[Congressional Record Volume 143, Number 109 (Tuesday, July 29, 1997)]
[Extensions of Remarks]
[Pages E1556-E1558]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            MORATORIUM ON LARGE FISHING VESSELS IN ATLANTIC

                                 ______
                                 

                               speech of

                           HON. JACK METCALF

                             of washington

                    in the house of representatives

                         Monday, July 28, 1997

  Mr. METCALF. Mr. Speaker, I rise in opposition to H.R. 1855 and to 
express my strong concerns with this bill. We have heard much today 
about the Atlantic herring and mackerel fishery stocks, as if somehow 
they are in danger. Yet this bill is not really about the fishery 
resources at all. It is about competition. It is about changing the 
rules in the middle of the game.
  It is about destroying an American company whose principals are 
fishermen from Washington State and from Maine. This company has 
invested in a $40 million project based on every known fishery 
management policy and law on the books. Policies that encouraged the 
development of vessels of this size are completely reversed by this 
Federal legislation. In fact, this company's vessel, the Atlantic Star, 
is the only vessel that will be legislated out of existence--and into 
bankruptcy--by enactment of H.R. 1855. Such a result is not only bad 
fishery policy, it is bad Government policy and is manifestly unfair. 
We here in Congress should be trying to prevent Government takings of 
private property, not facilitating them, as this legislation most 
certainly does.
  In 20 years of managing our fisheries resources, this is the first 
bill ever to waive the entire Magnuson-Stevens Fishery Conservation and 
Management Act. It preempts the Regional Fishery Management Councils 
and attempts to micromanage the Fishery from Washington, DC. And why? 
Because it is the only way that competitors can keep a single large 
vessel, the Atlantic Star, out of the fishery. This boat presently 
meets all necessary requirements. It has all permits needed for these 
fisheries. It is a U.S.-built, U.S.-flag, U.S.-owned and U.S.-crewed 
vessel that will generate over 100 new jobs, both on board and on land, 
as well as $25 million per year in benefits to the U.S. economy.
  This vessel is presently in the shipyard being refitted to fish 
mackerel and herring stocks that are so strong that Government 
scientists have for years characterized them as underutilized. The most 
recent information from National Marine Fisheries Service [NMFS] 
scientists tells us that ``the Northwest Atlantic mackerel stock is 
currently at a high level of biomass and is underexploited.'' In fact, 
the Spawning Stock Biomass [SSB] is an incredible 2.1 million metric 
tons, yet last year's total reported domestic landings were less than 
16,000 mt. The story is the same for Atlantic herring, with NMFS 
scientists calling the stocks extremely underutilized with a biomass of 
2.2 million mt and domestic landings of about 100,000 mt.
  Even assuming that these fishery stocks were somehow at risk, what is 
it exactly that H.R. 1855 does to protect them? First of all, it waives 
the entire Magnuson-Stevens Act, as it must because what it attempts 
to achieve is flatly prohibited by that act. Economic allocation 
decisions, such as this one, must be ``fair and reasonable to all 
fishermen'' under the Magnuson-Stevens Act. Prohibiting a single fully 
permitted U.S. vessel from fishing while allowing in thousands of other 
vessels with far greater capacity most certainly fails this standard. 
Although larger than the bill's size thresholds of 165 feet and 3000 
horsepower, the freezer trawler Atlantic Star takes only 250 mt of fish 
per day, because it catches only as much as it can freeze in a day. 
However a boat that comes under the size thresholds can easily take 500 
mt per day or more, twice as much as the Atlantic Star. How serious can 
we be in protecting the stocks when this bill imposes no limit at all 
on the number of these 500 mt per day vessels that come into these 
fisheries, yet a single vessel taking half as much per day is 
legislated out of business?

  What is perhaps even more surprising is that while this bill puts an 
American company out of business and destroys American jobs, it does 
nothing to prevent Russian-flag processing vessels of similar size from 
continuing to operate within our waters processing the same species of 
fish, employing Russian crews and paying no Federal income taxes. What 
is wrong with this picture? The Magnuson-Stevens Act was supposed to 
give U.S. vessels priority over foreign vessels, yet this bill would 
reverse that policy as well.
  This bill is an unwarranted Federal intervention in a system that is 
working and needs no help from Washington, DC. If it is to be enacted, 
however, it should at least include a savings clause to allow those 
projects that are in the pipeline and whose principals have invested in 
reliance on existing law not to be penalized. I am unaware of a single 
fishery management plan anywhere in the country that has not 
accommodated projects in the pipeline when new rules are adopted. We 
regularly adopt savings clauses in Congress to prevent exactly the kind 
of inequity that this bill, in its present form, will deliver to this 
single company.
  We can do better and we should. This kind of legislation is not 
needed, it is bad policy, it destroys American businesses and I urge 
you to oppose it.

