Skipper/Crew Co-Op:

Why:

            Fisheries rationalization is widely perceived as a flawed plan. Advantages in efficiency and management are offset by unintended consequences for skippers, crewmen, and coastal communities. The formation of a Co-Op for allocation of initial quota whose members include skippers and crew who show historic participation in, and dependence on, the resource could do much to address these problems. The resource would be harvested using low impact techniques and gear types and sold in a free market in the historical port of landing, addressing concerns with equity and sustainability.

How:

1.       Identification of potential members: Skippers and crew who participated in the harvest of the rationalized resource during the qualifying years will be sought out through advertisements in trade publications, newspapers and other appropriate media, as well as by contacting fisherman’s associations and trade organizations. Qualifying participants would show a dependence on the resource and be identified as long term participants by producing a crew contract, Internal Revenue Service documents or affidavits from vessel owners or fellow skippers and crew. It is important to note that by assigning the crewman one point for each year fished (two points for skippers) documentation is simplified, since it is not necessary to determine a specific amount of the resource harvested during the participant’s tenure.

2.       Creation of a legal structure: An Operations Plan and Agreement (first draft attached) will be submitted to the Regional Administrator of the National Marine Fisheries Service for approval. The Operations Plan will feature these four elements, designed to address equity and sustainability:

I.                   Regionalized Landings: Product must be delivered to the port of historical landing.

II.                Bycatch Limitations: Product must be harvested using fishing practices that minimize impact on non-target species.

III.             Free Market: No processor linkages.

IV.              Traditional Pay Scale: A system of compensation based on the Deep Sea Fisherman Union’s Set Line Agreement would be imposed.

3.       Allocation of Harvest Quota: Following an impartial research project to determine the level of investment in the industry by skippers and crew, including their share of daily operating expenses, inordinate levels of risk and physical effort, and keeping in mind their manner of compensation as independent contractors receiving “shares”, but also keeping in mind the long term nature of the investment of the vessel owner, a reasonable percentage of the total allowable catch would then be allocated to the Co-Op. Co-Op members would actively fish their shares as a skipper or crewman on any harvest vessel whose operation does not conflict with elements of the operations plan.

The following testimony has been supplied to staff in the Commerce Department as they contemplate the reauthorization of the Magnuson/Stevens Act:

A Call to Action for Sustainable and Diverse Coastal Fishing Communities

MSA Legislative Recommendations, August 2005

Reauthorization of the Magnuson-Stevens Act, and in particular any provisions for dedicated fishery access, must ensure the vitality of coastal fishing communities and the connection of community residents to local and regional marine resources. In particular, any authorization of limited access systems must maintain or enhance the connection of the fishing privileges to the fishing families in coastal communities.

The legislation should direct Councils to:

·        Establish conservation and socioeconomic objectives, including but not limited to the following socioeconomic objectives:

o       Promote active participation of quota share holders in harvesting operations as vessel owners (defined as owning a minimum of 20% of a vessel and being the owner of record for at least two years), operators, or crew;

o       Provide for the sustained participation of independent, coastal community-based fishermen as quota share holders and crew;

o       Maintain entry-level opportunities affordable to independent, coastal community-based fishermen;

o       Document crew member participation in harvest landings, by recording crew members on landing records;

o       Schedule periodic reviews, every five or at most seven years;

o       Provide incentives to achieve program objectives, including program modifications responsive to findings of periodic reviews.

Limited access programs should respect existing characteristics of the fleet, including ownership patterns, while enhancing access opportunities for active, coastal community-based fishermen.

Fishing quota must not become a commodity that can be traded independent of the actual fishing, the fishermen, vessel owners and the local, coastal communities.

The consolidation and absentee participation associated with rationalization of the Bering Sea & Aleutian Island crab fisheries should be examined and understood before authorizing additional limited access programs in the Magnuson Stevens Act.

A competitive market must be maintained for fishermen to sell their catch.

ALASKA LONGLINE FISHERMEN’S ASSOCIATION

403 Lincoln Street, Ste. 237 Sitka, AK 99835

phone: (907) 747-3400 fax: (907) 747-3462

alfafish@ptialaska.net

August 12, 2005

Matthew Paxton

Staff, Senator Stevens

Commerce Committee

Washington, DC

Dear Matt,

Thank you again for sending a copy of your Magnuson-Stevens Act (MSA) 2005 draft bill to ALFA, and for the obvious care you have taken in crafting it. I believe it is a good first draft, and will provide the template we all need to move ahead with reauthorization.

