the groups since those investments would
then be limited in their harvesting and processing activities by AFA
side boards. This appears contrary to the intent of the program (CDQ
corporations are intended to invest and diversify their investments in
the industry) and the intent of Congress in providing for $25 million
in federal loans (American Fisheries Act) to CDQ corporations to invest
in pollock vessels and processors.
We hope that the North Pacific Fishery Management Council will
exempt CDQ corporations from these provisions. If not, we would ask
that the Magnuson-Stevens Act be amended to address our concerns.
Federal Loan Funds: As mentioned above, the American Fisheries Act
set aside $25 million for loans in FY 1999 to assist CDQ corporations
to acquire ownership in AFA vessels and processors. We would like the
loan program extended and expanded to include other fisheries. This
would be of great benefit to us.
On other issues of importance, we have encountered continuous
difficulty with the National Marine Fisheries Service regarding
observer requirements for CDQ fisheries. The NMFS requires that there
be two observers on all catcher processor vessels, regardless of size.
The observers must be specially trained. The same rules have now been
extended to all AFA vessels participating in co-ops. There are simply
not enough trained observers to meet our individual CDQ or collective
CDQ and AFA needs. This past summer many of the CDQ corporations
experienced significant problems locating observers so they could
harvest their CDQ. One CDQ group went 45 days without locating the
necessary observers. Without the required observers we are not allowed
to fish. To the extent that the NMFS has indicated flexibility in this
rule, the flexibility they offered limited the fishing time to the
extent that the commercial fishing effort would not be economically
viable.
The NMFS has not been responsive to our problems in this area. It
is a major problem.
Another concern with observers is the variance between the observed
catch as defined by the observer and the back calculated catch as
defined by the products produced on board the vessel using NMFS product
recovery rates. The variance in Pacific cod CDQ fishing, for example,
has ranged as high as twenty percent or more, with the observer nearly
always showing a higher number. We strongly support accurate accounting
of catch, but we are not convinced that the current approach
accomplishes the goal given the variance. For Pacific cod, the six CDQ
groups jointly proposed to the NMFS that we implement an alternate
system that would include using the observer to count fish that drop
off before coming aboard and using product recovery rates (constantly
monitored to ensure they are accurate) to determine the landed weight.
Although the NMFS regulations allow for an alternate method of
catch accounting, the resistance to the change, or possibly time
restraints, have resulted in an unwillingness by NMFS to move forward
to address this problem. In the meantime, we do not know if we are over
harvesting or under harvesting. This has both biological and economic
ramifications. The problem is not limited to cod. It needs to be
resolved.
A final issue that concerns us is the exactness required by the
regulations in terms of harvesting our CDQ allocations. We are
prohibited from exceeding any allocation for any species, a regulation
that is not imposed on any other fishery. In some cases, our
allocations are several thousand tons, in other cases only four tons.
Fishing is not an exact science. There will be tows or sets where the
catch is greater or less than desired or sought. This regulation
greatly inhibits our ability to successfully harvest our allocations
since we are extremely concerned with the ramifications of any excess
harvest. All of the groups have excellent records of harvesting within
the specified allocations, but the threat of violations is constantly
hanging over our heads, particularly for species with extremely small
allocations.
The CDQ groups have proposed that the collective allocations from
all groups combined serve as the cap, and that an individual group who
exceeds their allocation for a particular species will not be penalized
if they can secure additional fish from another CDQ organization before
the end of the year to cover their overage. Again, due to time
restraints this issue has not been resolved.
Despite the problems identified in this testimony, the CDQ program
has worked wonderfully. In seven years, the CDQ corporations have
evolved and grown from nothing to fairly significant corporations.
There has been a great return to the villages and their residents. They
have ownership in the industry and they participate in the industry.
They have a future in the industry, and they have goals and objectives
as individuals and communities relative to the industry. None of this
would have been possible without the CDQ program.
Thank you again for providing me with the opportunity to testify
today. I note that several of the CDQ organizations will be submitting
their own written testimony, and hope you will give them the same
attention that you have given me.
Senator Snowe. No, that is fine, Mr. Cotter. Thank you.
Mr. Cotter. Thank you.
Senator Snowe. Mr. Bush.
STATEMENT OF JEFF BUSH, DEPUTY COMMISSIONER, DEPARTMENT OF
COMMUNITY & ECONOMIC DEVELOPMENT, ALASKA
Mr. Bush. Thank you, Madam Chair, and Senator Stevens.
Thank you for the opportunity to testify here today. I am
currently the Deputy Commissioner of the Department of
Community & Economic Development, which is the lead State
agency with respect to the CDQ program. We jointly manage the
program with the Department of Fish & Game, but the staff is
located, based upon a recent reorganization of the State
government, within my department.
Sixty five communities currently in Western Alaska
participate in the program, which began in 1992. Those 65
communities have approximately 27,000 residents. They
participate through six CDQ groups, and these groups vary in
size from one to 20 communities, and from approximately 550
people up to about 8,750 people.
The northern boundary of the program stretches as far as
the Bering Straits, and it stretches south toward the Aleutian
communities of Atka and Nikolski.
The State's role in the oversight of a CDQ program is to
ensure that the program is held accountable to its original
mission of promoting fisheries-related economic development and
providing ongoing opportunities for Western Alaska residents.
This is done by working with the CDQ groups in the development
of their plans and programs, monitoring their performance to
ensure that they comply with the program, and to reward
successful performance through the allocation process. We also
as a State frequently represent the CDQ program and advocate on
its behalf in both State and Federal arenas.
The CDQ program is still relatively new, but by most
measures, as stated by Mr. Cotter, it has been quite
successful. It provides approximately 1,000 jobs annually for
Western Alaska residents. It pays total wages, or has paid
total wages of approximately $30 million, it has annual royalty
returns to the various CDQ groups of approximately $30 million,
and the six groups now have assets totaling approximately $100
million.
The goal of the program, as I stated, is to provide
fisheries-related economic opportunities for Western Alaska
residents. As the program has grown, we have seen increasing
numbers of jobs provided. We have seen increasing numbers of
opportunities, economic opportunities to the region as a result
of the program. We are seeing more and more educational funding
programs, and more and more training opportunities as a result
of the program.
We also are seeing, particularly in recent years, more and
more interest in investment by the groups directly into the
fisheries themselves, into the capital investment of the
fisheries. Right now, according to our estimates, the CDQ
groups own approximately 2 percent of the capital, the
processing capital in the Bering Sea fisheries.
I would like to next comment briefly on a few provisions of
the Magnuson-Stevens Act. Under the Magnuson-Stevens Act
reauthorization in 1996, it was provided that the CDQ program
would -- that the Secretary of Commerce would institute a fee
program up to a maximum of 3 percent of the ex-vessel value of
the fish harvested by the groups, and this fee program would
help support the program.
To date, that particular fee program has not been
instituted. Because of State funding issues, the State and the
groups have worked together, and I am pleased to say have
reached an agreement recently to attempt to implement a State
CDQ fee system. We are introducing legislation in the current
legislature to have this fee system instituted at the State
level to cover the State management for the program, and that
will hopefully remove the program from the vagaries of the
State budgeting system, which have been a constant problem.
The other thing that I would like to comment on regarding
the act is that the act required the National Academy of
Sciences to do a report on the CDQ program, which was released
in 1998, and I would like to talk briefly about a few of the
comments made in that report.
The report found that the program is generally effective in
accomplishing the goals of providing the communities with
ongoing economic fishing activities and opportunities. They
create employment, they attract capital, develop
infrastructure, and generally promote social and economic
conditions in the region.
There were a few criticisms or recommendations out of the
report. The report identified a problem relating to a lack of
open and consistent communication between the groups and the
communities. The State is very sensitive to this particular
issue, and has responded through a regulations redraft just
this past year that now requires the groups to actively work
with their communities and to report back to us, and they are
accountable to the State on that.
I will be very brief, Madam Chair. Another issue related to
the State's communication directly with the groups in the
communities, and the State has also adopted a change in its
internal structure to consolidate all of the CDQ staff members
into one office, and now we are trying to implement more
outreach from that office, because with more efficiencies we
now have more time for staff to do that.
One comment of the National Academy of Science report that
has generated some interest and I know is of concern to the
groups, and Mr. Cotter commented upon it, is relating to the
flexibility of investments to be allowed by the CDQ groups, and
to permit more flexibility in allowing them to make
nonfisheries-related investments.
The State is working very closely with the groups to try to
work in that direction. We are very sensitive to that concern.
We are also sensitive to the concern that oftentimes a
particular group's interest in making a profit may not
necessarily be consistent with the program's purpose of
benefiting the region's residents, and so it is a tough balance
for the State in looking at the investment flexibility issue.
With that, Madam Chair, I would like to just say thank you
again for coming to Alaska and for giving me the opportunity to
testify.
Senator Snowe. Thank you very much, Mr. Bush.
Mr. Christiansen.
STATEMENT OF FREDDIE CHRISTIANSEN, CHAIRMAN, GULF OF ALASKA
COASTAL COMMUNITIES COALITION
Mr. Christiansen. Thank you. I would like to thank both of
you for allowing, Senator Stevens and Senator Snowe, for us to
participate in this testimony.
Senator Stevens. Would you pull that mike up close to you,
please?
Mr. Christiansen. My name is Freddie Christiansen. I am the
chairman of the Gulf of Alaska Coastal Community Coalition.
The Gulf of Alaska Coastal Community Coalition is an
alliance of more than 30 communities stretching from Metlakatla
in Southeast Alaska, around Prince William Sound, Cook Inlet
and Kodiak and out to False Pass and the Eastern side of
Aleutian Islands.
Our purpose is to create fair and sustainable marine
resource harvesting opportunities for smaller communities in
the Gulf of Alaska. Our core values include the necessity of
sustainable marine resource management. These are the same
values that have been championed by you, Senator Stevens, and
others, in the passage of the Sustainable Fisheries Act.
In order to explain why many people in the Gulf of Alaska
formed this coalition, I would like to tell you a little bit
about my personal experience. I have lived in Old Harbor all my
life, have been a commercial fisherman since I was 9 years old.
From the implementation of State limited entry programs for
salmon in 1973, I had observed a continual decline in my
community's opportunities to participate in fisheries. Our crab
and shrimp fisheries were lost because of resource problems,
and individual fishing quota systems restricted access to
halibut and black cod.
As fishing jobs disappeared, Old Harbor experienced social
problems, alcohol and substance abuse, population declines, and
a sense of being cutoff from the roots as a fishing community.
Section 301(a)(8) of the Magnuson-Stevens Fishery
Conservation Management Act states that conservation and
management measures shall take into account the importance of
fishery resources to fishing communities in order to a)
provide, to sustain participation of such communities, and b)
to the extent practical, minimize the adverse economic impacts
of such communities.
Based on a letter of January 6, 2000, Subcommittee Chair
Snowe, committee chairman McCain expressed their interest in
views on community development quotas and other management
alternatives. The CDQ program which has been employed in the
Bering Sea Aleutian Islands may not be easily transferable to
the Gulf of Alaska. However, some form of community-based
access to fisheries is imperative if the small coastal
communities are to remain viable.
Last August, the coalition submitted a proposal to the
North Pacific Fishery Management Council to modify the IFQ
program to permit communities to purchase retention and fishing
of halibut and sable fish IFQ's. The concept developed from the
recommendations of the Ocean Studies Board of the National
Academy of Sciences and the National Research Council in their
1999 report to Congress called Sharing the Fish: Toward a
National Policy on Individual Fishing Quotas.
The NRC congressionally mandated report, consistent with
the Magnuson-Stevens language, indicated that it had been an
oversight not to allocate IFQ's to communities when the program
was started, and recommended that regional councils, when
designing IFQ programs, should be allowed to allocate quota
shares to communities. Most importantly, the report stated that
for existing IFQ programs councils should be permitted to
authorize purchase-holding management and sale of IFQ's by
communities.
Some have suggested that the anticipated increased funding
for the Federal IFQ loan program through the 3 percent program
fee assessment could help meet the needs in our communities.
While this approach may be beneficial to some individuals in
our communities, it does not address the larger community need
to have access and economic benefit from marine resources.
Individual owners can easily come and go from a community,
or simply sell their shares. In fact, the National Marine
Fisheries Service reports that in the first 4 years of the IFQ
program, individuals living in rural Alaska have mostly sold
their IFQ shares.
The Gulf of Alaska Coastal Community Coalition is very
concerned about the continuing high levels of bycatch discards
in several Gulf of Alaska fisheries, and the habitat
alterations occurring from hard-on-bottom trawling. This is
especially true with the recent substantial decreases in the
halibut biomass estimates from the International Pacific
Halibut Commission for the Gulf of Alaska and projected long-
term negative trends, yet relatively long-term constant levels
of halibut wastes or bycatch continue to be authorized by the
North Pacific Fishery Management Council.
The GOACCC strongly urges the North Pacific Fishery
Management Council to aggressively implement the existing
provisions under Sustainable Fisheries Act to regulate
fisheries by requiring fishing methods that substantially
reduce bycatch and habitat alteration.
In addition, the coalition remains deeply concerned about
the gulf of Alaska crab stocks. As you know, there has not been
a Red King crab season in the Gulf of Alaska since 1982, and no
Tanner crab season since 1994. Despite elimination of fishing
and even a reduction in allowable subsistence harvest, Gulf of
Alaska crab stocks remain severely depressed.
Finally, we want to raise with the Subcommittee some
perhaps unintended but nevertheless detrimental impacts of the
National Marine Fisheries Services newly instituted license
limitation program, LLP, for cod, pollock, and flatfish
fisheries in the Gulf of Alaska.
The program assured fishing permits for a significant
number of larger vessels, particularly in the Western Gulf,
that had marginal fishing histories while at the same time
limiting new participation in these fisheries by coastal
community residents. Moreover, the program limits the vessel
size of participation, thus permanently vests the larger
vessels with a competitive edge, while prohibiting the natural
evolution of improving fishing equipment for small boat
fishermen. The LLP program is yet another barrier between
residents, rural communities, and the marine resources in
proximity to where they live.
In addition, the North Pacific Fishery Management Council
recently awarded a species allocation of Pacific cod fish in
the Bering Sea to a single gear type and is considering a
parallel proposal for trawl fishermen in the Gulf. If the
proposal is approved, and a single gear type given a percentage
of Gulf of Alaska Pacific cod fish quota, it will generate a
frenzied scramble for all gear types to obtain specific
allocations for all remaining fisheries. This accomplishes much
of the same result as IFQ's program, despite the current
constraints against new IFQ programs in Magnuson-Stevens, and
despite the protective language for communities in the
Magnuson-Stevens.
The LLP and species allocation do not provide for sustained
participation of our communities, and do not minimize adverse
economic impacts on these communities.
Thank you for the opportunity to testify about some of our
concerns for the sustainability of the fisheries-dependent
rural communities in the Gulf of Alaska. In summary, we believe
that community ownership of IFQ's is consistent with the intent
of the Magnuson-Stevens Act, and an excellent idea. We are
concerned about bycatch fishery waste. Substantial regulatory
changes need to be implemented to protect and rebuild crab
stocks. And finally, the recently implemented LLP program
possible quota allocations creates further access barriers for
the Gulf of Alaska coastal communities.
We are committed to working with your Subcommittee to find
sensible and feasible remedies to challenges we face, some of
which we have outlined in our testimony. The members of the
Gulf of Alaska Coastal Community Coalition and the men, women,
and children, both Native and non-Native, whose lives and
future way of life are linked to your work here today are
grateful to you for your commitment of time and energy to
address these matters.
Thank you.
[The prepared statement of Mr. Christiansen follows:]
Prepared Statement of Freddie Christiansen, Chairman, Gulf of Alaska
Coastal Communities Coalition
Chairwomen Snowe, Senator Stevens and members of the Subcommittee.
Thank you for holding your hearing in Alaska and providing a forum for
our views on the 1996 amendments to the Magnuson-Stevens Fishery
Conservation and Management Act.
My name is Freddie Christiansen and I am the Chairman of the Gulf
of Alaska Coastal Communities Coalition (GOACCC). The GOACCC is an
alliance of more than thirty-five (35) communities stretching from
Metlakatla in Southeast Alaska around Prince William Sound, Cook Inlet
and Kodiak out to False Pass in the Aleutian Islands. Our purpose is to
create fair and sustainable marine resource harvesting opportunities
for smaller communities in the Gulf of Alaska. Our core values include
the necessity of sustainable marine resource management. These are the
same values that have been championed by you, Senator Stevens and
others, in the passage of the Sustainable Fisheries Act.
In order to explain why many people in the Gulf of Alaska formed
this coalition, I'd like to tell you a little about my personal
experience. I have lived in Old Harbor all of my life and have been a
commercial fisherman since I was (8) years old. From the implementation
of the State's limited entry program for salmon in 1973, I have
observed a continual decline in my community's opportunities to
participate in fisheries. Our crab and shrimp fisheries were lost
because of resource problems and the Individual Fishing Quota system
restricted access to halibut and blackcod. As fishing jobs disappeared,
Old Harbor experienced increased social problems, substance abuse,
population declines and a sense of being cut off from our roots as a
fishing community. Declining population impacts our schools and the
opportunities for my children--fewer and fewer high school students
remain in our village for high school or return to the village after
attending high school elsewhere. As I traveled and talked with
residents from other communities I discovered that their experiences
paralleled mine. In fact, many communities have been almost entirely
disconnected from fishing and resource related jobs. A number of
residents of the Gulf formed the GOACCC to reconnect coastal
communities with marine resources and to encourage better and more
equitable management of these resources.
Section 301(a)(8) of the Magnuson-Stevens Fishery Conservation
Management Act states that ``Conservation and management measures shall
... take into account the importance of fishery resources to fishing
communities in order to (A) provide for the sustained participation of
such communities, and (B) to the extent practicable, minimize adverse
economic impacts on such communities.'' The Coalition's first
initiative was founded on this directive.
Based on the letter of January 6, 2000, Subcommittee Chair Snowe
and Committee Chairman McCain expressed their interest in views on
community development quotas and other management alternatives.
Although CDQs as they have been employed in the Bering Sea are not
easily or practically transferred to the Gulf of Alaska, some form of
community-based access to fisheries is an imperative if the small
coastal communities are to remain viable into the future.
Last August, the Coalition submitted a proposal to the North
Pacific Fisheries Management Council to modify the IFQ program to
permit community purchase, retention and fishing of halibut and
sablefish IFQs. The concept was developed from the recommendations of
the Ocean Studies Board of the National Academy of Sciences and
National Research Council in their 1999 report to Congress called,
``Sharing the Fish...Toward a National Policy on Individual Fishing
Quotas.'' The NRC Congressionally mandated report, consistent with the
Magnuson- Stevens language, indicated that it had been an oversight not
to allocate IFQs to communities when the program was started and
recommended that regional councils, when designing IFQ programs,
``should be allowed to allocate quota shares to communities ...'' Most
importantly, the report stated that ``for existing IFQ programs,
councils should be permitted to authorize the purchase, holding,
management, and sale of IFQs by communities.''
We envision that nonprofit entities, such as community development
foundations, would be formed to purchase, hold and manage quota share.
These shares would be held in perpetuity as a community endowment and
provide fishing access to halibut and sablefish for successive
generations of community residents. We anticipate that there would be
limits on the total amount of shares purchased by communities and the
amount of shares held by any single community. In addition there may be
limitations on how many community quota shares any one individual will
be able to fish.
Some have suggested that the anticipated increased funding for the
Federal IFQ loan program through the 3% program fee assessment could
help meet the needs in our communities. While this approach may be
beneficial to some individuals in our communities, it does not address
the larger community need to permanently have access to, and economic
benefit from, marine resources. Individual owners can easily come and
go from a community or simply sell their shares. In fact, the National
Marine Fisheries Service reports that, in the first 4 years of the IFQ
program, individuals living in rural Alaska have mostly sold their IFQ
shares and, if the trend continues, coastal communities will eventually
lose access to economic benefit from these resources. When a village
skipper sells his IFQ shares, two or three additional families in the
community lose income opportunities as crewmen. Community ownership of
the IFQs would guarantee that the quota shares remain available to the
community and that fishing jobs would remain available to community
residents.
The Coalition's IFQ proposal is the first step along a path toward
increased community benefit from marine resources. We seek your and
your Subcommittee's assistance, Senator Stowe, and your assistance,
Senator Stevens, in the reauthorization of the Magnuson/Stevens Act to
provide additional regulatory support for smaller, fisheries dependent,
Gulf of Alaska communities.
Gulf of Alaska Coastal Communities are very concerned about the
continuing high levels of bycatch and discards in several Gulf of
Alaska fisheries and the habitat alterations occurring from ``hard-on-
bottom'' trawling. This is especially true with the recent,
substantial, decreases in halibut biomass estimates from the
International Pacific Halibut Commission for the Gulf of Alaska and
projected long term negative trends. Yet, relatively constant levels of
halibut waste through bycatch continue to be authorized by the NPFMC.
The GOACCC strongly urges the North Pacific Fisheries Management
Council to aggressively implement the existing provisions of the
Sustainable Fisheries Act to regulate applicable fisheries by requiring
fishing methods that substantially reduce bycatch and habitat
alteration.
In addition, the Coalition remains deeply concerned about Gulf of
Alaska crab stocks. As you know, there hasn't been a red king crab
season in the Gulf since 1982 and no tanner crab season since 1994.
Despite elimination of fishing--and even a reduction in the allowable
subsistence harvest--Gulf of Alaska crab stocks remain severely
depressed. More aggressive implementation of the 1996 amendments to
Magnuson-Stevens and an increase in ``essential'' habitat protection in
federal waters for our crab along with vigorous efforts at minimization
of impacts on the essential habitat are called for.
Finally, we want to raise with the Subcommittee some perhaps
unintended, but nevertheless detrimental, impacts of the National
Marine Fisheries Service's newly instituted license limitation program
(LLP) for the cod, pollock and flatfish fisheries in the Gulf of
Alaska. The program assured a significant number of larger vessels,
particularly in the Western Gulf, that had marginal fishing histories
while, at the same time, limiting new participation in these fisheries
by coastal community residents. Moreover, the program limits the vessel
size of participation and thus permanently vests the larger vessels
with a competitive edge while prohibiting the natural evolution of
improving fishing equipment for small boat fishermen. The LLP program
is yet another barrier between residents of rural communities and the
marine resources in proximity to where they live that is in need of
attention.
In addition, the NPFMC recently awarded a species allocation of
pacific codfish in the Bering Sea to a single gear type and is
considering a parallel proposal for trawl fishermen in the Gulf. If the
proposal is approved and a single gear type given a percentage of the
Gulf of Alaska's pacific codfish quota, it will generate a frenzied
scramble for all gear type to obtain specific allocations for all
fisheries. This accomplishes much of the same result as an IFQ
program--despite the current prohibitions against new IFQ programs in
Magnuson- Stevens--and, despite the protective language for communities
in Magnuson-Stevens. The LLP and the species allocations do not provide
for the sustained participation of our communities and do not minimize
adverse economic impacts on these communities.
Thank you for this opportunity to testify about some of our
concerns for the sustainability of fisheries dependent rural
communities in the Gulf of Alaska and our desire to access the marine
resources upon which they depend.
Every month, every year that passes without the overriding problem
of access to fisheries adequately addressed moves some Gulf of Alaska
coastal communities closer to extinction. Without a viable rural
Alaska, something absolutely unique in the world will be lost, aside
from the economic stimulus a vibrant rural Alaska means to the urban
areas of Anchorage, Juneau, and Fairbanks. Once lost, it is not likely
to ever be restored. Therefore, we seek your help and intervention in
developing a lifeline to the future.
We are committed to working with your Subcommittee and anyone else
to find sensible and feasible remedies to the challenges we face, some
of which we have outlined in this testimony. The members of the GOACCC
and the men, women and children (both Native and non-Native) whose
lives and future way of life are linked to your work here today, will
be deeply grateful to you for your commitment of time, energy and
ingenuity to addressing the matters we have touched on in our
testimony.
Senator Snowe. Thank you very much. Thank you. How many
communities does your coalition represent?
Mr. Christiansen. 30.
Senator Snowe. 30?
Mr. Christiansen. 30.
Senator Snowe. And so they want the ability to have CDQ's
or IFQ's?
Mr. Christiansen. Well, at this time it would be--I think
that with the current regulations in place that that excludes
the gulf, to the best of my knowledge. However, there would
need to be something in place like that that would be able to
help us accomplish that if at all possible, and the IFQ's is
something, our proposal is something that we are trying to put
forward before the North Pacific Fishery Management Council,
and that will be the beginning of some of the solutions.
Senator Snowe. I see. Mr. Bush, you referred to the
National Research Council's report on CDQ's, and you addressed
some of the issues that they had raised in their 1998 report.
Did you address all four of them? Have you addressed some of
the problems that they raised?
Mr. Bush. Yes, we have addressed both of those. We are
working still to this day on trying to address all of the
concerns raised in the report.
Senator Snowe. Did you agree with the concerns that they
had raised?
Mr. Bush. Yes, I think we did.
Senator Snowe. You did?
Mr. Bush. Generally speaking we agreed with them.
Senator Snowe. Mr. Cotter, are you familiar with these
concerns?
Mr. Cotter. Yes, ma'am, I am, and generally I would concur
with what Mr. Bush said.
Senator Snowe. Have you made changes to improve the
communication between the CDQ groups and their communities?
Mr. Bush. Madam Chair, we have made some changes because we
now use that as a criterion, in essence, in evaluating the
performance of a group. The actual communication is something
that obviously the groups have to implement at their level.
Senator Snowe. So there is still more work to be done in
that area.
Mr. Bush. I would think there is always work to be done on
the communication level.
Senator Snowe. Which also goes to the issue of outreach.
Mr. Bush. Correct.
Senator Snowe. Now, has something been put in place for
outreach?
Mr. Cotter. Well, Madam Chair, the report was done a few
years ago, and you know, things have really changed in the past
few years. All of the groups have quarterly newsletters. Our
group, for example, we have an annual meeting of all of the
leaders from each of the villages.
Each of the groups has some sort of contact person inside
each village who is responsible for communicating with the
residents to make them aware of employment and other type of
opportunities. I think we have--as I said in my testimony, I
think we have matured substantially since December 1992, and I
think if they were to do their report again today they would
not find the same concerns.
Senator Snowe. How do you feel about allowing flexibility
in CDQ investments in nonfisheries industries?
Mr. Cotter. Madam Chair, I think that is very important.
You know, what we are dealing with is a group of very small
villages in very remote areas, and our charge in essence is to
try and develop a stable local economy in those villages, and
that is not an easy thing to accomplish, and by definition a
stable economy is going to mean an economy that is diversified,
and if the only thing that we pin our hat on is the fishing
industry, that leaves us vulnerable.
The other part of it is, as you start to develop a stable
local economy--and I will give you an example in our region.
The Village of Nikolski, we cannot put a harbor in there or a
port because of the reef that is around the village, so in
terms of helping the people go out and participate in
commercial fishing, serious commercial fishing is just not an
option, so we have looked at building a sport fishing lodge,
and if we do a sport fishing lodge, then there is also ducks to
hunt and, you know, anthropological sites to visit, and birds
to watch.
So by necessity, for the sport fishing lodge to be
economically viable, it has to include these other type of
activities, but then the next problem we face is, how do we get
people to and from the sport fishing lodge, and you know, air
travel is unreliable, and if people are going to spend a lot of
money to travel to Nikolski, we need to try and provide them
with some reasonable opportunity that they can get there.
So then you begin to think, well, we need to buy a boat
that we can move people from Analaska to Nikolski and back on a
weekly basis, but if we buy a boat, to do that on a weekly
basis, we cannot amortize the boat just by running back and
forth. We also need to deploy the boat into some other field of
economic endeavor in order to help pay for the boat, which
leads us to the possibility of operating a ferry service.
So in a way, rather quickly, if you do try and build a
stable local economy in a community, in order to accomplish
your goal you may be forced to diversify, otherwise your core
investment is not going to be viable, and I would really like
to see us given the opportunity in the region to be able to
diversify beyond investments strictly in the fishing business.
Senator Snowe. So you are obviously looking at that.
Mr. Cotter. Yes, ma'am, we are, and frankly, in a community
like Nikolski, it is the oldest continuously occupied community
in the Western Hemisphere. It goes back 10,000 years of
documented people living in the village, and now there is about
32 people left, and they are getting old, and unless we can
stimulate some local economy, it is going to die.
Senator Snowe. One of the other issues the report raised
was the fact that CDQ's are focused on economic and not
environmental considerations. How would you address this?
Mr. Cotter. Well, I would say that was probably an
unfortunate comment. The CDQ groups partner up with the private
sector to harvest our allocations, and increasingly the CDQ
groups have invested in those operations, so we are directly
participating.
Whenever a CDQ group contemplates developing a relationship
with another company, they pay very close attention to the
catch history of that company--Are they clean? Do they have
good bycatch rates?--and by and large I would say that the
companies that the CDQ groups have invested in are the cream of
the crop. By regulation, we are limited to catching no more
than our specific allocation of each species, and that is
unlike any of the other fishing entities in the North Pacific.
What that means is, if we run out of halibut, then any
fishery that we want to prosecute that requires halibut as
bycatch, we cannot prosecute that fishery, because we do not
have any more halibut to go with it, so we lose all that
revenue.
So the end result is that we have developed very complex
and comprehensive systems to track our bycatch and manage our
quotas so that they are as absolutely clean as they could
possibly be, simply because otherwise we will not be able to
catch our allocation, and that has become part of our creed,
and not just for economic reasons, but I think for personal
reasons. We like to brag about it.
Senator Snowe. Mr. Christiansen, what kind of benefits
would your gulf communities receive if you were a part of an
IFQ halibut program?
Mr. Christiansen. I guess I would have to respond with,
benefits would be that----
Senator Stevens. I am sorry, I cannot hear you. Can you
pull that up?
Mr. Christiansen. Well, first of all, you know, the number
1 benefit would be that our communities would continue to
exist. Without having access to the fisheries and being part of
the harvest and the management of the resources our--you know,
there is a continual decline in the coastal communities, and
specifically in my region, and as well as the rest of the
regions in the gulf.
But I can speak from first-hand experience that Kodiak
Island villages, there are a few of them that are on their way
out, and to have communities so close to the resources and not
having access to them is, you know, part of the reason why
communities are going to become non-existent, and so that would
be one of the benefits.
The other benefit I believe would be that participation, a
reason for the people to--a reason to wake up tomorrow and go
to work, and also being able to give a future for our children
and our kids that are continuing wanting to be involved in the
fishing industry.
The Kodiak Island villages are seafaring people, have
always been. We have been totally dependant on the ocean for
survival for thousands of years, and we need to continue to be
able to be involved in that for thousands of years to come, and
I think that is a major benefit, for the communities to be
participating in the management of it as well. We have a lot of
input that could help reduce bycatch per se, or you know, just
things in that nature, and you know, we need--there is
educational opportunities not only just in the fishing
industry.
So we have a lot of things relative to the ocean that can
keep our people in our communities and keep our villages
existing for generations to come, and as I stated, it is
difficult for me to continue to reside in my village and watch
the opportunities for the young people just being taken away
from them, and that was one of the reasons why I have gotten
involved. I have a heart for those kids, as my elders did for
me when I was a child.
Senator Snowe. Thank you very much. I appreciate it.
Senator Stevens. I do not quite understand how the IFQ
program could be modified. How would you propose to get part of
the IFQ of, say, halibut? How would you propose that?
Mr. Christiansen. Well, Senator Stevens, I will answer that
question to the best of my ability. I guess the IFQ, the way
that I would view the IFQ program, Senator, would be that it
would be owned by the community.
Senator Stevens. But currently the IFQ has already been
allocated.
Mr. Christiansen. Right.
Senator Stevens. So we would have to take it away from
somebody to give the community some of it.
