[Senate Hearing 114-239]
[From the U.S. Government Publishing Office]
S. Hrg. 114-239
IMPACT OF FEDERAL LABOR AND SAFETY LAWS ON THE U.S. SEAFOOD INDUSTRY
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
MAY 6, 2015
__________
Printed for the Committee on Small Business and Entrepreneurship
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED FOURTEENTH CONGRESS
----------
DAVID VITTER, Louisiana, Chairman
JEANNE SHAHEEN, New Hampshire, Ranking Member
JAMES E. RISCH, Idaho MARIA CANTWELL, Washington
MARCO RUBIO, Florida BENJAMIN L. CARDIN, Maryland
RAND PAUL, Kentucky HEIDI HEITKAMP, North Dakota
TIM SCOTT, South Carolina EDWARD J. MARKEY, Massachusetts
DEB FISCHER, Nebraska CORY A. BOOKER, New Jersey
CORY GARDNER, Colorado CHRISTOPHER A. COONS, Delaware
JONI ERNST, Iowa MAZIE K. HIRONO, Hawaii
KELLY AYOTTE, New Hampshire GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming
Zak Baig, Republican Staff Director
Ann Jacobs, Democratic Staff Director
C O N T E N T S
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Opening Statements
Page
Vitter, Hon. David, Chairman, and a U.S. Senator from Louisiana.. 1
Shaheen, Hon. Jeanne, Ranking Member, a U.S. Senator from New
Hampshire...................................................... 2
Witnesses
Panel 1
Dr. Steven Solomon, Deputy Associate Commissioner for Regulatory
Affairs, U.S. Food and Drug Administration..................... 8
Ms. Portia Wu, Assistant Secretary of the Employment and Training
Administration, U.S. Department of Labor....................... 26
Panel 2
Dr. Mike Strain, Commissioner, Louisiana Department of
Agriculture and Forestry....................................... 43
Mr. John P. Connelly, President, National Fisheries Institute.... 51
Mr. Frank Randol, President, Randol Inc.......................... 60
Alphabetical Listing and Appendix Material Submitted
Connelly, John P.
Testimony.................................................... 51
Prepared statement........................................... 53
Highliner Foods
Letter Dated May 5, 2015..................................... 4
Randol, Frank
Testimony.................................................... 60
Prepared statement........................................... 63
Addendum 1................................................... 74
Addendum 2................................................... 77
Addendum 3................................................... 79
Addendum 4................................................... 81
Addendum 5................................................... 90
Addendum 6................................................... 112
Addendum 7................................................... 123
Addendum 8................................................... 142
Addendum 9................................................... 149
Addendum 10.................................................. 177
Addendum 11.................................................. 193
Addendum 12.................................................. 212
Addendum 13.................................................. 237
Addendum 14.................................................. 263
Shaheen, Hon. Jeanne
Opening statement............................................ 2
Prepared statement........................................... 6
Letter Dated April 30, 2015.................................. 72
Solomon, Dr. Steven
Testimony.................................................... 8
Prepared statement........................................... 11
Responses to questions for the record........................ 264
Strain, Mike
Testimony.................................................... 43
Prepared statement........................................... 47
Vitter, Hon. David
Opening statement............................................ 1
Wu, Portia
Testimony.................................................... 26
Prepared statement........................................... 28
Responses to questions for the record........................ 269
IMPACT OF FEDERAL LABOR AND SAFETY LAWS ON THE U.S. SEAFOOD INDUSTRY
----------
WEDNESDAY, MAY 6, 2015
United States Senate,
Committee on Small Business
and Entrepreneurship,
Washington, DC.
The Committee met, pursuant to notice, at 2:34 p.m., in
Room SR-428A, Dirksen Senate Office Building, Hon. David
Vitter, Chairman of the Committee, presiding.
Present: Senators Vitter, Risch, Fischer, Ayotte, Shaheen,
and Cantwell.
OPENING STATEMENT OF HON. DAVID VITTER, CHAIRMAN, AND A U.S.
SENATOR FROM LOUISIANA
Chairman Vitter. Good afternoon. We are going to start our
hearing today on the Impact of Federal Labor and Safety Laws on
the U.S. Seafood Industry. Thanks for joining us today.
We are going to be hearing from two panels of expert
witnesses and stakeholders, a Federal panel who I will
introduce in a minute, and then a stakeholder panel. I want to
thank all of our witnesses for being here today to testify on
these important issues.
As anyone who has visited Louisiana knows, we enjoy great
quality seafood and that plays a major role in our culture and
our economy, and this is true for other States in the United
States and it is an important part of our economy. In
Louisiana, that seafood industry supports 20,000 jobs in the
State with an annual economic impact of over $1.7 billion.
More regionally, the Gulf States produce 70 percent of the
nation's oysters, 69 percent of domestic shrimp, and are a
leading producer of domestic hard- and soft-shell blue crabs.
More broadly, the seafood industry is responsible for creating
jobs and revenue that supports so many families along the Gulf,
in Alaska, and elsewhere, including the East Coast and the West
Coast.
Seafood processors in Louisiana and across the Gulf Coast
rely on seasonal foreign workers to fill the most labor-
intensive positions throughout the sector. These workers come
to the United States legally under the H-2B visa program. This
program is vital to many in the seafood business, as many of
these operations take place in small rural communities where
access to a stable, reliable labor force can be extremely
difficult.
Recently, we have seen the difficulty of compliance with
this program increase, most notably the Department of Labor's
decision to stop accepting private wage rate surveys, which has
often forced businesses to reallocate their financial
resources, and that has been a big, big cost increase for these
businesses.
Another area that requires attention is ensuring the safety
of seafood that is being imported into the country. It is
imperative that we ensure that foreign imports are playing by
the same rules and regulations that our domestic producers
operate under, and that is one of the reasons I introduced the
Imported Seafood Safety Standards Act. This legislation
increases inspection rates, quality standards, and penalties in
order to protect American families.
In closing, we need to make sure that Federal regulations
of all types, like the two areas I have highlighted, do not
unfairly and negatively impact our small domestic seafood
providers. What Washington bureaucrats often fail to realize is
that their rulemaking can literally put some small businesses,
like domestic seafood producers, out of business. So, we need
to focus on these and other regulatory areas.
Again, I thank everyone for being here today and I look
forward to our discussion.
With that, I will turn it over to our Ranking Member,
Senator Shaheen.
OPENING STATEMENT OF HON. JEANNE SHAHEEN, RANKING MEMBER, A
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Shaheen. Thank you, Mr. Chairman, and thank you to
all of our panelists this afternoon for being here.
As the Chairman said, seafood is a big issue in my home
State of New Hampshire just as it is in Louisiana. Even though
we only have 18 miles of coastline, it is an industry that is
important to the State, both because of our tourism industry
and the fishing--the pleasure boat fishing that goes on off the
coast of New Hampshire, but also because we have not only a
small fishing industry, but we also have a fish processing
industry in New Hampshire.
And, Mr. Chairman, in the interest of brevity and because I
have to leave early, I am going to submit my full statement for
the record, but I just wanted to raise a couple of concerns.
One is not directly related to this hearing, but since we
are talking about seafood, I feel compelled to talk about the
concerns that we have in New Hampshire and the Northeast
relative to the fishing quotas that have been set by the
Department of Commerce and specifically by NOAA. Over the past
few years, the Federal Government has found that the declining
levels of cod in the Gulf of Maine have been dramatic. There is
some disagreement about that among scientists and among the
fishing industry, but they have set very dramatic, very low
quotas that have almost totally decimated the fishing industry
in New Hampshire, and again, I appreciate that that is not the
subject of today's hearing, but it is an issue that we are very
concerned about and I think it is something that we need to
deal with because of its impact on our small business fishing
fleet in New Hampshire.
The other issue that is relevant to today's discussion is
one that is having an impact in New Hampshire, as well, and
that is the impact of creating a separate Federal program to
remove catfish inspection authority from the FDA. As some of
you probably already know, the 2008 farm bill transferred the
inspection of catfish alone from FDA to the Department of
Agriculture and it left the FDA with the jurisdiction of all
other seafood products. That means that all of our seafood
processors that handle catfish will now be subject to two
separate sets of regulations. This is a costly and unnecessary
burden on these businesses. It will kill jobs and hurt economic
development.