I have reviewed the draft bill and on behalf of ALFA’s membership would like to provide you with the following comments.

As you are aware, ALFA has two over-riding concerns regarding MSA reauthorization: maintaining healthy fish stocks and maintaining healthy fishing communities. We consider the two to be inextricably linked. We do not want to see this statute or other relevant law weakened in any way that compromises resource health. We believe the Act must be strengthened to protect and promote opportunities for independent, community-based fishermen or many coastal communities in Alaska and around the Nation will disappear, taking with them a vibrant culture and a steadfast constituency for resource health. I know you and Senator Stevens share that concern, and are looking for the means to accomplish both objectives through MSA 2005. With that in mind, let me address some specifics of the draft by focusing on the limited access privilege section.

First the bad news, since you specifically invited comment on the processor quota share section. As I am sure you anticipated ALFA remains firmly opposed to establishing limited access privileges for processors. While we recognize the efforts you made to create caveats around the issuance of processor shares, these caveats will be served through Council discourse and dismissed by Council vote. DAP programs are only appropriate if they serve resource conservation and address safety. They are not appropriate as a means of rewarding capital investment or endowing windfalls. There is no defensible rational for processor shares. Stranded capital is a transitional cost and could be addressed by securing a revenue bond that was paid back over time (10-20 years) through a tax on DAP holders. Regional delivery patterns can be maintained through limitations on some portion of harvester shares. Processors are not synonymous with communities; in fact, the processor shares created by the Bering Sea/Aleutian Island crab plan do nothing to protect communities. Instead they created a processor cartel that will economically strangle independent fishermen and the coastal communities they support.

And now the good news: the participation criteria section (B) contains many of the critical ingredients for maintaining or enhancing access opportunities for independent, owner-operated, small boat fishermen by referencing “sustained participation of fishing communities,” “assist…entry-level and small scale fishermen, captains and crew….”, and prevent “excessive share” (although it is imperative that the Act make explicit that participation in fishing cooperatives does not exempt cooperative members from excessive share requirements). What is missing from the Act is the mechanism to ensure that these criteria continue to be met over time; the incentives, as you called them, to ensure programs are modified if these participation criteria erode. Without this mechanism, dedicated access privilege (DAP) programs can be expected to evolve over time such that the high capital costs of entry preclude sustained participation by independent, small scale, community-based fishermen.

To address this, the program requirements section (G) must direct Councils to: (i) establish conservation and socioeconomic objectives, (ii) schedule periodic reviews (as included in the draft), and (iii) establish the responsibility of Councils to provide incentives, by modifying allocations if necessary, to achieve program objectives.

(i) Councils shall establish conservation and socioeconomic objectives for all future DAP programs. The socioeconomic objectives shall include, but not be limited to the following:

1) Promote active participation of quota share holders in harvesting operations as vessel owners (defined as owning a minimum of 20% of a vessel and being the owner of record for at least two years), operator, or crew;

2) Provide for the sustained participation of independent, coastal community-based fishermen as quota share holders and crew;

3) Maintain entry-level opportunities affordable to independent, coastal community-based fishermen;

4) Maintain competitive markets for fishermen to sell their catch and promote innovation in the processing/marketing sector.

(ii) ALFA agrees that the review should take place every five or at most seven years, since a longer time frame could compromise program objectives beyond recovery (i.e., fishermen unable to afford entry would be forced to find alternative employment and possibly forced to relocate).

(iii) The responsibility of councils to modify programs to meet objectives should be clarified as below:

1) Include incentives for access privilege holders and program managers to achieve the objectives of the program and the requirements of this Act, including;

a. Measures that reward access privilege holders who meet or otherwise comply with program objectives and requirements,

b. Measures that require access privilege holders not in compliance with the program objectives and requirements to achieve compliance by date certain or lose a portion of their access privileges. Forfeited privileges would be placed in an account from which program managers can assign or auction or otherwise distribute the privileges held therein in order to advance program objectives such as second generation fishermen’s access, owner operator, or others established during DAP program development.