Mr. Christiansen. Senator Stevens, I would have to respond
in a sense that I do not think that our proposal is asking for
a hand-out at this time. I think that we----
Senator Stevens. I am not accusing you of that. I am just--
it sounds like you are asking for a CDQ program to be imposed
on the IFQ. Is that what you are really saying, you want a
portion of that reserve for community use, for each community?
Mr. Christiansen. Senator Stevens, at this time I would
probably like to refer that to part of the technical team that
I have behind here if at all----
Senator Stevens. Well, I would appreciate it if you could
let us know how you and your advisors believe this could work,
because--Mr. Bush, have you looked into this, you or Larry?
Mr. Bush. I will go ahead first, Senator Stevens. I think
the answer would be that you are correct that what we are
looking at potentially is sort of a--or what is being proposed
would be imposing a CDQ program onto the IFQ program. The only
way that I could see that could happen would be through some
sort of a buyback system, where some of the IFQ that is
currently out there would be purchased on behalf of the
communities. My concern is that----
Senator Stevens. But do you use those fees for that? Where
are you going to get the money?
Mr. Bush. I have not looked at that particular proposal at
all. I am speculating here on how it would work. But I could
see that that kind of a system could work. My concern would be
that if you did impose such a system, I would hope that the
IFQ's that are purchased by communities are nontransferable in
the same way that the CDQ allocations are.
Senator Stevens. Mr. Cotter.
Mr. Cotter. Mr. Chairman, my understanding of the proposal
is essentially that, that a system would be implemented through
which designated communities that qualify in the Gulf of Alaska
would be allowed to buy IFQ's on the open market, and pull them
into the community, and they would then be able to use them as
a CDQ for local residents to use and fish, so they would be
buying in, and where they would get the money I do not know,
but that is my understanding of the concept.
Senator Stevens. Mr. Christiansen, I suggest that you get
together and give us some context to what your proposal would
be with regard to how this would be funded and really how you
would manage it if a CDQ was imposed on the IFQ concept, OK.
Mr. Christiansen. We would be more than willing to furnish
that.
Senator Stevens. Thank you.
Senator Snowe. Thank you. We thank you very much.
We will now proceed with our fourth and final panel of
witnesses: Mr. Jack Phelps, executive director of the Alaska
Forests Association; Mr. Paul Seaton, Director of the Alaska
Marine Conservation Council; and Mr. Al Burch, executive
director of the Alaska Draggers Association.
Welcome, gentlemen. Mr. Phelps, we will begin with you.
STATEMENT OF JACK E. PHELPS, EXECUTIVE DIRECTOR, ALASKA FOREST
ASSOCIATION
Mr. Phelps. Thank you, Madam Chairwoman. For the record, my
name is Jack Phelps, executive director of the Alaska Forest
Association, which is the Alaska State-wide trade association
for the forest products industry.
I appear before you today both as a representative of my
own association, which in turn represents nearly 300 member
companies, but also as a representative of the Nation-wide
Essential Fish Habitat Coalition.
My written testimony has been submitted to you previously,
and I ask that it be incorporated into the record of the
hearing, and with the permission of the chair I would also
submit my proposed oral comments for the record and would just
try to summarize a couple of key salient points at this time.
Senator Snowe. Yes. Without objection, it is so ordered.
All of your testimony will be included in the record.
Mr. Phelps. Thank you. The organizations participating in
the Essential Fish Habitat Coalition share a common commitment
to protecting habitat areas that are important to fish. Indeed,
our activities routinely undergo extensive review under other
laws, both State and Federal, to ensure such protection.
For that reason, we are deeply troubled by and opposed to
the attempt being made by the National Marine Fisheries Service
to take a simple information-gathering tool enacted by Congress
in 1996 and turn it into a massive, extensive, expensive,
inefficient, and prescriptive regulatory program. My remarks
today will reflect our view that it is necessary for Congress
to put strict limits on the essential fish habitat program.
The interim final rule, as written by NMFS, has led every
commentator who has reviewed those regulations to conclude that
NMFS has created an extremely broad and inclusive program. Both
the industry and environmental community see a developing
regulatory program fashioned after section 7 of the Endangered
Species Act. This program has been used by the agency to
influence if not exert its control over a vast array of Federal
agency decisions involving not only fishing but land use and
nonmarine resource utilization.
I want to mention just a couple of points that are of
particular concern. First of all, the essential fish habitat
definition, which has been discussed earlier today. As we
commented to NMFS at the outset of its rulemaking process, the
agency's definition is too broad. All waters where a Magnuson-
Stevens Act managed species could be, is now, or ever has been,
would be designated EFH.
I brought a couple of charts, which I will give to your
staff and submit for the record, that demonstrate the extensive
nature of the essential fish habitat designations around the
State of Alaska. As you can see, all the red area represents
what is now deemed to be essential fish habitat. Now, this
clearly completely eliminates the meaning of the word essential
fish habitat. We might as well rename the program fish habitat.
We do not take any comfort from the assurances you received
earlier from Ms. Dalton that they are going to now somehow
narrow this by creating a subcategory of it, habitat of
particular concern. I agree with the implications of your
comments that habitat of particular concern seems to be what we
were originally trying to say about EFH.
Our second concern has to do with the complexity of the
program. In its final rule, NMFS uses five pages of small type,
three columns to a page, to describe its consultation process.
Furthermore, NMFS often states that the EFH program is a
voluntary information-gathering tool, yet it is a promulgated
regulation that requires action agencies to prepare EFH
assessments and undertake other mandatory measures under
mandatory time lines. These are prescriptive provisions, and we
fully expect they will be used in court by opponents of various
resource development projects to try to stop agency action.
In the announcement of the reopening of the comment period
NMFS announced that there had been 2,000 consultations that had
taken place up till now. When we saw that claim, we were
astounded. It validated our worst fears about the program. EFH
designations have not been in place for even 1 year, and yet
more than twice the number of consultations have taken place
under EFH than took place during the same period under the
Endangered Species Act.
When we read that, we sought to obtain copies or
documentation of these 2,000 consultations. We filed a FOIA
request over 2 months ago, in fact, 2 months ago today, asking
for all documents relating to EFH consultations. We still do
not have the information, and NMFS has not been forthcoming
with that information. Indeed, even though this is the
information NMFS claims to be using in developing its final
rule, it appears the agency has not yet compiled those
documents, based on its response to our FOIA request, and they
have been told that it will cost us $32,000 just to get a hold
of these documents.
We think that that is unreasonable, and we think it
indicates that the full range of activities operated under
these consultations has not thoroughly been considered by the
rulemaking process, and we ask that Congress insist that NMFS
make this information available before finalizing its final
rule, and in a format that can be understood by the general
public.
I will very briefly mention the other two concerns we have,
which are in my testimony that will be submitted. We believe
that extending it to nonfishing interests who not only do not
particularly have an interest in being involved in ocean
fishery management, such as timber--you know, it is not our
inclination to be involved in fisheries issues directly--but to
include us in these provisions, who have no representation on
the councils, is extremely problematic for us as well.
And finally, with regard to overlap with other laws, the
EFH program simply does not fit. As noted previously, our
activities are already subject to a myriad of other laws that
generate the desired information and provide a consultation or
comment opportunity for NMFS. Laws such as NEPA, the ESA,
Coastal Zone Management, and so forth, all provide NMFS an
opportunity to comment. Thus, we believe that EFH consultation
should be preempted by law from applying to any activity
subject to a preexisting interagency consultation or comment
process.
In conclusion, it is necessary for Congress to intervene
now on the EFH program. EFH consultation requirements should be
repealed, or at least made nonapplicable to nonfishing
interests. In short, wholesale changes are needed. NMFS has
shown no inclination to make those changes. It is therefore
necessary for Congress to provide some direction to the EFH
program.
Thank you very much for the opportunity to testify.
[The prepared statement of Mr. Phelps follows:]
Prepared Statement of Jack E. Phelps, Executive Director,
Alaska Forest Association
Madame Chairwoman, members of the Committee:
My name is Jack Phelps, and I am the Executive Director of the
Alaska Forest Association. The Alaska Forest Association is the
statewide trade association for the forest products industry in Alaska,
and it is a member of the Essential Fish Habitat Coalition. The
Essential Fish Habitat Coalition consists of diverse non-fishing
resource and business interests, including the American Forest and
Paper Association, the Bay-Delta Urban Coalition, the Edison Electric
Institute, the National Association of Homebuilders and the Association
of California Water Agencies. As a coalition, we are concerned about a
new and expanding federal program that we fear will lead to
unnecessary, burdensome and costly federal controls over land use, and
an inappropriate intrusion into the rights of private property owners
across the country. That federal program is the ``Essential Fish
Habitat'' program, or EFH.
In August of 1998, Ronald Baird, director of NOAA's National Sea
Grant Program, made NMFS's plans for EFH clear when he said that EFH
was, ``. . . the most significant piece of environmental legislation
since the Clean Water Act of 1972. The full implications of essential
fish habitat are not widely appreciated by the public. They will be
shortly.'' It is the position of the EFH Coalition that there is no
justification for such a sweeping new program. It is also our position
that the EFH program, as described by Mr. Baird and implemented to date
by NMFS, is fundamentally at odds with the intent of Congress as
reflected in the 1996 amendments to the Magnuson-Stevens Fishery
Conservation and Management Act (hereafter, Magnuson-Stevens Act).
We are concerned that the EFH program, as described in the interim
final regulations released by NMFS, already has grown into yet another
regulatory impediment imposed on businesses by the federal government
as a condition to receiving a federal permit. A large variety of
permits could be affected. The EFH regulations could delay or stop a
timber harvest project on the Chugach or a water diversion in
California to irrigate a field.
Getting a permit approved by a federal agency is not a pleasant
experience. But, if a property owner has property that is in, near or
might affect EFH, as it is very broadly defined by the NMFS, it will
enter a regulatory morass that could be the equal of Section 7 of the
Endangered Species Act.
How did NMFS get this authority? They were not given it by Congress
- they assumed it on their own.
Improper and Unfair Inclusion of Non-fishing Interests in the Fishery
Management Council Process
The term essential fish habitat or ``EFH'' comes from the 1996
amendments to the Magnuson-Stevens Fishery Conservation and Management
Act. This was a law designed primarily to address offshore commercial
fisheries. The Magnuson-Stevens Act is administered by NMFS, an agency
within the Department of Commerce. NMFS also regulates endangered
species in the marine environment, and marine mammals like whales and
dolphins. All of these share something in common: oceans and marine
resources. NMFS enforces the Fisheries Act, but eight regional Fishery
Management Councils guide it.
As you know, the Councils are composed of appointed members from
the fishing industry, state agencies dealing with fish, Indian tribes
and, in some cases, representatives of environmental organizations. The
Council memberships do not reflect representation of any land use or
development interests. There is virtually no representation of
interests not directly involved in fishing.
The Council system is very procedural and very administrative.
Councils meet frequently. They set up technical committees on issues
like fishing gear, quotas, and habitat. These committees often meet for
days and make recommendations regarding those issues to the Councils,
which themselves meet for days. The Councils then make recommendations
to NMFS, which conducts rulemaking on the proposals. Those rules, when
final, become part of Fishery Management Plans. These Plans govern the
behavior of participants in the fishery; the very interests whose
representatives made the recommendations.
Plans cover many marine fish species--including anadromous species
like salmon--that are fished for commercial or sport purposes. A
species does not have to be rare, endangered, threatened, or even
subject to any particular risk. There are over 400 species of fish
subject to these Plans, ranging from salmon, halibut and swordfish to
spiny dogfish, shellfish and corals, etc.
Before the 1996 Magnuson-Stevens Act amendments, this process was
relatively self-contained. The interest groups involved in fishing
activities interacted with each other, fought and compromised with each
other, sued each other, and generally went on about their business.
Now, thanks to the EFH program being developed by NMFS, a wide range of
non-fishing activities, including real estate development, forest
practices, mining, hydro-power, water supply, and agriculture are going
to be affected by this process. All of these businesses and industries
are being confronted with the prospect of getting pulled into a
Fisheries Management Council system that does not represent, reflect,
or generally consider their interests.
The Magnuson-Stevens Act administrative regime should have no say
over how the non-fishing sector conducts its business. That has never
been the intent of this law. Indeed, it is notable that when the EFH
concept was being developed during the 1996 Magnuson-Stevens Act re-
authorization process, the views of the non-fishing sector were never
solicited. This is because, quite obviously, Congress did not intend
that our sectors be pulled into the Magnuson-Stevens Act program. But
NMFS has now expanded the EFH program so extensively that non-fishing
interests are forced to become involved.
It is necessary for Congress to fix this situation now. The
Councils should be expressly denied any jurisdiction over non-fishing
activities. All Council recommendations for, and NMFS actions on, EFH
designations involving habitat subject to non-fishing activities should
be rescinded. And it should be made clear that any recommendations or
comments issued by the Councils concerning impacts of non-fishing
activities on EFH will not be accorded special deference. Failure to
take these steps will subject non-fishing entities to a fundamentally
and irreparably unfair position in a administrative process that by
design, intent, and practice concerns only the fishing industry.
The NMFS Definition of EFH is Too Broad and All-Inclusive
The interim final regulations, as written by NMFS, lead every
commentator who has reviewed them to conclude that the agency has
created an extremely broad and complicated program. Why have the
regulations creating this program been written in this way?
EFH was intended to be an information gathering process. It was
designed to identify how the highest priority fish habitat was being
harmed. It was, as its name implies, designed to cover habitat that is
``essential,'' or especially important, to the subject fish species.
Congress defined EFH as, ``those waters and substrate necessary to fish
for spawning, breeding, feeding or growth to maturity.''
I agree with Joseph M. Brancaleone, Chairman of the New England
Fishery Management Council who alerted this Committee to the dangers of
an overly broad EFH definition. ``If everything is designated as
essential then nothing is essential, was a common theme throughout the
EFH designation process, on a national and regional scale. Either the
EFH definition should be modified, or the guidance on how to use
different types of data should be more specific,'' he said.
NMFS and the Councils, however, have taken this concept and greatly
extended it by regulation. There are four issues that are especially
noteworthy in the way that NMFS has defined, and the Councils have
designated, EFH:
First, NMFS interpreted EFH in its regulations to cover not
only the critically important habitat one would expect to be
considered ``essential,'' but instead concluded the designation
should cover all habitat necessary to a ``healthy ecosystem.''
Second, NMFS concluded that the term should not be limited to
the marine environment--the traditional realm of the Magnuson-
Stevens Act--but should be extended to cover inland waters as
well.
Third, having taken the step of pushing inland, NMFS announced
the need for ``watershed'' planning. Not only would rivers,
estuaries, and wetlands be covered, but also all areas that
could affect those waters, including terrestrial habitat, would
be included.
Finally, NMFS determined that it was not enough to cover waters
where fish currently are found, but also that EFH should cover
areas where fish historically were found.
The Fishery Management Councils used this NMFS approach in
developing EFH. In many cases, the results are indicative of a program
that seems destined to grow beyond the claims of NMFS. Here are some
examples:
The Pacific Fishery Management Council, governing fish species
off the coasts of California, Oregon, Washington and Idaho, has
proposed extensive inland habitat as EFH for salmon.
The North Pacific Fishery Management Council is proposing to
designate virtually every river that eventually touches the
ocean as EFH for salmon
in Alaska.
The Mid-Atlantic Council, with the New England and South
Atlantic Councils, is proposing to designate the entire inland
coast from North Carolina to Florida for bluefish. This is just
the southern bluefish range.
The New England, Mid-Atlantic and South Atlantic Councils have
actually listed all of the estuaries and most of the major bays
and river basins on the east coast, areas like the Connecticut
River and Chesapeake Bay, for bluefish.
The Gulf Coast Council has effectively listed every bit of the
Gulf Coast, its wetlands, estuaries and rivers from the tip of
Florida to the border with Texas as habitat for brown shrimp.
These designations are extraordinarily broad. Essential fish
habitat has become all fish habitat. Remember that there are over 400
fish species for which such designations must be made. The end result
can only be that EFH will be all waters everywhere a Magnuson-Stevens
Act managed species is now, or previously has been, found.
When asked why the EFH definition is so broad that it now includes
almost the entire coastline of the United States, and substantial
upland riverine habitats, NMFS points to the lack of definition it
received from Congress. The 1996 Amendments, NMFS asserts, established
a broad and vague definition of the term. NMFS claims that with more
funding from Congress would come better scientific information. Without
that scientific information they ``over include'' habitat that may not
necessarily be essential. This ``over inclusion'' of habitat expands
the jurisdiction of the agency and obligates it to consult on an ever-
increasing number of federal actions that ``may adversely affect''
habitat. How much money is enough money for NMFS to exercise restraint?
Who will judge when sufficient funds are made available? Apparently, in
NMFS view, not the Congress. NMFS has created a program that can have
an influence over even non-existent effects on terrestrial, riverine,
estuarial and coastal habitats on a nationwide basis. Will any federal
agency ever receive enough money from Congress or gather enough
scientific information to convince it to elect to reduce its own power
and influence over other Federal agencies?
This is another aspect of the EFH program that should be placed on
hold until a more reasonable approach to designation is developed. In
addition, it is clear that Congress will need to be very specific in
defining the term. The existing definition must be replaced with one
that spells out in detail precisely the kind of habitat that should be
subject to this information sharing process.
The NMFS Consultation Process Is Far Too Complex and Burdensome
The 1996 amendment requires federal action agencies--those that
decide whether to issue a permit or carry out a program--to ``consult''
with NMFS to determine what the impacts on EFH will be. NMFS, in turn,
takes into account the views of the Councils. NMFS and the Councils
submit recommendations to the action agencies. If the action agencies
don't follow those recommendations, they must explain why, in writing.
In short, a straightforward information process was envisioned. The
term ``consultation,'' however, is a term of art. As will be described,
NMFS has turned it into a complex, time-consuming, expensive process.
As described in, and envisioned by, the 1996 Magnuson-Stevens Act
amendments, this consultation process would be accomplished by a simple
exchange of information. It could readily be undertaken through
administrative agreements between NMFS and the principal action
agencies. Instead, the process described in the EFH consultation
regulations will be very similar to the cumbersome, detailed
consultation procedure of the Endangered Species Act. NMFS and other
supporters of the EFH program often proclaim that the 1996 amendments
did not create a new consultation duty. Instead, they argue, this duty
already existed and was simply never followed through on. They further
argue that the intent is to develop an information sharing program,
similar to what exists under the Fish and Wildlife Coordination Act.
These statements could be accepted as the basis for a reasonable
EFH program if NMFS was acting in a manner consistent with that intent.
To the contrary, the program that has emerged from the NMFS rulemaking
process bears little resemblance to the Fish and Wildlife Coordination
Act or other procedures through which agencies share information. As
noted above, it is modeled after the very burdensome and complex
Endangered Species Act program.
One need only make quick reference to the EFH regulations to
understand this concern. The regulations consist of eight pages of
Federal Register text. Of these, five pages are devoted to defining the
consultation process. How can any program that is intended to be
streamlined, efficient, and coordinated with existing consultation
procedures require five pages of Federal Register text to describe?
The severity of these problems becomes even more apparent when the
content of the regulations is considered. NMFS has taken a simple
statutory consultation process that could be satisfied through an
exchange of letters and turned it into a cumbersome, expensive, time
consuming process consisting of all of the following elements:
Memoranda of Agreement between NMFS and every Fishery Management
Council; Memorandum of Agreement between NMFS and every action agency;
programmatic consultations; project-specific consultations; abbreviated
consultations; expanded consultations; general concurrence for no
further consultation; notification of further consultation; periodic
review of general concurrence findings; mandatory preparation of
written assessments; consulting agency recommendations; action agency
responses; requests to elevate action agency decisions; reinitiation of
consultation at Fishery Management Council requests; Memoranda of
Agreement with agencies on dispute resolution; and supplemental
consultation. Needless to say, any program which contains so many
elements is extremely complex and is not likely to be efficient.
In this testimony, we do not intend to delve into the intricacies
of the EFH consultation regulations. Let it suffice to say, there is so
much room for confusion, delay, inefficiency and needless expense that
we are skeptical there is any way to work with the existing framework.
What is needed is a far-reaching revision of the regulations to develop
a more effective procedure. Our coalition of non-fishing interests has
offered on numerous occasions to work with NMFS to achieve these
results. We are pleased to report that NMFS has agreed to undertake
such discussions. We are hopeful that they will be beneficial. However,
even this prospect does not eliminate the need for additional guidance
from Congress. Unfortunately, the EFH program is so far down the road
at this point that we believe it is necessary for Congress to interject
itself in the process and get the program back on track.
The EFH Program Needlessly Duplicates Other Information Gathering
Programs
This process will be a new regulatory layer on top of those that
already exist, such as NEPA's environmental impact review, Coastal Zone
Management Act compliance, Endangered Species Act reviews, Federal
Power Act licensing, Fish and Wildlife Coordination Act consultation,
etc. Highlights include:
The duty of the action agency to prepare a detailed
``EFH Impact Assessment.'' When a private applicant is
involved, as when a federal Clean Water Act Section 404
wetlands permit is required, this duty will be probably be
passed to the private party who will be required to pay for
this analysis and ensure it is complete. In creating this
requirement, NMFS is seeking to transfer its EFH assessment
duties to other agencies and private parties.
Time deadlines exist, but, as with the timelines
associated with the ESA, the agencies can easily get around
them. As a result, the process can greatly extend the time
needed to complete federal permitting.
The recommendations of NMFS and the Councils will
become litigation fodder. Opponents of project development will
be able to sue based on these recommendations. This will
discourage action agencies from following any course other than
what is recommended by NMFS or the Councils, thus effectively
giving NMFS veto authority over the decisions of the action
agencies. Furthermore, we fear that NMFS and the Councils will
most likely recommend restrictions to protect habitat without
weighing the benefits against the economic consequences.
NMFS often states that the EFH program is a voluntary
information gathering tool, yet it has promulgated a regulation
that requires action agencies to prepare EFH assessments and
undertake other mandatory measures and meet mandatory
deadlines. Congress did not vest NMFS with the power to impose
these duties on other agencies and, if the program is to be co-
operative and voluntary as NMFS asserts, these requirements
must be deleted and replaced with co-operative mechanisms. For
example, NMFS should recast the program so NMFS will provide
helpful information about truly essential habitat for fish
species of concern, allowing other agencies to consider that
information in their own reviews of projects without formal
requirements for EFH assessments and consultations.
Almost certainly, this procedure will result in
delays in getting permits. The cost of getting permits will
increase--due to delays, due to the need to undertake
consultation and prepare EFH assessments, due to the inevitable
slippage in deadlines that cover the federal agencies, and due
to the cost of complying with EFH restrictions. Permits are
likely to be subject to new restrictions. In some cases,
permits for activities are likely to be denied. And, it is
important to remember, these are not restrictions to protect
species in danger of extinction, they are restrictions to
protect the habitat of all managed fish species, no matter how
plentiful.
The bottom line is that NMFS has not taken the steps necessary to
coordinate its EFH review efficiently and effectively with the many
environmental reviews non-fishing activities must already undertake.
Although lip service is paid to this principle, we need to see evidence
that it is being carried out. Accordingly, we believe Congress should
step in and make clear that NMFS cannot impose mandatory duties and
time frames on action agencies. It also should prescribe that EFH
consultation will be satisfied by any other preexisting environmental
review applicable to the agency action. EFH should be required to
operate within, rather than reside on top of, such other procedures.
Non-fishing Interests and the General Public Need More Information
about the EFH Program
The EFH program is growing into an enormously expensive and, to a
large extent, redundant program. The NMFS FY2000 budget request was for
$13.85 million dollars for EFH consultations. This amount does not
include the expense borne by other federal agencies to submit projects
to NMFS, to respond to NMFS's recommendations, and to implement those
recommendations. This amount also does not include the increased
project costs resulting from either the delays inherent in the NMFS
recommendation process or the cost of implementing the recommendations.
This Committee has already received testimony about project delays and
costs as a result of the EFH definition and there will be more to come
as we learn about the 1999 consultations. When all these costs are
taken together and combined with problems and costs associated with the
expansive and overbroad definition of EFH detailed above, it become
evident that the EFH program is entirely too expensive, cumbersome and
burdensome.
EFH could also be a new litigation tool for parties opposed to
development in all coastal regions of the country. For reference, take
a look at what has happened with the ESA and NEPA. Even if a party gets
a permit it can live with, there is no guarantee a lawsuit will not be
brought to protect EFH, especially if a NMFS/Council recommendation was
not adopted.
The announcement of the reopening of the comment period in
development of the final rule for EFH, published by NMFS on November 8,
1999, stated that: ``[s]ince the promulgation of the interim final
rule, EFH provisions for 39 fishery management plans have been
developed by the Councils and approved or partially approved by the
Secretary. Additionally, NMFS and Federal Agencies have begun
consulting on actions that may adversely affect EFH. Approximately 2000
EFH consultations have been completed to date.''
When we saw that claim, we were astounded. This claim provided
graphic validation of our fears about the program. We had claimed that
the overly broad ``ecosystem'' based definition of EFH would lead to a
massive influx of EFH consultations. This may explain why 2000
consultations have been required in the first 10 months of the new
program.
To get a sense of how disproportionate this program is compared to
the issues subject to review, one need only compare this level of
consultation with that under the ESA. In response to Congressional
questioning in March of 1999, the National Oceanic and Atmospheric
Administration responded in writing that: ``[a]pproximately 229 formal
and 981 informal [ESA] consultations are completed each year''. The
number of EFH consultations exceeds by a substantial number the formal
and informal consultations completed annually under the ESA, and yet
the EFH program is only in its earliest stages of implementation. NMFS
has 55 full time employees dedicated to section 7 consultations under
the ESA. What will it cost to staff a program that in less than a year
has grown to nearly twice the size of section 7 consultations under
ESA? Penelope Dalton, Assistant Administrator for the National Marine
Fisheries Service, has stated on numerous occasions before this
Committee that she only expects the number of EFH consultations to grow
as NMFS's reach over other Federal agencies continues. Clearly,
Congress did not intend to create a consultation program under the
Magnuson-Stevens Act that so far exceeded the ESA in complexity and
size.
When we saw the claim that NMFS had completed 2000 consultations,
we were astounded because NMFS had not made any of the information from
those consultations public. How could they expect informed comment from
the public when they had not released information about those
consultations? NMFS claims to want to know about problems with the
consultation process, but, they seem unwilling or unable to disclose
information about the process. Most of the consultations are with
federal agencies on federal projects and therefore the ability of the
public to have first hand knowledge about the consultation process and
its results are certainly limited.
When we read the claim in the Federal Register that NMFS had
completed 2000 consultations, we filed a FOIA request (dated November
18, 1999) asking for all documents related to EFH consultations. We are
still awaiting a substantive response.
This Committee and the public must be given sufficient information
about these consultations to evaluate the implementation of the EFH
program to date. The following is the kind of information that NMFS
should provide the people and the Congress to enable some level of
meaningful review of the EFH consultations it has been conducting:
1. The number of consultations completed, by NMFS Region;
2. The average time taken to complete a consultation, and the range and
distribution of time taken for each consultation around that average;
3. The average cost of each consultation, in dollars and man-hours or
full time equivalents (FTEs), and the range and distribution of the
costs of each consultation around that average;
4. The distribution and amount of that cost among NMFS, action
agencies, third party applicants for federal authorizations, and
others;
5. The number of consultations in each category described under the
IFR: national general concurrences, regional general concurrences,
abbreviated, expanded, extended, and supplemental consultations, and,
separately, the number of programmatic versus project-specific
consultations;
6. The number of documented ``no effect'' determinations by action
agencies, the number of these with which NMFS concurred/did not concur,
and the number of these for which an EFH consultation was nevertheless
completed;
7. The number of consultations involving federal actions for which ESA
consultation was also completed, and the number of these which involved
ESA consultation with NMFS;
8. The number of consultations involving federal actions for which NEPA
documentation was also completed, and the category of NEPA
documentation completed (e.g., EA or EIS);
9. The number of consultations involving other environmental analysis
documentation besides an EFH assessment, and the number of these for
which the environmental documentation prepared for other purposes also
served as the EFH assessment, without modification to meet EFH
consultation requirements;
10. Other information about how EFH consultation was consolidated or
integrated with procedures such as NEPA, ESA, Federal Power Act
licensing procedures, and Coastal Zone Management Act regulations for
individual or collective actions;
11. Categories of activities for which EFH consultations were
completed, including the basic categories of fishing and non-fishing,
more specific federal action categories such as Clean Water Act Section
404 permits and FERC power facility licensing or relicensing, and more
specific types of activities, such as timber sales, road projects,
marina developments, oil and gas drilling, hardrock mineral extraction,
housing subdivisions, agricultural water diversions, and so on;
12. The number of EFH consultations which were initiated but are not
yet completed, and how long they have been pending; and
13. The categories and representative examples of recommendations made
by NMFS in consultations, action agency disagreements with such
recommendations, and how these differences were resolved.
We ask for this Committee to request that NMFS compile this kind of
information into a format that promotes understanding of the EFH
consultations that have occurred so far, and that facilitates
constructive comment. We also ask this Committee to assist the American
people by halting implementation of the EFH program until more guidance
can be provided in the Act itself.
Conclusion
The non-fishing sector does not oppose the EFH concept. Indeed, we
address these concerns regularly. We are willing to engage with NMFS in
a discussion on how this program should work and where we might help.
We are pleased to report that we will be meeting with NMFS in the near
future to discuss these concerns. We hope to learn more about their
goals and plans, but we also will convey the need for fundamental
changes in the program. Congress can greatly facilitate this process by
letting NMFS know it is on the wrong track, and by developing more
specific guidance to address the concerns discussed in this testimony.
Moreover, we ask that Congress amend the Magnuson-Stevens Act to
address the problems highlighted in this testimony if NMFS does not
respond. Thank you.
Attachment: AFA's 12/23/99 letter to NMFS re: EFH Interim Final Rule
Alaska Forest Association, Inc.
EFH Coordinator
Office of Habitat Conservation
National Marine Fisheries Service
1315 East-West Highway
Silver Spring, Maryland 20910-3282
VIA FAX AND FIRST CLASS MAIL
Re: Essential Fish Habitat Interim Final Rule
Dear EFH Coordinator:
This letter constitutes the response of the Alaska Forest
Association (AFA) to the National Marine Fisheries Service (NMFS)
request for comments regarding the essential fish habitat (EFH) interim
final rule (IFR) and program, published in the November 8. 1999 Federal
Register, Volume 64, pages 60731-32. The AFA represents non-fishing
interests in Alaska who are affected by the EFH program under the
control and influence of NMFS. AFA members are engaged in forestry
activities, including road building, timber harvest, second growth
management, transportation of logs and chips and forest products
manufacturing. All of these activities could he affected by the EFH
program.
In a December 3, 1999 letter to the Assistant Administrator of NMFS
from our counsel, Perkins Coie, we have requested an extension or
reopening of the comment period on EFH. which has not yet been granted.
This extension is necessary to ensure that we obtain and review
information needed for meaningful comment on the four issues concerning
implementation of the IFR that were identified in the November 8. 1999
notice. This information has not yet been made available. We are
actively seeking pertinent information from NMFS through Freedom of
Information Act (FOIA) requests submitted to your office on November
18, 1999, and to NMFS regional field offices on November 29, 1999.
However, NMFS has not yet provided any documents in response to these
requests. Office of Habitat Conservation staff has indicated that it
may be early January before we receive even a cost estimate for
providing the information we are seeking through the FOIA. It appears
that NMFS still has not assembled much, if any, useful information
about the approximately 2000 EFH consultations which NMFS represents
have taken place over the past year, or other basic information that
would provide NMFS and the public a basis to start evaluating the early
implementation of the EFH program.