   Legislation To Impose a Size Limitation on Atlantic Mackerel and 
 Herring Fishing Vessels Would Not Protect the Fishery Resource While 
  Legislating Into Bankruptcy a $40 Million U.S.-Flag Fishing Vessel 
                  Project and Cost Over 100 U.S. Jobs

       Throughout the 1990's the consistent fisheries management 
     policy of the Regional Fishery Management Councils and the 
     federal government has been to encourage American development 
     of the abundant Atlantic mackerel and herring pelagic 
     resources, and to do so with large vessels. In reliance on 
     that policy, the owners of the Atlantic Star commenced a $40 
     million vessel project with the first large U.S. boat ever 
     designed exclusively for these fisheries. Now legislation has 
     been introduced which would reverse that policy, impose a 
     ``moratorium'' to limit entry of some large vessels (while 
     allowing others in), and destroy this investment before the 
     Atlantic Star is even delivered from the yard where refitting 
     work is now underway. While there are legitimate questions as 
     to whether Congress should be

[[Page E1557]]

     micromanaging these fisheries in this way, at the very least 
     the bill should be amended to allow the Atlantic Star--the 
     only vessel in the pipeline--to come in.
       1. The Resource: Government scientists agree that both the 
     Atlantic mackerel and herring stocks (``pelagic resources'') 
     are abundant, healthy and underexploited.
       Atlantic Mackerel: The estimated overall biomass is 2.1 
     million metric tons (mt); the estimated biomass available for 
     fishing is 383,000 mt (current proposed Allowable Biological 
     Catch, or ABC), and the last reported U.S. domestic landings 
     were only 15,712 mt. National Marine Fisheries Service (NMFS) 
     scientists recently concluded ``the Northwest Atlantic 
     mackerel stock is currently at a high level of biomass and is 
     underexplotied.'' SARC-20 at p. 71 (2/96) (emphasis added).
       Atlantic Herring: The estimated overall biomass is 3.6 
     million mt; the estimated biomass available for fishing is 
     540,000 mt; and the last reported U.S. domestic landings were 
     87,648 mt. NMFS scientists have concluded the stock is ``at a 
     high biomass level and is underexploited'' and that 
     ``increased fishing . . . is encouraged.'' SARC-20 at p. 
     19(2/96) (emphasis added).
       2. Fisheries Policy: the consistent message has been to 
     Americanize and develop the fishery by emulating the 
     foreigners with larger vessels to achieve economies of scale.
       A principal objective of the Magnuson-Stevens Fishery 
     Conservation and Management Act is the Americanization of our 
     domestic fisheries through a statutory priority for U.S. flag 
     vessels to catch and process our marine resources. It has 
     been so successful that the only fisheries in which foreign 
     processing vessels are still used is in herring internal 
     waters joint ventures on the East coast. The consistent 
     policy for twenty years has been to displace all foreign 
     vessels with U.S. flag vessels, as they come on line, yet the 
     proposed legislation would eliminate the U.S. flag Atlantic 
     Star from the herring fishery while still permitting Russian 
     fish processing vessels to operate in our waters.
       The Atlantic Herring Plan prepared by the Atlantic States 
     Marine Fisheries Commission in 1993 cited the reasons for the 
     lack of U.S. development of the herring resource as the high 
     volume necessary for profitable production and the fact that 
     ``there were no freezer-trawlers in the US fleet which would 
     have been necessary to operate successfully on Georges Bank 
     and to supply that high quality products [for the world 
     market].''
       In 1993 the International Trade Commission (ITC) conducted 
     an exhaustive study of the domestic Atlantic mackerel 
     industry, including public hearings and detailed cost 
     comparisons between large foreign vessels the size of the 
     Atlantic Star and the domestic fleet, and concluded that if 
     Americans were to be successful in developing the mackerel 
     fishery, they would need to use larger vessels to increase 
     the economies of scale so as to be competitive on the world 
     market, both in terms of production and transportation costs.
       The Mid-Atlantic Council reached similar conclusions in 
     developing Amendment #5 to the Mackerel Fishery Management 
     Plan (FMP). The following text appeared in the draft plan 
     amendment in 1994, again in the final amendment in 1995, and 
     was repeated once more with the publication of the annual 
