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«Prepared by: NOAA Fisheries Staff, Alaska Region Note: This document has not been comprehensively reviewed by NOAA General Counsel Table of Contents ...»

-- [ Page 1 ] --

Discussion Paper

Trawl Catcher/Processor Vessel

Replacement

(AFA and Amendment 80 vessels)

 

OCTOBER 2012, North Pacific Fishery Management Council

AGENDA C-5(a)

Prepared by: NOAA Fisheries Staff, Alaska Region

Note: This document has not been comprehensively reviewed by NOAA General Counsel

Table of Contents

 

Summary 

 

Background 

 

(1) Rationale for the Current Legal Interpretation that the CRP does not Prohibit an AFA Vessel from

Replacing an Amendment 80 Vessel 

  (2) Whether Allowing an AFA Vessel to Replace an Amendment 80 Vessel Would Meet the Purposes of the CRP 

  (3) Other Applicable Statutory Requirements for Replacement of Amendment 80 and AFA vessels ....... 11    (4) The Applicability of Sideboards should an AFA Vessel Replace an Amendment 80 vessel. .............. 16 .

  (5) Policy and Regulatory Considerations for Replacement of Amendment 80 vessels with AFA vessels, or AFA Vessels with Amendment 80 Vessels 

  References 

  Persons Consulted 

i    Summary At its June 2012 meeting, the North Pacific Fishery Management Council (Council) requested that NOAA Fisheries develop a discussion paper examining the potential impacts of allowing American Fisheries Act (AFA) vessels to be used as Amendment 80 replacement vessels. Current regulations prohibit AFA vessels from use as Amendment 80 replacement vessels. This discussion paper describes (1) the rationale for the current legal interpretation that the Capacity Reduction Program (CRP) does not prohibit an AFA vessel from replacing an Amendment 80 vessel, (2) whether allowing an AFA vessel to replace an Amendment 80 vessel would meet the purposes of the CRP, (3) other applicable statutory requirements for replacement of Amendment 80 and AFA vessels, (4) the applicability of sideboards (catch limitations) should an AFA vessel replace an Amendment 80 vessel, and (5) policy and regulatory considerations for replacement of Amendment 80 vessels with AFA vessels, or AFA vessels with Amendment 80 vessels.

NOAA Fisheries has reviewed the CRP, and continues to believe that the CRP does not prohibit the Council from recommending, or NOAA Fisheries from regulating, the use of AFA vessels as Amendment 80 replacement vessels. Further, the use of AFA vessels as Amendment 80 replacement vessels is consistent with the purposes of the CRP. Other provisions in the AFA and the Magnuson-Stevens Fishery Conservation and Management Act would need to be considered should the Council recommend further analysis. However, other statutes do not appear to prohibit the use of AFA vessels as Amendment 80 replacement vessels.

AFA sideboard measures would continue to apply to an AFA vessel when operating as an Amendment 80 replacement vessel. If the Council recommends further analysis, the Council could develop alternatives to explicitly modify AFA sideboards that would apply to these hybrid AFA/Amendment 80 replacement vessels so that these vessels could effectively operate in the Amendment 80 fishery.

This paper includes a qualitative review of issues for the Council to consider in deciding whether to move forward with this action. Overall, the impacts of allowing AFA vessels to replace Amendment 80 vessels are difficult to quantify given the limited information on the specific vessels being replaced, and limited operational, asset value, and cost data. The effects of allowing AFA vessels to participate in the Amendment 80 fishery are primarily economic and would not substantially change total catch or effort in the North Pacific. Importantly, the impacts would depend on how the Council designs the provisions for AFA vessel participation in the Amendment 80 fishery.

It is unlikely that any AFA catcher vessels could meet the necessary operational requirements to be effective Amendment 80 replacement vessels. AFA catcher/processors are the most viable Amendment 80 replacement vessels. If the prohibition on the use of AFA vessels in Amendment 80 fishery is removed, only 3 of the 20 AFA catcher/processors meet the other regulatory criteria to qualify as Amendment 80 replacement vessels.

However, in future years AFA vessels could be built to specifically meet the requirements for use as hybrid AFA/Amendment 80 vessels and more than the 3 vessels currently identified could qualify. If the Council recommends further analysis, the Council could develop alternatives to modify one, some, or all of the regulatory criteria now required for Amendment 80 replacement vessels, with differing impacts on the number of AFA vessels that could be used as Amendment 80 replacement vessels.