The following are brief comments regarding the four issues identified
in the November 8, 1999 Federal Register notice. based on the very
incomplete information available to us at this time. While we have
attempted to give some response on the requested subjects, these
comments to not constituteany waiver of our continued objection to NMFS
closing the comment period today. In the absence of NMFS's response to
the FOIAs mentioned above, we are simply not in possession of
sufficientinformation to adequately respond to the IFR.
Issue 1: Suggestions for improving the regulatory guidance regarding
the description and identification of EFH, including the breadth of EFH
designations, in Sec. Sec. 600.815(a)(1) and (2) of the interim final
rule.
NMFS must dramatically narrow the interpretation of the definition
of EFH and other direction in the IFR to conform to the scope
identified in the Magnuson-Stevens Fishery Conservation and Management
Act (Magnuson-Stevens). The 1996 amendments to Magnuson-Stevens do not
authorize the promulgation of standards and regulations that affect
non-fishing entities. By its terms, the EFH provision is limited to
``the description and identification of essential fish habitat in
fishery management plans.'' 16 U.S.C. 1 855(b)(1)(A)(emphasis added).
This limitation makes it clear that NMFS and Council authority applies
only to ``fisheries.'' As it is, the language in the IFR and other
guidance provided by NMFS has resulted in almost all areas used by
Council- or NMFS-managed species, currently or in the past. being
identified in FMCs as EFH (see, for example. the North Pacific Plan and
AFA's letter of December 21, 1998 to Sue Salveson of NMFS's Juneau
office regarding it). This approach fails to distinguish ``essential''
from other habitat and otherwise renders the concept of EFH
meaningless. NMFS must abandon its vague and overly broad ``ecosystem''
and unduly risk-averse approach to designating EFH and begin focusing
on present marine habitat within the jurisdiction of the various
Councils that is genuinely critical to the viability of managed
species. NMFS must require that acknowledged scientific standards be
used in making these determinations.
The overly broad approach to EFH designation adopted in the IFR may
largely explain why, according to NMFS, so many EFH consultations have
been completed in the first year of the program. In the Federal
Register notice, NMFS says that it has completed ``approximately 2000''
EFH consultations. In response to Congressional questioning in March of
1999, the National Oceanic and Atmospheric Administration (NOAA)
responded in writing that. ``(A)pproximately 229 formal and 981
informal [Endangered Species Act, Section 7] consultations are
completed each year.''
Thus the number of first year EFH consultations is about twice the
number of consultations completed annually under Section 7 of the
Endangered Species Act (ESA), and yet the EFH program is only in its
infancy. Despite the breadth of this program. NMFS has not made the
record of these consultations available to the public.
Issue 2: What additional guidance, if any, should the final rule
contain on how Councils should document their efforts to minimize the
effects of fishing on EFH, to the extent practicable?
As a non-fishing entity, AFA is not in a good position to answer
this questions. However, this points up the crucial problem with the
EFH program as a whole. So far as AFA can ascertain, the recently
revised FMCs have not addressed fishing impacts on EFH in any detail,
or required any further measures to reduce impacts from fishing. At the
same time. the FMCs have layered many stringent ``conservation''
measures on non-fishing interests (including. but not limited to,
costly and delay-producing consultations) which will have significant
adverse affects on their future operations. The IFR should focus on
fishing impacts to EFH, including over-fishing and other chronic
regulatory problems which Magnuson-Stevens was designed to address.
Issue 3: Has the use of existing environmental review procedures as
described in Sec. 600.920(e) of the interim rule been an effective way
to handle EFH consultations? What additional guidance, if any, should
the final rule provide on how to use existing environmental reviews to
satisfy EFH consultation requirements?
Once again, the absence of specific information regarding the
completed EFH consultations makes it difficult for AFA to comment on
this issue. NMFS apparently has not assembled and certainly has not
made available to us any information on the use of the procedures
described in Sec. 600.920(e) to complete EFH consultations. AFA members
have had no first hand experience so far with EFH consultations.
Therefore, we presently have no idea how effective or ineffective the
use of existing review procedures has been, or whether NMFS and other
agencies are even adhering to the regulations in conducting
consultations. We would assert, however, that a more cost-effective
approach would be to exclude activities from the EFH consultation
requirement if other environmental procedures applying to them provide
NMFS an opportunity for review and comment. Requiring EFH consultation
in these instances is mere duplication of effort and simply adds costs
to each project without producing a commensurate advantage to the
environment or the public.
Issue 4: How, if at all, should the EFH Assessment requirement be
revised in the final rule?
Requiring these EFH assessments in circumstances where NEPA
documentation or any Alaska Coastal Zone Consistency review is already
being prepared only generates extra costs, delay and confusion, whether
or not the EFH assessment is ``consolidated'' with other analyses of
the project. The rigid and formal consultation process set out in the
IFR, which is based on pervasive and cumbersome regulatory models such
as the Endangered Species Act and Clean Water Act, must be replaced
with a simple and straightforward exchange of information that may be
documented in an informal memorandum or letter. Magnuson-Stevens
requires no more.
Summary
As asserted previously, it is AFA's position that NMFS has provided
insufficient information for the public to comment meaningfully on the
IFR. For NMFS to receive an objective and useful evaluation of the EFH
program from the affected public, the agency must compile and share
pertinent information for review and evaluation by all interested
parties. At a minimum, we request that the following information be
provided and the public be afforded an opportunity to comment upon it
before the agency finalizes the IFR:
(1) The number of consultations completed, by NMFS Region;
(2) The average time taken to complete a consultation, and the range
and distribution of time taken for each consultation around that
average;
(3) The average cost of each consultation. in dollars and man-hours or
full time equivalents (FTEs), and the range and distribution of the
costs of each consultation around that average;
(4) The distribution and amount of average consultation costs as
distributed among NMFS, action agencies, third-party applicants for
federal authorizations, and others;
(5) The number of consultations in each category described under the
IFR: national general concurrences, regional general concurrences,
abbreviated, expanded, extended, and supplemental;
(6) The number of documented ``no effect'' determinations by action
agencies, the number of these with which NMFS concurred or did not
concur, and the number of these for which an EFH consultation was
nevertheless completed;
(7) The number of consultations involving federal actions for which ESA
consultation was also completed, and the number of these which involved
ESA consultation with NMFS;
(8) The number of consultations involving federal actions for which
NEPA documentation was also completed, and the category of NEPA
documentation completed (e.g. EA or EIS);
(9) The number of consultations involving other environmental analysis
documentation besides an EFH assessment, and the number of these for
which the environmental documentation prepared for other purposes also
served as the EFH assessment, without modification to meet EFH
consultation requirements;
(10) Other information about how EFH consultation was consolidated or
integrated with procedures such as (inter alia) NEPA, ESA, or Coastal
Zone Management Act regulations for individual or collective actions;
(11) Categories of activities for which EFH consultations were
completed, including the basic categories of fishing and non-fishing,
more specific federal action categories such as Clean Water Act Section
404 permits and FERC power facility licensing or re-licensing, and more
specific types of activities, such as timber sales, road projects,
marina developments, oil and gas drilling, hardrock mineral extraction,
housing subdivisions, agricultural water diversions, etc.;
(12) The number of EFH consultations that have been initiated but not
yet completed, and how long they have been pending;
13) The categories and representative examples of recommendations made
by NMFS in consultations, action agency disagreement with such
recommendations, and how these differences were resolved.
It is reasonable to expect NMFS to compile this kind of information
into a format that facilitates understanding of the EFH consultations
that have occurred so far and that enables constructive comment on the
IFR, before proceeding to a final rule. We hereby formally request that
NMFS do so.
Thank you for the opportunity to comment on the EFH program, and
the Interim Final Rule. Please contact me if you have any questions
concerning these comments.
Senator Snowe. Thank you, Mr. Phelps.
Mr. Seaton.
STATEMENT OF PAUL SEATON, MEMBER OF THE BOARD DIRECTORS, ALASKA
MARINE CONSERVATION COUNCIL
Mr. Seaton. Thank you for the opportunity to testify today.
For the record, my name is Paul Seaton. I am a commercial
fisherman, and a board member of the Alaska Marine Conservation
Council, known as AMCC. AMCC is a regional member-based
community-oriented organization. Most of the 500 members are
Alaskans who live in coastal communities and are a mixture of
commercial, subsistence, and sport fishermen. I have given you
a map of Alaska which shows where our board members come from
and the fisheries in which they participate.
I will be making three points in my testimony. First, the
1996 act contains critical mandates to minimize bycatch,
protect fish habitat, and prevent overfishing. Unfortunately,
implementation by National Marine Fisheries Service has been
slow and inadequate.
Second, we urge Congress to strengthen the protections for
essential fish habitat, and third, any limited access program,
including IFQ's or fishing co-operatives, needs to incorporate
conservation standards.
AMCC thanks the committee, and especially Senator Stevens,
for the precedent-setting conservation reforms of the Act in
its North Pacific section. Implementation of the law, however,
has been very slow, and the job is not yet done. The October
1998 implementation deadline for the law came and went, but we
have seen only incremental improvements. One reason for the
law's conservation provisions being put on the back burner is
that NMFS has been devoting substantial resources to allocation
issues.
An example of this delay is the bottom trawl ban to achieve
bycatch reduction in the Bering Sea pollock fishery. In 1997,
AMCC proposed allowing the use of only off-bottom trawls in
this fishery. In June of 1998, the North Pacific Fishery
Management Council approved. The draft regulations were not
published by NMFS for public comment until this last month. We
are very lucky the Council was able to put this into effect
despite the slow response of NMFS rulemaking.
Another example of slow implementation of the conservation
provisions of the law is a requirement to set a minimum stock
size threshold for each managed fishery. NMFS Alaska region
refused to recognize the necessity to follow the mandate of the
law even in the face of legal opinions and public pressure.
Finally, the region was told by Washington, D.C., that it must
comply. NMFS is just now starting to set MSSTs for each stock.
One of the important additions made to the 1996 Act was a
mandate for the identification and protection of essential fish
habitat. The broad support of Alaskans for habitat protection
is shown by the actions of the Board of Fisheries, which
manages all State fisheries.
The Board voted unanimously in March 1999 to protect crab
habitat by closing waters around Kodiak Island to bottom
trawls. The closure areas are shown on the Kodiak Island map
attached to my testimony. We hope NMFS will begin to take the
same kind of leadership in protecting marine habitat in Federal
waters.
The North Pacific Council is currently analyzing AMCC
proposals for additional habitat types and specific places as
habitat areas of particular concern. We hope the identification
of the HAPCs proceeds, and the managers get on with the job.
AMCC considers benthic habitat protection from destructive
fishing practices the highest priority in Federal fisheries
management in the North Pacific. A key feature to the 1996
reauthorization was a moratorium on IFQ programs. AMCC strongly
urges Congress to adopt conservation standards for any limited
access program before the moratorium is lifted and before any
new privatization programs are allowed to be developed by the
regional councils.
Some conservation improvement may come from limiting access
by virtue of slowing down the race for fish and improving
opportunities for more careful fishing practices. However, you
should make conservation achievements a required element of the
limited access fisheries. There should be deliberate mechanisms
that will ensure conservation goals are met, and we strongly
urge Congress to stipulate that if access is limited, viable
community-based opportunities to participate in fisheries are
included.
In summary, I want to thank the Subcommittee, and
especially Senator Stevens, for your attention to the Magnuson
act implementation reauthorization. What we need now from
Congress is to push NMFS to turn the conservation goals of the
law into action. Thank you.
[The prepared statement of Mr. Seaton follows:]
Prepared Statement of Paul Seaton, Member of the Board of Directors,
Alaska Marine Conservation Council
I. INTRODUCTION
Thank you for the opportunity to testify today. For the record, my
name is Paul Seaton. I am a commercial fisherman and board member of
the Alaska Marine Conservation Council (AMCC). AMCC is a membership-
based community organization comprised of Alaskans, many of whom live
and work in small communities along Alaska's coastline and draw their
living and culture from the sea.
AMCC's members include commercial and sport fishermen, biologists,
subsistence harvesters, small business owners and conservationists
dedicated to protecting the health and diversity of Alaska's ocean and
coastal resources. We work collaboratively with local people and
community organizations to reduce bycatch, protect habitat, and prevent
overfishing to sustain Alaska's fisheries and a healthy marine
ecosystem into the future.
Today, I will be talking about three major points:
1. The 1996 conservation mandates in the Magnuson-Stevens
Fisheries Conservation and Management Act (Magnuson-Stevens
Act) are excellent, but implementation has been slow and
inadequate. The National Marine Fisheries Service (NMFS) must
begin to aggressively implement the law. AMCC recommends
clarification and strengthening of the Act in the next
reauthorization.
2. Congress must maintain and increase strong protection for
the essential fish habitat provisions in the law.
3. The intent of the Magnuson-Stevens Act to enable progress in
the conservation of the nation's fisheries is being slowed, and
in some cases circumvented, by allocation decisions.
II. OVERVIEW
On behalf of the Alaska Marine Conservation Council, I want to
thank the committee and especially Alaska's Senator Ted Stevens, for
the precedent-setting conservation language that Congress made law
through passage in 1996 of the Magnuson-Stevens Fishery Management and
Conservation Act. Our members have seen some isolated, but positive
changes in management of the North Pacific fisheries as a result of the
new law. Examples of progress include the North Pacific Fishery
Management Council's (North Pacific Council) actions to eliminate
bottom trawl gear for Bering Sea pollock, establish rebuilding plans
for overfished Bering Sea crab stocks, and reduce Chinook salmon
bycatch in specific areas in the Bering Sea.
AMCC is proud to have played a role in these positive conservation
actions, but we recognize that they represent only the beginning of
what the Magnuson-Stevens Act was designed to achieve. Unfortunately,
implementation of the law has been hindered by the failure of NMFS to
prioritize work on it. Three years after its passage, what has changed
in fisheries management as compared to before the reauthorization? The
law called for a different way of doing business, yet fishery managers
have only incremental changes to show for it.
The most important work ahead for NMFS and the North Pacific
Council is the identification and protection of essential fish habitat
from adverse impacts caused by fishing practices. The Magnuson-Stevens
Act language on essential fish habitat provides strong direction and
the requirements are well-reasoned and sound. As described above, the
problem is not in the language of the law, but in its implementation.
We urge Congress to maintain the current habitat provisions and to
ensure fishery managers act aggressively to protect the diversity and
productivity of sensitive marine habitats.
The North Pacific is home to some of the largest fisheries
remaining in the world, and 50% of our nation's domestic fishery
landings. (Fisheries of the United States, National Marine Fisheries
Service, 1998.) The North Pacific region appears prosperous compared to
other parts of the U.S., such as the North Atlantic, where overfishing
problems have reached crisis proportions. However, our region is not
free of overfishing examples. In addition, the North Pacific has
excessively high bycatch as a consequence of industrial scale
operations and scientists are beginning to document habitat alteration
occurring on our fishing grounds. The North Pacific ecosystem is also
experiencing dramatic ecological changes: scientists and local people
have witnessed accelerated declines in regional populations of fish,
shellfish, marine mammals and seabird species. In light of these
changes, the National Research Council stated, ``It seems extremely
unlikely that the productivity of the Bering Sea ecosystem can sustain
current rates of human exploitation . . . .'' (National Research
Council, Bering Sea Ecosystem, 1996, p 4.)
To make our fisheries truly sustainable, the 1996 conservation
provisions to minimize bycatch, protect habitat and prevent overfishing
must be fully implemented. It is time to activate a new precautionary
approach to fisheries management that accounts for the effects of
fisheries on the ecosystem and reduces the risk that fisheries are
contributing to a reduction in productivity, biological diversity or
sensitive habitat. Such an approach is needed to guide fishery managers
when there is inadequate scientific data on which to base decisions.
(Paul Dayton, Reversal of the Burden of Proof in Fisheries Management,
Science, Feb. 6, 1998, p. 821-822.)
Since the Magnuson-Stevens Act passed, NMFS has been largely
focused on allocation issues and regulations, often at the expense of
conservation issues. Congress specifically gave NMFS the deadline of
October, 1998 to implement the conservation requirements. The deadline
came and went with only part of the job done. Then, with the passage of
the American Fisheries Act in 1998, NMFS began devoting substantial
resources to its implementation. NMFS has put the marine conservation
provisions of the Magnuson-Stevens Act on the back burner. Only in the
last month has NMFS published proposed rules for bycatch measures that
were approved by the North Pacific Council one or more years ago. AMCC
has been extremely frustrated by the pace of implementation.
AMCC recognizes that a pivotal issue in this upcoming
reauthorization of the Magnuson-Stevens Act is whether to lift the
moratorium on Individual Fishing Quotas (IFQs). In light of efforts to
address the problem of overcapitalization in the fisheries since the
Act's passage in 1996, AMCC believes a broader discussion needs to take
place. We agree overcapitalization is a serious problem, but we argue
that any restructuring of the management system must equally address
conservation goals. AMCC strongly urges Congress to adopt conservation
standards that will apply to any limited access program, whether the
program takes the form of IFQs, fishing co-operatives or another
management structure. The standards should achieve clear and explicit
conservation goals and support continued participation in the fisheries
by independent, community-based fishermen. The standards should be
defined before any new limited access programs are created and before
the IFQ moratorium is lifted.
AMCC members and Board of Directors have a vision of Alaska's
fisheries being a place where a young person can enter a fishery and
make a living through hard work and sweat equity. Our vision includes
the opportunity for a long career in the fishery, which rewards clean
fishing and habitat-friendly practices, and is managed for conservation
so as to sustain the fishery and the ecosystem needed to support
productive fisheries. Economic efficiency will be defined as managing
fisheries to provide an economic base for coastal communities, and
favoring a large number of fishermen who harvest fish slowly, rather
than favoring a few vessels that harvest as quickly as possible. Alaska
Native villages, where people harvest fish and marine resources for
subsistence, will thrive from an abundant supply of traditional foods
from the sea. This vision depends upon a healthy marine ecosystem and
precautionary management of the fisheries. The language of the
Magnuson-Stevens Act and how the law is implemented play a tremendously
important role in the realization of this vision.
A. EXAMPLES OF FAILED IMPLEMENTATION
1. Bycatch
Although improvements have been made in selected fisheries, bycatch
remains a major problem in the North Pacific. At least 1,000 different
species of fish and other sea life are hauled aboard and thrown back
dead or dying because they are the wrong species, the wrong sex or the
wrong size. Each year between 1993 and 1997--the most recent data
available--this bycatch averaged approximately 680 million pounds of
groundfish, 15,700,000 pounds of halibut, over 2,000,000 pounds of
herring, 61,500 Chinook salmon, 135,000 other salmon, and millions of
crabs. (Pacific Associates, 1995 & 1998.)
There are no estimates for those fish and seafloor species of non-
commercial value that are wasted as bycatch, and there is no measure of
the impact of the total bycatch on the ecosystem. There are also
sectors of the fishing industry that are not observed, which
compromises the reliability of data.
One tool to fix this problem is the North Pacific observer program,
the only one of its kind in the country. Although the observer program
has been of great assistance in gathering data to quantify the bycatch
in the North Pacific, this program is in need of improvement. The
current program and the integrity of data it generates are at risk
because of an inequitable funding mechanism and the limitations in how
observers are distributed across the fisheries. In order to function as
it should, AMCC recommends a mandatory fee-based system in which all
fishermen would pay according to the average value of the fish they
catch, including both target species and bycatch. This approach would
build in a bycatch reduction incentive by encouraging fishermen to
retain a greater proportion of the fish caught, process it into the
highest value product possible and thereby generate value from more of
the total catch. Waste would truly become a ``cost of doing business''
under this system. AMCC recommends that Congress institute a nationwide
observer program that is supported through a fee-based system. In any
observer program, AMCC recommends that managers be given the
flexibility to assign observers where they are most needed to collect
the data for conservation objectives.
In 1998, NMFS activated a program requiring all fisheries to retain
cod and pollock bycatch. A large portion of these discards were
juvenile fish, too small for processing machinery. The stated purpose
of the program (known as Improved Retention/Improved Utilization or IR/
IU) was to ``provide an incentive for fishermen to avoid unwanted
catch, increase utilization of fish that are taken, and thus, reduce
discards of whole fish.'' (62 Fed. Reg. 34430, 1997.) Bycatch data
shows a significant reduction in the amount of economic discards
compared to previous years as a result of this program. However, AMCC
urges Congress to look more closely at the results to see if vessels
are actually avoiding the catch of unwanted fish, or retaining them for
production of fishmeal and other new products. While some vessels are
employing methods to move away from schools of small fish, other
vessels most likely are not. There has been no method to validate
whether avoidance is occurring, casting doubt on the program's
effectiveness as a true bycatch reduction measure.
One method being used to reduce catch of small fish is large mesh
nets that allow small fish to escape. Recent scientific research has
shown that the fish escaping through these nets suffer a 46-84%
mortality rate from injury during escapement. (Alaska Fisheries
Development Foundation, Surviving the Great Escape, Lodestar, April
1999.) This new information is of major concern. While the statistics
show improvement in bycatch, the problem may just be masked and there
may, in fact, be a sizable amount of indirect mortality that is now
going uncounted. From a conservation standpoint, this situation would
be worse than discarding a known quantity of fish. A careful monitoring
program to measure the effects of the IR/IU program is the only way to
determine the level of actual bycatch avoidance. Congress, the North
Pacific Council and NMFS need to address this with open eyes and
careful scrutiny to make bycatch reduction efforts meaningful.
The Magnuson-Stevens Act states that it is the policy of
Congress to assure that the national fishery conservation and
management program...considers the effects of fishing on
immature fish and encourages development of practical measures
that minimize bycatch and avoid unnecessary waste of fish . . .
. (Sec. Sec. 2 (c)(3))
The IR/IU program is the primary bycatch reduction measure
instituted by the North Pacific Council to address economic discards.
AMCC does not consider this to be a true reduction of bycatch unless it
is clear that fishing vessels are successfully avoiding the catch of
juvenile fish and minimizing mortality of fish that are not retained,
as stipulated in the Magnuson-Stevens Act.
2. Overfishing
Since the Magnuson-Stevens Act passed in 1996, the number of
species considered to be overfished has steadily increased nationwide.
NMFS reported that 98 species are overfished, an increase from 90
overfished species in 1998. (Report to Congress: Status of Fisheries of
the United States, National Marine Fisheries Service, October 1999.)
In the North Pacific, no groundfish stocks are currently declared
overfished. However, NMFS has failed to implement a key element in the
overfishing regulations: the establishment of minimum stock size
thresholds for each stock. For this reason, fishery managers do not
know whether or not the North Pacific has any overfished stocks as
defined in the 1996 Magnuson-Stevens Act overfishing provisions.
Although the North Pacific overfishing definition started out being far
better than other regions of the country, adding minimum stock size
thresholds is an important conservation addition.
Fish populations rise and fall in natural ranges of abundance but
the minimum stock size threshold mechanism prevents a fishery from
driving a stock below a productive level, or exacerbating a natural
downward trend. The Aleutian Islands pollock fishery, for example, has
undergone serial overfishing: each year the fleet has to travel farther
west to find enough pollock. (Ecosystem-Based Management in the Bering
Sea: Proceedings, Center for Marine Conservation, 1998, p 46-47.)
Fortunately, NMFS closed this fishery in 1999 and 2000 in an effort to
allow the stock to recover. Minimum stock size thresholds would help
prevent fishery closures by guiding management toward conservation
measures before dire action is needed.
Over the last several years, the North Pacific Council and the
State of Alaska did assign minimum stock size thresholds to Bering Sea
crab stocks. As a result, major crab fisheries (Bairdi Tanner, opilio
or snow crab and St. Matthew blue king crab) were found to be
overfished. So far, only the Bairdi Tanner crab rebuilding plan has
been developed and approved by the North Pacific Council. AMCC is
concerned that, despite the rebuilding plan's conservative harvest
strategy, the plan is insufficient because (1) it does not include
measures to reduce crab bycatch in groundfish fisheries, and (2) it
does not include new habitat conservation measures beyond what has been
in place prior to the stock's overfished status. AMCC believes more
aggressive action is needed to improve the likelihood that rebuilding
can occur within a 10-year timeframe.
3. Managers are Operating with a Dangerous Lack of Information
Scientists and the public are increasingly concerned with the great
lack of information about the effect of large-scale fisheries on the
ecosystem. Indeed current methods used to set annual catch limits do
not take into account these effects and, in the North Pacific, there is
little data on the habitat requirements of any of the managed fish
species, not to mention those species in the food web that are not
monitored or studied. (Ecosystem Considerations for 1999 and 2000,
NPFMC.)
Nationwide scientists do not know if the majority of fish stocks
are healthy, increasing, declining or overfished. According to NMFS the
status of 649 stocks)--75% of those assessed--is ``unknown.'' In the
North Pacific, 70% are of unknown status. (Report to Congress: Status
of Fisheries of the United States, National Marine Fisheries Service,
October 1999.)
Fishery managers know little about recruitment and population
dynamics, basic biology of both non-commercial and commercially
valuable species, ecology of marine life communities, the habitat needs
of living marine resources, predator-prey relationships, and year-to-
year variability in ocean conditions. Fishery managers do not know how
high volume fisheries affect declining stocks during periods of natural
downward fluctuation.
The combination of all of these sources of missing information and
uncertainty makes it even more difficult to measure the effect of
fisheries on the ecosystem as a whole. Despite these gaps in
information, management decisions are being made routinely. While
scientists and managers will probably never have complete, quantifiable
knowledge of how the fisheries operate in an ecosystem context,
managers do have the responsibility to account for uncertainty and lack
of knowledge in their decision-making.
In their 1998 report to Congress, the Ecosystem Principles Advisory
Panel described the importance of considering ecosystem effects when
making fisheries management decisions.
This issue (overfishing and lack of knowledge) is urgent
because the current harvest levels are high and because new
fisheries will rise, be fully capitalized and reach
unsustainable levels of catch before the management process can
establish effective constraints . . . In many cases, the
ecological correlates of changing fish populations could have
served as evidence of intensified exploitation effects.
Frequently, the advent of a fishery and implementation of catch
restrictions have unknown ecological consequences. Too often,
we learn about ecological consequences after the fact, because
we do not consider them in our decision-making, nor do we
monitor ecosystem changes due to increased exploitation.
(Ecosystem-Based Fishery Management, A Report to Congress by
the Ecosystem Principles Advisory Panel, November 1998, p. 9.)
The Panel went on to recommend that Congress enact legislation in
the next reauthorization of the Magnuson-Stevens Act to require
Fisheries Ecosystem Plans, a proposal which AMCC fully supports.
Use of the Precautionary Principle is an internationally accepted
strategy for coming to terms with scientific uncertainty in a resource
management.. Elements of the Precautionary Principle include:
1. Uncertainty is unavoidable in sustainability issues;
2. Uncertainty as to the severity of the environmental impacts
resulting from a development decision or an ongoing human
activity should not be an excuse to avoid or delay
environmental protection measures;
3. The principle recommends an anticipatory or preventative
approach, rather than a defensive one which simply reacts to
the environmental damage when it becomes apparent; and
4. The onus of proof shifts away from the environment or those
advocating its protection, towards those proposing an action
that might harm it. (Dovers, S.R. and J.W. Handmer, Ignorance,
the precautionary principle, and sustainability, Royal Swedish
Academy of Sciences, 1995, Ambion 24 (2):92-97.)
Considering the lack of information about the majority of species
and ecosystem relationships in the North Pacific, employing the
Precautionary Principle in an ecosystem context is a wise and necessary
approach to management.
B. KEEP THE STRONG PROTECTION OF ESSENTIAL FISH HABITAT IN THE LAW.
Alaska Marine Conservation Council recommends that Congress
maintain the Magnuson-Stevens Act provisions to identify and protect
essential fish habitat, and to strengthen them further to ensure
effective and timely action is taken.
In the North Pacific, essential fish habitat implementation should
focus on protecting Alaska's ocean habitat from the adverse effects of
fishing practices. The North Pacific Council is beginning a process to
define, identify and consider protection for habitat areas of
particular concern (HAPC). HAPC designation is critical to attaining
the intent of the essential fish habitat requirements in the law. AMCC
is confident that such an approach focuses fishery management actions
on key geographic areas. A successful outcome for conservation would
encompass protection of an adequate representation and suitable
portions of sensitive or rare habitats in Alaskan waters. By
establishing a mosaic of habitat areas protected from the adverse
effects of fishing, managers can have greater confidence that the
functions of those habitats in fisheries production will be sustained.
In 1998 AMCC submitted several proposals to the North Pacific
Council to identify and protect habitat areas of particular concern.
The Council will consider them in 2000. In order to craft an effective
habitat conservation regime, fishery managers must commit to focused
and expeditious action on these and other proposals. The alternative is
a potential unraveling of ecosystem components created and supported by
important habitats and risking the well-being of diverse fisheries,
their productivity and other species in the marine food web. The risk
of losing habitat and creating barren areas in Alaska's marine waters
due to sluggish management response is unacceptable. While the North
Pacific region contains certain habitat protection measures, there is
still a lot of work to be done to fulfill the Magnuson-Stevens Act
mandate.
We appreciate the 1996 essential fish habitat requirements as a
good conservation tool and we recommend some additions to strengthen
the law. AMCC urges Congress to require the councils and NMFS to
evaluate the effectiveness of habitat protection measures and report
back to Congress.
The failure of NMFS and the North Pacific Council to move more
quickly to identify and protect essential fish habitat is made even
more apparent in comparison with recent actions at the state level in
Alaska. For example, the Alaska Board of Fisheries is providing
leadership in habitat protection in state waters. In March of 1999, the
Board voted to close nearshore waters around Kodiak to bottom trawling.
Their action was in response to the failure of the overfished Kodiak
red king crab population to recover after closure of the fishery in
1984. Even after sixteen years of no fishing, the Kodiak red king crab
population is estimated to be at 200,000 animals today, compared to an
estimated population of 30 million in the 1960s. The Board recognized
that habitat protection is a critical component of rebuilding the crab
population. As Board of Fish member Larry Engel stated during the
deliberations, ``Without habitat, we have no fish.'' The State of
Alaska is leading the way in marine habitat protection. AMCC urges NMFS
and the North Pacific Council to follow suit by advancing a thorough
habitat conservation regime in federal waters, as required by the
Magnuson Stevens Act.
C. IFQS AND OTHER LIMITED ACCESS PROGRAMS
A key feature of the 1996 reauthorization was the moratorium on new
IFQ programs. When Congress deliberates over whether or not to lift the
moratorium in the upcoming reauthorization we recommend looking broadly
at all limited access strategies. AMCC strongly urges Congress to adopt
conservation standards for any limited access program before the
moratorium is lifted and before any other new programs are allowed to
be developed by regional councils. Some conservation improvement may
come from limited access by virtue of slowing down the race for fish
and improving opportunities for more careful fishing practices.
However, Congress should make conservation achievements a required
element of limited access fisheries and there should be deliberate
mechanisms that will ensure conservation goals are met. We also
strongly urge Congress to stipulate that, if access is limited, viable
community-based opportunities to participate in fisheries are included.
Standards for limited access programs, whether they are IFQs,
fishing co-operatives or some other management structure should:
Achieve clear and explicit conservation goals including:
No rewards that institutionalize past bycatch-
intensive fishing practices;
Compliance with congressional mandates to minimize
bycatch, identify and protect habitat, and prevent or end
overfishing;
Application of the Precautionary Principle for
ecosystem-based fishery management.
2. Ensure community-based participation by independent fishermen in
fisheries through measures such as:
Prohibiting access to fisheries from becoming a
compensable property right;
Setting aside portions of the fishery for small
vessel or entry level fishermen;
Prohibiting consolidation of access to fisheries that
reduces participation by independent fishermen.