     mackerel specifications in July 1996: In order to compete in 
     the world bulk market, the US will have to emulate its 
     foreign competitors which harvest, process, and ship mackerel 
     in large quantities so as to take advantage of economies of 
     scale. Currently the US east coast industry does not have the 
     large vessels necessary to participate in this market.
       In developing the Mackerel FMP the Mid-Atlantic Council 
     expressly rejected a moratorium for mackerel citing the need 
     for an ``infusion of investment capital into the industry for 
     market and infra-structure development''. Instead the 
     Council's policy is to impose a control date, but only when 
     the commercial landings reach 50% of the ABC. The last 
     reported landings were only 4% of the ABC.
       Finally, every Council in the country that has adopted a 
     control date where there have been projects in the pipeline 
     has either expressly recognized and included those projects, 
     or has subsequently moved the control date forward to allow 
     those who have made investments on the previous policy to 
     complete those projects and come in before shutting the door. 
     Against this regulatory backdrop, the only surprise is why 
     the Atlantic Star project, or something like it, did not 
     happen sooner. To now usurp the Regional Fishery Management 
     Council process with federal legislation retroactively 
     reversing that policy so as to eliminate the Atlantic Star 
     would be manifestly unfair.
       3. The Vessel: The Atlantic Star is U.S.-built, U.S.-owned, 
     and U.S.-crewed and offers 80 new on board jobs for the East 
     coast industry, new market opportunities and other benefits.
       Built in the mid-1980's in Tacoma, Washington, the boat is 
     presently undergoing a $40 million refit for the mackerel and 
     herring fisheries. Originally intended as an incinerator 
     vessel, but never operated as such, the boat is ``overbuilt'' 
     with a complete double hull, heavy guage steel and meets the 
     highest Coast Guard standards.
       The boat has on-board accommodations for full-time NMFS 
     observers and scientists. With a registered net length of 
     332.8 feet (and length overall of 369 feet) the boat is 
     designed to achieve the economies of scale (through its 
     freezer capacity and ability to take 250 mt daily) identified 
     by fishery managers as necessary to compete on international 
     markets.
       The boat presently has all necessary federal fishing 
     permits for these fisheries.
       Eighty new on-board jobs will be created, plus as many more 
     jobs on shore in supporting the boat. Anticipated crewshare, 
     payroll, supplies and other vessel support is expected to 
     pump $10 million directly into the economy annually, with 
     additional multiplier effect (at 2.5x), the total benefits 
     are estimated at $25 million. A $7 million shore based 
     facility will add even more jobs.
       The boat is owned by American Pelagic Fisheries Company, 
     LP, a U.S. partnership of two U.S. companies and a Dutch 
     company (with a 49% minority limited partnership interest). 
     The owner meets the most stringent U.S. citizenship standards 
     for fishing vessels under the vessel documentation laws. The 
     minority partners bring necessary access to European markets 
     as well as extensive experience in pelagic fishing.
       For the first time, this project brings together the vessel 
     size, access and technology for Americans to compete 
     successfully in the world market for pelagic fish.
       4. The Legislation: H.R. 1855 and S. 1035 would pre-empt 
     the Regional Fishery Management Council process with a 
     purported ``moratorium'' that would not limit catches, 
     overcapitalization, or new entrants, but would exclude the 
     Atlantic Star.
       Any legislated solution sets a troubling precedent by pre-
     empting the well-established Regional Fishery Management 
     Council process with a federal micro-management of the 
     resource (the bill begins by waiving the entire Magnuson-
     Stevens Act). The Council's have within their existing power 
     the ability to impose a moratorium, to limit vessels by size, 
     gear type, or in other ways, all within the framework of the 
     Magnuson-Stevens Act. The fact that the New England Council 
     has had 20 years to develop a herring plan and has not is no 
     reason for Congressional intervention now. Both the New 
     England the Mid-Atlantic Councils have already acted to 
     put new entrants on notice that large vessels may be 
