[Congressional Record Volume 143, Number 130 (Thursday, September 25, 1997)]
[Senate]
[Pages S9972-S9974]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. STEVENS (for himself, Mr. Breaux, Mr. Murkowski, and Mr. 
        Hollings):
  S. 1221. A bill to amend title 46 of the United States Code to 
prevent foreign ownership and control of United States flag vessels 
employed in the fisheries in the navigable waters and exclusive 
economic zone of the United States, to prevent the issuance of fishery 
endorsements to certain vessels, and for other purposes; to the 
Committee on Commerce, Science, and Transportation.


                       the american fisheries act

  Mr. STEVENS. Mr. President, I am going to send to the desk a bill 
that is called the American Fisheries Act to raise the U.S. ownership 
standard for U.S.-flag fishing vessels operating in U.S. waters, to 
eliminate the exemptions and loopholes interpreted into the existing 
ownership and control standard, and to phase out large fishing vessels 
that are destructive to U.S. fishery resources because of their size 
and power.
  As I said, this bill is called the American Fisheries Act.
  Let me point out, these factory trawlers we are talking about make 
trucks look like tiny bugs. They certainly waste a tremendous amount of 
fish. According to the Alaska Department of Fish and Game statistics 
for 1995--that is the most recent year for which we have statistics--
the 55 factory trawlers in the Bering Sea off my State threw overboard 
483 million pounds of groundfish, wasted and unused.
  That is more fish than the targeted fisheries of New England lobster, 
Atlantic mackerel, Gulf of Mexico shrimp, and Pacific Northwest salmon 
combined. It is the most horrendous waste of fishery resources in the 
history of man. And this bill is designed to stop that.
  Mr. President, as I said, the bill I am introducing today would:
  First, raise U.S. ownership standard for U.S.-flag fishing vessels 
operating in U.S. waters; second, eliminate the exemptions and 
loopholes interpreted into the existing ownership and control standard; 
and third, phase out large fishing vessels that are destructive to U.S. 
fishery resources because of their size and power.
  The bill is called the American Fisheries Act. Senators Kerry, 
Murkowski, Breaux, and Hollings join me as original cosponsors.
  Last year, we enacted major revisions to the Magnuson-Stevens Fishery 
Conservation and Management Act to improve the conservation of the 
fishery resources. The other primary goal of the original Fishery 
Conservation and Management Act in 1975 was to Americanize the 
fisheries. We tried to complete that process through the Commercial 
Fishing Industry Anti-Reflagging Act--Public Law 100-239--in 1987. Due 
to exemptions in the act and to misinterpretations by the Coast Guard, 
this act has not been effective.
  The bill we introduce today would correct the basic controlling 
interest and foreign rebuilding requirements for U.S.-flag vessels that 
participate in our fisheries.


                         closing the loopholes

  The bill would require at least 75 percent of the controlling 
interest of all vessels that fly the U.S. flag and engage in the 
fisheries in the navigable waters and exclusive economic zone to be 
owned by citizens of the United States.
  The Commercial Fishing Industry Anti-Reflagging Act--Public Law 100-
239--imposed a 50 percent controlling interest standard, which has 
become meaningless because of exceptions in the bill and 
misinterpretations by the Coast Guard. The Coast Guard's 
misinterpretation of one provision of that

[[Page S9973]]

act allowed at least 14 massive factory trawlers to enter the fisheries 
off Alaska.
  As many here know, the House of Representatives recently passed a 
bill to keep one factory trawler out of the Atlantic herring and 
mackerel fisheries. Similar bills have been introduced in the Senate.
  In Alaska, we got stuck with at least 14 factory trawlers that should 
never have been allowed into our fisheries. Talk about loopholes you 
can drive a truck through--these factory trawlers make trucks look like 
tiny little bugs. And they waste fish.
  According to Alaska Department of Fish and Game statistics for 1995, 
the most recent year for which data is available, the 55 factory 
trawlers in the Bering Sea threw overboard 483 million pounds of 
groundfish wasted, and unused. That is more fish than the target 
fisheries for New England lobster, Atlantic mackerel, Gulf of Mexico 
shrimp, and Pacific Northwest salmon combined.
  The bill we introduce today draws heavily from the controlling 
interest standard in the Jones Act for vessels operating in the 
coastwide trade. Under our bill, vessel owners would have 18 months 
from the date of enactment to comply with the new 75 percent 
controlling interest standard.