III. MORE IMPROVEMENTS TO THE LAW ARE NEEDED:
RECOMMENDED CHANGES
Despite the many positive changes to the law in 1996, more
improvement is needed. Even with the strong language of the Magnuson-
Stevens Act, the management of our nation's fisheries has not shifted
to a new and focused priority on sustainability. Fishery managers
continue to place short-term economic considerations before long-term
conservation goals. Instead of a flood of rebuilding plans, a reversal
in the decline of fish stocks, and plans to protect habitat for
continued productive and diverse fisheries, we are seeing a continued
downward spiral of fish populations across the country and fisheries
and fishing communities pushed to the brink of ruin.
AMCC asks Congress to continue providing strong leadership in
fisheries management, and to clearly establish conservation as the top
priority of the Act. An economically sound fishery must be built around
long-term sustainable goals. Congress must give unmistakable direction
to NMFS and the regional councils to carry out the intent and spirit of
the law. To that end, we ask that Congress amend the Magnuson-Stevens
Act in the following areas.
A. REQUIRE FISHERY MANAGERS TO ACT CONSERVATIVELY IN THE FACE OF
UNCERTAINTY, AND TO CONSIDER THE EFFECTS OF FISHING ON THE ECOSYSTEM.
1. Require councils to develop a Fisheries Ecosystem Plan for the
major ecosystems under their jurisdictions, as recommended by the
National Research Council.
Sec. 305. OTHER REQUIREMENTS AND AUTHORITY
(J) FISHERIES ECOSYSTEM PLANS.
(1) Each council shall, within 18 months from the date of enactment
of this Act, prepare and submit to the Secretary a Fisheries Ecosystem
Plan (FEP) for the major marine ecosystem or ecosystems within its
jurisdiction. In the case where significant portions of ecosystems are
found in the jurisdictions of adjacent councils, joint FEPs shall be
prepared. The process for preparing and developing FEPs shall be
consistent with the fishery management plan process outlined in Section
302.
(2) Each fisheries ecosystem plan shall
(A) contain information on the structure and function of the
ecosystem in which fishing activities occur, including the
geographic extent of the ecosystem and its biological, physical
and chemical dynamics, a description of the significant food
web including key predator-prey relationships, and the habitat
needs of different life stages of species that make up the
significant food web;
(B) establish indices of ecosystem health and integrity;
(C) describe how the information on ecosystem structure and
function is to be incorporated into the context of fishery-
specific management plans;
(D) include specific recommendations for implementing ecosystem
protections in fishery management plans; and,
(E) outline a long-term monitoring program to evaluate fishery-
dependent and fishery-independent changes in the ecosystem.
(3) No later than 6 months from the date of enactment, the
Secretary shall prepare guidelines for FEP development, in conjunction
with the councils and other scientific, fisheries and conservation
interests as appropriate, and provide them to the councils to
facilitate development and implementation of the required FEPs within
the prescribed time period.
(4) The Secretary shall review each fisheries ecosystem plan
according to the guidelines prepared pursuant to paragraph (3) and
approve or disapprove FEPs, in whole or in part, according to the
process described in section 304. If the Secretary disapproves or
partially approves a plan, the council shall revise and re-submit the
plan within 9 months of its disapproval.
(5) If, within the 18 month period beginning on the date of
enactment of this Act, a council fails to develop and submit to the
Secretary a Fisheries Ecosystem Plan as required under this section,
the Secretary shall prepare a plan for that ecosystem within 9 months.
(6) Within no more than 24 months after approval of a FEP, each
council shall submit to the Secretary fishery management plans or plan
amendments required to make all FMPs under its jurisdiction consistent
with the principles, goals, policies and recommendations of the
relevant FEP.
(7) If, within the 24 month period after approval of a FEP, a
council fails to submit adequate amendments, the Secretary shall
prepare such amendments within 9 months.
2. Require councils to consider the ecosystem impacts of amendments
to Fishery Management Plans.
Sec. 303. CONTENTS OF FISHERY MANAGEMENT PLANS
(a) REQUIRED PROVISIONS.--Any fishery management plan which is
prepared by any Council, or by the Secretary, with respect to any
fishery, shall--
(1) contain the conservation and management measures,
applicable to foreign fishing and fishing vessels of the United
States, which are--
(A) necessary and appropriate for the conservation and
management of the fishery to prevent overfishing and rebuild
overfished stocks, and to protect, restore, and promote the
long-term health and stability of the fishery and the ecosystem
within which the fishery functions;
* * * * * * *
(15) include a fishery impact statement for the plan or
amendment which shall assess, specify, and describe the likely
effects, if any, of the conservation and management measures on
other species, including key predator-prey interactions, in the
ecosystem, such assessment to be used to determine consistency
with the relevant Fisheries Ecosystem Plan as required under
Section 305 (-)(-).
__________
3. Replace purpose and mission of the Act with conservation
oriented goals.
Sec. 2. FINDINGS, PURPOSES, AND POLICY
(b) PURPOSES.--It is therefore declared to be the purposes of the
Congress in the Act--
(6) to encourage the development by the United States fishing
industry of fisheries which are currently underutilized or not
utilized by United States fishermen, including bottom fish off
Alaska, and to that end, to ensure that optimum yield
determinations promote such development in a non-wasteful
manner;
(6) to ensure that U.S. fisheries management takes into
consideration the ecosystem needs of target species and the
impacts of fishing on other species in the ecosystem;
* * * * * * *
(8) to promote management decisions incorporating the
precautionary approach, especially when the effects of fishing
are unknown or uncertain, in order to maintain ecosystem health
and sustainability.
(c) POLICY.--It is further declared the policy of the Congress in
this Act--
* * * * * * *
(3) to assure that the national fishery conservation and management
program utilizes, and is based upon, the best scientific information
available; involves, and is responsive to the needs of, interested and
affected states and citizens; incorporates and applies ecosystem
principles; considers how fishing affects predator-prey and other
important ecological relationships within marine ecosystems;
efficiency; draws upon Federal, State, and academic capabilities in
carrying out research, administration, management, and enforcement;
considers the effects of fishing on immature fish and encourages
development of practical measures that minimize bycatch and avoid
unnecessary waste of fish; and is workable and effective;
__________
4. Add a national standard requiring the precautionary approach.
Sec. 301. NATIONAL STANDARDS FOR FISHERY CONSERVATION AND
MANAGEMENT
IN GENERAL.--Any fishery management plan prepared, and any
regulation promulgated to implement any such plan, pursuant to
this title shall be consistent with the following national
standards for fishery conservation and management.
(11) Conservation and management measures shall (A) when
information is uncertain, unreliable or inadequate, reduce
risks by setting precautionary reference points for each stock
of fish and the action to be taken should those thresholds be
approached or exceeded; (B) take into account the direct and
indirect impacts of fishing on other species and their habitats
and the conservation of those species as important components
of the ecosystem; and (C) allow the expansion of existing
fisheries or the development of new fisheries only after
measures are in place to prevent adverse impacts on the stocks,
associated species or the ecosystem.
__________
5. Change the definition of optimum yield (OY) and overfishing in
the Act to include ecosystem impacts.
Sec. 3. DEFINITIONS
* * * * * * *
(28) The term ``optimum,'' with respect to the yield from a
fishery, means the amount of fish which--
(A) will provide the greatest overall benefit to the Nation,
particularly with respect to protection of marine ecosystems,
food production, and recreational opportunities and taking into
account the protection of marine ecosystems;
(B) is prescribed as such on the basis of the maximum
sustainable yield from the fishery, as reduced by any relevant
economic, social, or ecological factors, including predator-
prey and other important ecological relationships within marine
ecosystems.
(29) The terms ``overfishing'' and ``overfished'' mean a rate or
level of fishing mortality that jeopardizes the capacity of a fishery
to produce the maximum sustainable yield on a continuing basis, or,
through direct or indirect impacts on other species, jeopardizes the
ecological integrity and sustainability of marine ecosystems;
__________
6. Appropriate funds for application of ecosystem principles to
fisheries research and management.
No specific language recommendations.
B. HOLD FISHERY MANAGERS ACCOUNTABLE FOR REDUCING BYCATCH, AND ENSURE
THAT BYCATCH IS NOT INSTITUTIONALIZED.
1. Congress should require Fishery Management Plans to include a
timeline and specific goals for bycatch reduction and incentives for
fishing practices that avoid bycatch or result in lower levels of
bycatch mortality.
Sec. 303. CONTENTS OF FISHERY MANAGEMENT PLANS
* * * * * * *
(a) REQUIRED PROVISIONS.--Any fishery management plan which is
prepared by any Council, or by the Secretary, with respect to any
fishery, shall--
* * * * * * *
(11) establish and implement an accurate and reliable a
standardized reporting methodology to assess the amount and
type of bycatch occurring in the fishery within one year of the
date of enactment of this Act, specify objective and measurable
bycatch targets that minimize bycatch, and specify a timetable,
not to exceed five years, for achieving those targets through
include conservation and management measures that, to the
extent practicable, and in the following priority--
(A) minimize avoid bycatch; and
(B) minimize the mortality of bycatch which cannot be avoided;
* * * * * * *
(16) include conservation and management measures that provide
catch incentives for participants within and among gear
categories to employ fishing practices that avoid bycatch or
result in lower levels of the mortality of bycatch which cannot
be avoided;
__________
2. The current language regarding Individual Bycatch Quotas (IBQs)
may allow the institutionalization of bycatch unless the law is changed
to prohibit the transfer of IBQs.
Sec. 303. CONTENTS OF FISHERY MANAGEMENT PLANS
* * * * * * *
(b) REQUIRED PROVISIONS.--Any fishery management plan which is
prepared by any Council, or by the Secretary, with respect to any
fishery, shall--
* * * * * * *
(17) in the case of an FMP or FMP amendment that allocates
bycatch to individual fishing vessels, or to groups of fishing
vessels within the fishery, specify that such allocations shall
not be transferable, shall be made on an annual basis only,
shall include measurable and objective bycatch minimization
goals, targets and schedules, and shall be reviewed
periodically.
__________
3. Change the North Pacific section of the law to require the North
Pacific Council to submit a plan to lower the total amount of bycatch,
not just economic discards.
Sec. 313. NORTH PACIFIC FISHERIES CONSERVATION
(f) BYCATCH REDUCTION.--In implementing section 303(a)(11) and this
section, the North Pacific Council shall submit conservation and
management measures to lower, on an annual basis for a period of not
less than four years, the total amount of bycatch economic discards
occurring in the fisheries under its jurisdiction.
C. IMPROVE THE EFFECTIVENESS OF THE OBSERVER PROGRAM.
Fund the North Pacific observer program with a user fee based on
value and applied to all fish landed and sold in the U.S.
Sec. 313. NORTH PACIFIC FISHERIES CONSERVATION
(a) IN GENERAL.--The North Pacific Council may shall prepare, in
consultation with the Secretary, a fisheries research plan for all
fisheries under the Council's jurisdiction except salmon fisheries
which--
(1) requires that observers be stationed on fishing vessels
engaged in the catching, taking, or harvesting of fish and on
United States fish processors fishing for or processing species
under the jurisdiction of the Council, including the North
Pacific halibut industry, for the purpose of collecting data
necessary for the conservation, management, and scientific
understanding of any fisheries under the Council's
jurisdiction; and
(2) establishes a system of fees to pay for the costs of
implementing the plan.
D. CLARIFY AND STRENGTHEN THE LAW REGARDING ESSENTIAL FISH HABITAT
IDENTIFICATION AND PROTECTION
Sec. 3. DEFINITIONS
* * * * * * *
The term ``essential fish habitat'' means those waters and
substrate necessary to fish, whether managed or not, for
spawning, breeding, feeding or growth to maturing.
Sec. 303. CONTENTS OF FISHERY MANAGEMENT PLANS
(a) REQUIRED PROVISIONS
* * * * * * *
(7) describe and identify essential fish habitat for the ,
giving priority to those fish species that are subject to the
fishery based on the guidelines established by the Secretary
under section 305(b)(1)(A), minimize to the extent practicable
adverse effects on such habitat caused by fishing, and--
(A) analyze the impacts of fishing on essential fish habitat;
(B) minimize any adverse impacts on essential fish habitat from
fishing;
(C) close an area to a fishing gear or practice if such fishing
gear or practice may adversely affect essential fish habitat
unless the Council determines, based on the best scientific
information available, that a closure is not necessary to
protect such habitat; and
(D) identify other actions to encourage the conservation and
enhancement of such habitats;
__________
Sec. 304. ACTION BY THE SECRETARY
* * * * * * *
(i) FINDING OF MINIMAL ADVERSE IMPACT._No person or vessel may
employ fishing gear or engage in a fishery;
(1) in an area closed to that fishing gear or fishery unless
the Secretary, after notice and opportunity for public comment,
finds that the fishing gear or fishery will have a minimal
adverse impact on essential fish habitat and minimal bycatch of
non-target species; or
(2) not currently used in the prosecution of the fishery, or
included on the list published pursuant to section 305(a)(1),
unless the Secretary, after notice and opportunity for public
comment, finds that the fishing gear or fishery will have a
minimal adverse impact on essential fish habitat and minimal
bycatch of non-target species.
Senator Stevens. Thank you, Mr. Seaton.
Mr. Burch.
STATEMENT OF AL BURCH, EXECUTIVE DIRECTOR, ALASKA DRAGGERS
ASSOCIATION
Mr. Burch. Thank you, Madam Chairman, Senator Stevens. I
appreciate the opportunity to speak before this committee. I am
Al Burch, executive director of the Alaska Draggers
Association, located in Kodiak.
Most of the boats I represent, including my own two
trawlers, the DAWN and the DUSK, are less than 100 feet and are
owned by Kodiak residents. I have been a fisherman since 1959
and owned or co-owned all the vessels I have been on. I have
survived many catastrophes during those 41 years, the collapse
of the King and Tanner crab and shrimp, the 1964 earthquake,
the sea lion closures of 1992, the roe-stripping vessel raid of
1989, and market problems that affected canners and boats
alike.
During this time we always had new fisheries to develop, so
we survived. We are now legislated into smaller and smaller
areas of opportunity. We can no longer diversify. With the
collapse of crab and shrimp in the late seventies, Senator
Stevens introduced legislation both in 1978 and 1979 to help
Alaskans Americanize the bottom fisheries. I would like to
quote from the Kadiak Times of February 1, 1979, his
introduction of his bill, and I quote:
The development of the bottom fish industry has been one of
my highest priorities, and the enactment of the 200-mile limit,
which I cosponsored with Senator Magnuson, laid the
foundations. Alaskans must now build a bottom fish fleet, and
the legislation introduced will help that develop by
substantially reducing the cost of loans to Alaska fishermen.
A number of us seized the opportunity and converted our
vessels. In a very short time, we did Americanize the
fisheries. The Gulf of Alaska communities led this effort with
help from grants from the Saltonstall-Kennedy funds through the
Alaska Fisheries Development Foundation. These grants created
the first full production of a shore-based surini plant at the
Alaska Pacific Seafoods in Kodiak.
We also supported the development of codfish fisheries with
the development of a cod and pollock fillet plant with Trident
Fisheries in Akatan. Then we concentrated on protecting the
fish. A status of stock document is presented every year. The
council very conservatively created quotas for each species.
Pollock in the gulf has gone from 400,000 metric tons in the
early eighties down to around 90,000 for the year 2000. The cod
in the gulf went from 81,000 down to 58,700.
With the co-operation of the canneries, we are developing a
flatfish and Pacific Ocean perch fisheries, but with the
tremendous increase of the halibut biomass and the fixed cap,
we are only allowed to catch a very small percentage of the
quota.
We offered 10 percent of the gray cod for a small boat pot
fishery to take place inside the State's 3-mile zone. The State
ended up taking 25 percent. The draconian sea lion restrictions
of 1999 and 2000 have pushed us further off-shore, a very
dangerous situation for our small trawlers, forcing us into
areas of potential higher bycatch, shorter seasons, and rougher
weather. We are forced into a disastrous race for fish. An
influx in the Bering Sea is also shortening our seasons.
This means less work for our resident cannery workers and
less income flowing through town. When shore cannery workers
leave town, new people must be trained each opening. Costs go
up, and recovery goes down.
Forming co-ops will allow fuller compliance with the intent
of improved retention and improved utilization. They would also
limit the number of plants and boats. This would give us a
known situation to work with. The vessels and plants are
already overcapitalized. More plants would mean more boats,
therefore shortening our limited season and income even more.
I wanted to thank Senator Stevens for his help in providing
$5 million for sea lion research in the year 2000. Beyond 2000
we need to continue the research on the availability and use of
prey by the Stellar sea lion in the Kodiak area. Wynne,
Narcross, Hills and Buck are the principal investigators. To
make this research meaningful, we need National Marine
Fisheries Service to open Barnabus and Gull Point, as outlined
in the University of Alaska research plan.
This program was only funded at a reduced level for 1 year.
We need multiyear funding in the future. This research is
critical to the long-term survival of Kodiak, Sand Point,
Seward, Cordova, and other communities.
And just in closing, Senator, I am very worried at
essential fish habitat also.
[The prepared statement of Mr. Burch follow:]
Prepared Statement of Al Burch, Executive Director,
Alaska Draggers Association
I appreciate the opportunity to speak before this committee. I am
Al Burch, Executive Director of the Alaska Draggers Association located
in Kodiak, Alaska.
Most of the boats I represent including my own two trawlers, the
Dawn and Dusk are less than 100, and are owned by Kodiak residents. I
have been a fisherman since 1959 and owned or co-owned all the vessels
I have been on. I have survived many catastrophes during these 41
years, the collapse of the king and tanner crab, shrimp, the 1964
earthquake, the sea lion closures of 1992, the roe stripping vessel
raid of 1989, and market problems that affected canneries and boats
alike.
During this time we always had a new fishery to develop so we
survived. We are now legislated into smaller and smaller areas of
opportunity. We can no longer diversify.
With the collapse of the crab, shrimp in the late 70's Senator
Stevens introduced legislation in both 1978 and 1979 to help Alaskans
to Americanize the bottom fisheries.
I would like to quote from the Kadiak Times of February 1, 1979--
his introduction of the bill ``The development of the bottom industry
has been one of my highest priorities, and the enactment of the 200
mile limit which I co-sponsored with Senator Magnuson laid the
foundation. Alaskans must now build a bottom fish fleet and the
legislation introduced will help that development by substantially
reducing the cost of loans to Alaskan fishermen.''
A number of us seized the opportunity and converted our vessels. In
a very short time we did Americanize the fisheries. The Gulf of Alaska
communities lead this effort with help of grants from the Salton-Stall
Kennedy funds through Alaska Fisheries Development Foundation. These
grants created the first full production shore-based surmi plant at the
Alaska Pacific Seafoods in Kodiak. It also supported the development of
the cod fish fisheries with the development of a cod and pollock fillet
plant with Trident Fisheries in Akutan. Then we concentrated on
protecting fish.
A status of stock document is presented every year. The Council
very conservatively created the quota for each species. The Pollock in
the Gulf has gone from 400,000mt in the early 80's down to around
90,000mt for 2000. The Cod in the Gulf went from 81,000mt down to
58,715mt. With the co-operation of the canneries we are developing a
flat fish and pacific ocean perch fishery. But with the tremendous
increase of the halibut biomass and a fixed by-catch cap, we are only
allowed to catch a very small percent of the quota.
We offered 10% of the gray cod for a small boat fishery to take
place inside the States 3 mile zone, the State took 25%.
The draconian sea lion restrictions of 1999 & 2000 have pushed us
further off shore (very dangerous for our smaller trawlers) forcing us
into areas of potential higher by-catch. Shorter seasons and rougher
weather, we are forced into a disastrous race for fish. An influx of
boats from the Bering Sea is also shortening our season. This means
less work for our resident cannery workers and less income flowing
through town. With short openings, cannery workers leave town. New
people must be trained each opening, costs go up and recovery goes
down.
Forming co-ops will allow fuller compliance with the intent of
Improved Retention & Improved Utilization. They would also limit the
number of plants and boats. This would give us a known situation to
work with. The vessels and plants are already over capitalized. More
plants would mean more boats, therefore shortening our limited season
and income even more.
I want to thank Senator Stevens for his help in providing
$5,000,000 for sea lion research in the year 2000. Beyond 2000 we need
to continue the research on availability and use of prey by stellar sea
lions in the Kodiak area.
Wynne, Norcross, Hills, and Buck are the principal investigators.
To make this research meaningful, we need National Marine Fisheries
Service to open Barnabus and Gull Point as outlined in the University
of Alaska research plan.
This program was only funded at a reduced level for 1 year. We need
multi year funding in the future. This research is critical to the
long-term survival of Kodiak, Sandpoint, Seward, Cordova and other Gulf
communities.
Senator Snowe. Thank you very much, Mr. Burch.
Mr. Phelps, on the question of essential fish habitat, you
said in your testimony that you did not believe that nonfishing
interests were meant to be included in this process, is that
correct?
Mr. Phelps. That is correct, Senator. It was my
understanding that the Magnuson act focused on ocean fisheries,
and we are being drawn in by the application of this to streams
and any activity that could possibly affect a stream.
Senator Snowe. And you believe that the 1996 amendments
never intended to have the nonfishing interests directly
affected by this process?
Mr. Phelps. That is correct. I believe that for a couple of
reasons. One is the law itself, and second is the fact that
there is no representation for those interests on the councils
that are making these determinations.
Senator Snowe. Do you have specific examples where there
have been permitting delays as a result of the consultation
process that NMFS has engaged in with other agencies? Where it
has actually held up specific permits?
Mr. Phelps. Actually, that is one of the reasons that I
would like to get a response from NMFS with respect to the
consultations that have been held. It appears to me, without
having that information, that some of the consultations that
have ben held in Alaska, and I heard Ms. Dalton say this
morning there were 400 of them, may have been -- because it
focuses on consultations with Federal action agencies, and what
I have seen showing up in some forest service EIS's would
indicate to me that some of those consultations may have taken
place in the context of timber projects proposed by the forest
service, and it would be interesting to see what the dynamic is
there. We suspect there are delays. We also suspect, however,
that like with the ESA these consultations are starting out as
being fairly benign, but as time goes along could become
increasingly draconian.
Senator Snowe. More than a consultative process.
Mr. Phelps. That is correct, and more than an information-
sharing process as well.
Senator Snowe. Now, have you been turned down in your
request for consultations?
Mr. Phelps. We have not been turned down. It is just taken
them a long time to get it together, and then what they have
said is, they do not have the information compiled yet, and it
will cost us in excess of $30,000 to get the information sent
to us.
Senator Snowe. And when was that request made?
Mr. Phelps. We filed the request on November 18 of last
year, 2 months ago today.
Senator Snowe. Are you talking about the 2,000 that they
have done?
Mr. Phelps. That is correct. The FOIA focused on the
statement in the NOI that there have been 2,000 done.
Senator Snowe. Now, Mr. Seaton, you have taken the opposite
point of view on this matter. Can you tell us why you think
that nonfishing activities should be incorporated in this
process? Could you also explain how you think the essential
fish habitat should be implemented, in a way that does not
represent a very complicated regulatory process? As we have
even seen on the Endangered Species Act, the intent may be
right, but the process becomes so complicated and expensive
that it undermines the ultimate goal.
I know you are suggesting very specific language to further
address essential fish habitat, but do you think that is going
to create more problems?
Mr. Seaton. Senator, the Alaska Marine Conservation Council
has addressed essential fish habitat from the very beginning.
We helped work with Senator Stevens and others to get this into
law, because it is so very important for the fish habitat
protection.
Alaska Marine Conservation Council has concentrated on
benthic--that is, bottom-of-ocean--habitat as our primary goal
and our focus in the North Pacific. We think that the reason it
was so broadly interpreted is because NMFS just does not have
very much information on a single-species basis on what the
essential fish habitat is. We think that the habitat areas,
HAPCs, are where the rubber meets the road, and that is where
things get done for essential fish habitat, and so as you will
notice our specific language is dealing with protection of
habitat, especially benthic habitat, from destructive fishing
practices, and that is where our concentration is.
Senator Snowe. Would you agree with a further clarification
on the essential fish habitat definitions? Do you see this as
problematic at all?
Mr. Seaton. Yes, Senator, we do see that there are some
problems with that, and we also suggested some specific
language and some specific ways to pinpoint this down,
requirements to actually get to some studies that are
investigating the effects of fishing gear on habitat.
You know, what we have in most of these areas is not a
wealth of knowledge. We have a problem in that we have a
deficiency of knowledge, and so we are operating in the dark on
many of these things, but the habitat area as a particular
concern is a way in which National Marine Fisheries Service has
set up a matrix of not only areas, but of what the concerns
are, high and low impacts, and that seems to work for the areas
that we have talked about.
Senator Snowe. Mr. Phelps showed this map showing the
designation. Would you agree that this may be an overly broad
interpretation of essential fish habitat? This is similar to
what we are dealing with in other areas. We have had a problem
in the Gulf of Maine and the Gulf of Mexico. The same sort of
issues have been raised time and again. We are using broader
designations as opposed to trying to narrow the designations.
Would you agree that that may be overly broad?
Mr. Seaton. Yes, Senator. I think that what we need to do
is--and I think the habitat area is of particular concern, to
get to that point of identifying the habitats that we need to
worry about, and especially, you know, like I said in our
testimony, we need to worry about the effects of destructive
fishing practices on that habitat.
Senator Snowe. Do you think it is possible that we can do
it? Is it possible to narrow the designations, while achieving
the goal?
Mr. Seaton. I think so, yes.
Senator Snowe. You do?
Mr. Seaton. Yes.
Senator Snowe. Mr. Burch, what changes have you seen in
your own community since the race to fishing has ended?
Mr. Burch. Our seasons are shorter and shorter. When we
were in shrimp, I fished 10 months out of the year. Due to a
regime shift, the shrimp and the crab disappeared. There are
studies done that show that that was not fishing pressure,
especially in the shrimp.
With Senator Stevens' help we converted into, at that time,
joint ventures. Our ultimate goal was Americanization. We did
do that. We had fairly extended seasons on cod and pollock. As
we developed our shore-based infrastructure, as we got more
sophisticated with our gear, we caught our quotas in shorter
and shorter time. We expanded into other fisheries to take up
that slack. Again, you know, the learning curve as we became
more efficient, better marketing, again our seasons got
shorter.
With the legislation forcing us out of certain areas into
different areas our bycatch patterns have changed, sometimes
for the good, sometimes not.
I had to do a count for my insurance company. I am down now
to about 120 days of actual fishing time per year, where I used
to fish 10 months, and that affects the production in town.
With the way our seasons our chopped up now, we cannot keep
cannery workers. We had a very large ethnic community in
Kodiak, Filipino, Spanish, Mexican workers. We are starting to
lose that trained work force now. This year for the first time
our canneries are flying people in from outside, putting them
up in bunkhouses.
Just, we need the opportunity to rationalize the fisheries.
We need to have the tools to work with the council to create
the seasons that will allow us to take the fish at the best
biological time for the fish, and also the best economical time
for us.
Senator Snowe. You mentioned that small boat owners are
taking greater risks. Do you believe that the fishing
regulations have forced small boat owners to go farther out to
sea and to take more risks in order to go where the fish are?
Mr. Burch. Well, no, not to go where the fish are. Sea lion
measures are closing us out of areas where the fish are. We are
being forced out of some pretty good areas, and that puts us
out off-shore looking for fish, and that is where you get into
that area of when you are looking for fish your bycatch
generally goes up.
If we were allowed in those in-shore areas, we would be
closer to protection, there is a higher concentration of fish,
and shorter fishing trips.
Senator Snowe. Thank you.
Senator Stevens.
Senator Stevens. You want, Al, to really have a council to
have authority to have co-ops or other management techniques
such as IFQ in all the fisheries, don't you?
Mr. Burch. Right. Our position is the right to co-op all of
the federally managed fisheries under the council system.
Senator Stevens. I sort of think they have got that
authority already.
Mr. Burch. We do not have the--if I understand the lawyers
right, not in the gulf. We cannot co-op in the gulf. You know,
we met before you in March. We thought we had an avenue to
follow. The attorneys at that time thought we could do
something. Evidently we cannot. You know, I am not a lawyer, I
do not fully understand the situation.
Senator Stevens. Is that because of legal restraints, or
because of the problem of financing the co-ops?
Mr. Burch. Legal restraints on co-ops in the gulf. Under
the 1937 act fishermen can co-op, but you need something like
90 percent of the fishermen to agree to it, then actually you
do not get anything when you co-op. You do not get the
opportunity to work with your canneries.
Senator Stevens. I see. It is the interrelationship between
facets of the industry, fishing and processing.
Mr. Burch. Right. It is going to need a joint venture type
operation in order to work, and right now we do not have that
opportunity in the gulf.
Senator Stevens. OK. Paul, you had an interesting
suggestion about observers. Do you want to go into that a
little bit? I do not think you did that here. You suggested,
did you not, that fishery managers assign observers to where
they are most needed and not have this requirement of 100
percent on all boats?
Mr. Seaton. Yes, Senator. One of the problems of the
observer program has been the way it is financed and the way it
is designated, not by fishery, where you are needing to look at
bycatch rates and verify things, but just by vessel length, and
this is a problem.
AMCC has supported a fee-based system where everybody that
has harvested fish is going to paying based on the amount of
fish they are taking, and then National Marine Fisheries
Service should apply and designate where the observers are
based on the need for management and regulation.
Senator Stevens. The regional council, or the National
Marine Fisheries Service?
Mr. Seaton. Well, the regional council, the National Marine
Fisheries Service actually I think implements the plan that the
council comes up with, so what we want to do, what we think is
necessary is to get the most value out of the observers, you
know, the money that is being spent, then the managers know
where they need the data from, and that is where the observers
should be placed.
Senator Stevens. OK. Now, Jack, on your point, for the
nonfishing interests that are impacted by the essential habitat
concept, for those that are already subject to EIS and
endangered species action, I can understand you, but there are
some that are not involved in that. It seems to me we have to
work out something whereby the redundancy factor is eliminated.
Have you thought about that?
Mr. Phelps. We have, Senator, and I am not sure I disagree
with you, but I think the number of actions where there is not
some regulatory process in place through which NMFS could get
information and provide commentary are pretty small, because if
it is operated within the coastal zone there is the CZM
process, and I think I would go one step farther than what you
summarized my thoughts to be, and that is that to the degree
that we are subject to regulation and restrictions, say,
through the Alaska State Forest Practices Act, with its best
management practices mandated and so forth, to the extent that
the issues concerning our effect on fish habitat are addressed
under some other regulatory process, then it seems that other
than an information-sharing relationship, that NMFS should not
be accorded jurisdiction in those areas, if the issues are
addressed properly and thoroughly by other agency regulations
and other laws.
We believe that the ground is fairly well-covered at this
point with respect to that, and so what we would urge is that
that be clearly looked at, and that perhaps some exception with
respect to NMFS would have some jurisdiction if they can
demonstrate that the issue is not being appropriately addressed
by some other State or Federal regulation.
Senator Stevens. I am really concerned with the increasing
costs to the Federal agencies by the redundancy in these
applications.
Mr. Phelps. And well you should be, sir.
Senator Stevens. We are financing all of these agencies to
conduct their activities under the Endangered Species Act, and
to some extent that is redundant to the need for process
itself, and then beyond that, we are financing consultations
between those agencies as one comments upon activities in the
jurisdiction of the other, and it seems that if you add to
that, then, the extreme cost of litigation when it is brought
by one Federal agency against another, or a State agency
against a Federal agency, or a private entity against both,
this thing is pyramiding now to be excessive costs that reduces
the amount of money we have for research, really for
application to programs to enhance the reproductive capability
of fisheries.
Somehow or other I think we have got to find a way to
eliminate this redundancy and get down to assigning co-
responsibilities to individual Federal agencies or the State,
and not allow this conflict between their authority to lead to
this excessive litigation. I do not know how to do that, but
you have got your finger on a portion of it that is applied to
the nonfishing, nonocean areas which are going to be impacted
because of the upland and particularly the river and stream--I
have not even mentioned wetlands. On top of that, there is
wetlands.