Also, under (5) No creation of right, title or interest, (B) should be amended to read: “may be revoked, limited or modified at any time in accordance with this Act, including revocation for failure to comply with the terms of the plan or if the system is found to have jeopardized the sustainability of the stock or the fishing communities, or the safety of the fishermen.” (additions underlined)

Establishing objectives that include sustained participation by independent community based fishermen, scheduling program reviews, and tasking Councils with providing incentives by modifying allocations to meet program objectives will provide the mechanism to ensure sustained community access to DAP fisheries. Without this mechanism history has demonstrated that over time program modifications will allow consolidation and absentee ownership, both of which drive quota prices out of the reach of independent, coastal community-based fishermen. In sum, ALFA members believe the draft currently contains the promise of protecting fisheries and fishing communities but lacks the mechanism to fulfill the promise. Hopefully we can assist you in providing the essential mechanism.

On a separate but related issue: ALFA requests that MSA 2005 include a provision directing the regional councils to establish deckhand registries for fisheries under their purview. Such a registry would provide councils with an important data base on which to draw when designing, monitoring and evaluating DAP programs. We suggest that deckhand names be required on fish tickets along with vessel operators. This would ensure that deckhand participation, or harvest activity is included in the data base.

In closing, ALFA members appreciate the many hours of work you have dedicated to listening to constituents, discussing issues, and creating this initial draft. We particularly appreciate the level of concern and interest you have expressed for maintaining the health and viability of coastal fisheries and fishing communities. Eliminating the process quota share section of the draft and including the mechanism to ensure sustained participation of independent coastal community-based fishermen will create a legacy the Nation will celebrate for many generations.

Matt, we look forward to working with you as the reauthorization process moves forward. Please feel free to contact me if I can provide any further clarifications or assistance.

Sincerely,

Linda Behnken

(Director, ALFA)

Comments Presented at Senate Commerce Committee Staff Meeting and Discussion

August 25^th, 2005

Stosh Anderson

Limited Access Privileges (LAPs):

o It is important to tie fisheries access to the waterfront.

o This means that either the quota holder or the vessel owner should be on board. Vessel ownership means a significant portion (e.g. 20% or more) of vessel ownership for at least two years.

o The character of the fisheries should be maintained.

o Provide for entry level fishing.

o Address crews in LAP programs.

Processor Quota (PQ):

o PQ in crab rationalization did not protect communities.

o Regionalization and regional delivery requirements did address community interests.

o Stranded capital is a legitimate economic consideration, but processors do not deserve rights into perpetuity.

John Sisk

Consideration of Crew in LAP programs:

o Need to recognize impacts on crew, and consider crew in LAP programs.

o Suggested requiring Councils to establish a registry or record of crew members in each fishery.

o Information could be included on fish tickets or other documentation of sales/landings/deliveries.

o This would provide an information base for including crew members in development of future LAP programs.

Here is what the Alaska Marine Conservation Council thinks about DAPs:

Alaska Marine Conservation Council

Box 101145, Anchorage Alaska 99510

(907) 277-5357 · (fax) 277-5975

amcc@akmarine.org · www.akmarine.org

Standards for IFQ or other Dedicated Access Programs – June 2005

Dedicated access programs are going to change the face of our fisheries forever. Whether good or bad, the consequences will be large and long lasting so it’s critically important to design them properly for intended outcomes. Standards in the Magnuson-Stevens Act would ensure that new dedicated access plans serve conservation effectively and promote the working waterfront of our fishery-dependent communities. AMCC recommends that Congress adopt the following standards to guide regional councils in the development of specific programs:

· Objectives – Programs must contain specific and measurable objectives defining the biological, social and economic goals of the program.

· Conservation Benefits – Programs should be designed to reward clean fishing (e.g. promote low bycatch, prevent high-grading, minimize habitat impacts).

· Limited Duration – Programs should be of limited duration. Before the end of each term of duration, programs should be subject to review. If programs are meeting their objectives, they should be continued for another term. If not, they should be modified to better achieve the objectives as a condition of their continuation. Regional councils should also be able to make minor course corrections as needed within a term of duration.

· New Entrants – Programs should create reasonable opportunity for future generations of independent fishermen to enter the fishery.

· Maintain Active Participation in Fishing –

- Preserve existing characteristics of today’s diverse independent fishing fleets by retaining the percentage of the catch that is harvested as owner-on-board.