And, in fact, just the prospect of this regulation has put
a freeze on job creation in some of those companies in New
Hampshire. One seafood company, High Liner Foods, which I have
had the opportunity to tour, has put on hold the job expansion
that they would like to do because of the uncertainty around
these regulations, and Mr. Chairman, I would like to enter this
letter from High Liner Foods for the record, if I can.
[The letter follows:]
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Chairman Vitter. Without objection.
Senator Shaheen. This duplicative regulation does not just
affect the seafood industry and it is not really about food
safety, I believe. I think it is an effort to set up trade
barriers against foreign catfish that will dramatically affect
not only the seafood processing business in New Hampshire and
this country, but it also could put us open to challenge at the
WTO and trade retaliation against other agricultural
industries.
So, Mr. Chairman, I have been working with other members of
the Senate to try and repeal this duplicative program. I hope
we can do that. I think it is unnecessary and I hope that we
will have the opportunity to do that and to further discuss
this, not just in this committee, but when we get to the floor
of the Senate.
So, thank you again to our panelists for being here and I
look forward to the discussion today.
[The prepared statement of Senator Shaheen follows:]
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Chairman Vitter. Thank you, Senator Shaheen.
We will now go to our first panel of witnesses, our Federal
panel. I will introduce both and then we will hear their
testimony and have discussion following their testimony.
Dr. Steven Solomon is Deputy Associate Commissioner for
Regulatory Affairs at the FDA, and he was appointed to that in
April 2014. Prior to his appointment, he served in several
capacities at the FDA since 1990. Dr. Solomon holds a D.V.M.
degree from Ohio State University and a Master's of Public
Health from Johns Hopkins University. Prior to joining the FDA,
he owned and operated a private veterinary practice.
And, he will be followed by Ms. Portia Wu, Assistant
Secretary of the Employment and Training Administration within
the U.S. Department of Labor. She was appointed to that in
April 2004 and she now leads that Employment and Training
Administration with its mission to address our nation's
workforce needs through high quality training and employment
programs. Prior to that, she held a number of positions in
public, nonprofit, and private sector situations, including
serving at the White House on the Domestic Policy Council as
Special Assistant to the President for Labor and Workforce
Policy. Ms. Wu holds a Yale Law School degree and a degree from
Yale College and a Master's degree from Cornell, and is
originally from Albany, New York.
Welcome to both of you, and we will start with Dr. Solomon.
STATEMENT OF STEVEN M. SOLOMON, D.V.M., M.P.H., DEPUTY
ASSOCIATE COMMISSIONER FOR REGULATORY AFFAIRS, FOOD AND DRUG
ADMINISTRATION, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Dr. Solomon. Good afternoon, Chairman Vitter, Ranking
Member Shaheen, and members of the committee. I am Dr. Steve
Solomon, Deputy Associate Commissioner for Regulatory Affairs
at the Food and Drug Administration, and I appreciate the
opportunity to appear before you today to discuss the agency's
ongoing efforts to oversee the safety of the U.S. seafood
supply.
FDA has a strong regulatory program in place to ensure the
safety of both domestic and imported seafood. In fact, the
Hazard Analysis and Risk Preventive Control framework of FDA's
seafood safety program is a basis for the preventive controls
requirements for other FDA regulated foods called for in the
FDA Food Safety Modernization Act, or FSMA. The agency has a
variety of tools to ensure compliance with seafood safety
requirements, including inspections of both domestic and
foreign processing facilities, a hundred percent electronic
screening of all imported products, examination of sampling of
domestic seafood and seafood offered for import in the United
States, domestic surveillance sampling of imported products,
inspection of seafood importers, and foreign country program
assessments.
In today's testimony, I want to discuss FDA's regulatory
framework for overseeing the safety of the U.S. seafood supply,
emphasizing the agency's risk-based efforts with regard to
imported seafood.
Processors of fish and fishery products are subject to
FDA's Hazard Analysis Critical Control Point, or HACCP,
regulation. In short, the regulation requires both domestic and
foreign processors of fish and fishery products to understand
the food safety hazards associated with their process and
product and require a preventive system to control for those
hazards. Every processor is required to have and implement a
written HACCP plan whenever a hazard analysis reveals one or
more food safety hazards that are reasonably likely to occur.
Foreign processors who export seafood to the United States also
have to have--apply to the HACCP regulation.
In addition, HACCP regulations require importers to
understand the hazards associated with the products they are
importing and to take positive steps to verify that they obtain
shipments from foreign processors who comply with these
requirements.
In recent years, there have been reports of seafood in the
United States being labeled with incorrect market names. FDA is
aware that there may be economic incentives for some seafood
producers and retailers to misrepresent the identity of the
seafood species that they sell to buyers and consumers. While
seafood fraud is often an economic issue, we have heightened
concerns when species substitution poses a public health risk.
The agency has invested in significant scientific
advancements to enhance its ability to identify seafood species
using state-of-the-art DNA sequencing. FDA is actively working
to transfer this technology, which will enable the seafood
industry and others to monitor and test their products to
confirm the species purchase is correct.
Turning now to imports specifically, it is the importers'
responsibility to offer for entry into the United States
product that is fully compliant with all applicable U.S. laws.
FDA has numerous tools and authorities that enable the agency
to take appropriate action regarding imported product. In
recent years, the agency has significantly increased its number
of foreign food inspections. Furthermore, if FDA requests to
inspect a foreign facility and is refused, FSMA gave the agency
the authority to not allow that facility's food submission into
the United States.
Besides HACCP inspection of foreign facilities, the agency
also conducts surveillance of food offered for import at the
border to check for compliance with U.S. requirements. FDA
reviews all import entries electronically prior to the product
being allowed into the country. The agency has implemented an
automated screening tool, the PREDICT system, which
significantly improves FDA's screening of imported food.
PREDICT utilizes the admissibility history of the firm and/or a
specific product and incorporates the inherent risk associated
with the product. For example, a PREDICT review includes the
facility inspection history, data quality concerns, sample
analytical findings, and type of product that the firm offers
for entry into U.S. commerce.
Based on this electronic screening, the agency will direct
resources to the most critical entries that have the greatest
impact on public health. A subset of the import entries flagged
may be physically inspected and/or sampled at varying rates
depending on the type of the seafood product and the risk
factors described.
Another key regulatory tool for controlling imported goods
is the Import Alert. Import Alerts inform FDA field personnel
that the agency has sufficient evidence or other information
about a particular product, producer, shipper, or importer to
believe that future shipments of an importer product may be
violative. On the basis of that evidence, FDA field personnel
may detain the article that is being offered for import in the
United States without physically examining the product. The
agency has over 45 active seafood Import Alerts that focus on
imports from certain firms, products, and/or countries based
upon past violations or public health concerns.
An Import Alert shifts the burden to the importer to
demonstrate that the product meets FDA regulatory requirements.
For example, FDA imposed a country-wide Import Alert on five
aquaculture species from China in June 2007 due to the presence
of unapproved animal drugs. These entries are currently subject
to private laboratory testing before they are allowed into
domestic commerce.
Finally, I would like to note that the FDA is working
globally to better accomplish its mission to promote and
protect the public health of the United States. As one example,
the agency has conducted foreign country assessments to
evaluate the country's laws for and implementation of good
aquaculture practices. FDA uses the information from country
assessments to target better surveillance sampling of imported
aquaculture products, informs its planning of foreign seafood
HACCP inspections, provide additional evidence for potential
regulatory actions, and improve collaboration with foreign
government and industry to achieve better compliance with FDA's
regulatory requirements.
In closing, oversight of the safety of the U.S. food supply
continues to be a top priority for FDA. The agency has a strong
regulatory program in place for seafood products. We will
continue to work with our domestic and international partners
to ensure the safety of both domestic and imported seafood.
Thank you again for the opportunity to appear before you
today, and I would be happy to answer any questions.
[The prepared statement of Dr. Solomon follows:]
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Chairman Vitter. Thank you very much, Doctor.
