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77–954 PDF 2002

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

(

(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

JOHN MCCAIN, Arizona, Chairman 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

SLADE GORTON, Washington 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

JOHN ASHCROFT, Missouri 

BILL FRIST, Tennessee 

SPENCER ABRAHAM, Michigan 

SAM BROWNBACK, Kansas 

ERNEST F. HOLLINGS, South Carolina 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

JOHN B. BREAUX, Louisiana 

RICHARD H. BRYAN, Nevada 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

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 

SLADE GORTON, Washington 

KAY BAILEY HUTCHISON, Texas 

JOHN F. KERRY, Massachusetts 

DANIEL K. INOUYE, Hawaii 

JOHN B. BREAUX, Louisiana 

(III)

C O N T E N T S 

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

Page

IV

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

(1)

REAUTHORIZATION OF THE MAGNUSONSTEVENS FISHERY CONSERVATION AND 

MANAGEMENT ACT 

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. 

2

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 

3

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. 

4

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 maVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
5

rine 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 

6

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. 

7

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 

8

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 MagnusonStevens 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. 

9

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 smallscale 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 parVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
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ticipation 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, conVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00014 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
11

sistent 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. 

12

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 nonCDQ 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, 

13

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. 

14

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 

15

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 cooperatives 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. 

16

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 

17

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 harVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
18

vest 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 MagnusonStevens 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 manmade 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 

19

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 

20

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 

21

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 notso-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. 

22

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. 

23

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 notrawl 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 

24

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. 

25

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 

26

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 

27

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 

28

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-byfishery 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. 

29

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, 

30

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 

31

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 

32

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 

33

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 requireVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00037 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
34

ment 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? 

35

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 

36

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 

37

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 

38

ownership should be limited to those who are actually participating 

in the fishery, and not end up on Wall Street, and the investorowned 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. 

39

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. 

40

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 

41

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 

42

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 coop. 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. 

43

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. 

44

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 

45

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 coops 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 emVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00049 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
46

pirical 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 MagnusonStevens 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 coops 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 impleVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00050 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
47

ment 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. 

48

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. 

49

[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. 

50

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 

51

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 

52

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. 

53

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 longterm 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 

54

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 cooperatives, 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 inshore processing sector. 

Second, the AFA specified eligible participants in the catcherprocessor 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. 

55

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. 

56

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, 

57

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 coop 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. 

58

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 highervalue 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 

59

$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 

60

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 coops 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 soVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00064 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
61

lution, 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. 

62

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. 

63

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 

64

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 cooperatives 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 inshore, 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 shorebased 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. 

65

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 procVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00069 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
66

ess 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 

67

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 

68

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 

69

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 

70

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 

71

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 

72

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. 

73

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. 

74

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 

75

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 allocaVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00079 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
76

tion 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 proVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00080 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
77

vided. 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 

78

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. 

79

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 longterm 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. 

80

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. 

81

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 

82

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.

83

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. 

84

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? 

85

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 

86

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 handout 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 

87

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 

88

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 

89

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. 

90

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 nonfishing 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? 

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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? 

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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, 

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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 nonfishing 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 guarVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00097 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
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antee 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; 

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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 

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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 §§ 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 overfishing 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 § 600.920(e) of the interim rule been an effective way to handle 

EFH consultations? What additional guidance, if any, should the final rule 

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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 § 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, 

98

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 communityoriented 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 

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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 

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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 

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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 

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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 . . . . (§§ 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.) 

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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 

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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 cooperatives 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.

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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.

§ 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. 

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(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.

§ 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 predatorprey 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.

§ 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.

§ 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.

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(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.

§ 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.

§ 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.

108

§ 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.

§ 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.

§ 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

§ 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.

§ 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;

109

§ 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 

110

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. 

111

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 shorebased 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? 

112

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 

113

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. 

114

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 

115

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 

116

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 hapVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00120 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
117

pen? 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 

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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 cooperatives 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 

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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, ondeck handling, changes in water temperature and to predation in a weakened 

condition. 

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• 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. 

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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 villagebased 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. 

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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 atsea research necessary to discover what fishing techniques and 

equipment will mitigate those interactions with minimal impact on 

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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 

124

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 dropdead 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 

125

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 carbonbased 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 

126

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. 

127

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. 

128

* The information referred to was not available at time of printing. 

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.* 

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 

129

1The 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. 

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 

130

Governor de facto authority to exercise the Secretary’s administrative discretion in 

the Secretary’s stead. 

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

131

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). 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 vioContinued

The fishing companies in which CDQ groups own equity interests are entities that 

are separate and distinct from the CDQ groups2. 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.’’

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

132

lating 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’’). 

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 

133

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.] 

(135)

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 

136

(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 

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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 nonresidents 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. 

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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. 

139

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 

140

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 

141

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 MagnusonStevens 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 

142

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 derbytype 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. 

143

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-todate 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 

144

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.

145

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 

146

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 biologicallyconsolidated 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 

147

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 

148

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 

149

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. 

150

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 ‘‘overVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00154 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
151

fished?’’ 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.

152

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 guidVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00156 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
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ance 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 

154

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 overburden 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 comVerDate Apr 24 2002 08:33 Oct 10, 2002 Jkt 077954 PO 00000 Frm 00158 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\77954.TXT SCOM1 PsN: CAROLT
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munity 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 

156

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.

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