HCR 12-FOREIGN SHIPS AND U.S. LONGSHOREMEN  CHAIRMAN STEVENS announced HCR 12 to be up for consideration. MR. TIM BENINTENDI, Staff to Representative Moses, sponsor of HCR 12, said this resolution addresses a long-standing unresolved national labor issue which affects Alaskans whereby longshoremen stand idle while ships of foreign registry from countries not part of labor reciprocity agreements reflag their cargo vessels as they pull into Alaskan ports. The problem is especially acute in Dutch Harbor. The ships do this so that they can use their own, often unskilled and untrained, crews to load and unload the ships. The reciprocity agreements and the exceptions to them and the enforcement activity and the practice of reflagging are supposed to be enforced by the State Department. The loopholes this is addressing skirt the intention of the U.S. law. HCR 12 would petition Congress and our State Department to close the loopholes exploited by the reflagging activities. SENATOR STEVENS asked where the ships would reflag before entering U.S. waters. MR. BENINTENDI replied that we have agreements with some nations to use their labor when our ships are in their ports and we use our labor when their ships are in our ports and then there are countries that aren't part of these agreements. The problem is when there are ships from countries that aren't part of these agreements. As they approach a port, they simply reflag to be able to use their cheaper and less skilled labor. It saves them money and puts Alaskans out of work. When they pull out of port, they can literally take the flag down and run their own flag back up. He said this has been an issue for about 20 years. CHAIRMAN STEVENS asked how much of the Bering Sea pollock that goes over seas is being loaded on the vessels that reflag before they enter U.S. waters. MR. BENINTENDI replied that he didn't know for sure, but he thought it was most of our production. SENATOR TORGERSON asked if this affects the three-mile limit and don't they load some of these boats a ways off-shore. CHAIRMAN STEVENS replied that doesn't happen too much any more. MR. BENINTENDI added that there is an Alaskan exception from 1993, which says the ships can use their own labor if there isn't sufficient local labor, but in Dutch Harbor labor is always available. The Alaskan exception is designed for small communities like Togiak where there are no longshore workers. This is not a problem there, but reflagging is being done in Dutch Harbor, Kodiak and Seward. SENATOR TORGESRON asked why the city doesn't sign project labor agreements with the longshoremen. MR. BENINTENDI said he didn't know why. SENATOR TORGERSON asked if Dutch Harbor supported this resolution. MR. BENINTENDI said yes. He explained that Mr. Pete Hendrickson, former President of the Longshoremen's Union in Dutch Harbor, is in Washington, D.C. visiting the Alaskan delegation on this issue. The unions, both regional and national, have participated exhaustively over the years on this issue. MR. PETE HENDRICKSON said he is currently representing Longshore workers throughout Alaska on the international executive board. Over the last three years, a large number of foreign trampers visiting our waters to load seafood bound for Europe and Asia have been filing for the reciprocity exception to the Immigration and Nationality Act. They can then displace Alaskan longshore workers by using their own crewmembers to work cargo on the ship side of loading operations. This is accomplished by representing to the Immigration and Naturalization Service that their flag of registry and majority ownership are from countries that currently qualify for this exception. The most common registries do not qualify. In virtually all cases, the vessels in question have changed their flag just prior to arrival in order to file for this exception, but the result has been the loss of thousands of hours of work for Alaskans and has resulted in loss of cargo and profits for those American companies and foreign vessels that do employ us, but cannot effective compete against foreign labor. We believe the reciprocity exception no longer serves any useful purpose for the United States since apparently no American seafarers do any loading elsewhere in the world any more anyway. As we have seen here in Alaska, all this does is provide a mechanism by which certain parties can exploit this exception in order to avoid Alaskan labor. Further, in the early 1990s we were able to convince Congress to create what is known as the Alaska exception to the Immigration and Nationality Act, which provides for the loading work to be done by foreign crew if Alaskan longshore workers are unavailable. This guarantees that the work will always get done, which is critical to the fishing industry. Our congressional delegation was instrumental in accomplishing this and particularly Senator Stevens was involved in that effort then. Therefore, we don't think the reciprocity exception should really apply to Alaska. The alternative, if we must live with this exception is to amend it so that application is more true to the original intent and it cannot be misused as it is today. In our view and exception is the best solution. He said that he is in Washington D.C. talking with the U.S. Department of State and our congressional delegation about this growing problem. Alaska Department of Labor Commissioner Flanagan is also involved. "We think your support of our efforts to either exempt Alaska or revised the law will be instrumental to our success as we continue to work toward solution to what can only be called a scam…" SENATOR TORGERSON said he thought flagging a vessel had to do with the country of registry. He asked if that was true. MR. HENDRICKSON replied that he is correct, that the registry and flag are generally of the same country. SENATOR TORGERSON asked how they could change their flag when they come into port. MR. HENDRICKSON replied that vessels infrequently change registries and flags for various reasons, especially when they change ownership. It's common that a new owner may prefer a different flag. Most ships in the world don't fly the flag of the country where they are actually from. They fly a flag of convenience from another country, which has minimal safety, insurance and labor standards. That's why there are thousands of Panamanian flagged ships, even though they have never been to Panama. SENATOR TORGERSON asked why we don't have labor agreements with the municipality that prohibits this activity. MR. HENDRICKSON replied that might be a solution in one location, but the problem is bigger than that. In Dutch Harbor, for instance, the city dock is not the only dock where this takes place. SENATOR TORGERSON asked if the other docks were private docks. MR. HENDRICKSON replied yes, there are a number of private docks in Dutch Harbor and just one city dock. SENATOR TORGERSON asked if one of the reasons the companies built their own docks was so they could do their own longshoring. MR. HENRICKSON replied in some cases that might be true, but the Longshoremen's Union does work on a lot of them. He explained that a lot of the small companies have a small number of people working for them and loading ships often takes 10 - 18 people on a foreign vessel. SENATOR LEMAN asked if reflagging is as simple as running another flag up, is that consistent with international law and any protocols we have with other countries. MR. HENDRICKSON answered that there is little that can be done about that. But there is something in the U.N. Convention on the Law of the Sea about changing flags in mid-stream, but it isn't absolutely prohibited, nor has the United States ratified that convention. So, basically, we are high centered. It is technically legal to change your flag and you don't have to give a particular reason. I'm sure there's some cost associated with it, but I believe that the labor savings in these cases must somewhat exceed the cost of change of flag. MR. BENINTENDI repeated the question of how much pollock destined for overseas actually goes out under this loophole. MR. HENDRICKSON replied at least a third of the offshore side of the quota. The shore plants are more likely to be using Japanese or Korean vessels to take their product away from the shore plants. Japan and Korea don't have reciprocity and American longshore workers do that work. CHAIRMAN STEVENS asked if this problem was mostly with the offshore fleet. MR. HENDRICKSON replied yes. It's always the offshore product that is loaded by the foreign crews. There were no further comments. SENATOR DAVIS moved to pass HCR 12 from committee with individual recommendations. There were no objections and it was so ordered.