Now, we will hear from Ms. Wu. Welcome.
STATEMENT OF PORTIA WU, ASSISTANT SECRETARY FOR EMPLOYMENT AND
TRAINING, U.S. DEPARTMENT OF LABOR
Ms. Wu. Thank you, Mr. Chairman. Chairman Vitter, Ranking
Member Shaheen, members of the committee, thank you for having
me here today to discuss the H-2B program and the seafood
industry. My name is Portia Wu and I am the Assistant Secretary
at the Employment and Training Administration at the Department
of Labor. Together with the Department of Homeland Security, we
administer the H-2B program.
The H-2B program allows employers to meet legitimate needs
for temporary foreign workers and the Department takes very
seriously its statutory responsibility to administer this
program and to ensure that U.S. workers have meaningful access
to these job opportunities, that their wages and working
conditions are not adversely affected. These efforts also help
protect foreign-born workers from exploitation.
The Department recognizes the vital role that the H-2B
program plays for the seafood industry. Many seafood employers
are multi-generational family-owned businesses and they are a
source of cultural pride in coastal areas. The jobs these
businesses provide are critical to local communities and create
additional jobs in other related industries.
And, Mr. Chairman, as you referenced, these businesses are
often in remote or rural areas and so they can struggle to
attract and retain a sufficient workforce necessary to provide
seafood products for the United States and for the world. Thus,
many do depend on temporary workers, including temporary
foreign workers.
Over the last five years, employers in some of the largest
seafood producing States, like Louisiana and Maryland, were
among the top ten users of the H-2B program, and last year,
approximately 55 percent of the seafood jobs certified by the
Department of Labor were located in the Gulf Coast States,
ranging from shrimp boat deckhands in Texas to seafood and
crawfish processors and packagers in Louisiana.
We understand that seafood employers and others are
impacted by the current annual 66,000 number cap on H-2B
workers. That cap is set by Congress. And, we are again seeing
demand nationwide that exceeds that cap.
The Department is committed to maintaining a fair and
reliable application process for those who use the program.
However, unfortunately, in recent years, we have faced
difficulties in achieving stability in this program because the
Department of Labor's H-2B regulations have been subject to
numerous cases brought in court by both employers and worker
advocates. In fact, this litigation ultimately resulted in
temporarily suspending the processing of H-2B applications
earlier this year.
Last week, in order to quickly reinstate the H-2B program
and also to bring certainty, stability, and continuity to that
program, the Department of Labor and the Department of Homeland
Security jointly issued two new regulations. One is an interim
final rule establishing the overall framework for the H-2B
program. I should note that is an interim final rule, so it is
open for public comment until June 29. The other is a final
updated wage rule that allows the use of private wage surveys
in certain circumstances in keeping with a recent court
decision.
These rules immediately restore processes for approving
prevailing wage requests and labor certification applications
so the program can continue to operate. They expand employer
requirements for recruitment and consideration of U.S. workers
so United States workers have a fair shot at finding and
applying for these jobs. It also permits employers in the
seafood industry to continue to stagger the entry of their H-2B
workers into the United States.
The regulations strengthen worker protections by clarifying
employer obligations with respect to wages, working conditions,
and benefits that must be offered to H-2B and U.S. workers
alike.
And, finally, as I noted, the rules explicitly include the
use of private wage surveys, which were restricted by a recent
court decision, and they--so, we set guidelines for how these
surveys can now be used, and that includes State surveys, which
are often used in the seafood industry.
Both the Department of Labor and DHS are trying to ensure a
smooth transition between the former regulations and the new
rules. First and foremost, anyone who had already applied under
the old rules or who were in line does not have to change
anything. They will continue to operate under the prior
regulations.
Second, the new regulations allow an expedited process for
employers who have a start date of need before October 1, 2015,
so people will have time to quickly transition.
In conclusion, the Department of Labor strives to maintain
an H-2B program that is both responsive to legitimate employer
needs where qualified U.S. workers are not available and to
provide adequate protections for U.S. and foreign temporary
workers. Doing so is not only good for law-abiding employers,
including employers in the seafood industry, but also for the
many U.S. workers seeking jobs in fields that rely heavily on
the H-2B program.
Thank you again for this opportunity and I look forward to
answering your questions.
[The prepared statement of Ms. Wu follows:]
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Chairman Vitter. Okay. Thank you, Ms. Wu, and we will start
with our questions, and let me begin with you on one of the
topics you discussed directly, and that is private wage
surveys.
Is it not correct that the new rule you were describing
greatly limits compared to past practice, greatly narrows and
limits the use of private wage surveys?
Ms. Wu. Senator, it is true that in December last year, we
had--our previous rule allowed significant use of private wage
surveys. That use was enjoined by a court in December of last
year and the court's opinion lays out a great deal of
reasoning, including concerns about how private wage surveys
might undercut wages and some other reasons that, for example,
surveys that use only entry-level wages are not permissible
under the law. They found that to be a violation of the law.
At that time, we had to immediately suspend the use of
surveys because of the court's order. However, with our new
rule, we allow surveys in limited circumstances. There are
some, and again, it is in keeping with the court's order, we
believe, where, for example, an occupation is not well
represented in the Occupational Employment Statistics.
We also specifically allow for State conducted surveys, and
I know this is a subject of particular interest in the seafood
industry because many States do this. There are some basic
criteria in keeping with the court's order. For example, as I
mentioned, you have to look at average wages in an industry,
not simply entry-level wages. But, we believe that this may be
an opportunity for many in the seafood industry to take
advantage of this provision. We actually--I was talking with
some of your folks from Louisiana today and we are putting out
some assistance next week to explain to people how they can use
these surveys.
In the transition provisions, we also said that, for
example, if you already got your certification but you have not
brought your workers in and you are wondering, can I go back
and get a new survey wage, as long as it complies with our
basic criteria, we put in a provision to allow people to go
back and adjust that wage.
Chairman Vitter. Well, Ms. Wu, as you know, there is a lot
of concern that the new system is too narrow and narrows the
use of these surveys way beyond anything that would be
absolutely required or demanded by the court. What is your
reaction to that critique, which I think is a fair one?
Ms. Wu. Thank you, Senator. I think we believe that the new
provisions are in keeping with the court's order. I should
note, the State-provided surveys, frankly, we may be getting
some criticism from the other side that it may be going beyond
what the court allowed. So, there are many points of view on
it.
But, I do think that this provision of State-provided
surveys may be an avenue that industries, particularly the
seafood industry, could take advantage of and have taken
advantage of in the past.
Chairman Vitter. Does use of these State surveys allow for
recognizing differences which exist from one local area to
others within the State?
Ms. Wu. Yes, Senator, it could. Obviously, it is up to the
State as to what level of detail is conducted in the surveys.
They certainly could provide a survey where there are
differences in locality. Obviously, with different sorts of
tasks in the industry, they would have different levels of
wages. And, the Department is not in the business of dictating
how employers should pay their wage or not. I know some
employers, for example, use piece rate. They will be able to
continue doing so.
Chairman Vitter. Okay. And, Dr. Solomon, my understanding
is that in 2014, only about 2.77 percent of all seafood imports
were inspected. Do you think that percentage is adequate, and
if not, what does the FDA plan to do differently?
Dr. Solomon. So, the seafood safety system that I described
during my testimony is multi-faceted, so there are many
components of it. First, it is putting the Hazard Analysis
Critical Control Point regulations into place, which puts the
burden on the processor to produce safe product. Then, we have
oversight by doing foreign inspections of them. Then, we also
conduct inspections of HACCP regulations by the importers.
So, the testing that takes place at the border is a
verification activity or a surveillance activity to try and
find if there is any flaws in the system and how it is working
and to identify them and it is verification activities.
So, we test at different rates a sampling. So, taking
generic rates for seafood, we test higher rates for certain
products, certain commodities, higher risk areas in much higher
rates than that because we want to have additional verification
for those particular aspects which pose the greatest safety
concerns.
Chairman Vitter. I understand all of that. I did not mean
to suggest by my question that you just do one thing, you just
stop 2.77 percent at the border and test it. So, as part of
that overall effort, do you think the net inspection rate of
2.77 percent is adequate?