In this State it pays the price, because the money goes to
the Federal agencies, and particularly to the activities they
must conduct in the courts, and we are losing the money, the
research base to get the funding for the actions we need, and
the gear reduction and other things. Somehow we have to work
together to find a process to work in this.
And Paul, I think your area may be the key to finding
solutions, because I hear you. You are saying, let us
concentrate on the seabed first, right?
Mr. Seaton. Right.
Senator Stevens. And that is what we intended to do, I
think. That is the dichotomy I see here, Madam Chairman.
Mr. Phelps. Senator Stevens, if I might, I could not help
but wonder today as I was listening to some of the needs under
the provisions of the Magnuson act for funding and so forth,
the almost $14 million that NMFS requested for fiscal year 2000
to do EFH consultations could probably be used better
elsewhere, within the context of the Magnuson act.
Senator Stevens. I think they would probably agree, but
they feel they are mandated right now by the terms of the act
to do that. I think we have got to review that act, and I think
it is going to have to be something that is worked out with the
agencies to delineate their responsibilities, to give them back
some of their authority and limit the access to the courts for
so much. Every one of these Federal agencies faces increased
participation in court activities that challenge their
authority before they even make the decisions, which is to me
wrong.
Thank you very much, Madam Chairman.
Senator Snowe. Well, thank you, Senator Stevens, and thank
all of you. Mr. Seaton, we will look at your recommendations
for specific language as we review this entire process.
One question I did want to ask, on individual fishing
quotas: do you believe that Congress should lift the
moratorium? It is going to expire in October, but do you think
we should allow it to happen? Or should we have some conditions
under which IFQ's could exist?
Mr. Seaton. The position of AMCC is that we should
definitely have some conditions concerning standards, and we
are worried about the conservation implications that occur here
in the moratorium, and like I said, also with the other things
that are going on, like the co-ops. There are big problems,
potential problems with the conservation implications of the
co-ops.
I mean, we have all these applications for co-ops going
forth now for people to lock in practices in fisheries that
have a high bycatch rate, so we have competing gears right now,
and gears that have high bycatch rates and that have been
losing harvest share are seeking to quickly move to co-ops so
that they can lock in that, and that will lock in those high
bycatch rates. We also see the co-ops as coming back to you
saying, well now, we should have credit for our past bycatch,
and we should be rewarded for our dirty fishing in the past,
and so there are a number of issues in co-ops, with the side
boards and those kinds of things, that are very important, and
we would like to send you some other comments on those.
Senator Snowe. Yes, please do. OK, thank you very much.
Thank you all very much.
The final portion of our hearing this morning is an open
microphone session for any individuals who may care to make a
comment. We will allow everyone 2 minutes. You may have the
opportunity to express your views to this committee, and
Senator Stevens' staff, Jim Egan, will introduce the speakers
for this part of the session.
Senator Stevens. Madam Chairman, as I understand, there was
a requirement to sign up, so that these people who wanted to
come have already signed up, right?
Mr. Egan. That is correct.
Senator Snowe. Begin.
Mr. Egan. Hazel Nelson, vice president of Bristol Bay
Economic Development Corp.
Senator Stevens. Who will be next?
Mr. Egan. Following her will be Arni Thomson, executive
director of Alaska Crab Coalition.
STATEMENT OF HAZEL NELSON, VICE PRESIDENT, BRISTOL BAY ECONOMIC
DEVELOPMENT CORPORATION
Ms. Nelson. Thank you, Senators. I appreciate the
opportunity come here and share my concerns for Bristol Bay
Economic Development Corporation with you. We are one of the
CDQ groups, and I am Hazel Nelson, the vice president of BBEDC.
There are 17 communities in our CDQ region, and we have
about 6,000 residents in those communities, and in many
respects all of the CDQ communities have the same problems and
opportunities. However, each of our regions are very different.
In Bristol Bay, for instance, we have the salmon fishery in the
State waters, which is a constant boom and bust economy for our
villages.
BBEDC has invested in the Bering Sea pollock, crab, and in
long-lining operations. We have concentrated on maximizing our
returns on CDQ royalties while focusing on protecting the
resources. We have also focused on human resource development
by funding training, employment, and scholarships, and this is
for all of our residents, regardless of race. Sometimes the CDQ
program has been called a Native program. It is not. It is for
everybody who is in a CDQ community.
We are aware of the importance of both State and Federal
oversight in fisheries. We have been unanimously supportive of
oversight of the CDQ program to ensure that the benefits of the
program are being brought to each of our communities.
Finally, we do not want to lose our opportunity to continue
this program because of mismanagement of how the CDQ is brought
to those communities. The CDQ program has made the biggest
difference in each of our villages since the inception of the
Alaska Native Claim Settlement Act, and we urge you to continue
support of this program in the reauthorization of the Magnuson-
Stevens Act, and if I knew I had 2 minutes I would have said a
lot more.
Senator Snowe. Thank you very much. We appreciate it.
Ms. Nelson. Thank you.
Mr. Egan. Thank you. Arni Thomson, executive director of
the Alaska Crab Coalition. Following Arni is going to be John
Gauvin, director of the Groundfish Forum.
STATEMENT OF ARNI THOMSON, EXECUTIVE DIRECTOR, ALASKA CRAB
COALITION
Mr. Thomson. Thank you, Senator Snowe and Senator Stevens
for the opportunity to make a few brief comments. My name is
Arni Thomson. I am executive director of the Alaska Crab
Coalition, a trade association representing the owners of 55
Bering Sea crab vessels from Washington, Oregon, and Alaska.
The ACC submitted extensive written comments to the
Subcommittee for its Washington, D.C. hearing.
I would first of all like to reference the excellent
technical remarks of Penny Dalton, head of the National Marine
Fisheries Service. In addition, I appreciate John Iani and
Kevin O'Leary for having brought attention to the plight of the
Bering Sea crab fisheries, and having made some suggestions
about the direction in which we need to move.
The ACC definitely supports moving ahead with crab co-
operatives for Bering Sea crab fisheries. We feel that it is
vital, if many of the independent vessel owners are going to
survive in the near future.
I would also like to take the opportunity to compliment the
U.S. Senate for its leadership in adoption of the 1996
amendments to the Magnuson-Stevens Act to improve safety and
conservation, including control of wasteful bycatch and
initiation of habitat protection measures.
The ACC applauds the U.S. Senate initiative for the
enactment of the American Fisheries Act in 1998, which
frameworked an innovative harvester and processor catch
history-based quota share program for the Bering Sea pollock
fishery. The negotiated framework contained in the act had the
inherent resource life-saving and economic benefits of an ITQ
program.
Having said that, I would like to just divert for a minute
at Senator Stevens' suggestion for some input on some ideas in
terms of John Iani's suggestion for a direct appropriation. He
was searching for an amount. I would like to just sort of
briefly respond and suggest somewhere in the neighborhood of
$30 to $40 million in a direct appropriation.
The source of that, the Alaska Crab Coalition and another
nonprofit group called the Crab Group worked very intensively
on a business plan for a crab buy-back program under section
312 of the act, and at that time the industry was asking for
$60 million in an industry-funded buy-back, so the industry
cannot afford that now. We are suggesting maybe a $30 million
appropriation.
Also, another suggestion, to open up title 11 to allow
individual vessel owners on a vessel-by-vessel basis to access
title 11 loan money for the sole purpose of purchasing vessels
to retire the vessels on an individual basis, but allow the
transfer of the catch history to be used in a council-
authorized co-op program. This would enable down-sizing of the
fleet, but provide an incentive for individual vessel owners to
purchase the vessels out of the fishery. This is kind of a
spin-off from the AFA.
Thank you very much for the opportunity.
[The prepared statement of Mr. Thomson follows:]
Prepared Statement of Arni Thomson, Executive Director,
Alaska Crab Coalition
The Alaska Crab Coalition (ACC). is a trade association which
represents the owners of 55 Bering Sea crab vessels and a similar
number of service and supply companies. The ACC submitted extensive
written comments to the Subcommittee for its Washington D.C. Hearing on
July 22, 1999. Reiterated below are key points from that statement.
The ACC compliments the U.S. Senate for its
leadership in adoption of the 1996 amendments to the MSFCMA for
improved safety and conservation, including control of wasteful
bycatch and initiation of habitat protection measures. The 1996
safety, bycatch and habitat protection provisions had their
origins in the proposals of the ACC, FVOA and DSFU.
The ACC applauds the U.S. Senate initiative for the
enactment of the American Fisheries Act in 1998. which
frameworked an innovative harvester and processor, catch-
history-based quota share program for the Bering Sea pollock
fishery. The negotiated framework contained in the Act has the
inherent resource, life-saving and economic benefits of an ITQ
program, otherwise barred from implementation by the 1996
moratorium on new ITQ programs.
Since 1996, three of the five major Bering Sea crab
fisheries available to the fleet have been closed for low
abundance, with the major one, opilio crab, scheduled for
likely closure in 2001, and the Bristol Bay king crab fishery
in a low and questionable stock status.
Although many in the commercial fishing industry
today are promoting the need for research as the key to
sustainability in fisheries, ACC members' experience over the
last twenty-five years with research into crab life cycle
issues leaves them pessimistic about the productivity of
science. New scientific research in crab, unless it is
incorporated within a revitalized management structure--ITQs or
co-operatives, will contribute little towards rebuilding and
sustainability.
ITQs or co-operatives can provide the single most
effective means of promoting safety, resource conservation, and
habitat protection through reduction of what is now excessive
capacity to sustainable levels. The widely publicized hazardous
race for crab could be brought decisively to a close. As
recently as 1999, 7 lives were lost in the Bering Sea crab
fisheries.
Longer soak times for pots would allow juvenile and
non-legal female crabs to ``sort out'' on the ocean bottom
through escape mechanisms in the gear In a slower-paced
fishery, there would be fewer potlifts, thus reducing bycatch
mortality due to exposure of juvenile and female crabs to
multiple captures, on-deck handling, changes in water
temperature and to predation in a weakened condition.
Under the existing regime, managers are restricted to
reducing pot limits, to counteract overcapacity and to slow the
pace of the crab fisheries. However, this exacerbates directed
fishing mortalities and precludes the likelihood for rebuilding
stocks that might be presented by changing climatic and
oceanographic conditions.
In conclusion, the ACC is encouraged that, at the
July 22nd 1999 Senate hearing, in written testimony, the
chairmen of all eight of the regional councils called for
termination of the ITQ moratorium.
Senator Snowe. Thank you. We appreciate it.
Mr. Egan. John Gauvin, and then Morgan Crow.
STATEMENT OF JOHN GAUVIN, DIRECTOR, GROUNDFISH FORUM
Mr. Gauvin. Tank you, Senators Snowe and Stevens, for the
opportunity to make a few comments.
I am John Gauvin, and I am the director of the Groundfish
Forum. We are flatfish fishing boats in the Bering Sea, and our
group is principally involved with development of bycatch
reduction methods for our fisheries.
I would like to talk a little bit about essential fish
habitat and the existing mandate in the act. I do agree with
earlier comments that their mandate is too broad. They should
focus it on the essential part of essential fish habitat. That
has been covered, but a couple of other things that I thought
were worth mentioning, there is a body of information about the
impacts of fishing gears. It is mostly about trawls and
dredges. It is inadequate, and most of it was developed at a
time before side scan sonar was widely available and the
techniques were really there that exist today.
I think one of the things Congress could do is put some
money toward development of empirical research, because I think
that is what is going to help further our understanding and
make the intelligent decisions on the effects of fishing gear
on fish habitat, which is very important to the future of this
industry.
I will tell you that our group is involved in funding some
of this research. It is incredibly complex. The experimental
designs to be able to control for natural disturbance are
overwhelming, but this is what has to happen if we are going to
understand what fishing gears are doing, and I believe that to
put this mandate in without funding is not going to result in a
good debate over the effects of fishing gears, so I encourage
you to do that.
Second, I would like to see the act include language that
would take out the allocation agenda aspects of essential fish
habitat that I think is sort of playing out as this mandate
gets implemented. What I mean by that is, a competing gear
group, if there is available information on one gear group that
suggests there may be some implications of the gear on habitat,
to use essential fish habitat to further that aim, rather than
really getting at the goal of essential fish habitat, which is
to protect the habitat.
I think that some standards should be put in for peer-
reviewed science to be used. I think it should say up-front
that if there are problems with a gear type, that it does not
necessarily follow that that gear loses its allocation of fish.
There should be an opportunity to modify that gear to address
the issues with the gear, or suggest where that gear can be
fished, or the type of habitat that would be appropriate for
that gear.
Thank you very much for your time.
Senator Snowe. Thank you very much.
Mr. Egan. Morgan Crow, and then Thorn Smith.
STATEMENT OF MORGAN CROW, COASTAL VILLAGES
Mr. Crow. Good afternoon, Madam Chairman. My name is Morgan
Crow. I work for Coastal Villages. We had intended to have our
president deliver this speech. He called this morning from the
village and they are having rains there and planes cannot land.
Therefore I am going to read his message.
Our president's name is Fred K. Phillips from Guidamuk.
This is his thing that he faxed in to me this morning.
It is my firm belief that the CDQ program is working, and
working well.
Senator Snowe. Could you speak into the microphone?
Senator Stevens. Pull the mike toward you.
Senator Snowe. We cannot hear you.
Mr. Crow. How is that?
Senator Snowe. That is great.
Mr. Crow. It is my firm belief that the CDQ program is
working, and is working well. It is succeeding in achieving the
goals that were set out at its inception by the North Pacific
Fisheries Management Council in 1991, and it was placed into
Federal law as part of the Magnuson-Stevens Act in 1997.
On behalf of our member communities, I want to thank you
for your leadership in supporting this program, and look
forward to its continued development in the future. Coastal
Villages is providing many of the tangible benefits from the
program directly to the residents of its member communities,
employment opportunities, training, scholarship programs, and
the development of operating fishing businesses in our
communities.
In addition, I would like to highlight some of the programs
that we believe are unique to CVRF that will soon be seen as
some of the extraordinary benefits to come from this program.
These include the CVRF leadership team, the Yukon-Kusokwin
Delta Employers Council, and numerous partnerships with
Federal, State, private, tribal, and regional entities that
create and expand village-based services in the area of
literacy, business education, drug and alcohol dependency and
prevention, youth mentoring, home support programs, development
of information technology skills and infrastructure, and
community development strategic planning.
CVRF is implementing these services in collaboration with
Alaska Human Resource Investment Council, the State-wide
Private Industry Council work force, investment board, the
Cholista Corporation, the Yukon-Kusokwin Health Corporation,
Junior Achievement of Alaska, United National Indian Tribal
Youth Unity, the Distance Delivery Consortium, School-to-Work
Business Consortium, the University of Alaska Rural Development
program, the U.S. Army Corps of Engineers, the State
Departments of Transportation, Energy, and Trade and
Development, the U.S. Department of Agriculture, Rural
Development, and the U.S. Department of Commerce and Economic
Development Administration.
Thank you for your support of the CDQ program.
Senator Snowe. Thank you very much.
Mr. Egan. Thorn Smith, and then Charles McGee.
STATEMENT OF THORN SMITH, NORTH PACIFIC LONGLINE ASSOCIATION
Mr. Smith. Good afternoon, Senators. Thank you for your
patience. I will try to talk fast here.
I am with the North Pacific Longline Association, and
represent freezer and longliners fishing process off Alaska.
Freezer longliners are owned and operated by Alaskans, Alaska
Native groups, and Washingtonians. Most of the folks in our
association have come up the hard way, from the back deck. We
are now a group of small, independent competitive companies. We
would like to stay that way. Sometimes Federal legislation
aimed at stabilizing other sectors of the industry tend to
destabilize ours, and I will try to explain.
There were two events in recent years that have posed
serious threats to our continued existence. First is fishery
interaction with the short-tailed albatross, a seriously
endangered sea bird. Second is an unintended consequence of the
passage of the American Fisheries Act.
With regard to the first issue, the general issue is agency
responsibility in endangered species interactions. It relates
to Senator Stevens' statements on research. In 1995, we were
shocked to find that we had taken the short-tailed albatross on
the endangered species. We had never heard of one. Our industry
response was to develop regulations that are now in effect to
try to prevent us from doing that.
The Fish & Wildlife Service wrote a biological opinion
saying that NMFS was required in 1999 to commence research to
figure out whether these methods worked. I was shocked to find
later on, talking to NMFS staff, that NMFS had not budgeted any
money for this research. I was concerned that that would give
rise to a cause of action and litigation that could have dire
consequences for our industry, so I joined with Ed Melville of
the Washington Sea Grant, later with Ed Alverson, and we flew
together a program by getting a bunch of small grants out of
NMFS and Fish & Wildlife.
We now have a program which we hope is meeting the
obligation of the biological opinion, but it is a very
difficult process. We are still dazed and confused as to why no
Federal agency had undertaken this work a long time ago.
The Endangered Species Act is a drop-dead act. There is no
consideration, as you know, of the impacts on human activities.
Given that, it is reasonable to expect the industry to
participate in mitigative activities with respect to endangered
species, but somebody in the Federal Government has got to
shoulder the burden of figuring out how this gets done.
We think in the course of Magnuson act reauthorization,
since the Endangered Species Act is not going to be amended in
the near term, as near as we can tell, that usually require
that NMFS as steward of the fisheries identify potential
commercial fisheries endangered species interactions, and
perform the basic hands-on at-sea research necessary to
discover what fishing techniques and equipment will mitigate
those interactions with minimal impact on the fisheries, long
before we get to the point where lawsuits are filed.
We note that NMFS has spent millions of dollars trying to
mitigate trawl bycatch. We think they should be doing the same
thing for longliners.
As far as co-ops are concerned, which is our second
concern, the co-ops that were created in the American Fisheries
Act have created a new race for fish in our fishery, people
trying to get into our fishery because it is basically an open
access fishery. There is a license limitation program, but it
does not protect us.
We tried to get protection in the act because we knew the
co-ops were going to cause this. The Senate told us to go to
the council to get side boards. We did that. The council twice
voted emergency rules to protect us. The Secretary of Commerce
has twice refused to implement those rules.
A week ago, the council voted 9 to 1 to reaffirm its
intention that these protections be implemented by emergency
rule, and we are now waiting, still, to find out whether the
Secretary of Commerce will do it.
With respect to co-ops, there is one thing we are concerned
about, and that is that within a fairly uniform group like
ours, that you do not allow cherry-picking, or you do not
change the law so that we can have cherry-picking or what Kevin
O'Leary calls highliner co-ops. We do not want small subgroups
within a fishery to be able to go out because they have got
more catch within a certain period, or whatever. Small, little
co-ops form a little co-op and basically screw the rest of the
guys.
If you allow that to happen, if you change the law, you are
going to end up with that same rear view mirror effect that
Rick Lauber was talking about. You are going to end up with a
lot of people who get crunched. Better to require that
everybody get in that room for 150 hours and negotiate on a
level playing field, and at least the weaker players will have
some chance of coming out with something, whether it is a long-
term buy-out, or whatever.
Thank you very much.
Senator Snowe. Thank you.
Mr. Egan. Charles McGee. After Charles will be Mark Lloyd,
and then Tammy Schrader.
[The prepared statement of Mr. Smith follow:]
Prepared Statement of Thorn Smith, North Pacific Longline Association
Mr Chairman, members of the Senate, thank you for the opportunity
to speak with you today. The North Pacific Longline Association
represents freezer-longliners that harvest groundfish in the waters off
Alaska, processing and freezing their catch at sea. Most of our owners
and operators have worked their way up from the back deck in the
traditional manner--we are now a group of small, independent and
competitive companies--and we want to stay that way.
In recent years two events have posed serious threats to our
continued existence: fishery interaction with the short-tailed
albatross, and passage of the American Fisheries Act. We are hopeful
that you will be mindful of these occurrences as you proceed with
reauthorization.
agency responsibility in endangered species interactions
In 1995 our industry was shocked when we found we had taken a
short-tailed albatross, an endangered species. Neither the United
States Fish and Wildlife Service (USFWS) nor the National Marine
Fisheries Service (NMFS), responsible for seabirds and for regulating
fisheries respectively, had given us warning. Our response was to
develop a set of regulations to minimize seabird bycatch, that are now
in effect. USFWS then wrote a biological opinion which required NFMS to
commence research to test the effectiveness of these regulations during
1999. In 1998 I discovered to my surprise that NMFS had not budgeted
funds for the research.
There followed a dizzying chain if events in which a researcher
from Washington Sea Grant, another longline representative and myself
developed a modest research program by obtaining an inadequate
Saltonstall/Kennedy grant, exempted fishing permits, small grants from
USFWS and NMFS. We are now meeting the obligation of the biological
opinion, but would like to be testing many more applications. In my
view a NMFS failure to undertake the research might well have provided
a legal cause of action with dire potential consequences for our
fishery.
The Endangered Species Act provides no balancing test between the
interests of the species involved and the impact of regulation on human
activity--it is a drop-dead statute, and amendment in the near future
seems unlikely. While it is reasonable to expect industry to
participate in discovering ways to mitigate endangerd species
interactions it is entirely unreasonable to expect a tiny fleet like
ours to do basic research on a worldwide problem. So long as our
environmental statutes maintain their current posture (we have no
problem with the protection of endangered species), the Magnuson/
Stevens Act should require that NMFS, as steward of the fisheries,
identify potential commercial fisheries/endangered species interactions
and perform the basic hands-on at-sea research necessary to discover
what fishing techniques and equipment will mitigate those interactions
with minimal impact on the fisheries--long before lawsuits are filed.
Alternatively (or perhaps better), NMFS should be required to provide
adequate funding for those willing to take the initiative--undoubtedly
this would require additional NMFS funding. NMFS has spent millions
trying to mitigate trawl bycatch. Why not expend equal sums when
longliners have a problem with an endangered species?
the american fisheries act--no cherry-picking co-ops
Among the unintended consequences of the American Fisheries Act is
a race to establish catch history in the BSAI fixed gear fishery for
cod, by those who have no real dependence on the fishery (exacerbated
now by a crab stock crash). The theory is that a ``co-op'' may be
established in the future, based on catch history, and everyone needs
to race to get one. We were not allowed to participate in the
development of the Act, and when we realized that it posed a threat to
us, we asked that language be included in the Act to protect us from
just this threat. We were told to go to the North Pacific Fishery
Management Council. We did, and twice the Council recommended emergency
rules to freeze the BSAI fixed gear cod fisheries at historic levels.
Twice the Secretary of Commerce disapproved those rules. We are now
awaiting with bated breath the secretary's response to a recent Council
reaffirmation of its earlier intent.
The sudden race for ``co-op'' catch history has placed us in
serious jeopardy, and makes us ask what other legislative changes might
have such unanticipated consequences. One which occurs to us is this:
the NOAA Office of General Counsel has offered the opinion that absent
a chance in legislation, NMFS cannot allocate ``catch history'' to sub-
groups within fisheries. This is exactly as it should be. ``Cherry-
picking co-ops'' raise the specter of groups of fishermen gathering in
smoke-filled rooms calculating what qualifying years might be selected
so that they can form a small co-op claiming the lion's share of their
fishery's quota. Twenty per cent of the vessels could quite possibly
walk away with forty percent of the quota, leaving the rest of the
vessels to wither on the vine. Good continuing public policy would
provide a level plyaing field so that all vessels in a fishery must be
included in a co-op. In that manner those whose recent catch histories
have suffered because of mechanical failure or for many other reasons
will have some bargaining power and a chance to survive.
In summary, we hope that in the course of reauthorization you will
impose a specific requirement that NMFS identify potential endangerd
species interactions in the fisheries it regulates, and undertake
hands-on at-sea research to ameliorate the problems; and that you
prevent the development of ``cherry-picking co-ops.''
Thank you again for your attention.
STATEMENT OF CHARLES McGEE, ANCHORAGE, ALASKA 99524
Mr. McGee. My name is Charles McGee, for the record. On
there is my post office box address, Anchorage, Alaska, 99524,
and what you are looking at is a mathematical description of
what a star looks like when it goes through Kodiak. Now, that
was copyrighted in 1992, and I called it on my sign-up, In the
Wake of IFQ's.
Now, I was commercial fishing out of Kodiak. I have been in
commercial fishing for many years prior to the IFQ's. In fact,
I recorded in the State of Alaska, Juneau, incorporated an
independent commercial fishing association in 1979, and I took
my proposal, my business plan to Lydia Silcraig, professor of
program planning and business development, University of
Alaska, and she gave me an A plus. I was the only one who
received any kind of grade, bothered to take a grant rating
course to begin with, and then submitted that underneath
Stevens' support through that foundation that was run by Mrs.
Henpeel down in Juneau under that foundation structure.
So from 1979, that fell flat because the proposal was
essentially too good, and so then I went and got on-the-deck
support for commercial fishing with salmon, prior to IFQ's
there, limited entry permits, and then I went into Grey cod and
halibut, and that was prior to IFQ's at that point.
Then I went beyond that, once I got out of that industry
because of the injuries sustained on the boat, wanting to get
back to it, because then I realized there was much more
draconian measures going on with the insurance industry, and so
I went into investigating that aspect of it because of my
sustained injury.
I present all this to you because this is a Senate
Committee on Commerce, Science, and Transportation, and I have
not yet received a notice of consideration for a Nobel peace
prize, and I cannot submit my own nomination. It has to be a
professor or a Senator, any Senator, and of course that would
give me the notoriety of achieving something that they have
been trying to do for, oh, 100 years, to figure out the theory
of everything. This is how all carbon-based life form came into
being.
I present this as a matter of record to Senator Snowe, and
I will make a copy for Senator Stevens, and I also gave a copy
to a commissioner representing the Securities and Exchange
Commission, indicating to him, and giving him some background
information that the State of Alaska, or its collective
manipulative attitude in controlling resource development has
been very bad to me.
Senator Snowe. Well, thank you very much.
Mr. Egan. Mark Lloyd, and then Tammy Schrader, followed by
Jack Stern.
STATEMENT OF DR. MARK LLOYD, EXECUTIVE DIRECTOR, ALASKA SEA
LIFE CENTER
Dr. Lloyd. I am Dr. Mark Lloyd. I am the executive director
of the Alaska Sea Life Center, and I certainly want to thank
Madam Chair, Senator Snowe, Senator Stevens and the committee
for allowing me to say a few words. I will try to make my
comments very brief.
I am no fisheries expert. I am a relatively new Alaskan
resident, but I did spend about 6 years as a conservation
management individual in New England, and at that time there
were numerous fisheries issues, including the management of
George's Bank, which indirectly and directly affected the
management of the entire region, and so I feel like I am kind
of back in that arena again, even though I had no plans to be
here at that time.
Many individuals and organizations represented right here
today have supported the institution where I work now, but the
single key issue I think here today is information. We need
more information on the marine ecosystem. For example,
obviously the EFH designation, what are the essential habitats,
and the direct impacts and social issues that go along with it.
I simply want to encourage broadbased support from all of
you on marine research, not only at the Alaska Sea Life Center,
but also institutes of marine sciences, various governmental
entities, and others, both public and private, to collect that
data in order to minimize redundancy of people reinventing the
wheel in different places.
Our institution collaborates with the parks department,
with NMFS, NOAA, with universities, and to disseminate data
throughout those organizations as well as to the general
public.
I am sort of glad to say that the Sea Life Center is
actually turning away research projects because of the physical
facility limitations and the fiscal constraints upon our
institution. The demand is overwhelming. It is really a good
thing to see that that many people are looking into the marine
ecosystem and what is going on there. We need that information.
But we are now challenged to accept new projects on
halibut, on cod, on invertebrates such as crabs, and we have to
balance those physical limitations and those fiscal restraints
in order to achieve those goals, but I simply want to encourage
support of all scientific research to evaluate the ecosystem
management and the social implications thereof.
Thank you very much.
Senator Snowe. Thank you.
Mr. Egan. Tammy Schrader, and then Jack Stern, followed by
Michael O'Callahan.
STATEMENT OF TAMMY SCHRADER, SMALL BOAT HALIBUT FISHERMAN
Ms. Schrader. My name is Tammy Schrader, and I am a small
boat halibut fisherman from Homer. I have purchased every
halibut IFQ that I own. My partner was given an initial
allocation, and he has since purchased additional quota through
loans. We fish from Homer to Dutch Harbor for halibut.
We feel that the current IFQ program is a better system of
management than the previous scheme for the following reasons.
Number 1, it is better for the resource. Gear conflict and gear
loss, with resultant wastage of halibut, is a nonissue.
Number 2, the market for halibut has given a resounding
yes. Our buyer did not buy halibut pre-IFQ. Fresh fish is now
the cornerstone of his business, and he actively seeks halibut
throughout the entire season. His company is one of the 500
fastest-growing companies, according to Inc Magazine, November
1999.
Number 3, each fisherman and processor has equal
opportunity to participate. For fishermen, both entrants and
long-time participants, loans are available due in large part
to a stable system of management if you would like to buy more
quota.
Number 4, safety was increased immensely by eliminating the
Derby-style fishery and the race for the fish. This benefit is
a measure that cannot be quantified.
Number 5, the current form of the program affords both
fishermen and processors much opportunity to deliver a better
product for a better price.
In conclusion, I feel that the system may be refined, but I
feel very strongly that it would not be good to do a wholesale
revamping of the program. We are small boat fishermen who have
made this work for us through loan purchases. Keep the current
equal assess through all participants, and do not create
special classes of IFQ holders.
Thank you.
Senator Snowe. Thank you.
Mr. Egan. Jack Stern, and then Michael O'Callahan.
STATEMENT OF JACK STERN, ATTORNEY, TRUSTEES FOR ALASKA
Mr. Stern. Thank you, Senator Snowe and Senator Stevens. My
name is Jack Stern. I am an attorney with the environmental law
firm, Trustees for Alaska. We, along with Earth Justice Legal
Defense Fund, represent Greenpeace, American Oceans Campaign,
and the Sierra Club in the Stellar sea lion litigation. I am
here today on behalf of Greenpeace, and I would like to say it
is a privilege to be here.
I would like to emphasize today our view that there have
been serious problems with the Magnuson-Stevens Act,
particularly the Sustainable Fisheries Act implementation by
NMFS and the North Pacific Council.
If I may, I would like to introduce into the record a
letter which was sent by our clients to NMFS last week that
details these problems, particularly with respect to
overfishing. As the letter points out, NMFS has failed to
implement minimum stock size thresholds and appropriate harvest
control rules, as required by the Sustainable Fisheries Act
amendments. Furthermore, NMFS has failed to identify maximum
sustainable yield and optimum sustainable yield, MSY and OSY,
for individual fish stocks although this is a basic tenet of
MSY management.
While we have serious reservations about whether MSY
management adequately takes into account the protection of
marine ecosystems, the fact remains that NMFS is not even
complying with the system that the law mandates now. As a
result, we think that serious problems of overfishing are being
overlooked here in the North Pacific.
Under the current overfishing definition, for instance, for
groundfish, a stock would not be declared overfished until it
reached 5 percent of MSY, which is roughly 2 percent of virgin
biomass. This is a frighteningly low biomass level, one that
would probably justify an ESA listing.
By not having MSST's, the North Pacific avoids having to
declare a fish species as overfished, and we have seen what has
happened with MSST's in the crab fisheries, and we think that
there would be similar results for other groundfish species
should appropriate MSST's be put into place here.
As to EFH, we would echo what Paul Seaton of AMCC said and
note that NMFS made a deliberate decision not to attempt to
comply with EFH mandates during the statutory time period.
