Tuesday, March 20, 2012

The Fisheries Hippocratic Oath

This letter from the President of the Nome Fishermen's Association was delivered to the North Pacific Fisheries Management Council as public testimony. Tim Smith has been valiantly pursuing rebuilding the salmon stocks in the Nome area. Think John the Baptist. And the 800 pound gorilla in the area, the NSEDC, would love to have his head on a platter.Tim is trying to get a hatchery going, as the head of the region's only authorized aquaculture association. The salmon rebuilding was co-opted by NSEDC affiliates and never produced a whit of extra salmon. All other areas of Alaska have ocean ranched salmon in spades. NSEDC runs massive factory trawlers that accidentally catch hundreds of tons of salmon, and really don't want to catch any more. Connect the dots. Including the dots leading to federal responsibilities all over the place.

There is a simple concept missing here that the Hippocratic Oath always echoed, "First, do no harm." The Government finally figured out that if you applied that to Medicaid it would work wonders for saving money and helping people too. Specifically, make the health care facility pay to fix someone who was injured or got sick under their care. Now apply that concept to the fishing business. These big trawlers would not be allowed to decimate any other stocks of fish they weren't allowed to harvest. And if they can't accomplish that, then a new way of catching the target specie would be required. But by all means, stop the carnage that is going on by the leaders of these Native fishing groups. I call them groups, because they are a Board of Directors and staff; the big benefits to the Native community is yet to be seen.
The following is the text of some of the testimony I provided to the North Pacific Fishery Management Council when they met in Nome June 6-14.
The MSA requires that the State of Alaska conduct a decennial review of the CDQ program beginning in 2012; twenty years after the program’s inception and every ten years thereafter.
It is unclear how the state will address this unfunded mandate. Because of the importance of the CDQ program to western Alaska and its profound impacts on the economy, society and culture of western Alaska communities it is essential to ensure that the decennial review will be done well.
The week before last, we heard from the North Pacific Fishery Management Council’s Scientific and Statistical Committee and its Advisory Panel about the need for additional analysis of the impacts of chum salmon bycatch on coastal communities. These impacts and others associated with management of fisheries within the U.S. Exclusive Economic Zone are intimately connected to the CDQ program and I recommend that the council direct its staff to actively participate in the CDQ program decennial review.
Previous attempts to evaluate the CDQ program suffered from significant shortcomings. The National Research Council of the National Academy of Sciences published the findings of its review in 1999. The report discussed the program’s newness and data limitations, particularly the lack of financial data upon which to base quantitative analysis.
Governor Murkowski’s 2005 Blue Ribbon Committee report suffered from the same lack of detailed economic data and lacked objectivity.
Many of the decisions the council makes impact the CDQ program and a comprehensive decennial review will be a valuable reference in your deliberations.
In dealing with the salmon bycatch issue, we have seen how the profit making goals of the CDQ groups can put them in direct opposition to the economic, social and cultural interests of their rural Alaska stakeholders. The decennial review should identify the areas where these conflicts occur, how they have been resolved and quantitatively assess outcomes for the CDQ groups and rural Alaska residents.
The following comments primarily relate to NSEDC, the CDQ group I am most familiar with but I have heard from numerous residents of other CDQ program eligible communities that the same situation is widespread.
In Norton Sound, NSEDC has become a de facto monopoly, dominating all fisheries related economic activity and impacting many segments of the society and culture including the subsistence economy.
In my personal experience, NSEDC has become an oppressive monopoly. Ironically, I have been forced out of fisheries related economic activities by the program that was created specifically for the purpose of developing self-sustaining fisheries related economies in this region.
At best, it is difficult to engage in any kind of business where a near-monopoly exists; for me it has been impossible. Unfortunately, neither the MSA nor the state and federal laws governing the CDQ program contain provisions prohibiting the CDQ groups from engaging in unfair competition to the detriment of coastal community residents. The need for additional rulemaking to minimize these negative consequences of the CDQ program should be addressed in the decennial review.
Furthermore, there are no mechanisms in the governance structures of the CDQ groups for resolving conflicts. CDQ groups are privately owned nonprofit corporations with no members. In addition, some if not all of them have moved a substantial portion of their assets into for-profit subsidiaries in which their community residents are not shareholders.
The residents of coastal communities have none of the statutory protections or rights provided to members by the Alaska Nonprofit Corporation Act or the rights provided to corporate shareholders by the Business and Industrial Development Act.
CDQ groups and their subsidiaries are not regulated by the SEC and are exempt from the shareholder protections provided by the Sarbanes-Oxley Act.
Most troubling is that the CDQ groups are not accountable to the residents of the communities they represent and their financial records are held confidential. The residents of NSEDC’s communities cannot see audited financial statements for the nonprofit and even the NSEDC board of directors is denied access to detailed financial records of NSEDC’s for-profit subsidiaries.
Prior to 2006, the council along with the State of Alaska and the National Marine Fisheries Service provided substantial regulatory oversight over the business activities of the CDQ groups. The 2006 amendments to Magnuson-Stevens Act privatized the CDQ groups and today they are controlled by a very small number of individuals without a clearly codified relationship to their stakeholders. There are no other corporations similar to the CDQ groups, no precedents for how they are supposed to work and little quantitative information except from the CDQ industry on how they are working.
The council was a major player in creating and overseeing the CDQ program. Because of the importance of the program to western Alaska communities and Bering Sea and Aleutian Islands fisheries, I hope that the council will actively participate in the decennial review by assigning staff to participate in designing, implementing, conducting and analyzing the review to ensure that it is thorough, objective and comprehensive.