Dr. Solomon. Examination at the border as a verification
activity at the various rates we do, we think is a viable
control measure in light of all the other measures that we have
in place.
Chairman Vitter. So, you have no plans to increase it?
Dr. Solomon. With the resources we currently have, we would
not just increase sampling testing. If the agency had
additional resources, we would focus on all the aspects of the
framework, the regulatory structure that I described.
Chairman Vitter. Why would you increase it if you had more
resources?
Dr. Solomon. Greater oversight and greater confidence in
how the system is working. We would do more foreign
inspections. We would do more importer examinations. But, once
again, not on a universal basis, on a risk basis, on the
products----
Chairman Vitter. So, the level you do now is not optimal?
Dr. Solomon. Uh, we think we actually have very few
foodborne illnesses associated with seafood products, but with
more resources, the agency could do more.
Chairman Vitter. Okay. I am just trying to understand. You
are suggesting it is adequate, but in the next sentence, you
said you would certainly do more with more money.
Dr. Solomon. So, it is a risk basis in terms of looking at
the products that are coming in. With additional resources, we
could look at lower levels of risk. We are looking at the
highest levels of risk now.
Chairman Vitter. Doctor, certainly in the past, the
following has happened. A batch of actually tested and rejected
seafood imports has been simply shopped to another port of
entry. What in your overall system today categorically prevents
that?
Dr. Solomon. So, we have a notification system, electronic
notification system. When we refuse an entry, that electronic
notification system not only notifies Customs and Border
Protection, but all the other FDA district offices and ports.
Chairman Vitter. And, so, how is that batch tagged
indelibly so that that notification is meaningful so that those
other ports can identify the same batch we are talking about?
Dr. Solomon. So, as you may be aware, we have been working
for many years to try and get a marking rule that would provide
that marking of the product. That is not in place yet, but
right now, we do notifications based off the data that we have
of who the importer is, what the commodity line is, and make
sure that everyone is aware about that shipment was refused.
Chairman Vitter. So, if they--so, there is not a set
marking rule, so if they change the packaging or any of the
markings, they could very possibly get away with what I am
describing?
Dr. Solomon. The system is not foolproof, I agree with you,
but we do do notifications.
Chairman Vitter. Okay. Well, I mean, I would suggest that
is a bigger hole than simply saying it is not absolutely
foolproof, but we will pursue that.
Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman.
Dr. Solomon, as I said in my opening statement, I am very
concerned that we are in the process of setting up a new
program under the Department of Agriculture to separate catfish
out from all other seafood and inspect them separately. I think
it is duplicative and it does not make sense.
So, I wonder if you could talk a little bit about the
program that has been operating under FDA, which up until now
has had the responsibility for inspecting catfish. Can you tell
us how it has functioned and whether or not catfish consumption
has posed a risk to human health. Is there a reason why we
should be setting up a separate program?
Dr. Solomon. So, the last part of the question, catfish is
not one of the species that we particularly target as being a
risky product. It is not a product that is typically eaten or
consumed raw. It is cooked beforehand. It is not put into
reduced oxygen packaging, some of the other risk factors that
may be associated with it. So, we handle catfish under the same
framework that I described before. We have both inspections,
domestic inspections, foreign inspections, the HACCP controls
in place that have been adequately controlling issues
associated with catfish.
Senator Shaheen. So, and just to be clear, it is not the
FDA or the Department of Labor or USDA that has set up this
program separately. It was Congress that did this in the farm
bill. But, there was not a safety risk to human health from
catfish that triggered this effort, is that how you would
analyze the situation?
Dr. Solomon. I am not aware of any specific safety hazards
unique to catfish.
Senator Shaheen. Thank you. And, I know it may be hard for
you to put a cost figure on the inspection of catfish under the
FDA jurisdiction, that it may take you some time to come up
with that. It is my understanding that right now, the USDA's
catfish inspection program, it is estimated that it will cost
about $14 million a year to operate. So, I am going to ask you
to take for the record and try and get for this committee the
cost of the inspection of catfish under FDA jurisdiction, if
you would.
Dr. Solomon. We would be happy to provide that back to you.
Senator Shaheen. Okay. Thank you.
Ms. Wu, I appreciate the fact that the Department is in a
challenging position relative to how to make the H-2B visa
program work, given that we have not yet taken up comprehensive
immigration reform, which would go a long way towards
addressing this challenge. But, in the meantime we do have
small businesses in my State, we heard from the Chairman in
Louisiana, who are using the H-2B program and are confused
about how the new rules will affect their business. So, can you
talk a little bit about how you are addressing outreach to
those small businesses that are affected.
Ms. Wu. Absolutely, Senator. As I noted, we have a bunch of
fact sheets on our Web site. We are also doing some sort of
webinars and outreach next week to talk with people. We
always--we have frequent listening sessions. We recognize the
use of this program by small business. We are happy to answer
any questions.
We have very detailed questions about, you know, if I
already submitted my application, what happens to me now. And,
I think, as I noted, for people who had already submitted their
application before this whole court case in April, they can
just keep going along. They got approved. They can keep going
along, running the program the way they were going to do it
this summer. There will be changes in the future.
For those who want workers before October 1, we put in a
sort of expedited process. As you may know, DHS administers the
cap, but the cap was hit fairly early this year. But, we
continue to process requests for labor certification, because
there are some exceptions. So, we are happy to answer any
questions. We are doing outreach to small businesses.
Senator Shaheen. And, so, when you advertise those webinars
that you are doing, do you notify the Small Business
Administration so they can get it out to the Small Business
Development Centers to share that with other businesses around
the country? How do you get the word out that you are doing
those kinds of webinars?
Ms. Wu. Well, first and foremost, we use the contacts list
that we have of the users of the program, because, obviously,
the Small Business Administration deals with many, many
businesses who do not even know what the H-2B program is.
Senator Shaheen. Right.
Ms. Wu. So, we really focus on the contacts that we have
and work with our colleagues at DHS and others to make sure
that we get the word out. But, if you have other suggestions or
if you are concerned about the employers in your State, we
would be happy to conduct some targeted outreach there. We also
work with many of the associations who follow these regulations
very closely. We make sure we get the word out to them. And, we
have regular listening sessions with them to hear about their
concerns.
I will note the new comprehensive rule is an interim final
rule. We took comments on a similar rule in 2011-2012. We made
some changes, in part in recognition of the concerns of small
business. We are taking comments again and we very much welcome
people's comments on how we can improve the program and make it
usable for them.
Senator Shaheen. So, just because I am still not quite
clear, if anybody has--if a company has applied for H-2B visas
in the past, would they get a notification of proposed rule
changes, of various outreach efforts that you are doing
automatically because they are on your list?
Ms. Wu. They should. They should. I will check with my
operations people----
Senator Shaheen. Okay.
Ms. Wu. Yes, we do.
Senator Shaheen. Behind you, they are nodding.
[Laughter.]
So, hopefully, that means that any New Hampshire company
that has applied in the past will get those notifications.
Ms. Wu. Yes, that is our hope.
Senator Shaheen. Thank you very much.
Chairman Vitter. Thank you.
Next is Senator Ayotte.
Senator Ayotte. Thank you, Chairman.
I wanted to follow up on the question that Senator Shaheen
had asked Dr. Solomon about the catfish program. As far as I
can tell, the U.S. FDA handles seafood inspections for all
other forms of seafood, correct?
Dr. Solomon. That is correct.
Senator Ayotte. And, so, there is no reason why you could
not continue to handle independently the inspection as you did
before Congress on its own created this duplicative inspection
regime, the inspection of catfish, which is actually a low-risk
species, correct?
Dr. Solomon. We are currently, since that rule is not in
effect yet, we are currently handling all the catfish
inspections.
Senator Ayotte. And in the end, as I understand it--you
know, it has been interesting to me, we have nine GAO reports
on this topic, and those nine GAO reports actually consistently
recommend eliminating the newly created by Congress USDA
program that, as I understand--you would not know these
numbers--but as I understand, has already spent $20 million.