  For vessels above 100 gross registered tons--which are more likely to 
have multiple owners or layers of ownership--the bill would require the 
Maritime Administration to closely scrutinize who actually controls the 
vessel before the vessel receives or can renew a fishery endorsement.
  The Maritime Administration already reviews the controlling interest 
of entities applying for title XI loan guarantees and maritime security 
program payments. MarAd has the best expertise among Federal agencies 
to do the thorough job we intend.
  The Secretary of Transportation would be required to revoke the 
fishery endorsement of any vessel above 100 gross tons that MarAd 
determines does not meet the new standard for controlling interest.
  The bill gives the Secretary of Transportation flexibility in 
establishing the requirements for the owners of vessels equal to or 
less than 100 gross registered tons to show compliance with the new 
standard. Vessels of this size generally do not exceed 75 feet in 
length, are usually owner-operated, and are less likely to have 
multiple layers of ownership that must be scrutinized.
  If the Secretary decides that compliance with the new 75 percent 
standard can be demonstrated by vessels 100 tons or less using the 
existing process through the Coast Guard, the Secretary could continue 
to use this process for those vessels.
  As the findings point out, international law--including Article 62 of 
the U.N. Convention on the Law of the Sea--gives coastal nations the 
clear sovereign right to harvest and process the entire allowable catch 
of fishery resources in their exclusive economic zone [EEZ] if their 
citizens have the harvesting capacity to do so. International law 
requires that other nations be given access if the coastal nation 
cannot harvest and process the entire allowable catch in its EEZ.
  In the United States, we have established a framework that fulfills 
these two basic principles. Through the Magnuson-Stevens Act, we gave 
U.S. fishermen first priority in the harvesting and processing of our 
fishery resources. Foreign fishing is allowed under that act, however, 
if U.S. vessels cannot harvest the entire allowable catch.
  For obvious reasons, the priority works only if U.S.-owned vessels 
can be distinguished from foreign-owned vessels in the fisheries. I am 
sad to report that our current law--the way it has been 
misinterpreted--fails to allow for this differentiation. In the 
Nation's largest fishery by volume (Bering Sea pollock) Norwegian and 
Japanese companies control the vessels that take over half the 
allowable catch.
  There is not enough fish to support the existing harvesting capacity 
in this and other fisheries, yet the line to differentiate true U.S.-
controlled vessels from foreign-controlled vessels is not adequate to 
protect the first priority for U.S. citizens. The American Fisheries 
Act will clear up this blurred line and give U.S. fishermen the top 
priority to harvest fishery resources, consistent with the historical 
intent of our laws.


                       phase out of large vessels

  When the Senate passed my bill last year to strengthen the 
conservation measures of the Magnuson-Stevens Act, I said on the Senate 
floor that I would seek a ban on factory trawlers if those measures did 
not work. It is too early to tell whether those measures will be 
sufficient.
  We propose today a phase out--not a ban--of factory trawlers and 
other fishing vessels that are longer than 165 feet, greater than 750 
tons, or that have greater than 3,000 shaft horsepower.
  By fishing vessel, we mean factory trawlers and other vessels that 
harvest fish. Existing fishing vessels above these thresholds are 
grandfathered--and can stay in the fisheries for their useful lives, 
provided the 75 percent controlling interest standard is met, and the 
vessel does not surrender its fishery endorsement at any time.
  Gradually, the useful lives of these large fishing vessels will end, 
however, and a smaller fleet--more able to avoid bycatch and waste and 
more likely to be owner-operated--will replace them.
  I reserve the option to accelerate this process through an immediate 
ban on factory trawlers if the management and conservation measures 
enacted last year in the Sustainable Fisheries Act are not effective.
  The phase out of large fishing vessels does not apply to vessels that 
fish exclusively for highly migratory fish species primarily outside 
U.S. navigable waters and the exclusive economic zone.
  Earlier this year--we enacted comprehensive legislation to achieve 
conservation under the International Dolphin Conservation Program--in 
part with the hope that some of the eastern tropical tuna fishing 
vessels would re-flag to the Unites States.
  These vessels are subject to stringent international conservation 
measures, and are able to harvest tuna in a way safer for the overall 
ecosystem than smaller vessels. These vessels were dealt with 
differently under the Anti-Reflagging Act as well.


