Legislature(1997 - 1998)
02/16/1998 05:05 PM House FSH
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HJR 55 - ALLOCATION OF POLLOCK AND PACIFIC COD Number 1298 CHAIRMAN AUSTERMAN announced the committee would hear HJR 55, relating to the allocation of pollock and Pacific cod. He stated that he and Representative Carl Moses are the sponsors. He explained that it addresses the allocation of fish between onshore and offshore processors. He stated that the more fish that is processed onshore produces a larger economic benefit to the state of Alaska than when processed offshore. Number 1405 GLENN REED, Executive Director, North Pacific Seafood Coalition, stated that the coalition is comprised of members from the shore- based processing mother ship and catcher-boat communities. He stated that the coalition represents all sectors of the fishery with the exception of factory trawlers. He stated that they are in support of HJR 55. He referred to the Magnuson-Stevens Act and its intent to Americanize the harvest of these resources. He referred to an event in 1989, where several factory ships from the Bering Sea moved into the Gulf of Alaska and harvested their pollock quota in a few weeks and then went back to the Bering Sea to continue fishing it was the precursor to the onshore/offshore regime that is present today. He explained that event closed Kodiak shore plants that the local fleet would have kept open with the harvest they would have brought to the community. Number 1502 MR. REED stated that in 1991 the North Pacific Fisheries Management Council recommended moving factory trawler efforts from the Gulf of Alaska and reducing the pollock and the Pacific cod fishery to 10 percent. He pointed out that they recommended allocating 45 percent of the pollock resource of the Bering Sea to the shore- based plants and 55 percent to the off-shore sector. He stated that it was rejected in 1992 by the Secretary of Commerce, and without a vote of the council, the allocation was set to the existing amount of 35 percent to the onshore sector and 65 percent to the offshore sector. He stated that the economic basis of that decision have been proven flawed in the interim. Number 1561 MR. REED stated the reason why the shore-based plants should receive an additional amount of the resource is because of their utilization of the resource. He stated that in three years the shore-based plants have increased their utilization by almost 50 percent and currently utilize the resource 60 percent higher than the factory trawlers. This is because the onshore plants buy the fish from fishermen, and therefore use it more wisely since they have to pay for it. He pointed out that factory trawlers catch their fish and it is not economical for them to use all of the parts of the fish that they catch. Number 1618 MR. REED referred to the issue of excessive shares which is written into the Magnuson-Stevens Act. He stated that currently 35 percent of the fish are going to the onshore processors. Half of the 35 percent is going to American companies. In regards to the offshore sector 40 percent is going to one foreign company, which is in violation of the Magnuson-Stevens Act. Number 1674 REPRESENTATIVE OGAN asked if the reason that the onshore processors do not throw anything away is because they are only buying the parts that they use. Number 1736 MR. REED stated that in 1996 the statistics for the offshore sector waste was 2.5 percent and 1 percent for the onshore sector. Number 1781 REPRESENTATIVE OGAN asked what the technical difference is in the fishery that would cause a higher discard rate. Number 1798 MR. REED replied that he did not know. Number 1844 CHAIRMAN AUSTERMAN referred Representative Ogan to the catch reports in the committee packet. Number 1874 MR. REED stated that instead of waiting to make a decision until the analysis from the North Pacific Fisheries Management Council is complete, which is going to consider what is in the net benefit for the country; he asked that they think of what is in the best interest for the state of Alaska and the communities economic future. He stated that the onshore processors are here for the long term as there is a half of billion dollars in plants onshore paying taxes in Alaska. Number 1971 DICK TREMAINE, Representative, Central Bering Sea Fishermen's Association, testified via teleconference from Anchorage that the justification for the resolution is just that people would like more than they have. He stated that the issue should be what is better for the state. He asserted the answer to that is not clear as studies are being conducted to try and figure it out. He stated that in 1995 it was agreed that a balance has been met and there as been nothing to suggest that the balance has been tipped. He explained that as a CDQ group they would lose revenues. He asserted that the status quo works and it should be left at that. Number 2252 HARVEY SAMUELSON testified via teleconference from Anchorage that the CDQ groups are good for Western Alaska. He stated that the rural villages benefit from the decent wages received on the factory ships. He asserted that the jobs have lessened the amount of people on welfare. He stated that 52 percent of the fish in the Bering Sea is caught by the catcher boats and they catch 100 percent of the fish in the Gulf of Alaska. He stated that there will not be a market for the factory ships with this bill. He suggested that the status quo be keep as it is. TAPE 98-6, SIDE A Number 0031 JOE McGILL, President, Bristol Bay Herring Marketing Cooperative, testified via teleconference from Dillingham that he would like to see the fishery stay the way it is so that the local residents can continue to have jobs. Number 0130 ANDY GOLIA, Fisherman, stated that he is opposed to HJR 55. He asserted that the North Pacific Fisheries Management Council will do a good job. He stated that he is concerned that jobs will be lost in the Bristol Bay and Kuskokwim areas. He explained that there would also be a chance that the salmon market may be lost as American Seafoods buys salmon and markets