Not one fish has been inspected. Obviously, the FDA has handled
the inspection of seafood for a long time. And, here we are in
the Congress going to--already spent another, you know, USDA,
trying to stand up duplicative inspection, already spent $20
million on it, and as Senator Shaheen mentioned, it is going to
cost USDA, the estimate is, $14 million a year to continue
doing what you already do quite well.
So, I do not know if you have had a chance to look at these
GAO reports. Have you?
Dr. Solomon. Not nine of them, but I have read some.
Senator Ayotte. And, do you agree that you can handle the
inspection of catfish, that we do not really need another
office to inspect catfish?
Dr. Solomon. The program has worked effectively as far--
from FDA's perspective.
Senator Ayotte. Right. So, this is a great example of
government run amok, truthfully, because the notion that we
already have the FDA doing its job inspecting seafood, and to
carve out just catfish so that we can spend millions of dollars
more to have the USDA have another office inspecting catfish,
which you are already doing quite well, for one species of
fish--you know, these are the kinds of things that I think
people look at Washington and they say, what are you all doing
down there?
So, I really hope, you know, that we will have some common
sense on this and allow you to continue to do what you have
been doing historically rather than creating another--
continuing to plunk millions of dollars into a duplicative
program.
I also wanted to follow up, Ms. Wu, on the H-2B issue. I
share--obviously, I serve in New Hampshire with Senator
Shaheen, and what I have heard in New Hampshire, many of our
seasonal businesses depend on these workers. In fact, in
Portsmouth, Nashua, Laconia, they had the most H-2B visas
granted. But, the abrupt breaks and a burdensome process,
especially for smaller business, have been very, very
difficult. So, when are we going to make sure that we are not
in the same position we were this year as we look to the
application process next year, you know, given that this is--
people have to plan on what their workforce needs are?
Ms. Wu. Thank you, Senator. It has been frustrating, I
know. It has been frustrating for us trying to run a program. I
am sure it has been frustrating and frightening, frankly, for a
lot of small businesses when these abrupt court decisions come
along and halt us from doing something we have been doing in
the program, make us suspend this. I mean, it has really been
very difficult.
That is why we asked for a stay with the court order so we
could keep running the program this spring, and now we have
issued comprehensive rules--even though the Department of Labor
believes we have the authority to do this on our own, because
of the legal challenges, we jointly issued these regulations
with DHS. So, I think we feel like we are at least insulating
ourselves from that level of legal attack. Unfortunately, we do
continue to see attacks from all sides on this program, but we
hope that brings some certainty and stability. And, we also are
trying to include some provisions that will make things easier
over the long run for businesses using this program.
Senator Ayotte. Well, I really appreciate that, because
just the feedback I have gotten from businesses in New
Hampshire on the program is that under the administration, it
has become more complicated, more difficult, more paperwork,
and as I look at the new H-2B interim and wage final rules that
were issued on April 29, it is more than 100 pages, and I see
the burden on employers increasing. So, I hope when you look at
this that we need to decrease the burden on employers, not
create more paperwork, especially when many of them, as you
know, this is something that they do every year and they have
been in the program already. So, thank you for being here
today.
Chairman Vitter. Thank you.
And next, we will go to Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chair.
Dr. Solomon, I wanted to ask you about Russian pollack.
Last fall, I sent a letter, led by my colleague, Senator
Murkowski, to the FDA Commissioner Hamburg requesting to fix
this labeling problem. The FDA has authority to change the
acceptable market name of product from pollack, and not just
Alaska pollack. The change would prevent Russian pollack from
being labeled as United States Alaskan pollack. So, we
requested that the FDA make this change in September and now it
is May of 2015. So, do you agree that the term ``Alaskan
pollack'' would give consumers the impression that the product
is from Alaska?
Dr. Solomon. So, the determination about the species naming
is handled by our Center for Food Safety and Applied Nutrition.
They have what they call a seafood list. I know that your
submission--that issue is before that group. They look at both
the species name, they work with fish taxonomists and look at
the DNA sequencing that talks about these different species,
and I know they have that issue under review.
Senator Cantwell. And, so, when will we hear about that
decision?
Dr. Solomon. I know they are actively working on it. I do
not have that. We will be happy to try and get back with you.
Senator Cantwell. Okay. Do you think, in your view, is the
Russian pollack industry a sustainable fishing industry
specifically--scientifically, I guess I would say?
Dr. Solomon. So, I do not think I am qualified to speak on
that. We look at fish from a food safety perspective and we are
not, you know, related to the trade issues or other issues
associated with it.
Senator Cantwell. Well, I think we see things, obviously,
about it. They are known for labor issues. Just last month, a
Russian pollack catcher/processor vessel sank in the Bering
Sea. Only 63 crew members survived. Sixty-nine were lost. Forty
percent of the crew were--they are illegally from countries
like Burma, Ukraine, Latvia. And, so, these lives are being
lost because of lack of training and survival skills, and then
consumers are seeing a product that is labeled Alaska and is
not really Alaskan pollack. So, we hope that you will get a
decision through the FDA about this and look at both the way
the industry is operating and the right that consumers have to
understand this product. Thank you.
Thank you, Mr. Chairman.
Chairman Vitter. Okay. Thank you both very much. We will
excuse you and call up our second panel of witnesses. As they
get situated, I am going to go ahead and be introducing all
three of them.
We are really pleased to be joined by Dr. Mike Strain, the
Commissioner of the Louisiana Department of Agriculture and
Forestry, who was elected to that position in 2007, sworn into
office in January 2008. Dr. Strain holds a Doctorate in
Veterinary Medicine from LSU and opened the Claiborne Hill
Veterinary Hospital in Covington soon after he received that
degree.
We are also joined by Mr. John P. Connelly, President of
the National Fisheries Institute, America's leading trade
association advocating for the full seafood supply chain. John
was Chairman of the International Coalition of Fisheries
Associations and a board trustee of the Marine Stewardship
Council and is currently a board member of the International
Seafood Sustainability Organization.
And, we are also joined by Mr. Frank Randol, President of
Randol, Incorporated. Frank is a seafood processor from
Lafayette, Louisiana. He has over 40 years of experience in the
industry and also owns Randol's Restaurant in Lafayette,
Louisiana.
Welcome to all of you, and we will start with Dr. Strain.
STATEMENT OF MIKE STRAIN, D.V.M., COMMISSIONER, LOUISIANA
DEPARTMENT OF AGRICULTURE AND FORESTRY
Dr. Strain. Thank you. Good afternoon, Chairman Vitter.
Thank you very much for the opportunity to come here and speak
today. My name is Dr. Mike Strain. I am the Louisiana
Commissioner of the Department of Agriculture, Forestry, and
Aquaculture. I am testifying today on behalf of the Louisiana
Department of Agriculture.
State Departments of Agriculture are responsible for a wide
variety of programs, including food safety, combating the
introduction and spread of plant and animal diseases, and
fostering the economic vitality of our rural communities. Our
department oversees all agriculture activities within the
State, including the markets for products produced by our
farmers, and especially what we are here to talk about today in
seafood, in the crawfish industry, which falls under my
purview.
First of all, I would like to thank Ms. Wu and other
members of the Department of Labor for allowing us to come and
visit with them on March 23 about this issue and have a very
open and frank discussion.
Also with me today is the Director of the National
Association of State Departments of Agriculture, which I am a
Vice President, Dr. Barbara Glenn. My statement is also
consistent with the position of the National Association of
State Departments of Agriculture, representing commissioners,
secretaries, and directors across all 50 States and four
Territories, in the development, implementation, and
communication of sound public policy and programs which support
and promote American agricultural industry while promoting and
protecting the environment and our consumers.
In order to feed our increased U.S. population, we must
have a stable agricultural labor supply. The ability of
seasonal businesses to keep their doors open and retain their
full-time U.S. employees relies upon having successful peak
seasons to offset the rest of the year when business is slow.
During their busy seasons, companies must supplement their
permanent staff with temporary seasonal employees. Employers
spend thousands of dollars and hundreds of hours in their
efforts to fill these positions.