Finally, with respect to bycatch I would note that we have
pointed out numerous times that NMFS and the council have
failed to take adequate measures to avoid bycatch. NMFS relies
on the IRIU full retention program, forgetting to note that
this program was put into place prior to the SFA amendments, at
least in the Bering Sea, and therefore is not sufficient to
meet the more stringent standards of SFA.
To summarize, we see serious problems with each of the
three main areas of the SFA amendments, and we urge you to
strengthen those mandates during reauthorization.
I have 20 copies of the letter. Should I----
Senator Snowe. Yes, you can give the letters to us and we
will include them in the record.*
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* The information referred to was not available at time of
printing.
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Mr. Egan. Michael O'Callahan. Is Michael O'Callahan here?
That concludes the list.
Senator Snowe. Thank you. Senator Stevens, I want to thank
you again for your hospitality in extending this invitation to
the Subcommittee. I want to thank all of you in the audience,
the witnesses, and those who have testified at the open
microphone session. Your insights and views will be very
helpful as we undertake the reauthorization of the Magnuson-
Stevens Act in this session of Congress.
This process does not stop here. Please do not hesitate to
submit information to the Subcommittee. In fact, I will ask
unanimous consent to hold the record open for the next 10
legislative days so that people can submit information and
statements for the Subcommittee record.
[The prepared statement of Mr. Asicksik follows:]
Prepared Statement of Eugene Asicksik, President and Executive
Director, of the Norton Sound Economic Developmenmt Corporation
Madame Chair and members of the Subcommittee, I am Eugene Asicksik,
the president and executive director of the Norton Sound Economic
Development Corporation (NSEDC).
In 1976 when Congress enacted the Magnuson-Stevens Fishery
Conservation and Management Act (MSFCMA), the fishery resources of the
Bering Sea were being harvested nearly exclusively by foreign
fishermen. The MSFCMA instructed the North Pacific Fishery Management
Council (NPFMC) and the Secretary of Commerce (Secretary) to regulate
the Bering Sea fishery in a manner that would reduce, and eventually
eliminate, foreign fishing by encouraging fishing by United States
fishermen.
In accomplishing that objective, MSFCMA national standard no. 4
directed the NPFMC and the Secretary to allocate fishing privileges in
the Bering Sea fishery among United States fishermen in a manner that
would be ``fair and equitable'' to all such fishermen. However, by 1991
the NPFMC realized that it and the Secretary's regulation of the Bering
Sea fishery had not afforded fishermen who reside in small western
Alaska communities ``fair and equitable'' fishing opportunities. To
conform its regulation of the Bering Sea fishery to the
nondiscretionary ``fair and equitable allocation of fishing
privileges'' national standard no. 4 requirement, in 1991 the NPFMC
established, and in 1992 the Secretary by regulation began
implementing, the western Alaska community development quota program
(CDQ program).
The NPFMC and the Secretary initially allocated 7.5 percent of the
total allowable catch (TAC) of Bering Sea pollock to the CDQ program.
In 1991 and 1996 the NPFMC and the Secretary expanded the CDQ program
to include a percentage of the TACs and guideline harvest levels, first
of halibut and sablefish, and then of crab and other groundfish
species. In 1996, Congress amended the MSFCMA to mandate the Secretary
to establish the CDQ program and to allocate a percentage of the TAC of
each Bering Sea fishery to the program. In 1998 Congress enacted the
American Fisheries Act, which increased the percentage of the TAC of
Bering Sea pollock allocated to the CDQ program from 7.5 percent to 10
percent.
In 1992 the 56 communities that initially were eligible to
participate in the CDQ program organized six CDQ groups. In
northwestern Alaska, fifteen communities on the Seward Peninsula and
surrounding Norton Sound (which collectively have a population of more
than 7,000 residents) organized NSEDC. NSEDC then applied to the
Secretary for a percentage of the 7.5 percent of the TAC of Bering Sea
pollock that had been allocated to the CDQ program, and was awarded 20
percent of the 7.5 percent. Today, NSEDC annually harvests 22 percent
of the 10 percent of the pollock TAC that has been allocated to the CDQ
program.
The opportunities arising from NSEDC's ability to harvest a share
of the percentage of the TACs of pollock and other Bering Sea fisheries
that have been allocated to the CDQ program are of significant economic
value. NSEDC has used the revenue it has derived from those harvest
opportunities to fund a variety of activities that benefit residents of
NSEDC's member communities, including employment and job training and
placement. NSEDC has funded near-shore salmon and other fish processing
and marketing, as well as salmon restoration projects and other
fisheries development activities. NSEDC also has created, and is
constantly enlarging, an education, training, and scholarship
endowment, which reflects NSEDC's recognition that investing in the
people who reside in its member communities, and particularly the
communities' teenagers and young adults, is key to improving the long
term economic future of the Seward Peninsula and Norton Sound region.
NSEDC also has invested in income-producing assets outside its
member communities that generate revenue which NSEDC then expends in
its member communities. NSEDC has purchased a fifty percent ownership
interest in Glacier Fish Company, a fishing company that owns two
midwater catcher-processor vessels and a freezer longline vessel, which
the company operates primarily in the Bering Sea. NSEDC's ownership
interest in Glacier Fish Company annually brings capital that would not
otherwise be available into the Seward Peninsula and Norton Sound
region. NSEDC believes that, in the years ahead, that annual in-flow of
capital will be another key component of regional economic self-
sufficiency. To accelerate that process, NSEDC intends to purchase
additional equity interests in the Bering Sea fishing industry.
As the CDQ program was conceived, and as it today continues to
operate, each CDQ group periodically prepares a community development
plan (CDP) that requests that the Secretary award the group a share of
the percentage of the TAC of a Bering Sea fishery that has been
allocated to the CDQ program. A CDP describes how the CDQ group that
submits it will harvest the requested share and how the group will use
the revenue earned from the harvesting to provide economic development
and social benefits to the western Alaska community or communities that
organized the company.
As the CDQ program was conceived, the Secretary evaluates the six
CDQ companies' CDPs, after which he, as an exercise of his
administrative discretion, apportions the percentage of the TAC of a
Bering Sea fishery that has been allocated to the CDQ program among the
six companies however he deems appropriate. But the Secretary's
regulations require the companies to first submit their CDPs to the
Governor of Alaska. The regulations then require the Governor to
transmit the CDPs and his recommendations regarding their approval to
the Secretary. See 50 C.F.R. 679.30(d).
The Secretary routinely accepts and implements the Governor's
recommendations.\1\ The practical consequence of the Secretary doing so
has been to delegate the Governor de facto authority to exercise the
Secretary's administrative discretion in the Secretary's stead.
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\1\ The National Academy of Sciences' report on the CDQ program
describes the Governor's de facto control over the apportionment of CDQ
allocations among the six CDQ groups as follows:
The CDPs are] submitted [by the groups] to the State of Alaska,
which reviews the plans for compliance with federal and state
guidelines and may return a plan for revision if pertinent information
is missing. The state [i.e., the Governor's staff] recommends
allocation to the governor, who has the option of changing it. Once the
state has decided on an allocation, the [NPFMC] is consulted. Although
the National Marine Fisheries Service is required to perform a final
review of the plans prior to their approval and authorization, this has
been basically a pro forma step to date.
Report, at 63-64.
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Because the right to harvest a share of the TAC of a Bering Sea
fishery--and particularly the Bering Sea pollock fishery-is of
significant economic value, the CDP application process through which
CDQ groups are awarded shares of the TACs is highly competitive. The
competition has created a strong inducement for the groups to conform
the content of their CDP applications to satisfy the perceived desires
of the members of the Governor's staff who recommend to the Governor
the percentage share of the TACs that the Governor recommends to the
Secretary that each CDQ group should receive. Since the same members of
the Governor's staff also closely monitor the ongoing business
decisions and activities of the CDQ groups, the constant need for each
group to satisfy the discretionary requirements of State oversight
intensifies the competition between the groups and motivates the groups
to engage in business activities of which they hope State regulators
will approve. Conversely, it also motivates the groups not to engage in
business activities of which State regulators do not approve, even if
the decision to engage in a particular activity makes good business
sense.
During the early years of the CDQ program the CDQ groups for the
most part contracted with established fishing companies to harvest
their respective shares of the TACs. Each CDQ group used its harvest
contract to negotiate employment opportunities on board fishing company
vessels, and used the revenue derived from the harvest to provide local
economic development-related activities for the benefit of their
western Alaska communities.
Because negotiating a contract with an established fishing company
is a relatively simple and straightforward activity, the discretionary
award of shares of the TACs to the competing CDQ groups initially did
not hinder the groups' ability to operate in the time-sensitive and
highly competitive international business world of which the Bering Sea
fisheries are a part. However, as the size, scope, and sophistication
of the business activities in which CDQ groups are involved have
increased as the CDQ program has matured, policy issues relating to
state and federal government involvement in the business activities of
the CDQ groups have grown more complex. To provide this Congress
information about both those and other CDQ program-related issues for
use during its consideration of the reauthorization of the MSFCMA, in
1996 the 104th Congress directed the National Academy of Sciences to
prepare and to deliver to this Congress a ``comprehensive report on the
performance and effectiveness of the [CDQ program].'' See section
108(h) of the Sustainable Fisheries Act, Pub. L. No. 104-297. In 1999
the Academy delivered its report to this Subcommittee. See National
Research Council, The Community Development Quota Program in Alaska,
National Academy Press (1999).
After evaluating the information and conclusions in the Academy's
report and reviewing the lessons learned from its eight years of
participation in the CDQ program, NSEDC has identified the following
CDQ program-related subject areas that it requests the Subcommittee to
investigate and address.
1. Authority of the Governor of Alaska to Approve and Control
Business Activities of Subsidiary Companies in Which CDQ
Companies Own Equity Interests.
As the CDQ program has matured, CDQ groups have purchased varying
percentages of equity interests in fishing companies. Most of those
companies are the companies with whom the CDQ groups initially had
contracted to harvest their respective shares of the percentages of the
TACs of Bering Sea fisheries that have been allocated to the CDQ
program.
For example, NSEDC has purchased a fifty percent equity interest in
Glacier Fish Company. The Bristol Bay Economic Development Corporation
and Aleutian Pribilof Community Development Association have purchased
equity interests in the Arctic Storm and Starbound companies. And the
Central Bering Sea Fishermen's Association and the Coastal Villages
Regional Fund are in the process of purchasing equity interests in the
American Seafoods Company.
The Secretary's CDQ regulations require the CDQ groups to include a
``detailed description of all proposed CDQ projects'' in the CDPs that
the groups submit to the Governor, and the Governor then submits to the
Secretary. See 50 CFR 679.30(a). The Secretary's regulations define the
term ``CDQ project'' to mean
any program that is funded by a CDQ group's assets for the
economic or social development of a community or group of
communities that are participating in a CDQ group, including,
but not limited to, infrastructure development, CDQ
investments, employment and training programs, and CDP
administration.
See 50 CFR 679.2
The fishing companies in which CDQ groups own equity interests are
entities that are separate and distinct from the CDQ groups\2\. The
business activities of the fishing companies in which CDQ groups own
equity interests are funded by the assets of the fishing companies,
rather than by the assets of the CDQ groups. Nor are those activities
``program[s] . . . for the economic or social development of a
community or group of communities that are participating in a CDQ
group.''
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\2\ It is a blackletter rule of law that:
A corporation is a legal entity, separate and distinct from its
shareholders, officers, and directors, and, generally, from all other
corporations with which it may be affiliated. It possesses a legal
entity separate and distinct from its owners, regardless of whether
such owner is another corporation, a group of individuals, or a single
individual. (emphasis added).
18 CJS Corporations, section 8 at 273. Accord, State, Dept. of Rev.
v. Alaska Pulp America, 674 P.2d 268, 275 (Alaska 1983) (Alaska Supreme
Court holding that ``courts refuse to look through the corporate veil
and consider separate corporations a single unit even when inter-
corporation transactions are mere bookkeeping entries'' and ``even if
commonly owned and managed''); Croxtion v. Crowley Maritime Corp., 817
P.2d 460, 466 (Alaska 1991) (holding that ``The entire point of the
corporate veil doctrine . . . is that form does prevail over
substance'') (emphasis in original).
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For those reasons, the business activities of the fishing companies
are not ``CDQ projects'' over which, through control of the CDP
approval process and the discretion to apportion fishing opportunities
among the CDQ groups, either the Governor or the Secretary lawfully may
assert jurisdiction under the Secretary's CDQ regulations.
The Secretary has correctly held that, as a matter of federal law,
the Governor may not impose requirements on the administration of the
CDQ program that ``conflict with the Federal requirements.'' See 63
Fed. Reg. 30383 (1998). Nevertheless, for the past several years the
Governor has asserted that the business activities of Glacier Fish
Company and other fishing companies in which NSEDC and the other CDQ
groups own equity interests are ``CDQ projects'' as that term has been
defined by the Secretary.
NSEDC believes that the Governor's assertion is inconsistent with
the plain meaning of the text of the Secretary's ``CDQ project''
definition. Because NSEDC and the Governor's disagreement regarding the
meaning of the text of the Secretary's ``CDQ project'' definition is
legal in nature, NSEDC requested the National Marine Fisheries Service
(NMFS) to ask its attorney, the Office of NOAA General Counsel, to
issue a legal opinion regarding the subject. NMFS made the request, and
the legal opinion is being prepared.
Whatever the opinion's conclusion, it is appropriate during its
reauthorization of the MSFCMA for the Subcommittee to consider, and to
then reach its own view regarding, the policy implications for the CDQ
program of treating the business activities of fishing companies in
which CDQ companies own equity interests as ``CDQ projects'' that are
subject to the Governor's oversight and control. After considering
those implications, NSEDC recommends that, as a matter of national
fisheries policy, the fishing companies in which CDQ groups own equity
interests should be allowed to compete in the Bering Sea fishing
industry without having to subject their business decisions and
activities to prior review and approval by the Secretary or the
Governor through the CDQ program.
2. Issues Relating to Congress' Native American Self-Determination
Policy.
The CDQ program affords all residents of eligible western Alaska
communities an equal opportunity to participate in, and to derive
benefits from, the CDQ program. However, as Senators Inouye and Stevens
in 1996 explained to the Senate during its consideration of the
Sustainable Fisheries Act, Congress amended the MSFCMA to direct the
Secretary to establish the CDQ program because a majority of residents
of the eligible communities are Alaska Natives for whose economic and
social well-being Congress, under established principles of federal
Indian law, has a special fiduciary responsibility. See generally 142
Cong. Rec. S10820-24 (daily ed. Sept. 18, 1996).\3\
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\3\ In pertinent part, Senator Stevens informed the Senate that the
provisions for the community development quotas are based in part on
the authority of Congress to regulate the commerce of the Indian
tribes. The communities of the west coast of Alaska are predominately
Alaska native people. They were there and fishing a long time before
anyone else came on the fishing scene . . . We are allocating a portion
of the fisheries to the communities involved that are historic native
communities along our coast.
142 Cong. Rec. S10824 (daily ed. Sept. 18, 1996). See also Alliance
Against IFOs v. Brown, U. S. District Court for the District of Alaska,
No. A93-480 CIV, Transcript of Order Granting Motion for Summary
Judgment (Dec. 19, 1994) (holding that Secretary was authorized to
create the CDQ program by regulation because the Secretary ``has
substantial authority, without violating MSFCMA national standard four,
to specifically, intentionally, and voluntarily benefit Alaska Natives
if [the Secretary] spells out the fact that that is what she is
doing'').
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Since 1970 the hallmark of Congress's Native American policy has
been a commitment to Native American self-determination and to
affording Native Americans maximum participation in the administration
of federal programs that have been implemented for their benefit. But
for reasons more of happenstance than design, the Governor has been de
facto authorized to exercise oversight authority over the activities of
CDQ groups that contravenes Congress's Native American self-
determination policy.
Still, NSEDC believes that the exercise of oversight authority may
be appropriate if it reasonably and practicably furthers an appropriate
governmental interest. In the past, two governmental interests have
been advanced. The first is the interest that CDQ groups make informed
and financially prudent business decisions regarding the use of their
CDQ allocations. The second is the interest that the business decisions
of CDQ groups advance achievement of community economic development and
social objectives.
With respect to the first interest, the Governor's staff does not
necessarily have business and financial technical expertise that the
staffs of the CDQ groups do not. With respect to the second interest,
oversight which has the effect of allowing the Governor's staff to
substitute its judgment for the judgment of members of the boards of
directors of the CDQ companies regarding how best to provide economic
development and social benefits derived from the CDQ program to the
residents of western Alaska communities is an approach that Congress
abandoned when it established its Native American self-determination
policy.
For those reasons, NSEDC believes that Congress should revisit the
manner in which the Secretary and the Governor oversee the business and
other activities of CDQ groups.
3. The Need for an Identifiable and Judicially Enforceable
Standard for Apportioning the Percentage of the TAC of a Bering
Sea Fishery That Has Been Allocated to the CDQ Program Among
the CDQ Groups.
The Secretary's regulations delegate the Secretary administrative
discretion to apportion shares of the 7.5 or 10 percent of the TAC of a
Bering Sea fishery that has been allocated to the CDQ program among the
six CDQ groups. The Secretary's regulations also delegate the Governor
administrative discretion to fashion the recommendations regarding the
apportionments that he submits to the Secretary.
Since the Secretary in practice accepts the Governor's
recommendations, the Governor's exercise of his administrative
discretion is determinative, and there is no timely opportunity to
appeal the Governor's recommendations.
The Governor has adopted regulations that describe the procedure
that governs the participation by the Governor and his staff in the
administration of the CDQ program. See generally 6 A.A.C. 93.010 et
seq. In August 1999 the Governor amended his regulations. Section
93.040 of the amended regulations identify twenty factors the Governor
and his staff may consider in deciding the Governor's recommendation to
the Secretary regarding the division of CDQ quota among the CDQ groups.
In actual practice, an administrative structure that allows a
decisionmaker to make decisions by applying multi-decisionmaking
criteria actually allows the decisionmaker to make decisions pursuant
to no legal standard other than his or her unfettered discretion. As
the National Academy of Sciences has explained regarding the CDQ
program:
Multi-criteria decision-making is difficult. As Arrow and
Raymond (1986) have shown for the general case, such decision-
making is troubled by two tendencies: either one criterion
appears to take over as the single criterion, or decisions
appear to be inconsistent. These dangers exist whether or not
the analyst applies a ``scoring system,'' which implies a
single unit of measure for all of the criteria. Use of a
scoring system tends to increase the probability of being
inconsistent. Thus, it should be no surprise that the [CDQ
companies] most affected by the application of the many
criteria that the State uses find the outcome somewhat
difficult to fathom.
NAS Study, at 88.
[CDQ groups] fear that their particular allocation of a share
of the total CDQ quota is highly uncertain. This uncertainty
arises from a sense that the criteria used by the State of
Alaska to allocate individual shares of the total quota are
unclear. There is a concern that if a group is perceived by the
State as receiving ``too much'' income their share of the total
allocation may be reduced and given to another group with
greater needs. Conversely, if a group is not performing well it
may lose its share of the total allocation in the future. The
committee [that conducted the NAS study] finds these various
forms of uncertainty to have undesirable effects on the
development strategies chosen by the various boards of
directors [of CDQ companies].
Id. 74.
To remedy the problem, the National Academy of Sciences has
recommended to the Subcommittee ``that changes be made to simplify the
criteria, in consultation with the CDQ groups.'' Id. 95.
NSEDC supports that recommendation.
4. The Advisability of Authorizing CDQ Groups to Expend
Revenues Derived From the CDQ Program for Non-Fisheries-Related
Economic Development Activities in Western Alaska Communities.
Although the limitation does not appear either in the section of
the MSFCMA that directs him to establish the CDQ program or in his
regulations, the Secretary generally has required CDQ groups to
restrict the ``CDQ projects'' described in their CDPs to fisheries-
related economic development activities. NSEDC understands that the
Secretary's implementation of the restriction relies on language in the
text of the preamble to the Secretary's regulations (which has no force
of law), rather than on the text of the regulations themselves.
After investigating the result that the fisheries-related
development restriction has produced, the committee that conducted the
National Academy of Sciences study concluded that the restriction means
that although the CDQ program has two objectives--community development
and fishery development--``community development'' is defined as
``fishery development.'' The committee finds this strict requirement to
be of dubious merit. Thee are, to be sure, advantages to a fisheries
program that encourages continued investment in, and improvement of,
fishery resources and fishing capacity. To the extent that there are
viable fishery-related investments in the coastal villages that promise
reasonable returns on investment, they should be pursued. However, we
can foresee a time when this restriction on investment opportunities
will force the CDQ [company] boards [of directors] to make investments
that may not promote economic diversity and sustainability at the
village level. it is also possible that the available sound fisheries
investments in many villages will ultimately be exploited, in which
case the restriction will force some CDQ boards to undertake less than
ideal investments. A more compelling argument is that ``community
development'' should be seen as broader than just fisheries
development.
Id 75-76.
To remedy those problems, the National Academy of Sciences has
recommended that
the restriction that CDQ revenues [are] to be invested only in
fishery-related activities should be removed, at least for some
portion of the revenues. Many of the communities will find that
fishery investments are still the ones they wish to undertake.
However, since community development is broader than fishery
development, funds should also be available for other
activities that will enhance community infrastructure or land-
based economic activity. This broadening of the allowed
investments would also remove uncertainty about whether
particular investments are indeed ``fishery related'' and thus
allowable under current rules.
Id. 76-77.
NSEDC supports that recommendation.
I would like to conclude my remarks by on behalf of the NSEDC board
of directors emphasizing that NSEDC very much appreciates the CDQ
program and the commitment Congress made in 1996 when it amended the
MSFCMA to codify the Secretary's establishment of the program to
improving the lives of all residents of the Seward Peninsula and Norton
Sound region. Over the past seven years the CDQ program has
accomplished much. And if during the years ahead the program is allowed
to fulfill its potential, it will continue to grow as one of western
Alaska's most important economic development programs.
Thank you.
Senator Stevens. With that, the hearing is adjourned.
[Whereupon, at 1:46 p.m., the Subcommittee adjourned.]
A P P E N D I X
Prepared Statement of Kris Poulsen, Owner and Manager of
Three Crab Vessels
I have been a participant in the Bering Sea crab fisheries for over
30 years. I currently own and manage three crab vessels. The current
crisis in the Bering Sea crab industry can only be compared to the
resource collapse in the early 1980's. However, in the early 1980's,
crab vessels had the opportunity to enter the emerging joint venture
groundfish fisheries. Today, with the recent collapse in all the major
Bering Sea crab fisheries and the beginning of limited entry in all the
EEZ fisheries off the coast of Alaska, there are no new alternative
fisheries for crab vessels.
The Bering Sea crab industry is grossly overcapitalized for the
size of the resource. There are more than 250 vessels which have
historically fished crab, and have been granted licenses. It is
estimated that total revenue for vessels during 2000 will be about $75
million. That equates to about $300,000 per vessel during 2000.
Unfortunately, the average vessel has historically required $650,000
per year to break-even. Obviously, many vessels are going to go
bankrupt, and the stability of the most dangerous industry in the
United States will be upset even more. Immediate relief is necessary in
the form of a direct financial assistance from the federal government
to buyout excess fishing effort in order to alleviate this disaster.
The Magnuson-Stevens Fishery Conservation and Management Act of
1996 took steps in the right direction, especially with implementation
of National Standards 9 (bycatch) and National Standard 10 (safety of
life at sea). However, I still find the industry to be in the same
place today, in regards to both bycatch and safety of life at sea, as
it was in 1996.
Bycatch of crab is a major problem in the crab fisheries,
especially with the implementation of pot limits in 1992, which
heightened the race for crab. By speeding up the fishery, crabs are
unable to escape from the mandated escape mechanisms which crab traps
(or pots) employ. What results is increased bycatch, as well as crab
mortality, which has undoubtedly had a hand in the recent crash of the
crab resources.
Safety of life at sea has improved very little since 1996. In fact,
just last year 7 crewmembers were killed during the snow crab fishery.
Innumerable injuries also occur, scarring peoples lives forever. Both
problems of safety of life at sea, as well as bycatch can be
dramatically reduced if the management regime were allowed to change.
The current olympic style derby is bad for both the fishermen and the
resource.
Congress should allow the moratorium on IFQ's to lapse, to
authorize the regional Councils the proper tools to fix problems such
as those faced by the crab industry. Some form of IFQ or co-operative
is necessary for the long-term survival of this industry, comprised of
a lot of independent small businessmen. An IFQ or co-operative will
take away the race for fish and allow fishermen to avoid periods of
dangerous conditions. In addition, by slowing down the fishery, the
crab pots will be able to function as designed. Undersize crab will
have time to crawl out before the pot is hauled to the surface again,
minimizing bycatch and the impact on the crab resource.
In conclusion, the Bering Sea crab industry is in desperate need of
relief in the form of reduction of capacity, due to severely low crab
resource levels. However, it is also my belief that implementation of
either an ITQ or co-operative is necessary to avoid resource collapses
in the future. An ITQ or co-operative is also the only viable solution
to the severe safety problem of the Bering Sea crab industry.
______
Prepared Statement of Bristol Bay Economic Development Corporation
Introduction:
The Bristol Bay Economic Development Corporation (BBEDC) is the
third largest of the six CDQ groups participating in the Community
Development Quota Program (CDQ). BBEDC represents seventeen communities
and their 6000 residents in Bristol Bay.
The CDQ Program has provided the only opportunity for the region,
its communities, and residents to participate in the Bering Sea
fisheries and bring the benefits of that participation back to the
region for the benefit of the communities and their residents.
CDQ Program Issues:
We in the CDQ Program are just beginning to make a positive impact
on our regions. Given time, the CDQ Program will be the most important
and successful economic development tool to be made available to the
residents of western Alaska. It is the last and only hope to move our
areas toward self-sufficient economies. We in the remote geographic
areas of the state encounter many roadblocks and barriers to the
development of diverse and well established economies. The high cost of
living and lack of year round employment in smaller communities, where
as many as 50% of the residents live below the poverty level, documents
the enormous problems facing the CDQ program participants. High costs
of living, transportation and lack of modern communication tools along
with relatively small and geographically dispersed populations
compounds the problems that confront us.
Here in Bristol Bay and other CDQ regions, where salmon is our
bread and butter, we have seen the dramatic down turn in prices and
resources available to our local fishers. It is no longer possible to
support our living costs with returns from salmon fishing and
subsistence. Subsistence is a necessity of life in the ``bush''. The
NAS study clearly points out the necessity of a cash economy to support
and make possible the subsistence economy.
BBEDC has placed a great deal of emphasis on the development of the
``Human Resources'' of the region. Through the CDQ program, training
and employment within the Bering Sea fisheries has provided well paying
jobs for residents totaling many millions of dollars brought back to
the region through wages.
Programmatic Issues:
The CDQ Program was organized to provide the maximum flexibility in
project development to the individual CDQ groups, recognizing the many
differences between the groups. Differences in geographic location,
economic opportunities, number of residents served, and cultural and
philosophical differences.
An important aspect of the program is the ``OVERSIGHT'' role
assigned to the State of Alaska. BBEDC recognizes and fully supports
the necessity and appropriateness of state oversight. Oversight
provides a mechanism to ensure that the intent of the CDQ Program is
met and the benefits of the program are delivered to the communities
and residents of the region.
Oversight is critical to the CDQ program to insure and defend the
integrity of the program from those who would diminish or destroy this
program. The integrity of the program must be maintained at all cost to
protect and move the CDQ Program forward.
The National Academy of Science, National Research Council Ocean
Studies Board Report, mandated in the Magnasun Act Reauthorization,
pointed out the many successes and suggestions for further improvements
in the CDQ Program.
Conclusion:
Attached to this document is a copy of the Bristol Bay Economic
Development Corporation's Executive Summary for the 1998-2000 CDP and
the Annual Report for 1998 both which give more detail descriptions of
the projects and programs undertaken by BBEDC during the past three
years.
BBEDC appreciates the opportunity to address the committee and
supply written information. We urge you to continue the CDQ Program as
authorized at its current levels of allocation of the fishery resources
of the Bering Sea. The people of western Alaska look forward to the
coming years and the positive impacts the CDQ Program will have on
their communities and their lives.
Respectfully submitted:
Judith Nelson
Bristol Bay Economic Development Corporation
community purchase of halibut and sablefish individual fishing quota
shares discussion paper and community ``set aside'' of halibut charter
individual fishing quota shares discussion paper
NOTICE
Following are the Gulf of Alaska Coastal Communities' Discussion Papers
regarding Community Purchase of Existing Commercial IFQs and Community
``Set Aside'' of halibut charter IFQ.
These documents, although approved in concept by the GOACCC Board of
Directors, have been approved in their final form and may be edited
prior to final approval at the May 31, 2000 GOACCC Board of Directors
meeting.
Executive Summary
National Standard 8 of the Magnuson-Stevens Fishery Conservation
Management Act directs that ``Conservation and management measures
shall, consistent with the conservation requirements of this Act
(including the prevention of overfishing and rebuilding of overfished
stocks), take into account the importance of fishery resources to
fishing communities in order to (A) provide for the sustained
participation of such communities, and (B) to the extent practicable,
minimize adverse economic impacts in such communities.''
The Oceans Studies Board of the National Academy of Science's
National Research Council (NRC) report on Individual Fishing Quotas,
Sharing the Fish: Toward a National Policy on IFQs, explicitly
recommends that ``For existing IFQ programs, councils should be
permitted to authorize the purchase, holding, management and sale of
IFQ by communities.''
Alaska's halibut and sablefish IFQ program, created prior to the
adoption of National Standard 8, was not designed to minimize adverse
economic impacts on smaller fisheries-dependant coastal communities in
the Gulf of Alaska and, by all current indications, will not provide
for the sustained participation of many of Alaska's smaller Gulf
communities in the halibut and sablefish IFQ fisheries.
Existing loan programs or newly created community loan entities may
help reverse current trends regarding quota share transfer and job
loss. However, these approaches still focus on individual ownership and
are subject to an individual's economic needs and decisions.
Community IFQ ownership provides an alternative model that could
allow qualifying communities to obtain halibut and sablefish fishing
rights and preserve those rights in perpetuity--similar to an
endowment.
Eligible communities are defined by four criteria: 1. located on
salt water (coastal); 2. fisheries dependant; 3. remote (no road
access); and 4. less than 2,500 people as recorded by the 2000 census.
These criteria qualify six communities in halibut management area 3B,
twelve communities located in halibut management area 3A, and twenty-
two communities located in halibut management area 2C.
A non-profit community development corporation or fisherman's
association would be an appropriate ownership and management entity for
community IFQs. The entity must be inclusive of all residents in
qualifying coastal communities, native and non-native alike.
Communities should be restricted by the same ownership caps
currently applied to individual IFQ holders. In addition, communities
should be restricted to purchasing shares for areas in proximity to
their communities. Additional limitations should be applied to halibut
management area 2C and sablefish area ``Southeast'' and ``West
Yakatat''.
Given community caps and geography limitations as well as market
costs, it is improbable that a cumulative cap for the program is
needed.
Once IFQs are purchased by the community ownership entity, they
become ``community fishing quota'' (CFQ) and can be fished by community
residents without block or vessel class distinction.
If blocking restrictions are imposed, they should not be limited in
number nor more restrictive than the current ratio of blocked and
unblocked shares.
Allocations within communities should primarily be determined by
the community ownership entity--with each community developing its own
criteria.
Communities are required to have some community residents involved
in the fishing of community quota shares and cannot ``lease'' quota
share for fishing by non-residents with non-resident crews.
Individuals should have use caps, probably in the range of 25,000
to 75,000# per individual--inclusive of privately held IFQs.
The community ownership entity remains the registered owner of
community quota shares and annually notifies RAM division of its intent
to transfer an amount of quota to an designated community member
Communities are free to resell their quota shares; however, upon
resale quota retains its block and vessel size restrictions. (Some
exceptions may apply for blocks in area 3B).