AFA vessels could more cheaply and rapidly replace some Amendment 80 vessels than newly constructed vessels. They could also provide for more economically efficient groundfish fisheries. However, Amendment 80 vessel owners believe these new entrants are not necessary to meet their needs for new vessels, and would destabilize existing business relationships, markets, and economics of the fishery. NOAA Fisheries does not have adequate data at this time to quantitatively assess these claims. The use of AFA vessels in the Amendment 80 fishery would likely increase consolidation in the Bering Sea and Aleutian Islands groundfish fisheries, may reduce crew employment, and could reduce the number of replacement vessels likely to be built. If the Council recommends further analysis, the Council could develop alternatives to limit the total amount of harvest or maximum number of AFA vessels that could be used in the Amendment 80 sector to control the rate of new entrants. These measures could slow consolidation and moderate the potential impact on the Amendment 80 sector.





AGENDA C-5(a), NPFMC, October 2012 1 Background The American Fisheries Act (AFA) In 1998, Congress enacted the American Fisheries Act of 1998 (AFA) (Public Law 105-227, Title II of Division C). The AFA had two primary objectives; (1) to complete the process begun in 1976 to give U.S. interests a priority in the harvest of U.S. fishery resources, and also (2) to significantly decapitalize the Bering Sea pollock fishery. Congress believed that the state of overcapacity that existed in the Bering Sea/Aleutian Islands Management Area (BSAI) pollock fishery at the time of passage of the AFA in 1998 was the result of mistakes in, and misinterpretations of, the 1987 Commercial Fishery Industry Vessel Anti-Reflagging Act (Anti-Reflagging Act) Pub. L. 100-293 that only Congress had the capacity to fix (Cong. Rec. 1998, 12777-12782).

In addition to addressing what Congress believed were mistakes in the Anti-Reflagging Act (i.e.

exempting some vessels from use in U.S. fisheries that were rebuilt in foreign shipyards), and providing for the de-capitalization of the BSAI pollock fleet, the AFA resolved longstanding allocation issues in the BSAI pollock fishery which began in 1991 with the passage of Amendments 18/23 to the Fishery Management Plan for BSAI groundfish (FMP). These amendments established separate inshore and offshore allocations of pollock in the BSAI and Gulf of Alaska (GOA). The AFA and its implementing regulations were intended to (1) de-capitalized the BSAI pollock fleet through the buyout of nine pollock trawl catcher/processors (C/Ps) and the subsequent scrapping of eight of these vessels, (2) establish a fixed allocation between the inshore and offshore sectors, (3) establish a catch share program involving fishery cooperatives for the inshore sector, and (4) establish management measures to address the spillover effects of these actions.

The Amendment 80 Program In June 2006, the Council adopted Amendment 80 to the FMP, NOAA Fisheries published a final rule in 2007, and regulations became fully effective starting with the 2008 fishing year (72 FR 52668, September 14, 2007). Amendment 80 established a specific type of catch share program, a limited access privilege program (LAPP), for trawl C/Ps that are not authorized to conduct directed fishing for pollock under the AFA. These non-AFA trawl C/Ps1 are referred to as Amendment 80 vessels, or the Amendment 80 sector. Amendment 80 was intended to reduce potential bycatch reduction costs, encourage fishing practices with lower discard rates, and promote opportunities for the sector to increase the value of harvested species. The management program implemented by the final rule is commonly known as the Amendment 80 Program.

The Amendment 80 Program allocates a quota share (QS) permit to a person, based on a vessel’s catch history of six species (the Amendment 80 species: Atka mackerel, Aleutian Islands Pacific ocean perch, flathead sole, Pacific cod, rock sole, and yellowfin sole) in the BSAI, from 1998 through 2004. In order to receive an allocation of QS, a person must own the catch history of an original qualifying nonAFA trawl C/P subsector vessel (Amendment 80 vessel) that met specific criteria. These criteria are set forth in the Catcher Processor Capacity Reduction Program (CRP), which is contained within the Department of Commerce and Related Agencies Appropriations Act, 2005 (Public Law No. 108-447).