it domestically. He stated that there are five communities in the Chignik Bay area that have set up a cod market with American Seafoods. Number 0332 TAMMY FOWLER POUND testified via teleconference from Dutch Harbor that she would like to address the difference in the bycatch rate. All factory trawlers have observers onboard, not all catcher boats have observers. She stated that both sectors of the industry are needed in the community. It is due to both sectors that investments are being made in the community. Number 0468 VINCE CURRY, Owner, Alaska Prime Resources Consultants, testified via teleconference from Anchorage against HJR 55. He stated that the allocation issue involves both the Bering Sea and the Gulf of Alaska. He stated that the Gulf of Alaska does 100 percent of its pollock onshore and 90 percent of the cod is processed onshore. He referred to 1995 when the state overwhelmingly supported the 65/35 percent split. He stated that HJR 33 passed in 1995 stated that "The Legislature should not get involved in reallocations of fishery resources from one group of Alaskans to another." He reiterated that further analysis needs to be done and the status quo should remain. He stated that in the Bering Sea the quota is more of 50/50 split as catcher boats catch 52 percent of the pollock and factory trawlers are catching 48 percent. He reiterated his opposition. He stated that the only place that Alaskans are investing in the pollock fishery is in offshore sector. Number 0862 REPRESENTATIVE OGAN asked if he could back up his statement that investment is only seen in the offshore fishery. Number 0884 MR. CURRY referred to Norton Sound Economic Development Corporation, a CDQ group which has purchased an offshore pollock processing company. He stated that there should be a letter in the committee members' packet that details the reason for their investment in the offshore industry. Number 0959 JUDY NELSON, Executive Director, Bristol Bay Economic Development Corporation, testified via teleconference from Dillingham against HJR 55. She stated that the corporation is in support of CDQ's and are not advocates for either the onshore or offshore fleets. She stated that their pollock partner is in the offshore sector, however, they do business with the onshore sector as well. She stated that the bill is under analysis by the North Pacific Fisheries Management Council and will be completed in April. She pointed out that the communities are dependant on the pollock fishery for social and economic needs. She agreed that the fishery is overcapitalized, however the resolution does not address this problem. She asked that HJR 55 be tabled until it is dealt with in the council's forum. Number 1060 KENNY WILSON, Fisherman, testified via teleconference from Dillingham that American Seafoods operates mid-water trawlers and not bottom trawlers. He stated that the mid-water trawlers do not touch the bottom of the ocean, therefore their bycatch is very low. The factory ships that are over 165 feet are a lot safer. He stated that the CDQ communities are starting to make jobs for younger people during the winter months as there are very few jobs available in Western Alaska. He stated that the onshore plants pay poor wages compared to the factory trawlers wages. He stated that if this opportunity is taken away from the villages it will bring back more welfare. He stated that this past year American Seafoods started to buy Alaskan salmon. Number 1361 TOM TILDEN, Fisherman, testified via teleconference from Dillingham, against HJR 55. He stated that his son fishes on one of the factory trawlers and has done very well. He stated that the factory ships are needed for the youths and for the economy. Number 1426 DON MITCHELL, Representative, Norton Sound Economic Development Corporation, stated that the resolution deals with two separate fisheries, one is in the gulf and the other is in the Bering Sea. He stated that the standard for consideration should be what is in the best interest of Alaska. The present situation is what would be best for the Gulf of Alaska and the resolution is asking for that. He stated that in respect to the Bering Sea pollock fishery the opinions have been varied. He pointed out that this is not a well suited forum to get to the bottom of this issue. He stated that is why Congress has invented the North Pacific Fisheries Management Council. He stated it is a poor idea to express a view about the Bering Sea pollock fishery at this stage of the process. He stated that once the data is accumulated and analyzed, the conclusion will be that the best benefit to Alaska is the present regime in respect to the offshore pollock fishery in the Bering Sea. He stated that every CDQ group when given the opportunity to have a CDQ fishery, acquired on offshore pardon. Norton Sound Economic Corporation validates the view that is where the net benefit will be to Western Alaska. He stated that the data of the benefits from the onshore sector has not been collected. He stated that most of the onshore sector plants and vessels are owned by non-Alaskans. He stated that there are a lot of questions about the onshore sector that need to be answered in order to determine what is in the best interest of Alaska for the Bering Sea pollock fishery. He stated that a healthy offshore pollock fishery is in the best interest of Alaska. Number 1677 RON DALBY, Employee, American Seafoods Company, referred to a letter by Joe Chase, catcher vessel owner, who fishes for both onshore and offshore sectors. He that the biggest benefit to the current system is jobs; he had visited 33 communities in Alaska, hiring from every one of them. He stated that the higher utilization results in a lower grade product. He stated that American Seafoods boats produce the highest value-added products that come out of the Bering Sea pollock fishery. He stated that a higher price for pollock results in more money for the state in fish taxes. He stated that pollock taken away from the offshore sector will be spread amongst catcher boats and mother ships. The mother ship, Ocean