                            foreign rebuilds

  The bill specifically addresses the foreign rebuilding provision of 
the Anti-Reflagging Act that was misinterpreted by the Coast Guard and 
abused by speculators who did exactly what Congress tried to avoid with 
this act. This misinterpretation and abuse resulted in at least 14 
factory trawlers entering the fisheries off Alaska that should have 
been prohibited by the Anti-Reflagging Act.
  Section 4(a)(4)(A) of the Act was meant to protect a specific group 
of owners who relied on pre-existing law in planning to convert U.S.-
built fishing vessels abroad for use in the U.S. fisheries.
  This provision was not intended to protect speculators who entered 
contingent contracts to purchase vessels with the intent to profit by 
the coming change in the law. To avoid this, Congress specifically 
required under section 4(a)(4)(A) and section 4(b) that the owner had 
to:
  First, have purchased or contracted to purchase a vessel by July 28, 
1997; second, have demonstrated his/her/its specific intent to enter 
the U.S. fisheries through the purchase of the contract itself or a 
Coast Guard letter ruling; and third, have accepted delivery of the 
vessel by July 28, 1990 and entered it into service.
  Under the Act, all three conditions had to be met by the same owner 
before a fishery license could be issued to the vessel.
  The Coast Guard erroneously allowed the vessel to be redelivered to 
any owner by July 28, 1990, and created freely transferable and 
valuable rights to enter the fishery that Congress specifically 
intended to avoid.
  The American Fisheries Act would correct this problem by putting the 
burden on those who benefited from the loophole to help with the 
reduction in the overcapacity that resulted. Specifically, from the 
date of the introduction of this act--September 25, 1997--if the 
controlling interest a vessel that used this loophole materially 
changes, another active vessel of equal or greater length, tonnage, and 
horsepower in the same region will have to permanently surrender its 
fishery endorsement.
  The capacity in the Bering Sea would be reduced on the backs of those 
who caused the problem and who argued for

[[Page S9974]]

and benefited from an interpretation clearly contrary to congressional 
intent.


                        federal loan guarantees

  The bill would permanently prohibit Federal loan guarantees for any 
vessel that is intended for use as a fishing vessel, and that will be 
greater than 165 registered feet, 750 gross registered tons, or 3,000 
shaft horsepower when the construction or rebuilding is completed.
  We mean to prevent the Federal Government from subsidizing or 
assisting in any way in the: No. 1, construction of vessels above these 
thresholds; No. 2 extension of the useful life of vessels above these 
thresholds; or No. 3 expansion of vessels so that they exceed these 
thresholds--where the vessel will be used as a fishing vessel.
  For the purposes of this measure, fishing vessel has the same 
definition as under section 2101 of title 46, United States Code, 
meaning a vessel that engages in the catching, taking, or harvesting of 
fish or any activity that can reasonably be expected to result in the 
catching, taking, or harvesting of fish. This obviously includes 
factory trawlers and other fishing vessels above the thresholds listed 
above.