Unfortunately, even in today's tough economic climates,
there are not enough local workers available to fill all the
temporary seasonal positions, and efforts to obtain U.S.
workers to relocate for temporary seasonal employment have not
been successful. As a result, businesses must utilize the H-2B
guest worker program to find seasonal workers and workers for
their peak workforce needs. The H-2B program is vitally
important for many industries, including forestry, nursery,
landscaping, outdoor amusement, restaurant and hospitality,
tourism, livestock, horse training, sugar, and many others.
In Louisiana, the seafood industry, which includes
crawfish, shrimp, crabs, oysters, and catfish, is in a critical
situation because seafood processors traditionally cannot fill
their temporary or seasonal vacancies with U.S. workers. Many
of these businesses are located in rural areas that simply do
not have sufficient populations to supply their extra workforce
needs. Additionally, many who are willing to work want full-
time, year-round jobs. Indeed, many of the jobs in these
locales that are year-round and are full-time depend on the
various processors operating for their own jobs and business
operations.
In 2014, Louisiana hired 5,546 H-2B workers. For each H-2B
worker, it is estimated that 4.64 American jobs are created and
sustained.
Over the last ten years, Louisiana has seen many natural
challenges to the agricultural sector of our economy, with
Hurricanes Katrina and Rita, floods on the Mississippi River,
spilling water through the spillways into the Atchafalaya
Basin, and drought. The H-2B regulations released on April 29,
2015, by the U.S. Department of Labor and the U.S. Department
of Homeland Security could impact an already fragile industry's
economic competitiveness.
The seasonal industries have had to weather several years
of regulatory instability. The H-2B wage rule that the
Department of Labor adopted on January 19, 2011, imposed a new,
untested wage determining methodology that would significantly
increase costs for small and seasonal small businesses. After
being blocked by Congress in April 2013, the DOL issued an
interim final rule that included the same methodology for
setting wages, but recognized the importance of State wage
surveys. Unfortunately, the new rule released two weeks ago is
virtually identical to the rule that was blocked by Congress,
causing additional obstacles for employers in the program.
In December 2014, the Department of Labor announced that it
would no longer allow the private wage rate surveys that were
developed by many State Departments of Agriculture, including
Louisiana. My staff has spent countless hours gathering
information to accurately depict the current wages that the
industry is paying in our geographic location. This action
forced employers into accepting higher prevailing wages that
are not representative of the wages that are being paid
domestically.
To make matters worse, the H-2B worker caps have already
been exceeded and now many seafood processors have not received
the workers that they need. Seafood processing has already
begun early in the spring, and with the crawfish industry
especially, it is time sensitive. These actions have a negative
impact on the seafood industry and related commerce sectors,
such as restaurants, et cetera.
Two months ago, the LSU Ag Center conducted a rapid
economic analysis of the recent H-2B policy changes from the
U.S. Department of Labor for the Louisiana seafood industry.
The assessment was conducted in response to potential changes
in the cost and availability of labor stemming from a mid-year
cap on H-2B permits and the Department of Labor announcement
that it would no longer accept the private wage rate surveys.
Results indicate that for every one dollar of employee
compensation created by the seafood preparation and packaging
industry in Louisiana, employee compensation increased by $2.06
across all sectors of the Louisiana economy. This includes the
original one dollar of employee compensation created by the
seafood preparation and packaging industry plus $1.06 of
induced multiplier effects across all sectors of the economy.
Total income generated by H-2B visa workers in the
Louisiana seafood industry is estimated between $36 and $43
million. Based on the assumption of $35 million in revenue, the
loss of this revenue for any given number of firms would lead
to a total reduction in labor income across the entire
Louisiana economy, eventually leading to a number of companies
closing. The economic impact of two processing facilities
closing is $5.3 million, and with five firms shutting down,
$13.3. Louisiana has already faced a number of processing
facilities closing due to hurricanes and oil spills and the
industry simply cannot be sustained without a stable workforce.
I am certain that not only is the seafood industry in
Louisiana impacted, but the entire United States seafood
industry will be affected by these actions. Our markets are
subject to particularly fierce competition from abroad. For
example, the Chinese have been extremely aggressive in trying
to corner the U.S. crawfish market. This predatory practice and
behavior began in 1993 and it has continued. The Chinese
presently control over 50 percent of the market and are poised
to capture even a larger market share if our producers are put
at a further competitive price and labor disadvantage.
Without temporary H-2B guest seasonal workers to process
seafood, Louisiana seafood processors would shut down,
eliminating the primary market for our fishermen and our
farmers to sell their catch. As a result, foreign seafood would
gain a stronger foothold in the U.S. market and our fishermen
and farmers who produce and harvest crawfish, shrimp, crabs,
oysters, and catfish would be devastated and a key segment of
the Louisiana economy crippled.
Once we lose the processors, we would not be able to depend
on them coming back in future years. Therefore, the losses
because of the processors scale back and do not have the
ability to operate during the season will have irreparable and
bad repercussions now and in the future.
The short-term consequence of an immediate expulsion of
this vital segment of the workforce will cause a production
crisis in a wide variety of seafood processing, field and
nursery crops, sugar processing, forestry, livestock,
restaurant industry, and others. This would leave the United
States and our State of Louisiana no alternative but to import
many food products from countries with surplus foreign labor.
This is unacceptable. We must do everything in our power to
grow and support America's jobs and economy.
We are asking for your help. We must streamline and
expedite the H-2B process. We need a working system without
overburdensome rules, unrealistic time tables, and outright
road blocks. Neglecting the labor needs of agriculture will
raise the costs of production in a way that harms farmers,
fishers, and industries throughout America.
I appreciate your time and encourage you to work with us to
find workable solutions, ways that we can facilitate rather
than making it so difficult to where our processors and our
industries cannot operate. Where we are at currently, we have a
large crawfish harvest and we do not have enough peelers to
process it and that puts us in a severe economic state, and I
am sure Mr. Randol will address that, as well.
Thank you.
[The prepared statement of Dr. Strain follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Thank you very much, Dr. Strain.
We will now go to John Connelly. John, welcome.
STATEMENT OF JOHN P. CONNELLY, PRESIDENT, NATIONAL FISHERIES
INSTITUTE
Mr. Connelly. Thank you, Chairman Vitter, for inviting the
National Fisheries Institute to present our views today. Our
comments will include a brief introduction, the importance of
H-2B visas to seafood processors, the economics of the American
seafood industry, and the U.S. seafood safety system and its
results.
NFI is the nation's most comprehensive trade association.
Our members include harvesters, like those on ``Deadliest
Catch,'' to importers who enable us to enjoy seafood from
around the globe, to processors who put fish in a form that
consumers recognize, to retailers and restaurants. We do
represent all geographic regions, and we were particularly
proud to have had the late Louisiana seafood leader, Mike
Voisin of Motavatit Seafood in Houma, as our Chairman.
On H-2B visas, a functioning H-2B system is essential to
seafood processors. Senator Mikulski captured many of the
Senator's concerns in her letter to Secretary Johnson last
week. Quote, ``The lack of available temporary foreign workers
has caused chaos among businesses in Maryland that depend on
the H-2B program. More than 40 percent of Maryland's seafood
processors have been unable to get the workers that they need
for the 2015 crab season.'' I think Dr. Strain pretty much said
it all, and I think that is reflective of the rest of the
seafood community in the U.S.
On economics, seafood is the most globally traded food
commodity. That benefits our fishing communities, as we send
high quality and bountiful American seafood to Northern Asia
and throughout Europe. Trade also benefits the more than
525,000 Americans that process, distribute, and sell imported
seafood. Those jobs are found in nearly every State and are an
important reminder that trade benefits the U.S. not just when
we export.
Seafood trade also benefits farm States in two ways. About
18 percent of all soy goes into fish farms, many of those fish
farms in Asia. And, two, the countries to which American
farmers increasingly seek to send our ag products are countries
that export seafood to America. We cannot expect to open Asian
markets to U.S. pork, beef, poultry, corn, dairy, and soy if we
shut off access to our seafood markets.
