Written by Jen Finn
December 4, 2012
Forgotten crewman in the Sea of Privatization
The Bering Sea Crab Rationalization plan has resulted in the Godzilla of all privatization programs that leaves the labor portion of the industry with the short end of the crabstick, while granting the quota holders free harvest quotas and the ability to extract hundreds of millions of dollars more in profits right out of the crews' pockets.
This program was planted into the federal register by U.S. Sen. Ted Stevens (R-Alaska). In 2001 he asked the North Pacific Fishery Management Council to decide if the Bering Sea crab fisheries needed to be privatized and if the processors deserved some type of allocation, as well. The council in June of 2002 passed a fishery management plan that gave 97 percent of the active fishing privileges to LLP holders, a pittance of 3 percent quota shares to crab captains, nothing to crewmen and rights to processing companies that ensured they would receive 90 percent of the deliveries.
There were protests at that June 2002 meeting, "What are we doing; is it even legal?" asked Robin Samuelson, a council member.
There were alternatives to give quota to crew in the documents, but the council never even read them into the record. The advisory panel had a minority report that predicted every problem that would be created by rationalization, but Chairman Dave Benton skipped over it. The AP members had to use their personal public comment time to read it into the record. This shows that the council was not in compliance with the standard operating procedures of the regional fishery councils and deviated from being in compliance with the regulatory process.
More than 1,000 crewmen lost their jobs with this decision, and most of them had been in the fishery for 20 to 25 years. Now about 420 jobs are left in both the Bering Sea red king crab and opilio (snow) crab fisheries, and most are being paid much less now because the quota holders have control and charge exorbitant lease rates on quota for which they never paid a dime.
The normal rate of lease for king crab quota is 70 to 75 percent, while 50 to 60 percent is taken for opilios, and the crew usually pay the 7 to 8 percent IFQ, buyback and administration taxes, as well as all of the expenses after the quota holders have taken their leases first. Before rationalization, on average crewmen made 6 percent of the gross minus raw fish landing tax (borough), fuel, bait, and pot loss, then their share of the provisions was deducted. If a crewman makes 2 or 3 percent now, he is one of the lucky ones; many make only 1/2 to 1 percent.
Crewmen as an aggregate used to receive 35 to 40 percent of the gross proceeds for crab minus expenses, but now they receive 15 to 20 percent, while many quota shareholders do not own a boat but take the lion's share of the profits. A publicly held common resource has been privatized so an elite few investors can extract profits.
The 2002 council-preferred alternative for the Bering Sea/Aleutian Island crab crewmen was a $3 million NOAA loan program that allowed crew to buy quota. The program was initiated in October 2005 (the quota shares were issued to vessel owners), while the loan program was not available until 2011. The approximate value of Bering Sea/Aleutian Island quota shares is $1.2 billion, and the loan program is supposed to make $5 million available to crew. One of the problems, there is almost no crab quota available on the market for crew to buy. Second there is no way to ascend in the fisheries to skipper or vessel owner, as the quotas never have to change hands to active participants. The families of those who inherit the quota can reap the profits as a dynasty without ever stepping foot on a boat. So the crew is left only with empty hands and hurting backs.
The Bering Sea/Aleutian Island rationalization program was written into law as a rider (November 2002), at the hands of Sen. Stevens, into the Consolidated Appropriations Act of 2003. The environmental impact statement for the program was not finished until June 2004. Chairman of U.S. Commerce, Science, and Transportation Committee Sen. John McCain (R-Ariz.) and Subcommittee Chairwoman of Oceans, Atmosphere, Fisheries, and Coast Guard Sen. Olympia Snowe (R-Maine) wrote Sen. Stevens a letter stating that they had jurisdiction of fisheries issues in protest to his fisheries legislation that was being prepared to be inserted as end-run legislation, to no avail.
The council had the chance to collect data on the crew, leasing of quotas, and profits to quota shareholders in a motion to collect the legally required federal contracts and reconcilable settlement sheets (that we've asked the council to collect for five years) for all vessels over 20 tons and the reconcilable settlement sheets for all the crew in a meeting in Seattle February 2012. But the council declined to collect this data even though their own Science and Statistical Committee voiced that there was a social contract to collect the data when privatizing a public resource. The council received a letter from an attorney, Peter Van Tuyn, in April 2011 requesting that the council collect the necessary data on crew and leasing for the rationalization program to be in compliance with National Standards No. 2 and No. 4 that crewmen were never treated fairly and equitably in the allocation process. The council never responded to the letter or made an effort to collect the data.
There is also the issue of the restraint of trade as a result of the regionalization of landings. There were eight processors in the northern region of the Bering Sea. Now there are only two , which slows the ability of the fishing vessels to offload their crab. The fleet will be lucky to deliver all of the total allowable catch by the May 31 season closure. The landing requirements (processor quotas) have forced vessels to wait to fish so they could make delivery to their processor.
Of course our Alaskan delegation in Washington as well as the council tout crab rationalization as one of the best catch shares fishery management plans in the land. And to think that Alaskan catch share plans are supposed to be the model for the nation. From a crewman's point of view there is no light at the end of the tunnel, only a spotlight on corrupt fish politics from Anchorage to D.C.
Shawn C. Dochtermann
Governor Bill Walker has officially requested that the federal government declare a disaster for four Alaska regions hurt by one of the poorest pink salmon returns in decades.Read more ...
The New England Fishery Management Council recently elected Dr. John F. Quinn of Massachusetts and E. F. “Terry” Stockwell III of Maine to serve respectively as chairman and vice chairman in the year ahead. The two have led the Council since 2014 but reversed roles this year.Read more ...