Codes of conduct will be established for the ownership entity,
quota transferee and crewmembers. Administrative costs and dept service
will be limited to 25% of ex-vessel value.
Sunset provisions would compromise the program's objective of
creating endowment like fishing opportunities for residents of
qualifying Gulf of Alaska coastal communities.
RAM division of the National Marine Fisheries Service would he the
primary agency for administration and oversight of the program.
Community governing structures provide another approach to natural
resource management that may enhancement the success of Alaska's
halibut and sablefish IFQ program.
______
Letters Written to Hon. Olympia J. Snowe and Hon. Ted Stevens
January 17, 2000
Dear Senators:
My name is Gordon Ito and I am a lifelong resident of the Kotzebue
region. I am currently a board member of the Bering Sea Fishermen's
Association, a member of the Kotzebue Fish a Game Advisory Committee, a
board member of the Arctic Marine Resource Commission and a tong time
subsistence hunter and fisher of our regions resources.
The CDQ program which has been in affect since 1992 has been of
enormous importance to the villages south of my region. The jobs and
opportunities created for these villagers has meant the difference in
particular for the young people who are struggling to enter into the
21st century's economy. When the program was adopted by the NPFMC many
of the people of our region were dismayed that the council's adoption
of a boundary excluding us from the program was upheld. We see no just
reason that our exclusion from participating in the Bering Sea program
be maintained into the future by federal regulation. The justification
for the adoption into the program are as fitting in our region, as they
are to the south. Our economic circumstances at this time are as
compelling, as the reasons cited for the adoption of the program to
benefit the regions to the south of us, also. At the present time our
small salmon fishery is a ghost of its former economic importance to
the region. Additionally, though there are other species that we may be
able to promote, such promotions will take significant capital and at
this time we lack that specific capital to go forward and attempt to
market these underutilized species in our region. We believe our
inclusion into the CDQ allocation program administered by the state
under direction by the NFMS and the NPFMC is the vehicle to allow not
only for localized job creation but as training for our young people to
pursue creative economic endeavors elsewhere.
It is clear that the money available from the pollock CDQ in
particular could and would be used in our region to fully develop our
other marine resources.
We are asking that the Magnuson Act amendments include a new
provision including us within the boundaries of the current CDQ
program. The communities of Kivalina, Point Hope, Deering, Buckland,
Shishmaref and Kotzebue have asked me to provide this request to you.
We will be submitting more detailed information about our communities
the past reliance on the marine resources of the region and information
concerning the state of our regional economy.
I hope that after reviewing our situation you will see the wisdom
in allowing our inclusion in the CDQ program.
Sincerely,
Gordon Ito
______
January 12, 2000
Dear Sirs/Madam,
The Native Village of Kotzebue, on behalf of its 2,400 members,
would like to provide testimony in support of the inclusion of Point
Hope, Kivalina. Kotzebue, Buckland, Deering and Shishmaref into the CDQ
program.
The justification for this consideration is both sensible and
biologically supported.
It is sensible because all coastal villages affected, potentially
and practically, have some stake in the maintaining of present levels
of resource populations, regardless if they have been delineated in
some way. For example, the current qualification boundary for the
existing CDQ program essentially qualifies ``all villages south'' of
the imaginary boundary extending Russia-bound from Wales. There is no
real practical reason for this boundary, as marine resources give no
heed to boundaries.
Biologically, it is becoming evident that the continental shallows,
which in this area constitutes all of the Kotzebue Sound connected to
and including the Bering Sea, is a birthing area for marine resources,
such as crab of several species, as well as a feeding ground for most
marine mammals which feed off of the assorted resources. Since we do
have ongoing studies that are indicating that this may be the case,
then it makes sense to include the above Villages to be included in
present and future CDQ scenarios.
In the event the North Pacific Management Council takes this
testimony into consideration, we thank you.
Sincerely
Pete Schaeffer,
Executive Director
______
January 17, 2000
Dear members of the Senate:
On behalf of 10,000 residents, and the marine communities residing
in this area, I am submitting testimony in support of amending and
reauthorizing the Magnuson-Stevens Fisheries Conservation Act.
We ask for favorable consideration and inclusion into the Community
Development Quota (CDQ) for these several communities in the Arctic/
sub-Arctic region.
Kotzebue, Kivalina, Buckland, Deering, Pt. Hope, and Shishmaref are
coastal cities in need of inclusion to foster a long-term economic
development with resources familiar to our livlihood.
Through participation as communities within the jurisdiction of the
Northwest Arctic Borough, North Slope Borough (Pt. Hope), and the
Bering Straits region (Shishmaref), they have an opportunity to become
members of Federal fisheries allocation plan that is necessary for them
to regain some meaningful purpose in the state, and in waters that
include Federal jurisdiction.
The Kotzebue Sound/Bering Sea-Arctic Ocean that these communities
occupy must have some stake in the future activities that allow them to
be part of an overall fisheries plan previously excluded to them in the
past for unnecessary and overlooked reasons. This can now be corrected
through appropriate legislative language in the reauthorization of the
Magnuson-Stevens Fisheries Conservation Act.
Respectfully submitted,
Dennis J. Tiepelman
President/ CEO
______
January 14, 2000
Dear Senate Commerce Committee:
The Northwest Arctic Borough is aware that the northern boundary of
the Bering Straits may have been misinterpreted in the Community
Development Quota (CDQ) Program. Because it may have been
misinterpreted, several Northwest Arctic Borough communities (Kotzebue,
Kivalina, Deering, Buckland), a Northslope Borough community (Point
Hope) and a Bering Straits Region community (Shishmaref) are left out
of beneficial economic and long range fishery career opportunities that
a CDQ Program provides.
The Northwest Arctic Region no longer has a thriving commercial
salmon fishery. Since the latter part of the 1980's the price of chum
has dropped from a high of .85 cents a pound to .16 cents a pound in
1999. The down hill spiral of prices for chum has had a profound
economic impact for our 220 primary permit holders and 220 or so
``deck-hand'' permit holders. Not only do our fishermen suffer, but
their families also feel the economic impacts of Kotzebue Sound's
distressed fishing industry.
In reading the Magnuson-Stevens Act (as amended), which established
the CDQ Program, there is no definition of where the northern boundary
of the Bering Sea or Bering Strait ends. Since this act established the
CDQ Program and has authority to define the northern boundary of the
CDQ Program, the Northwest Arctic Borough is recommending to this
Senate Committee, who has authority to propose amendments to the act,
to allow the Magnuson-Stevens Act to include the above communities to
participate in the CDQ Program.
The CDQ Program has brought stability, jobs and economic
development to other areas in western Alaska that have some of the
highest unemployment rates. The Northwest Arctic Region has the highest
unemployment rates in the state. Taking the annual averages from the
years 1990 to 1998, the unemployment rate in the Northwest Arctic
Borough for these nine years is 16.2% (Alaska Department of Labor) . A
CDQ Program would definitely alleviate the unemployment in this region.
By allowing Point hope, Kivalina, Kotzebue, Buckland, Deering and
Shishmaref to participate in the CDQ Program, it would not merely be
adding them to the program, but it would be justice due to these
communities.
Whether it be clarifying the northern boundary of the Bering Sea or
amending the Magnuson-Stevens Act to include the above communities,
because they do have a distressed fishing industry, it is important to
allow these communities to participate in the economic opportunities
that a CDQ Program provides.
The Northwest Arctic Borough strongly encourages this committee to
consider adding these villages to the CDQ Program.
Sincerely,
Chuck Greene
Mayor
______
January 18, 2000
The Honorable Olympia J. Snowe, Chair
Subcommittee on Oceans and Fisheries of the Senate
Committee on Commerce, Science, and Transportation
Washington, D.C.
Re: Written Comments of Coastal Villages Region Fund on the Magnuson-
Stevens Act Reauthorization
Dear Senator Snowe:
On behalf of the twenty member communities of the Coastal Villages
Region Fund (``CVRF''), I would like to present our comments to the
Subcommittee concerning the reauthorization of the Magnuson-Stevens
Act. This Act provides the framework for how the fishery resources of
the United States are to be managed throughout the exclusive economic
zone. As such, the policies that are enacted into the law by the
Congress are critical to those individuals, companies, and regions that
rely upon those resources for their livelihood and well-being.
CVRF is one of the six community-based groups organized to
participate in the Harold Sparck Western Alaska Community Development
Program. In fact, in addition to being the one individual who conceived
of the CDQ program as a way of bootstrapping Western Alaska residents
into the commercial fisheries immediately adjacent to their
communities, it also was Mr. Sparck who organized the Coastal Villages
CDQ program.
As any independent observer will tell you, the CDQ program has met
and surpassed everyone's expectation of what could be accomplished. As
we near the end of the first decade of its existence, western Alaskan
residents are now a part of the Bering Sea and North Pacific fisheries.
Whether through employment on vessels, within fishing companies, or as
owners of those companies, the CDQ program is meeting its goals. As to
local and regional economic development, the program is beginning to
put the pieces together where the benefits from the offshore fishing
activity will provide the mechanism to create self-supporting economies
in the communities. I am sure that each CDQ group will go about this
process in a different manner, however, the bottom line is that without
the CDQ program, there would be no tools or mechanisms available.
This brings me to the points that I would like for the Subcommittee
to consider as it completes the reauthorization process.
1. The CDQ program has been included specifically in the Magnuson-
Stevens Act and in the American Fisheries Act of 1999. It has been
studied by the National Research Council, which concluded that it is a
successful program and should be continued for the long term, if not
permanently. We believe that the program has become even more
successful and beneficial since that report was completed. We request
that the Subcommittee enshrine the program as a permanent part of the
Nation's fisheries policies.
2. In action by the North Pacific Fishery Management Council (the
``Council'') in1995 and in amendments to the Magnuson-Stevens Act in
1997, the CDQ program was expanded to include all species for which
there is a total allowable catch in the Bering Sea and Aleutian Islands
area. Regulations implementing the statute require that CDQ harvests of
target species be kept within the quotas for all species, no matter how
small the allocation. This system has made it impossible to harvest a
sizable portion of many of the target species. While the National
Marine Fisheries Service (``NMFS'') and the Council are dealing with
this issue, it is our belief that for the issue to be addressed fully
it will need Congressional action. We do not have a specific proposal
at this time other that to identify this as an issue that needs further
consideration through the reauthorization process.
3. In the joint CDQ groups' testimony presented by Larry Cotter,
there is an extensive discussion of the observer requirements that have
been added for the CDQ program. We agree with the points raised in
those comments and would like for the Subcommittee to consider one
additional point. During 1999, CVRF petitioned the Council to reduce
the observer requirements on a sablefish and halibut catcher boat in
which we own an interest. The justification for this petition was that
when this same vessel is participating in the IFQ program there is a
less onerous observer requirement. In addition, CVRF agreed to some
additional restrictions to meet the legitimate needs of NMFS in regard
to harvest of prohibited species and discard of unwanted bycatch. Upon
consideration of this request, the Council twice approved the petition
and twice it was denied by NMFS. We believe that the observer
requirements, in some cases, are onerous given the amount of harvest on
a particular vessel and the precedents set in the management of the IFQ
program. We request that the Subcommittee review these requirements and
reduce the burden on this aspect of the CDQ harvest.
4. CVRF has been a supporter of the concept that revenues from the
CDQ program be invested in the fishing industry. While the CDQ groups
have a monumental charge--creating a self-sustaining economy in their
respective regions--accomplishing this solely through investment in
fisheries-related projects is not feasible. In our view, investments
outside the region in the fishing industry (offshore fishing boats,
shoreside seafood facilities located outside the region, etc.) will
provide the financial ability to create self-sustaining economies in
the groups' regions that are based in part on fishery-related
industries and in part on other economic activities. CDQ groups should
be able to invest their fishery-related income into a wide-range of
economic activities that together will provide the jobs and
opportunities for residents of western Alaska communities. We are now
reaching the point when the range of economic activities will begin to
be identified and implemented. Consequently, flexibility to support the
various choices needs to be available to the CDQ groups.
Thank you for the opportunity to present this testimony. We look
forward to working with the Subcommittee as it continues its
consideration of the Magnuson-Stevens Act.
Fred K. Phillip
Board President
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Rear Admiral Thomas Barrett
challenges in meeting enforcement responsibilities
Question 1. In your statement, you briefly discussed the challenges
you face in meeting your enforcement responsibilities under the
Magnuson-Stevens Act. It has been stated that the Coast Guard is
stretched thin and recruitment and retention problems are occurring
throughout the service. You stated that the Coast Guard will be cutting
back on routine operations to save resources for emergency situations.
How are the Coast Guard's organizational problems affecting your
operations in the north Pacific, including fisheries law enforcement,
search and rescue, and drug and migrant interdiction? Please give
examples of operations that will he reduced in the north Pacific.
Answer. Our operational reduction will require some routine patrols
to he shortened or cancelled and may impact our ability to project a
full-time presence along the U.S./Russia Maritime Boundary or fully
monitor domestic fishing operations. There will he no planned
reductions in our search and rescue response operations.
commercial fishing vessel safety
Question 2. Beginning with field hearings during the 1996
reauthorization, the Subcommittee heard of the need for an increased
focus on safety of life at sea. The Sustainable Fisheries Act added
National Standard 10, which promotes the safety of life at sea. It is
understood that fishing in Alaska is one of the most hazardous
occupations in the nation. In some fisheries, a race for fish and other
conditions cause fishermen to forego needed vessel maintenance and fish
in conditions that are too dangerous for their boats. Please respond to
the following two questions regarding the Coast Guard's recently
completed series of dockside safety boardings of crab fishing boats in
preparation for the Bering Sea Snow Crab season: Did you find a
significantly better or worse maintained fleet than in previous years?
Answer. The Coast Guard conducted dockside safety boardings prior
to both the Red King Crab fishery in October, 1999 and the Bering Sea
Snow Crab fishery from January 15, 1999 to March 23, 1999. Since this
was the first operation of this type, it is difficult to compare this
year's results to previous years. The information gathered during this
first operation will serve as a useful data point in developing trends
and conclusions about the material condition of the fleet in future
years. Though not indicative of nationwide compliance trends and
voluntary examination participation rates (6 percent of the total
commercial fishing fleet is examined in the voluntary examination
program nationally with only 3 percent of the total fleet receiving
decals for compliance), the results of the operation were positive in
that they indicated a large number of vessels in the targeted fisheries
had current Coast Guard Commercial Fishing Industry Vessel Safety Act
Decals. The Coast Guard boarded 75 out of the 250 (30 percent) vessels
in the fishery and found 53 (70 percent) of those vessels had current
Coast Guard Fishing Vessel Safety Exams and 73 (97 percent) had
stability letters. Two vessels were found to be overloaded and three
others reportedly offloaded pots when they learned of the Coast Guard's
presence.
Question 3. Did you find any problems that would support the
position that current fisheries regulations force fishermen to put to
sea in unsafe vessels?
Answer. No. Generally, the intense competitive nature of the crab
fisheries, along with the extraordinarily harsh winter conditions of
the Bering Sea, dictate that only substantial, well-founded boats can
economically survive in this fishery. So this is not a situation of
unsafe vessels being ``forced to'' put to sea. Instead, the derby-type
nature of the crab fisheries, or any derby fishery for that matter,
creates a substantial economic penalty for those operators who chose to
delay fishing or suspend operations in adverse weather. Under this
system, when the quota is caught, the entire fishery is closed, leaving
no reasonable way for those who choose to delay operations due to
forecasted had weather to catch up. Under this situation, some
fishermen may choose to operate in weather far more severe than might
otherwise be prudent.
u.s.-russian maritime boundary line: illegal foreign fishing vessels
Question 4. What is being done by the Coast Guard to address the
significant increase in foreign fishing vessels illegally crossing the
U.S.-Russia maritime boundary to fish?
Answer. In response to increased foreign fishing vessel activity,
the Coast Guard dedicated additional air and surface resources to the
U.S.-Russia Maritime Boundary (MB) patrol and enforcement effort in
1999. Ninety-two MB incursions were detected in 1999, a ten-fold
increase over 1998. In addition to increased patrol efforts, which may
not be sustainable given other mission demands, the Coast Guard is
pursuing various initiatives related to the maritime boundary.
Recently, the Seventeenth Coast Guard District Commander (D17),
headquartered in Juneau, Alaska, met with his Russian counterpart from
the Northeast Russian Federal Border Service (NRFBS) to discuss ways of
improving the current situation. Discussions included possible joint
patrols, formal hand-off procedures for future incursion cases,
potential data sharing, and a shiprider program. The NRFBS and D17 have
developed a working relationship and are actively engaged in
identifying more effective means of fisheries enforcement along the MB.
The Coast Guard will continue to pursue and develop this co-operative
relationship. In addition, the Coast Guard continues to work closely
with the Department of State to address international issues regarding
the maritime boundary treaty. Finally, in an effort to increase
operational effectiveness, the Coast Guard is exploring the use of non-
lethal technologies as a means of stopping non-compliant foreign
fishing vessels detected operating inside the U.S. Exclusive Economic
Zone.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Al Burch
Question 1. What are your thoughts on EFJ?
Answer. It is a very dangerous piece of legislation for the harvesting
and processing industry. It is so vague that the environmentalists will
miss interpret and miss use it to close down large areas to trawlers
first and all other fisheries later. Case in point--Marine Mammal
Protection Act and Endangered Species Act lawsuits against National
Marine Fisheries Service by the environmentalists because of an
unproven link between sea lions and Pollock, cod herring salmon and
flat fish are next.
Question 2. Has NMFS adopted an overly-broad interpretation that
dilutes the original intent--that is, to protect truly essential
habitat, rather than the entire ocean?
Answer. The way NMFS interprets the act is irrelevant. Anything NMFS or
NPFMC does will not be acceptable to the environmentalists. The act
needs to be re-written in such a manner that will protect the
environment and still allow the industry to survive. Proof that an
action is detrimental to the environment needs to be determined before
actions are taken. The socio-economic impact studies of the proposed
actions need to be in-depth and per reviewed. I am sure that any action
taken now will result in more law suites than were filed under the MMPA
and ISA.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Jeffrey W. Bush
Question 1. In 1992, the North Pacific Fisheries Management Council
implemented the community development quota program, or CDQ's for
western Alaska. As you know, the CDQ program allocates a percentage of
the annual catch of a variety of commercial fisheries directly to
western Alaska villages. These villages were originally selected
because of their geographic isolation and dependence on subsistence
lifestyles. Therefore, the CDQ program was designed to increase limited
economic opportunities through enhanced development of fishing
industries, new employment opportunities, and community infrastructure.
The 1999 National Research Council report, required by the Sustainable
Fisheries Act, concluded that the greatest weakness of the CDQ program
is a lack of open, consistent communication between the CDQ groups and
the communities they represent. At approximately $20 million a year,
the CDQ program ought to be providing real benefits to these
communities. Certainly, the development of some villages has had a
positive effect, but what can the State of Alaska do to help distribute
the wealth?
Answqer. The State of Alaska (state) monitors the actions of the
CDQ group participants very closely. A significant component of state
oversight is determining the level of benefits reaching CDQ
communities. Each CDQ group must maintain a Community Development Plan
(CDP), which is a working business plan that must be kept current. A
CDQ group may not engage in an activity that requires an amendment to
the group's CDP until state and federal approval has been granted.
CDQ groups are required to submit quarterly reports with
consolidated financial statements that clearly identify CDQ projects,
revenue and expenditures, year-to-date information on education,
employment and training activities, and minutes from all board
meetings. An annual audit from an independent auditor is also required
from each group. The state monitors and responds to quarterly reports
and annual audits on a regular basis.
New state regulations for the CDQ program were incorporated in
1999. Among the revisions was the establishment of CDQ Program
Standards. Included in the program standards are requirements that each
CDP must include specific and measurable benefits to each community
participating in the CDP, and that a proposed CDQ have the support of
all participating communities. A CDQ group must also demonstrate how a
proposed CDQ project will further the goals and purposes of the CDQ
program set out in 50 C.F.R. 679.
Question 2. The NRC report on community development quotas
recommended that the State of Alaska prohibit the permanent conveyance
of CDQ's to businesses located outside of these Western Alaska
communities. Clearly, the point of the program was to provide a
platform for fisheries and economic development in these villages. Has
there been notable interest in outside businesses to invest or
otherwise become involved in the CDQ Programs in western Alaska?
Answer. Yes. Recognizing the strength of this program and the potential
for growth by the CDQ groups, CDQ groups have been approached by
several non-Alaskan fishing businesses as potential investment
partners. CDQ groups have become equity investors in various catcher
processor vessels owned by non-Alaskan corporations. The passage of the
American Fisheries Act in 1998, and in particular its American
ownership requirements, has created additional opportunities for CDQ
groups to partner on an equity basis with industry players.
Question 3. Regarding the permanent conveyance of CDQ's, do you
(the state) support this recommendation of a permanent prohibition?
Answer. The state opposes any permanent transfer of CDQ's (quota),
and has adopted state regulations to prohibit the commitment or
encumbrance of future quota. The CDQ program was structured to provide
ongoing fisheries-related opportunities to communities in western
Alaska. The state believes the best way to provide benefits to CDQ
communities is through the local control and ownership of CDQ quota at
the CDQ group level.
I hope this reply provides adequate responses to your questions.
Please let me know if further information is required.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Paul Seaton
Question 1. Do you think the concern over the potential for delay
in routine projects or other monetary losses by non-fishing interests
as a result of essential fish habitat is valid?
Answer. It is difficult to answer this question because Alaska
Marine Conservation Council (AMCC) has no knowledge of examples where
the consultation process has caused delay and additional costs to non-
fishing interests. Staff of the National Marine Fisheries Service have
indicated that the consultation review process is not an additional
review process, but is coordinated with existing review of permit
applications and project plans.
Question 2. In regard to ITQs, how do you see the allocation
process of halibut and sablefish affecting these stocks, and what is
the potential for success in other fisheries?
Answer. The Total Allowable Catch, or TAC, was not altered when
ITQs were introduced into the Alaska halibut and sablefish fisheries,
so the overall level of fishing has not changed. There have been some
cases of localized depletions of fish stocks because of concentrated
fishing activity in near-shore areas by ITQ-holders, as well as other
fishermen.
Applying the ITQ model, or other quota system, to fisheries in the
Gulf of Alaska could have very different results than the halibut and
sablefish ITQ program, which are two species fished by a single gear
type. Fisheries in the Gulf of Alaska are multi-species and are fished
using a variety of gear types, making management and monitoring of the
program much more difficult and complex.
Strong conservation measures must be tied to the establishment of
new programs; conservation should not be left to chance, but instead
should be a required part of any allocation system. AMCC advocates that
any new program to establish fishing co-operatives, ITQs or other
efforts to limit access to a fishery, be explicitly designed to promote
habitat-friendly and low-bycatch gear. AMCC urges Congress to require
that the conservation objectives listed in ``Sharing the Fish'' be met
before a new co-operative, ITQ, or other quota program is allowed to be
established. AMCC also advocates that any new quota program should
include a sunset, and not continue on in perpetuity. Sunsets give
managers the option to make conservation adjustments as needed.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Richard Lauber
Question 1. In which North Pacific fisheries, if any, do you think
new ITQ programs should be considered?
Answer. I would recommend considering new IFQs only for the scallop
fishery. We approved a license system for scallops in February 1999,
and if approved by the Secretary, only nine vessels will be authorized
to fish scallops. Management for the most part is delegated to the
State of Alaska. Scallop IFQs would allow the fishery to proceed at a
slower pace, and the fishermen to fish more cleanly and provide the
highest quality product possible. In the past, the Council expressed
interest in proceeding with development of an IFQ system for the
pollock fisheries, but with the recent development of co-operatives for
those fisheries under the American Fisheries Act, the need for further
rationalization seems to have abated for the time being.
Question 2. How do you suggest bringing common sense into the
Essential Fish Habitat dialogue, and do what the Sustainable Fisheries
Act intended by protecting those areas that are truly essential
habitat? How would you suggest refining EFH provisions to place the
appropriate emphasis on unique habitat? What types of research is
needed to appropriately designate Habitat Areas of Particular Concern
in Alaska? Could you describe how the Council went about establishing
the closed areas in the Bering Sea and Gulf of Alaska? What sort of
scientific information were these closures based on?
Answer. The definition of Essential Fish Habitat (EFH) in the
Magnuson-Stevens Act (the Act) and NMFS guidelines both have
contributed to the very expansive treatment of EFH. I believe that most
legislators probably were thinking of a much narrower focus to EFH when
the SFA was being drafted. For example, the staff of the Committee on
Merchant Marine and Fisheries, in an April 25, 1994 memorandum to the
Council chairmen, suggested that the definition of essential habitat
should include spawning areas, nursery areas, and areas of special
ecological significance to those fisheries. They cautioned that the
definition should not include the entire geographical area occupied by
the fish stocks. Other definitions were offered as well, some more
expansive than others. In the Congressional Record of October 18, 1995,
when final amendments to HR 39 were being debated on the House floor,
essential habitat was characterized as breeding and nursery areas.
However, in the end, the following more expansive definition was placed
in the Act:
``Essential fish habitat includes the waters and substrate
necessary to fish for spawning, breeding, feeding, or growth to
maturity.''
NMFS guidelines then defined and expanded on almost every word in the
definition:
Waters: aquatic areas and associated physical, chemical, and
biological properties, used currently or historically.
Substrate: sediments, geological features underlying the
waters, and associated biological communities such as coral
reefs or submerged aquatic vegetation.
Necessary: habitat required to support a managed species or
assemblage at a target production level reflecting
conscientious stewardship.
Spawning, breeding, feeding, or growth to maturity: covers a
species' full life cycle.
Feeding and growth to maturity: includes EFH for prey species
if the managed species depends on the existence of a specific
prey species.
This is not, of course, the first time that this has ever happened.
Almost any piece of legislation, regardless of how simple and straight
forward it may appear at first blush, undergoes a very expansive
transformation when it is reshaped into guidelines or federal rules by
the Agency or the councils. The old axiom is very true: the devil
really is in the details.
Nonetheless, the combined effect of the legislated definition and
the interpretive guidelines is to commit the Secretary and councils to
a very broad ecosystem approach to fish habitat conservation and
enhancement. And to a great extent, this approach is in many respects
far beyond our technical abilities and knowledge base. As much as we
would like to know what the habitat needs are for each species, the
reality is that our current information is very limited, even in our
case off Alaska where there have been large commercial fisheries, with
rigorous reporting requirements, for many years.
Instead of attempting to tinker with the definition of EFH or the
guidelines, as I suggested in my original testimony, it may be more
constructive to set our sights on gathering the types of detailed
information that will be required to delineate those very specific
ecologically significant, spawning and nursery areas that were more
likely the expectation of the legislators when the SFA was developed.
We need to proceed from the basic EFH amendments we now have, which are
very broad brush, based mainly on level 0 (no systematic sampling), 1
(presence/absence data), and 2 (habitat-related densities, available
mainly for adults) type information, to well defined focused areas
that, if damaged, either by fishing or non-fishing activities, could be
a critical factor in the sustainability of a particular species.
The guidelines provide such a pathway: identification of Habitat
Areas of Particular Concern (HAPCs). These will provide the basis for
defining habitat that is truly essential. We have started that process
up here and hope to identify such special habitats at our meeting in
April 2000. The second avenue, already mentioned above, is to do more
research. Currently, only salmon information rates much more than a
level 2 status. With more research over the next ten years, we need to
elevate the level of information for our major groundfish species and
species complexes to levels 3-4, which should enable us to sharply
focus on those hotspots that need to be protected and given special
consideration. This will take significant funding for research by NMFS
and its science centers if we truly want to identify and ultimately
protect essential habitat.
In summary, I do not believe that we should tinker with the
definition of EFH just yet, but should keep firmly in mind that
protecting EFH will require compromise, both in addressing fishing and
non-fishing impacts, because our data are so limited. Over time, as
more information is garnered to identify special areas needing
protection, we can apply more of a rifle, rather than shotgun, approach
to addressing protection of EFH.
In answer to some of the other questions posed above, our Council
has closed large areas to on-bottom trawling. In doing so we relied on
distribution maps of the species we were trying to protect. For
example, trawl surveys and catch information showed that what was left
of the king crab populations occurred throughout Bristol Bay. We had
extensive information on trawl bycatch of crab because of our
comprehensive observer program that has been imposed on the fishing
fleet since 1990, and before that on the foreign fleets. The crab
stocks have remained low for some time now. We have closed other areas,
such as around the Pribilof Islands, and near rookeries and haulouts to
protect marine mammals. Much of the information comes from commercial
fisheries, trawl surveys and other more archival information generated
in past research. But again, our observer program plays a significant
role in providing information and verifiable bycatch data. Without that
program, we would have little idea of what was being caught and
discarded by fishermen in the absence of observers.
Regarding further delineation of Habitat Areas of Particular
Concern, we will need considerable research on the location and
functions of specific bottom habitats in the overall ecosystem. Our
original EFH amendments in 1999 already identified living substrates
(e.g., eelgrass, kelp, sponges, and coral) and freshwater areas used by
anadromous fish as HAPCs. Currently, we are considering HAPC habitat
types including seamounts and pinnacles, the ice edge, the shelf break,
and biologically-consolidated fine-grained sediments for HAPC status.
We also are examining certain specific HAPC areas including a deep
basin in Prince William Sound, the Chirikov Basin north of St. Lawrence
Island, and red king crab bycatch areas around Kodiak Island.
Our goal is to identify ecologically important, sensitive, exposed,
and/or rare areas that are vulnerable to fishing and non-fishing
activities. In the longer run, we will need to be as specific as
possible so that we can better balance protection of habitat with the
needs of both fishing and non-fishing stakeholders. We need more
research by NMFS, and we need stakeholders involved in locating these
valuable, vulnerable habitat areas. Significant funding will be needed,
as well as patience, as we try to tease out the relationships of fish
species to their habitat.
Question 3. The Council and NMFS should be commended that only one
stock in the North Pacific has been designated ``overfished''--Bering
Sea snow crab. However, the decline in snow crab populations may be
largely due to environmental factors. Additionally, in the October 1999
Status of Stocks report, NMFS states fishing levels are safe, but that
Snow crab is ``overfished.'' If the decline is due to environmental
factors, the agency may inaccurately be labeling the status of snow
crab as being ``overfished.'' Do you have any comments on this topic?
Answer. We actually now have two additional crab species classified
as overfished--opilio and blue crab. As with bairdi, these fisheries
are managed by the State of Alaska, with general oversight through the
Council's crab FMP. As with bairdi, environmental factors are thought
to be the primary cause of the declines, such that ``overfished'' may
well be a misnomer. However, the specific regulations stipulate
criteria for classification as overfished, and those regulations
require an ``overfished'' designation based on the biomass level of the
stock, regardless of the cause. In any case, removals by fishing
remains one variable we can control, so quotas should be reduced or
eliminated as necessary to achieve rebuilding goals, along with other
measures including habitat protection and bycatch mortality reductions.
In the spirit of fairness and public perception, however, it may be
desirable to coin a new phrase to refer to specific species which are
in low abundance, but for which fishing cannot be identified as the
primary culprit. As I stated in my testimony on January 18th, we want
to be precautionary, especially if a species is in low abundance and
needs extra protection. But we do not want to be compelled to close
down or significantly reduce other target fisheries on the basis of
bycatch concerns, if an environmental shift will still be needed to
restore the species in low abundance.
Question 4. The North Pacific Council is often identified as the
region with the best fisheries conservation record, but NMFS' October
1999 Status of Fisheries Report to Congress indicated that the agency
does not know the status of 219 out of 252 fish stocks in the area. In
the Bering Sea groundfish fishery alone, NMFS says 14 species are not
overfished and the status of 109 is unknown. Do you feel the agency
needs to improve how it presents information to the public in order to
restore some measure of confidence in the quality of scientific
research and fishery management actions that it takes with taxpayer
money?