Phoenix, has off loaded in Japan for five of the last six years and does not pay a fish tax. He stated that by giving the onshore processors more fish they are getting more of an ability to set the price of fish. He stated that American Seafoods is investigating the possibility of processing alternative fisheries for alternate markets. He pointed out that 140 fishermen came to fish for American Seafoods from other companies where they had been a long time employees. He reiterated that it is the cleanest fishery, American Seafoods is providing more and more Alaskans jobs every year, alternative markets and more money in taxes. He stated that he is opposed to HJR 55. He stated that since the quota system was put in place eight or nine factory trawlers have gone out of business, but not a single shore plant. Number 1904 DENNIS ANDREW, Fisherman and Employee, American Seafoods, stated that he fished for Peter Pan Seafoods for over 20 years and in the time of need they turned their back to him. American Seafoods put him back in the fishery. He stated that in the villages there are no jobs only welfare but American Seafoods is providing jobs in the winter. He asserted that the factory ships are needed. Number 2000 REPRESENTATIVE IVAN thanked him for his testimony and welcomed him to Juneau. Number 2061 REPRESENTATIVE OGAN asked if it is correct that if there is a reallocation it will hurt the residents of New Stuyahok because they would not be able to get jobs in the coastal communities. MR. ANDREW stated that it would affect jobs. Number 2112 REPRESENTATIVE IVAN stated that there is a 50-mile radius inland that all the coastal communities participate in the CDQ program, and Mr. Andrew is referring to the inland villages that can not participate. Number 2181 BART EATON, Stockholder, Trident Seafoods, stated that he is in support of HJR 55. In regards to the shore-based processors sector there are 11 or 12 observers in the system. He stated that there is a CDQ partner that has invested in a shore-based boat. He pointed out that in the mid-1980's each sector was utilizing 50 percent of the domestically processed groundfish. In 1989 and 1990 there was a big influx of factory trawlers, resulting in pressure to divide the resources. He stated that in 1991 the North Pacific Fisheries Management Council voted to phase in an increase on allocation to shore-based from 35 percent to 45 percent of the pollock quota. Economic analysis done by the federal government, resulted in a cap on the 35 percent allocation. He stated that all shore-based processors have meal plans and handle 100 percent of the product. All fish that comes to shore is processed. He stated that the council is being made to decide on an issue that they had previously decided on in 1991, 45 percent allocation to shore-based processors. MR. EATON stated that Trident Seafoods has had an office in Anchorage since 1989 and regularly recruits from Western Alaska. He stated that the critical question is what will the outcome be. A lot of fisherman depend on the shore-based industry. He stated that in Sand Point 24 percent of the fish in the last opening came from Trident-owned boats, 76 percent came from 17 other vessels. He stated in Akutan 35 percent of the fish comes from Trident Seafoods boats and the rest comes from outside boats or boats that Trident may have a percent interest with the operator. He stated that Tridents Seafoods pays 10 million dollars in state and local taxes each year. He stated that they are 100 percent dependent on Alaska's resource. TAPE 98-6, SIDE B Number 0018 STEPHANIE MADSEN, Employee, Aleutian Seafood Processors Association, stated that she is an 25 year resident of Alaska. She stated that she has worked for the offshore sector and was on the city council during the first inshore/offshore allocation. She stated that a clinic was built because of a partnership between the city of Unalaska, state of Alaska and the onshore seafood processors. She stated that the reason the Japanese own the shore- side processors is because they were told that if they wanted any kind of fishery allocation during the joint venture period, they would have to bring their money and their technology to Alaska. She stated that Alaska needed their surimi technology and their money, therefore they encouraged Japanese investments onshore. She stated that Ms. Pound who testified earlier does not work for a processor but her husband does work for American Seafoods. Number 0123 MS. MADSEN stated that the onshore processors buy in addition to pollock; crab, cod, herring, salmon, halibut, turbot, et cetera. She pointed out that nearly 100 percent of the fish are utilized by onshore processors. She stated that the catcher-processors in regards to surimi utilize 19 percent and use a product recovery rate to back calculate what their estimate is and their landing tax is based on that calculation because unlike shore-based processors they do not weigh their fish. Number 0255 MS. MADSEN stated that all vessels are documented by the North Pacific Fisheries Management Council. She stated that the value of CDQ's will go up and is evidenced in the most recent proposals by both sectors. She stated that the jobs will not go away. Aleutians Seafoods has 2,000 employees and out of that 700 are Alaskans working in Unalaska in onshore processors. That is more that the entire at-sea fleet. She read a quote by Senator Stevens: "In Alaska some of the foreign participants are doing what they can to patch up their relationship with Alaska, but I question their long-term commitment. The North Pacific Council is reviewing the onshore/offshore pollock allocation right now, which will substantially impact them. They have been good partners this year in anticipations of this council debate but where were they last year? They were here in Washington D.C. lobbying against our bill to protect fishing communities." She urged support of HJR 55. Number 0311 CHAIRMAN AUSTERMAN stated that he will hold HJR 55 over to be heard at the next meeting.
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