To seafood safety. NFI has been a long and strong supporter
of seafood safety in word and deed. NFI has worked closely with
academia and regulators to understand how to best implement
HACCP. NFI joined you, Mr. Chairman, as an early and strong
supporter of FSMA. And, NFI works with the Alliance for a
Stronger FDA to urge Congress to appropriate the needed
resources for the agency to meet its statutory obligations.
As Dr. Solomon aptly and fully described the HACCP system,
I will not duplicate that extensive discussion.
I will close, though, speaking to results. Results, after
all, are what matters. The fact is, the Centers for Disease
Control analyzed and reported illnesses from all foods. Over
the five-year period ending in 2010, CDC found that 141 of
122,000, that is, 0.001156, or 0.12 percent of illnesses were
caused by imported seafood.
Most of us love baseball. It is a great day to go down to
the Nats game. But, we recall going to the games with our dads,
clutching that mitt, and hoping to catch that foul ball.
Unfortunately, we often came home crestfallen because we
rarely, if ever, did, because the chance of catching a foul
ball is the exact same as becoming sick from imported seafood,
0.001156, or 0.12 percent.
As an example of the effectiveness of the FDA, and again,
while the hearing focus is not on the USDA catfish program, I
did want to acknowledge the leadership of Senators Shaheen and
Ayotte and others on this committee in working in a bipartisan
manner to eliminate a program that USDA's own risk experts have
said will not improve public health, primarily because the FDA
regulation of catfish, both domestic and imported, has reduced
illnesses to less than two per year. That is a safe product.
It is because of the stringent requirements of HACCP, a
system required for both domestic and imported seafood, a
system that requires problems to be fixed thousands of miles
away from America and not caught at the border, that Congress
acknowledged and exempted companies in seafood HACCP compliance
from some of FSMA's key provisions. NFI agrees with Congress'
determination. The safety of domestic and imported seafood is
excellent.
Thank you.
[The prepared statement of Mr. Connelly follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Thank you very much.
And now, we will hear from Mr. Frank Randol. Frank,
welcome.
STATEMENT OF FRANK B. RANDOL, PRESIDENT, RANDOL, INC.,
LAFAYETTE, LA
Mr. Randol. Thank you, Chairman Vitter, and for the members
that are not here, Ranking Member Shaheen, Senator Cardin. I
want to thank you for inviting me here to testify about the
guest worker program that we refer to as H-2B.
The program is a vital part of the survival--this program
is vital to the survival of seafood processing, especially in
Louisiana and Maryland. The program--I will--and I am getting
shook. Excuse me. Just let me go.
Chairman Vitter. Sure.
Mr. Randol. It is vital. I will submit my statements for
the record, in addition to a number of exhibits that will
provide a useful reference for the committee. I will now
provide my oral comments.
I am here to express my concerns for the future of my
business and other small businesses that struggle daily to
succeed. I started Randols in 1971, starting small--one man,
one truck. After four decades, Randols has grown in size and
scope. We are transitioning to the next generation. The future
is in my sons that work my business, allowing me to pull back.
Hurdles over the last four years were detailed by the
Commissioner--floods, hurricanes, oil spills, lack of product,
predatory imports from China, yet the single most pressing
issue for us has always been the lack of labor.
In the 1970s, when I started my business, I was lucky
enough to have the refugees from Vietnam come in, so we brought
in roughly 40 to help us get through that time. Over the course
of the years, we came to the 1990s, when that started to wane
just a little bit. We discovered the H-2B program and started
bringing in the guest workers from Mexico. We started with 40,
dwindled to 30, now we are to 25.
I am here to talk about the H-2B guest worker program, the
legal--legal--temporary workers that we get from visas to
support businesses from farming, fishing, to restaurants,
wholesale, and retail food operations. The attached
declarations that I have submitted from Dr. Strain, filed in
our suit of 2011 against the Department of Labor, gives an
overview of the importance of the H-2B program to the Louisiana
economy.
The H-2B application process has been a growing and
expensive challenge. Since DOL took over the initial wage
certification from the State in 2008, the process has become
increasingly more time consuming and costly. Initially, I did
the paperwork myself, but now, I have to turn it over to
someone else more qualified to run through the governmental
hoops. Many people are using legal or international immigration
attorneys to do their paperwork. The stack of paperwork here
represents what was submitted on the October 2014 application
for the first cap. The same amount was resubmitted for the
second cap, so it would be twice that stack.
We missed both caps. Our plant was scheduled to open
February 2015. We are still waiting to see if we will be
getting any workers this year so we can open and salvage a part
of it. Last year, we were processing between 6,000 and 8,000
pounds of seafood daily, and like I said, right now, we are
shuttered.
Often, we hear the remark, why, if you pay more money, then
you will get the labor you need. We feel that that is not the
case. It is more about the job than the money in our seafood
industry. After missing the cap--both caps--we tried something
different, seven prison trustees. After one day, one prison
trustee said, ``I would rather go back to jail than to peel
crawfish.''
[Laughter.]
The warden picked him up, brought him back, we did not see
him again. The remaining trustees continued to shrink until
after a two-week effort, they were all gone.
Now, union activity has started to increase and created
problems for us, and recently, the NLRB has surfaced and
getting involved. We have referenced this in documents that we
brought as exhibits.
We need--urgently, we need fixes to save the H-2B program
for small businesses. Congress has to take action now. The lost
opportunity to fix the problems created by DHS and DOL last
year have already done severe harm in Louisiana. Some of
Louisiana's small businesses will not recover. Others may be
forced to cross the border. As in the past, we need immediate
Congressional action to block the new DHS and DOL proposals of
last Wednesday. The H-2B Workforce Coalition has submitted a
statement which we have attached as an exhibit.
In addition, we need to resume the H-2B returning worker,
guest worker exemption from the annual cap. We also have to
return to the authority of determining prevailing wages to the
States. Additionally, we feel we need a seat at the table with
DOL, just like the National Guest Workers Alliance. SBA's
Office of Advocacy needs to be more aggressive in confronting
DHS and DOL as policy changes are being discussed.
And, part of what came up today, as I was listening to the
testimony, is what we have been hearing, that somehow, what is
happening here was caused by a judge or was caused by industry.
You know, we just do not see it that way. We are small people,
but we do know that no matter where it was caused or what,
somehow, when something like this happens, if there is an error
or whatever, the people that make the error still have their
jobs. But in our case, we are small. We do not survive.
So, there is some give and take that has got to take place
here, and that is really why I am here. Somebody had to come up
and tell you about what is going on back home, the little guys
that are having problems. And, some of the big guys have the
same problem. Hershey had these problems the last part of--from
2007 on to 2011 when they decided to open up in Monterrey,
Mexico, and most of their growth has already been funneled into
that plant for their--American chocolate is now the Americas'
chocolate.
We have one right here, Elmer's, Louisiana, Ponchatoula,
largest employer in Ponchatoula. He hires--he uses H-2B. He
missed the cap and he is struggling. He is trying to make his
orders for this year. Small business. He is up against somebody
like Hershey. I am not saying that they are going to Mexico.
This is good chocolate. It needs to stay home.
I would be happy to answer any questions you may have.
Thank you again.
[The prepared statement of Mr. Randol follows:]
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Chairman Vitter. Thank you very much, Frank, and let us
start with you, since you offer such a great real world
perspective.
If you can--I know you touched on it in your testimony--
walk through the specific, concrete impact to your business
that the various recent Department of Labor changes and rulings
have had, number one. Number two, if you have any reaction so
far--and it may be too new, maybe you do not--but, if you have
any reaction so far of the new Department of Labor guidance
moving forward on wage surveys.
Mr. Randol. Let me start from the back. It is more of the
same, as I see it, from DOL. We have reviewed this stuff. It is
stuff that does not work. I mean, program rules, 75 percent
guarantee. Hurricane comes, I cannot turn them back, got to
keep them for ten months and got to pay them. That does not
work in Louisiana.
As far as the parity, if I pay one person this, another
person has to be paid the same. In the seafood industry, we pay
for productivity. You know, we might bring them in at entry
level, but we give them the incentives through piece work. They
accelerate. They get better. They might enter at a nominal
rate, but a lot of these people get up to these larger rates,
$12 to $15 an hour, peeling crawfish. That is attainable.