The CRP is primarily a statute that identifies specific conditions under which a capacity reduction program may be implemented for a “catcher processor subsector.” The CRP identifies four catcher processor subsectors: AFA trawl catcher processor; non-AFA trawl catcher processor; longline catcher

                                                            

These vessels are prohibited from directed fishing for pollock in the Bering Sea under the AFA, with the exception of one vessel the F/V Ocean Peace that is eligible to directed fish for a limited amount of pollock as defined under the section 208(e)(21) of the AFA. Non-AFA trawl catcher/processors participate in flatfish, rockfish, Pacific cod, and Atka mackerel fisheries in the BSAI and to a lesser extent flatfish, rockfish, and Pacific cod fisheries in the GOA.

AGENDA C-5(a), NPFMC, October 2012 2 processor2; and pot catcher processor. Section 219(g)(1) of the CRP states that “[o]nly a member of a catcher processor subsector may participate in the catcher processor sector of the BSAI non-pollock groundfish fishery.” The “non-AFA trawl catcher processor subsector” is defined in section 219(a)(7)

and section 219(a)(8) defines non-pollock groundfish:

(7) NON-AFA TRAWL CATCHER PROCESSOR SUBSECTOR – The term “non-AFA trawl catcher processor subsector” means the owner of each trawl catcher processor – (A) that is not an AFA trawl catcher processor;

(B) to whom a valid LLP [License Limitation Program] license that is endorsed for Bering Sea or Aleutian Islands trawl catcher processor fishing activity has been issued; and (C) that the Secretary determines has harvested with trawl gear and processed not less than a total of 150 metric tons on non-pollock groundfish during the period of January 1, 1997 through December 31, 2002.

(8) NON-POLLOCK GROUNDFISH FISHERY.—The term ‘‘non-pollock groundfish fishery’’ means target species of Atka mackerel, flathead sole, Pacific cod, Pacific Ocean perch, rock sole, turbot, or yellowfin sole harvested in the BSAI.

NOAA Fisheries determined that 28 vessels originally qualified for the Amendment 80 Program based on the criteria established in the CRP (see Table 1). Regulations require a person who owns the catch history of an original qualifying Amendment 80 vessel to apply to NOAA Fisheries for an Amendment 80 QS permit. NOAA Fisheries has issued QS permits based on the catch history of all but one of the 28 originally qualifying Amendment 80 vessels. Based on the interpretation of the CRP at the time the Amendment 80 Program was implemented, only the 28 vessels identified were eligible to fish in the Amendment 80 sector. As originally implemented, Amendment 80 vessels could only be replaced by another original Amendment 80 vessel. This regulation effectively prevented the replacement of Amendment 80 vessels with new vessels, or other vessels outside of the 28 identified originally qualifying Amendment 80 vessels.

–  –  –

NOAA Fisheries implemented regulations at § 679.4(o)(v) requiring that Amendment 80 QS units assigned to an Amendment 80 QS permit are non-severable from that Amendment 80 QS permit and if transferred, then the Amendment 80 QS permit must be transferred in its entirety to another person. Of the 28 originally qualifying vessels, several vessels are no longer active in the Amendment 80 fleet due to an actual or constructive total loss (i.e., F/V Alaska Ranger, F/V Arctic Rose, F/V Prosperity), or because those vessels have been reflagged under foreign ownership and are no longer eligible to re-enter U.S.

fisheries under the provisions of 46 U.S.C. 12113 (i.e., F/V Bering Enterprise). In cases where an original qualifying vessel has suffered a total or constructive loss, or is no longer eligible to receive a fishery endorsement (i.e., the vessel has been removed through a vessel buyback program, or has been reflagged as a foreign vessel), the regulations required that an Amendment 80 QS permit must be permanently assigned to the License Limitation Program (LLP) license, described in detail below, initially assigned to that original qualifying vessel, thus creating an Amendment 80 LLP/QS license.

Three Amendment 80 QS permits are currently assigned to LLP licenses.

Most of the annual total allowable catch (TAC) for the six defined Amendment 80 species is assigned to the Amendment 80 sector. A portion of the TAC for the Amendment 80 species is also assigned to the Western Alaska Community Development Quota (CDQ) Program, and to participants outside of the Amendment 80 sector to accommodate either incidental catch in other fisheries, or more limited directed fisheries.



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