     subject to the kinds of limitations contained in H.R. 
     1855. The Council process is working. Federal legislation 
     sets a dangerous precedent and is simply not needed.
       H.R. 1855/S. 1035 would waive the Magnuson-Stevens Act and 
     impose a moratorium on ``large''fishing vessels in the 
     Atlantic Herring and Mackerel Fisheries until (1) NMFS has 
     completed new population surveys of the stocks (even though 
     there is no evidence why NMFS current assessments are 
     unreliable, or that the stocks are in any way threatened), 
     and (2) the Secretary of Commerce has approved amendments to 
     the relevant fishery management plans regarding large vessels 
     (even though both Councils have had ample opportunity to do 
     so, and the Mid-Atlantic, in particular, has encouraged large 
     vessels as noted above). The bill's definition of ``large 
     vessels'' bears no relationship to a vessel's fishing power, 
     only an arbitrary length and horsepower cap. By defining a 
     ``large vessel'' as one that does not exceed 165 feet and 
     3000 horsepower the bill would allow the following vessels 
     into the mackerel and herring fisheries notwithstanding the 
     ``moratorium'':
       All vessels that are either less than 165 feet, or less 
     than 3000 horsepower. These include the 316' Stellar Sea 
     (3000 hp); the 200' Ocean Peace (ex-Amfish) (2250 hp), and in 
     the 165' range, e.g., the Meghan Hope (1860 hp), 
     Constellation (2250 hp), and Pacific Prince (2000 hp).
       Every one of the 120,000 documented fishing vessels could 
     be rebuilt essentially into new factory trawlers of 165' and 
     300 horsepower.
       All new vessels regardless of length, provided only that 
     horsepower is under 3000.
       All new vessels regardless of horsepower, provided only 
     that length is less than 165'.
       It is also significant that a number of the existing 
     vessels on the East coast, and any of the new vessels built 
     within the moratorium size limitations or those that are 
     rebuilt, could easily have daily catches well in excess of 
     the Atlantic Star. These vessels can take as much as 600 mt 
     per day whereas the Atlantic Star is necessarily limited to 
     catch only as much as it can freeze, i.e., 250 mt per day. 
     Consequently existing vessels (and new ones permitted under 
     the bill) that are under the size limitations can outpace the 
     Atlantic Star on a daily catch basis.
       The bill would also preclude the Atlantic Star or similar 
     large vessels from operating as dedicated processing vessels 
     in these fisheries, thus depriving existing East coast 
     fishermen of new at-sea markets. Such a prohibition makes no 
     sense, particularly with a strong resource and when so many 
     existing vessels are still permitted to come in to the 
     fishery.
       Clearly the proposed ``moratorium'' would not limit 
     overcapitalization, slow growth, restrict new entrants, 
     control harvest levels or otherwise protect the resource or 
     provide any kind of meaningful moratorium. While H.R. 1855/S. 
     1035 would discourage the speculative entry of new large 
     vessels from parts of the country other than the East coast, 
     the only known boat presently intending to enter these 
     fisheries that would be legislated out is the Atlantic Star.
       5. Conclusion: H.R. 1855/S. 1035 is substantively flawed 
     and creates bad precedent. If it moves forward, it should be 
     amended to permit the only vessel in the pipeline into these 
     fisheries.
       This legislation turns the Magnuson-Stevens Act 
     Americanization process upside

[[Page E1558]]

     down. Not only does it pre-empt the Regional Councils, but it 
     would eliminate a U.S. flag vessel while allowing Russian 
     vessels to process the very same resource. It does not 
     reflect sound management policy nor a reasoned approach to 
     what is only a potential problem. It also flies in the face 
     of national Standard #4 which requires allocation decisions 
     among U.S. fishermen to be ``fair and equitable to all such 
     fishermen.'' A result which eliminates the enormous 
     investment made by the owners of the Atlantic Star in 
     complete reliance on every known fishery statute, regulation 
     and policy would be unprecedented and manifestly unfair. If 
     legislation moves forward to address the speculative entry of 
     large mackerel and herring vessels, then due process and 
     simple fairness require that the bill be amended with a 
     savings clause to allow the Atlantic Star to remain in these 
     fisheries.

     

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