- Prevent ownership of fishing privileges by individuals or entities not otherwise associated with the fishery.

- Prevent excessive consolidation.

· Data Collection & Disclosure – Programs that dedicate access to a public resource to private individuals should require transparency of 1) ownership of fishing quotas, 2) quota transfers and leasing, and 3) agreements that govern the use of quota. Such information is needed for managers to understand who controls quota as a prerequisite to enforcing caps on consolidation. This may be especially important as it applies to cooperatives.

· Competitive Markets – Congress should not authorize controls on markets through processing quota, limiting what processors are eligible to buy fish or requiring independent fishermen to deliver the catch to specific markets. All of these restraints are barriers to competition. It is not in Alaska or the Nation’s interest to limit entrepreneurial activity in the seafood business. We recommend Congress look to other non-permanent means to assist processors in adapting to the transition from the open access “race for fish” to slower-paced fisheries.

Here is what the Fish Heads Think:

To: North Pacific Fisheries Management Council

Re: C-6 GOA Groundfish Rationalization

From: Fish Heads, an advocacy group for Fishermen, Families, and Coastal Alaskans

We suggest the following:

1. Processor Compensation:

A.)Stranded capital issues should be addressed with a one time buy out program, not by restricting the free market.

B.) If linkages between the trawl fleet and processors are inevitable, the fixed gear fleet, with its more ecologically sound methods, manned by smaller, mostly local boats, delivering a higher quality product should be restricted in no way from pursuing any market, or exploring new ways to fish better, and cleaner.

2. Skipper and Crew Documentation:

We propose that all skippers and crew be documented for purposes of identifying long term participants of rationalized fisheries. All fishermen on all harvest boats must be listed on the fish ticket. In this way, independent contractors with a history of participation could be factored in as fisheries are further rationalized. Further, an effort should be made to identify skippers and crew displaced by Bering Sea crab rationalization.

3.) Once identified, we suggest their investment in the industry, and the disenfranchisement visited on them by rationalization, be addressed in the following ways:

3. Skipper and Crew Compensation :

The lack of recognition of crew as stakeholders, and the minimal compensation offered to skippers has never been justified. Every argument offered to support the awarding of shares to processors applies to skippers and crew, who pay, on average, 35% of a boat's daily operating expenses, plus the cost of their own equipment, and the investment of many hours of labor, for what is only a chance to make money. If they were wage earners, with the owners taking all the risk, making all the investment, and therefore taking all the profit, they would have no claim. But they are not. Fishing is a venture, undertaken by contractually linked businessmen, three quarters of which are skippers and crew.

Therefore, a "Buy Back My Back" program should be implemented to compensate long term participants in the industry:

A long term participant is defined as a skipper or crewman who fulfils his/her full seasonal contractual obligations during the qualifying years of each rationalized fishery.

I. Qualifying crewmen would be assigned one point for each of the IFQ qualifying years in which he fulfils his contractual obligation, Skippers two points. Acknowledging that Skipper/Crew often move from boat to boat, while also requiring contractual fulfillment for qualification recognizes the fluid nature of skipper/crew employment dynamic, while also recognizing the importance of dependable professionals. Qualified participants could receive a one time payment, amount depending on number of points, funded in a way similar to the vessel buyback program. This purpose of this payment would be to enable excess Skipper/Crew to leave the industry, or for those wishing to remain to buy into the industry. Alternately, those Skipper/Crew able to remain in the industry could convert their points into harvest quota to be added to that of the catcher vessel.

II. A second alternative: Reserve a share of the quota similar to the traditional share taken by Skippers and Crew. This "Slice of Pie" would be harvested like a Community Development Quota, with the proceeds distributed according to amount of points held. The quota should be harvested by local fixed gear vessels under 60 feet, to ensure the continued health of coastal communities, and the ecosystem.

Such a program would address issues of equitable distribution of the resource to all stakeholders in the industry as well as fostering a stable, professional pool of harvesters.

By allowing local fixed gear harvesters a chance to supply a free market, and recognizing skippers and crew as stakeholders, the resource can be linked to the local harvesters and the coastal communities for whom fish is their life’s blood. We strongly urge that these changes be seriously considered as you refine the alternatives for GOA Groundfish and implement the BSAI crab rationalization plan.

Fish Heads, Terry Haines, representative

e-mail yohaines@alaska.com