Chairman Vitter. Just to take those two examples, as far as
you know, is any of that mandated by statutory law, or is it
just a creation of the Department of Labor?
Mr. Randol. Creation. These mandates are killers for us.
You know, you all write the laws, they interpret the laws, and
then we try to say that is not what you meant, and that is what
I have been doing for the last decade. You saw me up here in
2006. It was very easy to predict or see where we were going,
and now we are here, you know, when I first came to discuss
this. The pain is in reality, and the pain to me. I feel it
because I am in it and I cannot get out of it.
We got through the process. We missed the first cap. I have
been at this for a half a year, trying to make a deadline that
was imposed--I can only start four months before I need them,
four months, and I have been at it for six months and I am
still not in the last step, which would gain me access in six
weeks to bring them in. The real lifting is at the border to
determine whether these people really need to come in. We
demonstrated that we do not have the workforce here, but----
Chairman Vitter. Frank, if I can interrupt for a second, if
I can just through the record ask Ms. Wu, we talked about two
specific requirements that you mentioned that are just flat out
unworkable in the real world from your perspective. Ms. Wu, if
you could submit for the record any statutory basis that
requires the Department of Labor to do that, because from what
I see, there is none. Thank you.
Go ahead, Frank.
Mr. Randol. Okay. The last one, we see that a lot of this
stuff is outlined in the H-2B Coalition paper, but what comes
to mind is open up a job order that starts four months out and
you have to take it 20 days to where these people are coming
inside the country and leave it open. So, normally, we--you
know, we have demonstrated that there are no people that want
this job. But these are just some of the few, and what I have
offered to DOL is, you know, the NGA apparently has their ear.
Let us let small business somehow be in the process so that we
do not see the results of a mandate, but we have a team effort
to try to move forward. Because, like I say, when they impose
these things, we feel the pain. A lot of people go out of
business.
Chairman Vitter. Right. Let me ask both you and Dr. Strain
if you have any specific reaction yet to their new guidance
about allowing private, including State, surveys. Is it
workable? Is it not? Is it reasonable? Is it too narrow? Do you
have any reaction yet?
Dr. Strain. Mr. Chairman, the reaction I have is that we
have been using the State prevailing wage rate surveys for many
years, and when you look at the final rule, it says they will
be used in limited exceptions. And, so, now we have several
different methodologies to determine a wage rate. I mean,
simply let us continue to use the prevailing wage rate rule.
If you look at it in the seafood industry and the crawfish
industry, the State prevailing wage rate, as determined by the
LSU Ag Center and my office, it is currently $8.66. That is a
floor. But, they are also paid on piecemeal, and you have
some--you have workers that make $12, $15, $18 an hour
depending on production. This sets a minimum wage.
So, let us not--if you look at what is in the interim rule
there, it is very--it is complicated. We need to simplify this.
Chairman Vitter. Okay. And, Dr. Strain, I also wanted to
touch on my Imported Seafood Safety Act.
Dr. Strain. Yes, sir. Please.
Chairman Vitter. As you know, we have worked on it
together. We have talked about it. As you know, it would give
States more power to increase seafood inspections for foreign
imports----
Dr. Strain. Yes, sir.
Chairman Vitter [continuing]. In conjunction with the
Federal Government. We have talked about this before,
essentially empowering you to reinforce the effort of the
Federal Government to put more cops on the beat. We do this in
many other areas where the primary regulation is at the Federal
level, but related State entities can help enforce that. What
is your view on that and how it could improve seafood safety?
Dr. Strain. Mr. Chairman, the American public, when they go
to the market, 100 percent of the mammalian proteins for beef
and pork and 99 percent for poultry--there is a specialty thing
for poultry, if you have a very small amount, less than 10,000
chickens, you can sell them, but it is very tiny--but all those
proteins are inspected. They are monitored from the farm all
the way through slaughter. They are inspected at slaughter and
they are tested and back-traced. The American public believes
their seafood that they consume is inspected and safe at that
same level.
If you look at the CDC report, and I am going to quote
their press release, March 14, 2012, it says that we currently
import about 85 percent of our seafood, 60 percent of our fresh
produce, and we currently import about 50 percent of our
crawfish. And, I quote, ``CDC experts reviewed outbreaks from
their Foodborne Disease Outbreak Surveillance System from 2005
to 2010. During that five-year period, 39 outbreaks, 2,348
illnesses, were linked to imported food from 15 countries. Of
those outbreaks, 17, half, occurred in 2009 and 2010. Overall,
fish, 17 outbreaks, were the most common source of implicated
imported foodborne disease outbreaks, followed by spices.
Nearly 45 percent of the imported foods causing outbreaks came
from Asia.''
The American public assumes that we are doing this testing.
We know that we are not. Less than three percent of the
imported seafood. Eighty-five percent of the seafood consumed
in the United States is imported, and less than three percent
is being tested.
Furthermore, when you look at that particular issue, if you
look in a container of seafood, there could be, in the case of
crawfish, there could be up to 20 different lots--20 different
lots, different origins, coming together. So, when you think
that it is all a blended product and you take one sample and
that it is consistent with everything in the container, it is
not.
And, when you look at the particular issues that we are
talking about, we are talking about antibiotics that are banned
from the United States, such as chloramphenicol, chemicals such
as malachite green that are banned from the United States.
And, so, when you look at that, it is imperative that we
all be on the same level playing field. And, when you start
talking about why we need to test this seafood and you say,
well, how are we going to stop port shopping, well, it is very
simple, is that we need to make sure that we have eyes on at
the processing level in those foreign countries, and I think
some of that will take into effect in the future under the Food
Safety Modernization Act, but that is somewhere in the future,
and that container be accompanied by a certificate stating that
it has been tested, and that when--if you get--and if that
container comes in and you retest that container and it is not
what it says, then it can either return directly and be
certified to go back to the country of origin or be destroyed
on site.
Now, our department, I am responsible--I oversee the
Department of Animal Health and Food Safety and we have a food
inspection program. We also work hand in hand with the USDA
Animal and Plant Health Inspection Service, to where we do
joint meat inspection. We do State plants and we can work
jointly on Federal plants where those products can cross State
lines. But, I am not permitted to test imported seafood. Now, I
can look at the containers to make sure that, and as I, as the
Commissioner of the Office of Metrology, Weights, Measures, and
Standards, that if there is a pound of seafood in there, there
is supposed to be a pound. But, we are not allowed to take
samples and test it for contaminants.
So, just like we are having a working relationship and we
have a cooperative endeavor agreement with the Federal
Government to do the other protein inspections, let us have the
same arrangements where my inspectors who are out at those
plants looking at other things--and we do label inspections for
the Federal Government, as well--give us the authority under
cooperative endeavor agreement to be a further arm. We have
testing labs in Louisiana. We do half of the seafood testing.
Chairman Vitter. And, so, if that were done, which I
certainly support and am advocating through my bill, that would
be fully consistent with the Federal standards. It would not be
using different standards in any way. You would just be
additional cops on the beat, correct?
Dr. Strain. That is correct. And, if you--and, what we do,
our standards, our procedures are in alignment with the Federal
procedures.
Chairman Vitter. Right. Right.
Dr. Strain. And, we should have standards as high as the
European Union.
Chairman Vitter. Right.
Dr. Strain. They test, and I believe it is up to 15 to 20
percent of all the products going to the EU. We should meet at
least those standards.
Chairman Vitter. Right. Well, thank you all very much.
We are going to wrap up, but in doing so, let me also ask
through the record if Dr. Solomon could supplement his
testimony with a response to this question. Dr. Strain
mentioned the use of chemicals on imported seafood that are
banned in the United States. Why should not that practice be
presumptive grounds to not allow that seafood into the country,
if Dr. Solomon could respond for the record.
Thank you all very much. I think this was very informative
and productive, particularly focusing on Department of Labor
activity and regulations and the safety regime for seafood
imports.
Thanks very much, and our hearing is adjourned.
[Whereupon, at 3:54 p.m., the committee was adjourned.]
APPENDIX MATERIAL SUBMITTED
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