                                summary

  With the American Fisheries Act, we will clean up the mess caused by 
the exceptions and misinterpretation of the Anti-Reflagging Act. We 
will also serve notice that entities that do not meet the 75 
controlling interest standard will not likely receive individual 
fishing quota's [IFQ's] or other limited access permits under the 
Magnuson-Stevens Act.
  The Sustainable Fisheries Act--Public Law 104-297--requires the 
National Academy of Sciences to study how to prohibit entities that 
don't meet the standard from owning IFQ's. We will analyze the 
Academy's report during the reauthorization of the Magnuson-Stevens Act 
in 1999. I do not want any foreign-controlled entities to be surprised 
when that process begins.
  Non-U.S. citizens simply should not be given what, for all practical 
purposes, are permanent access privileges to U.S. marine resource when 
there are U.S. citizens that can harvest these fish. The Magnuson-
Stevens Act allows these foreign-controlled entities to harvest the 
portion of the allowable catch that U.S. citizens cannot.
  In Alaska, some of the foreign participants are doing what they can 
to patch up their relationship with Alaska and Alaskans--but I question 
their long-term commitment.
  The North Pacific Council is reviewing the inshore/offshore pollock 
allocation right now--which will substantially impact them. They have 
been good partners this year in anticipation of this council debate--
but where were they last year? They were here in Washington, DC, 
lobbying against our bill to protect fishing communities, reduce 
bycatch, and prevent foreign entities from receiving a windfall 
giveaway through IFQ's.
  If Congress or the North Pacific Council gives away permanent access 
to our fisheries, I believe these entities will go back to their 
tactics of the last 10 years.
  Flannery O'Connor explained this well in her short story ``A Good Man 
Is Hard to Find.'' In that story, the ``Misfit'' says of another 
character that ``She would of been a good woman, if [there] had been 
somebody there to shoot her every minute of her life.''
  The foreign-controlled factory trawlers have the inshore/offshore gun 
to their head right now, and are being good. But their track record 
without this gun has been poor, both with respect to the conservation 
and to protecting fishing communities.
  In the Bering Sea pollock, specifically, I am concerned that a single 
Norwegian entity controls an excessive share of the harvest in 
violation of National Standard Four of the Magnuson-Stevens Act. I am 
also concerned about the expansion of the ownership of catcher vessels 
and factory trawlers by Japanese entities.
  Will we have the strength in the Congress or at the council level to 
prevent a giveaway of IFQ's to foreign-controlled entities in 2000 or 
beyond if they are the only ones left in the fishery?
  The time has come to put Americanization back on the track as we 
first envisioned when we extended U.S. jurisdiction over the fisheries 
out to 200 miles.
  Mr. MURKOWSKI. Mr. President, I am very pleased to join Senator 
Stevens in sponsoring this important legislation.
  This is a necessary follow-on to legislation I first introduced in 
1986, the Commercial Fishing Vessel Anti-Reflagging Act, which was 
enacted in 1987. That act attempted to control an anticipated influx of 
foreign-owned fishing vessels by prohibiting them from reflagging as 
U.S. vessels except in certain circumstances. At the time, I backed a 
move to impose, for the first time, an American ownership provision 
that would ensure U.S. control of corporations owning such vessels.
  Had that legislation been implemented the way it was intended, 
today's bill would probably not be necessary. Our intention was to 
gradually eliminate foreign control by requiring new owners to be U.S.-
controlled. Unfortunately, in making a decision on implementation, the 
Coast Guard decided to rely primarily on its past practice, and 
permitted all vessels with U.S. documentation to continue fishing 
regardless of existing or new ownership.
  That, as much as any one factor, led to today's crisis, in which 
there are far too many large vessels operating. Something has to give, 
and the laws of nature and economics say that it has to be one of two 
things: either the resource itself or the number of vessels.
  This bill will help insure that the resource will be held harmless; 
if change occurs, it will come to the number of large vessels allowed 
to operate in U.S. fisheries.
  The bill we are introducing today will increase the American 
ownership requirement for vessels to 75 percent from the 51-percent 
level required by current law. This new level is consistent with other 
laws affecting ownership of vessels involved in the coastwise trade, 
which are also required to meet the 75-percent test.
  It will also correct the mistake made by the Coast Guard a decade ago 
by requiring fishery endorsements to be removed from vessels which do 
not qualify for the ownership criterion within a reasonable period of 
time--18 months under this bill.
  Under this bill, the Coast Guard will no longer be responsible for 
reviewing the ownership of fishing vessels. This authority will rest 
more appropriately with the Maritime Administration, which currently 
has the same responsibility for vessels seeking title XI loan 
guarantees and Maritime Security Program assistance, among other 
things.
  The bill will also begin the process of restoring the number of large 
fishing vessels operating off our shores to a reasonable and manageable 
level, by eliminating the entry of new vessels, regardless of 
ownership, and by allowing attrition to take its toll on the existing 
fleet. Large vessels are those over 165 registered feet in length, 
greater than 750 gross registered tons, or with engines totaling more 
than 3,000 horsepower. The bill also eliminates Federal loan guarantees 
that have been used to subsidize and accelerate the unrestrained growth 
of this fleet.
  Further, currently operating vessels which were rebuilt for fishing 
in foreign shipyards using the loophole created by the Coast Guard's 
interpretation of the earlier act, and which are sold to new owners in 
the future, will not be eligible to fish under the new owners unless a 
similarly sized vessel is also removed from the fishery.
  Taken together, these provisions will help to move us away from a 
fleet that is only nominally U.S.-controlled to one which is truly 
U.S.-controlled.
  Moreover, in reducing the total number of these large vessels over 
time, this measure will also provide tremendous benefits to the many 
small communities which depend not on these large vessels, but on the 
far greater numbers of small fishing vessels and shore-based processing 
plants that hire locally, deliver locally, process locally, and support 
their communities through local taxes.
  Mr. President, I enthusiastically support this legislation, and urge 
my colleagues to do the same.
                                 ______