Answer. When NMFS says it ``does not know the status of 109
species'', much of the time they are referring to various species of
little or no commercial value. We do not really manage for those
species and the commercial catch is very low. We have little or no
knowledge of their relative abundance, and their importance in the
overall ecosystem remains unclear to us. Unfortunately, it is unlikely
that we are going to gain definitive information on these species,
because the science and technology do not exist to accurately assess
their numbers or their specific importance to the ecosystem.
In an ideal world, with boundless funding for fisheries research,
we would know everything we need to about each species in our realm. We
know, however, that NMFS has very limited research funds and must
target those funds on research on fish species that are the true basis
for commercial fisheries. Our scientific support from the NMFS Alaska
Fisheries Science Center is outstanding. We receive annual reports on
each species with a TAC and on species complexes of importance to the
fisheries. I rarely hear any complaints about the research
presentations and their adequacy, and I firmly believe that their
scientific recommendations are highly respected.
Some species will remain unknown, and the issue raised here may be
one more of opticality than real significance. The lists of species in
the report to Congress seem more the result of an effort by over-eager
fisheries biologists to show they know all the species in the water,
rather than a cogent presentation of the species that are really
managed, and how they are faring. How to couch the lack of knowledge is
something which could stand improvement. These are minor species in
terms of management, and somehow the message needs to be conveyed to
the public, that with limited research funds, it is better policy to
expend them on the species of significance to the commercial fisheries,
since that is where the greatest potential damage could be done if the
managers are flying blind. We are happy that we receive the types of
comprehensive information that we do from NMFS, especially compared to
other regions of the U.S. Our scientific resources are valued highly up
here and we would not want their capacity diminished in any way.
We also have the most expensive and comprehensive observer program
in the nation, if not the world, all paid for by industry. The
observers count all species brought aboard and this information helps
us track any emergent problem with certain species. If we were having a
significant impact on a particular species that is not being tracked by
the scientists at the Center, I think that it would show up in our
observer collection program and set off alarms. Otherwise, we will
continue to believe that the most significant impact of our fisheries
is the removal of specific target species, and those are well monitored
and researched.
Question 5. Under Section 303 of the Magnuson Act, the North
Pacific Fishery Management Council is mandated to reduce bycatch for
fisheries under its jurisdiction. How have bycatch reduction incentives
worked? What have been the problems in creating these incentives? In
the North Pacific region, what do you see as the costs and benefits of
bycatch quotas, the sale of bycatch to support research, and the
donation of unavoidable bycatch to food kitchens?
Answer. Bycatch has been a focal issue for the Council over its 23-
year existence and we spend a significant amount of our time addressing
bycatch management, allocation, and reduction. Since enactment of the
1996 amendments the Council has taken the following specific actions:
Banned on-bottom trawling for pollock;
Established an incremental chinook salmon bycatch
reduction in trawl fisheries from 48,000 chinook down to 29,000
chinook by year 2003;
In process of developing a halibut mortality
avoidance program;
Reduced the maximum retainable bycatch (MRB) amount
for several species, including sablefish and rockfish; and
Implemented an improved retention and utilization
program which prohibits the discard of all pollock and Pacific
cod in all North Pacific fisheries, regardless of gear type or
fishery. Flatfish retention will be required for certain
species beginning in 2003, which should reduce overall total
discard rates in our groundfish fisheries to about 5%, well
below the world average of about 25%.
Unfortunately, we do not have a viable program of bycatch reduction
incentives at an individual vessel level. Our regulations promote
reduction of bycatch on a fleet-wide basis; however, no matter how
finely we subdivide the bycatch caps, there is always opportunity for a
few dirty vessels to spoil the fishery for all; i.e., there is little
incentive for vessels toindividually avoid bycatch because the penalty
is spread across the entire fleet. Our so-called vessel incentive
program (VIP) does provide for after-the-fact monetary penalties on
vessels which exceed certain bycatch rates of prohibited species.
However, the legal burden of proof required and the level of penalties
do not provide a strong incentive. In fact, very few cases have ever
been successfully prosecuted under this program. It remains on the
books simply because it is the only individual incentive program we
have, and it may provide some deterrent.
The ability to develop a system of individual bycatch
accountability has been fraught with legal issues. Primarily, again,
the burden of proof required to take a vessel off the water, on a real-
time basis, is too high given the level of hard data (from observers)
required. The necessary levels of observer coverage and sampling
protocols to very accurately measure real-time bycatch levels would be
prohibitively expensive, and still may not overcome the legal burden-
of-proof threshold required. Programs which might reserve quota for
clean fishers suffer from the same problem - how can we precisely and
accurately measure bycatch levels to determine who gets to fish and who
does not? The co-operative program now in effect for Bering Sea and
Aleutian Islands pollock fishermen may provide a new and effective tool
for individual bycatch reduction incentives. Because they are limited
in their catch of non-pollock species, the pollock co-op participants
are developing inter-co-op agreements, and employing the services of
real-time data monitors, to allocate bycatch of groundfish and PSC
species among the participants.
Concerning the benefits and costs of bycatch quotas, sale of
bycatch, donations, etc., presumably what we are referring to in this
context is Prohibited Species Catch (PSC) species which are not allowed
to be retained and for which there are specific, overall, fleet-wide
caps in existence (and not referring, for example, to cod that may be
caught while targeting pollock, but which is open for fishing and
marketable and not discarded). Quotas for these species would indeed
provide direct incentives for reduction of such bycatch, and allow
those species to be (1) caught in their directed fisheries and brought
to market instead of being discarded, or (2) in the case of juvenile,
unmarketable species, would enhance the overall productivity of the
stock. Benefits also would occur from a public perception standpoint.
Costs are related to the discussion above, in terms of the necessary
observer coverage required to monitor such quotas.
In conjunction with quotas, or all by itself, mandatory retention
of PSC and surrender for sale by the government (or donation to food
banks) may make sense from a public perception standpoint, but there
are market competition issues to consider, particularly for halibut.
There also are strong, longstanding political currents against allowing
the retention and sale of trawl bycaught halibut. There is also the
fact that, in the case of halibut, many are released back into the
water alive. Nonetheless, some halibut that have a very low chance of
surviving after being taken as bycatch, are donated to food banks. We
also have a pilot program for donation of salmon which normally die
when taken as bycatch in trawls. Crab bycatch is mostly small,
unmarketable crab that amounts to a small percentage of the total
mortality (< 2%). It must be discarded immediately.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Kevin B. O'Leary
Question 1. Should Councils be able to use an ITQ system?
Answer. An individual transferable quota-like system is one of many
mechanisms for managing fishery resources. If a council is to have the
proper flexibility to consider management options for the specific
needs of fisheries in their region, an ITQ style program is a needed
tool for them to have.
Question 2. How should the issue of fees or taxes be handled?
Answer. The current Magnuson-Stevens Act provides for a 3% fee on
the halibut and sablefish IFQ program in Alaska. This is not an initial
allocation fee, but an annual fee based on value of landed product.
This fee is designed for the management and enforcement of the IFQ
program in Alaska, as well as a certain percentage to be made available
for IFQ loans for first time IFQ buyers and small boat owners.
I believe it is inappropriate for an initial allocation fee to be
established. The granting of IFQs in the sablefish and halibut program
was based on history and this type of system can provide stability to
those involved in the fishery. The amount of quota issued is directly
relational to their participation and therefore, dependence on the
fishery in question. If initial allocation fees were established, some
of those who are most dependent on the fishery would not be able to pay
the price for continued participation.
I believe that an annual fee based on actual landed product for the
management of the program is totally appropriate and I supported the
implementation of fees for the sablefish and halibut program.
It is important to note that in addition to the 3% IFQ management
fee, that there are federal taxes on the sale of quota, and in many
areas of Alaska there are landing taxes for municipalities.
Question 3. Please provide guidance regarding the concerns about
consolidation and how traditional, family run businesses are impacted
under an ITQ program.
Answer. Without some sort of social engineering, the consolidation
of IFQs into the hands of a few would be a natural progression that
would be unacceptable. Each fishery should be evaluated to determine
what type of consolidation would be appropriate based on the social and
economic needs of the harvesters, processors and communities.
The small family owned fishing businesses are vital to the
viability of the coastal communities. In any kind of an ITQ program you
have some natural and needed consolidation. Usually when an quota
share-like program is requested by industry participants, the level of
over-capitalization and excess capacity have reached a level where all
participants are at risk. It is important to realize that consolidation
to one person is providing stability to another. Some form of
consolidation is expected and desired. The councils must carefully
analyze what the ownership caps for a specific fishery and/or area
should be, carefully weighing the needs of all involved, but allowing
for stability to develop.
Yes, you can have an ITQ program and continue to have traditional,
family run businesses which thrive and prosper. A perfect example of
that is the halibut IFQ program in Alaska which has provided a
tremendous source of stability and security to many small, family-owned
operations. In fact, there is some thought that without IFQs, many of
these operations may not have survived.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Chris Blackburn
Question 1. If excess capacity, or too many fishermen targeting
particular fish, is a problem in a fishery, should the regional council
be allowed to consider whether or not to use an ITQ system?
Answer: An unqualified YES. The Magnuson-Stevens Act requires the
commercial fishing industry to take significant measures to assure
sustainable fisheries. The Alaska fishing industry supported these
measures. Our communities are dependent on well management fisheries.
Open access fisheries are not ``environmentally friendly'',
``sustainably friendly'' or ``safety friendly'' models for fishery
management. Open access rewards those who can take the most fish in the
shortest amount of time. The fishermen who take time to avoid bycatch,
avoid critical habitat, deliver fish in prime condition and fish in a
safe manner is a fishermen are rewarded with a steadily declining share
of the catch. Not even the Magnuson-Stevens Act mandates can be fully
realized when fisheries are open access. For example, there are times
when halibut or salmon are mixed with trawl targets like flatfish or
pollock. Waiting to fish a week or so would give time for these
prohibited will move on and allow for clean fishing. However, NMFS does
not have the ability to close the season until conditions change. Since
many fishing seasons only last a week or two due to over-capitalization
fishermen have the choice of losing a season or dealing the best they
can to avoid the bycatch species.
The poster child for ITQ fisheries is the Alaska halibut fishery.
For decades it was a nearly year long fishery. Then the price went up,
the number of participants increased to the point that the fishery
became a two day derby. In the derby skates of gear with hooked halibut
were left on the bottom, fishermen worked 24 hours a day and sustained
injuries as a result and usually there were several deaths. The same
problems occur in the crab fishery for the same reasons.
Implementation of the halibut ITQ program allowed fishermen to take
personal responsibility for their fishery. The race was over, exvessel
value increased, new markets were developed, and skates of gear with
hooked halibut or no longer left on the sea bottom. Even more
important, the injury and death rates dropped dramatically.
It is amazing to me that the number of taxi caps are limited in
many areas of the nation and that in some areas the taxi's are limited
to specific areas within an area, but fisheries are open to all in most
cases.
Only during the development stage of a fishery can open access
work, and only for a short time.
Question 2. If Congress were to allow for some form of ITQ's, how
should the issue related to fees and taxes be handled?
Answer. Under any scenario there should be a fee or tax for the
management measures specific to a rights based fishery. The fee should
be based on the tonnage held by the fishermen. I also believe that
transfers of ITQ's should be taxed at a significant rate and the
revenue used for research. A significant transfer tax used this way
returns benefit to the industry and is a way of charging users for
their acquisition of a national resource.I actually prefer the American
Fisheries Act model since it does not give ``until death'' rights to a
quota, but allows the co-op to annually allocate among the members.
It's more like a lease arrangement. This model requires more
responsibility by the co-oped fishermen than does IFQ's, and therefore
relieves NMFS of micro management and some allocative decisions. In
this case some annual fee based on share would be appropriate and
should be assessed to the Coop itself.
Question 3. If councils were allowed to design an ITQ program with
fees or taxes, would your position on IFQ*s change?
Answer. No.
Question 4. Can you in fact continue to have traditional, family
run businesses in a fishery with an IFQ program?
Answer.The Alaska halibut IFQ program has actually put the family
back into the fishery. Since fishermen can take their time many now
employ family members on their boats.
Concerning concentration of share by large entities the North
Pacific Fishery Management Council dealt with this issue in the halibut
and sablefish fisheries by setting share caps and requiring owners to
be on the vessel while fishing their IFQ quotas.
Also, halibut shares were divided into ``blocks'' of three
different quota share sizes. There are limits on how many blocks a
vessel may have. A vessel cannot aggregate different sized blocks. A
vessel maxed out on his ability to buy more small blocks has to sell
the small blocks before buying larger blocks.
Critical to an ITQ program is the qualification criteria used to
initially to determine who will receive IFQ's. The criteria needs to be
pretty inclusive even at the risk of substantially decreasing the
allocation to large operations. It may also be useful to set aside some
quota for small boats in artesianal fisheries. Alaska has exempted
boats under 60-feet from a number of management regulations. I've
always felt it was a shame that some halibut quota was not left in open
access for fishermen to fish by hand from a skiff.
Thank you for the opportunity to expand on my comments at the
Anchorage field hearing.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Penelope Dalton
Please state whether or not you support Congress lifting the
moratorium on ITQ' and respond to some of the concerns raised in the
NAS study. For example, how could the initial allocations of quota be
accomplished in a fair manner and what could be done to address the
fear of a consolidated fishing industry in the hands of a few large
companies?
The witness did not provide a response.
In which North Pacific fisheries, if any, do you think new ITQ
programs should be considered?
The witness did not provide a response.
The Council and NMFS should be commended that only one stock in the
North Pacific has been designated ``overfished''--Bering Sea Snow crab.
However, the decline in Snow crab populations may be largely due to
environmental factors. In addition, in the October 1999 Status of
Stocks report, NMFS states fishing levels are safe, but that Snow crab
is ``overfished.'' If the decline is due to environmental factors, has
the agency inaccurately labeled the status of Snow crab as being
``overfished?'' Additionally, how many of the 98 species defined in
NMFS's report as ``overfished'' suffer from a similarly inaccurate
description as the Snow crab fishery?
The witness did not provide a response.
The North Pacific is often identified as the region with the best
fisheries conservation record, but NMFS' October 1999 Status of
Fisheries Report to Congress indicates that the agency does not know
the status of 219 out of 252 fish stocks in the area. In the Bering Sea
groundfish fishery alone, NMFS says 14 species are not overfished and
the status of 109 is unknown. What percent of the commercial catch do
these 109 Bering Sea species account for?
The witness did not provide a response.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Dave Benton
In which North Pacific fisheries, if any, do you think new ITQ
programs should be considered?
The witness did not provide a response.
How do you suggest bringing common sense into the Essential Fish
Habitat dialogue, and do what the Sustainable Fisheries Act intended by
protecting those areas that are truly essential habitat?
The witness did not provide a response.
Is the decline in Snow crab stocks due to overfishing or are there
other environmental factors to blame?
The witness did not provide a response.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Beth Stewart
If excess capacity, or too many fishermen targeting particular
fish, is a problem in a fishery, should the regional council be allowed
to consider whether or not to use an ITQ system?
The witness did not provide a response.
The 1999 National Research Council report on ITQ's recommended that
Congress should permit (1) the assessment of fees on initial
allocations of quota; and (2) imposition of an annual tax on quota
shares. Please answer the following two questions regarding this topic:
If Congress were to allow for some form of ITQ's, how
should the issue related to fees and taxes be handled?
The witness did not provide a response.
The NRC report indicates that such fees or taxes
should be considered because an ITQ program essentially
provides for the gift of a public resource to a private entity,
therefore, it may be appropriate to allow the public to receive
some economic benefit from the program. If councils were
allowed to design an ITQ program with fees or taxes, would your
positions on ITQ's change?
The witness did not provide a response.
Due to the free-market nature of ITQ's, a primary criticism is that
they could result in the consolidation of quota among only a few large
fishing companies. This could squeeze many traditional, small and
family run fishing operations out of business. These businesses are the
foundation of coastal communities all over this country. It is a
concern that if the number of ITQ programs increases nation-wide, then
the quota will be consolidated in a number of large fishing companies.
In regards to requiring accumulation limits, one NRC report recommends
that councils considering an ITQ program define limits on accumulation
of quota and other measures to prevent such a consolidation. It is
understood that these decisions would need to be made on a fishery-by-
fishery basis, but can you offer the Subcommittee any guidance on
whether you can in fact continue to have traditional, family run
businesses in a fishery with an ITQ program?
The witness did not provide a response.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
John Iani
If excess capacity, or too many fishermen targeting particular
fish, is a problem in a fishery, should the regional council be allowed
to consider whether or not to use an ITQ system?
The witness did not provide a response.
The 1999 National Research Council report on ITQ's recommended that
Congress should permit (1) the assessment of fees on initial
allocations of quota; and (2) imposition of an annual tax on quota
shares. Please answer the following two questions regarding this topic:
If Congress were to allow for some form of ITQ's, how
should the issue related to fees and taxes be handled?
The witness did not provide a response.
The NRC report indicates that such fees or taxes
should be considered because an ITQ program essentially
provides for the gift of a public resource to a private entity,
therefore, it may be appropriate to allow the public to receive
some economic benefit from the program. If councils were
allowed to design an ITQ program with fees or taxes, would your
positions on ITQ's change?
The witness did not provide a response.
Due to the free-market nature of ITQ's, a primary criticism is that
they could result in the consolidation of quota among only a few large
fishing companies. This could squeeze many traditional, small and
family run fishing operations out of business. These businesses are the
foundation of coastal communities all over this country. It is a
concern that if the number of ITQ programs increases nation-wide, then
the quota will be consolidated in a number of large fishing companies.
In regards to requiring accumulation limits, one NRC report recommends
that councils considering an ITQ program define limits on accumulation
of quota and other measures to prevent such a consolidation. It is
understood that these decisions would need to be made on a fishery-by-
fishery basis, but can you offer the Subcommittee any guidance on
whether you can in fact continue to have traditional, family run
businesses in a fishery with an ITQ program?
The witness did not provide a response.
If excess capacity, or too many fishermen targeting particular
fish, is a problem in a fishery, should the regional council be allowed
to consider whether or not to use an ITQ system?
The witness did not provide a response.
The 1999 National Research Council report on ITQ's recommended that
Congress should permit (1) the assessment of fees on initial
allocations of quota; and (2) imposition of an annual tax on quota
shares. Please answer the following two questions regarding this topic:
If Congress were to allow for some form of ITQ's, how
should the issue related to fees and taxes be handled?
The witness did not provide a response.
The NRC report indicates that such fees or taxes
should be considered because an ITQ program essentially
provides for the gift of a public resource to a private entity,
therefore, it may be appropriate to allow the public to receive
some economic benefit from the program. If councils were
allowed to design an ITQ program with fees or taxes, would your
positions on ITQ's change?
The witness did not provide a response.
Due to the free-market nature of ITQ's, a primary criticism is that
they could result in the consolidation of quota among only a few large
fishing companies. This could squeeze many traditional, small and
family run fishing operations out of business. These businesses are the
foundation of coastal communities all over this country. It is a
concern that if the number of ITQ programs increases nation-wide, then
the quota will be consolidated in a number of large fishing companies.
In regards to requiring accumulation limits, one NRC report recommends
that councils considering an ITQ program define limits on accumulation
of quota and other measures to prevent such a consolidation. It is
understood that these decisions would need to be made on a fishery-by-
fishery basis, but can you offer the Subcommittee any guidance on
whether you can in fact continue to have traditional, family run
businesses in a fishery with an ITQ program?
The witness did not provide a response.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Larry Cotter
In 1992, the North Pacific Council implemented the community
development quota program, or CDQ's for Western Alaska. As you know,
the CDQ program allocates a percentage of the annual catch of a variety
of commercial fisheries directly to Western Alaskan villages. These
villages were originally selected because of their geographic isolation
and dependence on subsistence lifestyles. Therefore, the CDQ program
was designed to increase limited economic opportunities through
enhanced development of fishing industries, new employment
opportunities, and community infrastructure. The 1999 National Research
Council report, required by the Sustainable Fisheries Act, concluded
that the greatest weakness of the CDQ program in Western Alaska is a
lack of open, consistent communication between the CDQ groups and the
communities they represent. Since CDQ's were designed to benefit entire
communities, not just a select few who have financial investments in a
CDQ business interest, how do you respond to the criticism raised in
the NRC report?
The witness did not provide a response.
The NRC report on CDQ's also criticizes the State of Alaska for not
providing enough outreach to the communities. The report goes so far as
to say that the State needs to help ensure that the communities and
their residents are aware of the program and how to participate. Do you
have any comments on this subject?
The witness did not provide a response.
The NRC report on community development quotas recommended that the
State of Alaska prohibit the permanent conveyance of CDQ's to
businesses located outside of these Western Alaska communities.
Clearly, the point of the program was to provide a platform for
fisheries and economic development in these villages.
Has there been notable interest in outside businesses
to invest or otherwise become involved in the CDQ programs in
Western Alaska?
The witness did not provide a response.
Do you support this recommendation of a permanent prohibition?
The witness did not provide a response.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Jack Phelps
During the Subcommittee's hearings on Magnuson, we have heard a
fairly extensive debate on the essential fish habitat provisions in the
Sustainable Fisheries Act. In short, many fishing interests support the
concept, but believe that the interpretation and implementation have
been too broad. On the other hand, the environmental community believes
that NMFS and the Councils should be more aggressive in identifying and
protecting EFH. And, finally, many non-fishing interests are extremely
concerned about the effect that EFH may have on businesses, especially
routine permitting procedures. It is possible that some of these non-
fishing interests may be afraid of having to deal with a new federal
agency and its bureaucracy. As a representative of the Alaska Forest
Association, could you please tell us if any of your member companies
experienced actual business losses or delays as a result of the EFH
provisions? Please explain.
The witness did not provide a response.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Freddie Christensen
In 1992, the North Pacific Council implemented the community
development quota program, or CDQ's for Western Alaska. As you know,
the CDQ program allocates a percentage of the annual catch of a variety
of commercial fisheries directly to Western Alaskan villages. These
villages were originally selected because of their geographic isolation
and dependence on subsistence lifestyles. Therefore, the CDQ program
was designed to increase limited economic opportunities through
enhanced development of fishing industries, new employment
opportunities, and community infrastructure. The 1999 National Research
Council report, required by the Sustainable Fisheries Act, concluded
that the greatest weakness of the CDQ program in Western Alaska is a
lack of open, consistent communication between the CDQ groups and the
communities they represent. Since CDQ's were designed to benefit entire
communities, not just a select few who have financial investments in a
CDQ business interest, how do you respond to the criticism raised in
the NRC report?
The NRC report on CDQ's also criticizes the State of Alaska for not
providing enough outreach to the communities. The report goes so far as
to say that the State needs to help ensure that the communities and
their residents are aware of the program and how to participate. Can
you please comment on this subject?
The NRC report on community development quotas recommended that the
State of Alaska prohibit the permanent conveyance of CDQ's to
businesses located outside of these Western Alaska communities.
Clearly, the point of the program was to provide a platform for
fisheries and economic development in these villages.
Has there been notable interest in outside businesses
to invest or otherwise become involved in the CDQ programs in
Western Alaska?
Do you support this recommendation of a permanent
prohibition?
Pertaining to the ``Questions for the Record'':
The questions as posed regard CDQs (Community Development Quotas)
already existing in Western Alaska (Bering Sea / Aleutian Islands.)
As you know, there are currently no CDQs in the Gulf of Alaska and
our constituency, with the exception of communities on the eastern side
of the Aleutians, are not in CDQ areas. Therefore, we cannot comment on
the questions as they directly relate to the current CDQ
program.However, our testimony to the Subcommittee reflected the
concern we have in the Gulf of Alaska that there is no corresponding
program which can retain or encourage fisheries access, specifically in
our smaller communities. Our feeling, substantiated by declining
village populations and job opportunities, by the ``migration'' of
permits and quota shares outside of those communities and by the
erosion of fishing access, is that if we don't do something soon, we
are going to see a lot of ``ghost towns'' in the Gulf of Alaska.
We are losing what development and access we traditionally had and
we are fighting continual restrictions on developing new fisheries
access, such as within the charter and tourism industry.
Subsequent to our testimony, we have continually promoted our
proposal to the North Pacific Fishery Management Council (NPFMC)
regarding amendments to the existing Halibut and sablefish IFQ
(Individual Fishing Quota) program which would allow a community non-
profit to purchase X number of quota shares (based on a cap) for
management within a community. The purpose of this proposal is to
maintain a certain level of quota share within a small coastal
community (or group of communities) in perpetuity. This would be based
on open market criteria. The status of this proposal is that it is only
now (as of February 11, 2001) being tasked by Council for first
analysis. This action has ostensibly been delayed by an over-burden on
staff due to analysis of the Stellar sea lion Biological Opinion and
other issues before Council. This has not been a satisfactory response
for us but we are encouraged that the Council is now moving forward. We
still have a long way to go but we are gaining political support from
various stakeholders as people further understand the proposal.It is
important to note that our commercial proposal is NOT a reallocation of
resources but just an addition of ``qualifying buyer.'' As we
understand from NMFS (National Marine Fisheries Service) General
Counsel, this is an allowable amendment to the existing IFQ program.
An additional proposal regards a community set-aside for the
proposed halibut charterboat IFQ program. We have been continually
testifying before Council that the charter ITQ will only work in our
communities if (a) we don't repeat the same mistakes of the commercial
IFQ implementation, and (b) if we have a ``community set aside'' for
initial issuance that allows our current operators to stay fishing and
promotes growth in the industry, combined with proposed Local Area
Management Plans (LAMPs) which can protect conservation concerns.
We are concerned, also, about other rationalization plans for other
fisheries and we want to make certain with every rationalization
proposal that (a) the impacts on small coastal communities are well
analyzed, and (b) there is some form of ``setaside'' or allowance for
community purchase. Here again, our intent is to reverse the decline of
fisheries access, prevent any future loss, and encourage new forms
which stabilize community economics.
We feel these items are specifically pertinent to Section 301 (a)
(8) of the Magnuson-Stevens Fishery Conservation Management Act
regarding consideration of community impacts. We feel we have had to
continually educate Council members and others of their obligation to
consider those impacts and we believe we are making progress in this
direction but it is a painfully slow process with no current guarantee
of positive results for the communities. We have chosen to ``work
within the system'' and we are committed to that process, but we ask
that the Senate Committee keep in mind the dilemma we are facing.
Subsequent to the January 18, 2000 hearings, we submitted copies of
our proposals to the Senate Committee, but I am sending additional
copies to your office for the record.
Thank you. Please call us at the above number if there are further
questions.
Sincerely,
Gale K. Vick, Executive Director
Gulf of Alaska Coastal Communities Coalition (GOAC3)
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Michael J. Hyde
Question 1. If Congress were to allow for some form of ITQ's, how
should the issue related to fees on initial allocation of quota shares
and an annual tax on quota shares be handled?
Answer. As Congress considers whether or not the moratorium on new
Individual Fishing Quotas (IFQs) programs should expire, it is
appropriate for Congress to review the issue of fees and taxes. While
Congress has authorized the collection of fees to recover management
and enforcement cost for IFQ/ITQ programs, the Secretary is prohibited
from collecting fees for in other fisheries, except for purpose of
recovering administrative costs. Congress should begin first by
deciding whether IFQ/ITQ programs should be treated differently than
other limited access programs in which the government extends to a
certain class of individuals the privilege to participate in a specific
fishery.
This policy issue received little or no attention in 1996 when the
Magnuson-Stevens Act was amended, authorizing the Secretary to collect
a fee of up to 3 percent to recover the costs of managing and enforcing
an IFQ/ITQ program. (Congress extended the authority to use fees
collected under an IFQ/ITQ system to fund programs aiding new entrants
and small boat fishermen.) Congress should be cautious before it
considers fees on recipients of initial quota allocation shares or
attempts to collect economic rent from IFQ/ITQ participants. The issue
should be considered within the context of the increasing use of
limited entry systems.
Question 2. If councils were allowed to design an ITQ program with
fees or taxes, would your positions on ITQs change?
Answer. If councils were given a free hand to impose fees and taxes
on ITQ programs, my position on ITQs would not change, but my
enthusiasm for participating in an ITQ program might well diminish.
Congress established a national policy in 1996 relating to appropriate
fee levels. Congress might elect to amend those provisions, but it
should continue to provide for a uniform, national policy on fees in
the Magnuson-Stevens Act to which councils must adhere.
Question 3. Can you offer the Subcommittee any guidance on whether
you can in fact continue to have traditional, family-run businesses in
a fishery with an ITQ program?
Answer. The answer is an unqualified ``yes.'' The halibut/sablefish
IFQ program is an excellent example of a fishery that retained its
traditional, family-run business character after converting from a
dangerous, wasteful ``race for fish'' format to a rationalized IFQ
fishery. The North Pacific Council instituted limits on quota
accumulation and adopted numerous other management measures designed to
preserve the socio-economic characteristics of the fishery. Congress
should allow councils the flexibility to tailor future IFQ/ITQ programs
to meet the management objectives of disparate fisheries.
______
Response to Written Questions by Hon. John F. Kerry to Kevin B. O'Leary
Question 1. What type of buyback program is recommended for crab?
Answer. Because the Alaska crab industry is currently facing a
fisheries disaster, with greatly reduced crab seasons, a straight
buyback for crab licenses is unrealistic. The buyback regulations
(which have not been published) would require some demonstration of an
ability to repay a loan. For the crab fisheries of Alaska, it is most
likely appropriate to combine some form of straight federal disaster
aid to a portion of the fleet, giving them an opportunity to sell out
of the fishery and lose the license/catch history and vessel. This
disaster money coupled with the ability to obtain direct and individual
loans to purchase catch history seems to make a lot of sense. One
thought that seems to have some merit is that of the ability to use
existing Capital Construction Fund accounts for the purpose of buying
someone out.
Regarding a buyback in the form of a reverse auction, this concept
should certainly be considered. A benefit to the nation would be that
those entities that are bought out won't go bankrupt causing further
distress in the industry.
Question 2. How have bycatch incentives worked and what have been
the problems?
Answer. As long as there is a ``race for fish'', bycatch incentives
will not work. When the fishery is slowed down through an IFQ or co-
operative program, then there is a reason to expect that industry will
have the ability to make a bycatch difference. Until that time, the
only option is to set a bycatch cap at the lowest possible level and
shut fisheries down when the cap is achieved.
Question 3. What are the costs and benefits of bycatch quotas, the
sale of bycatch to support research, and the donation of unavoidable
bycatch to food kitchens?
Answer. The concept of bycatch quotas has been debated among
industry for many years. One position is that by giving bycatch quotas
based on history that you are simply rewarding those who were the
dirtiest. Another way to give bycatch quotas would be to estimate a
realistic bycatch rate based on data and everyone would receive an
equal share. A bycatch quota would only work if there were an IFQ
system in place for the target species. The ability to slow the fishery
down and take more care under a quota system will automatically reduce
the bycatch of prohibited species, undesirable species, and the
interaction with seabirds. This is a good thing for the resource.
The sale of bycatch to support research is probably not a good
idea. The whole idea is to reduce the bycatch, not make money on it.
This would reduce the incentives to fish clean and have a lower
bycatch. After all, it is being used for a good cause. It is also
possible that research dollars could be higher than what the fishermen
who target on that species for their livelihood might receive. This
would result in an allocation dispute over the resource that is not
needed.
With regard to the donation of unavoidable bycatch to food banks, I
can only say that it is the right thing to do. With world hunger and
many people in the United States experiencing hunger problems, we have
an obligation as stewards of the resource to make sure the best and
wisest utilization is developed. It is absolutely appropriate to take
unavoidable bycatch, such as halibut and salmon in the trawl fisheries,
process that product and give it to the poor.