June 4, 2009

Global Seafoods testimony on pilot rockfish program

For the Official Record: re C-1(a) GOA Groundfish Issues Review Alternatives for CGOA Rockfish Program

Secretary Locke, Chairman Olson & NPFMC members:

We support Alternative 1 "no action"- allowing management to revert to the License Limitation Program (LLP), just as before wrongful legislation implemented the Rockfish Pilot (Demonstration) Program.

We wholly agree with the discussion paper's statement that since the existing purpose and needs statement "is based on the legislation directing the development of the program, it is clearly inapplicable to the development of a long term program."

The Council should reject the attempts by existing players to place band-aids on the deep wounds of the failing RPP. They'll be making false statements - unsubstantiated self-serving conclusions about the program - and acting as if that meets the requirements for respecification of the purpose, needs and goals of the program under MSA Reauthorized. It will not.

Equally, we agree that the "processor association requirement for eligible catcher vessels may be beyond the general authority granted the Council under the MSA." We believe it was a restraint of trade upon Global Seafoods in violation of federal antitrust laws. The benefits of joint harvesting for coordinated catch management are legally outweighed by per se antitrust conditions.

If the day ever comes that overfishing or legitimate reason means a new program is considered, it should follow the legal due process of MSA Reauthorized. In any case, the Council is required to establish Authority based on its Rationale for Action and demonstrate a Connection between Action, Purpose and Authority - and that starts with revisiting the entire process. Alternatives 2 and 4 will not meet the requirements for a fair and equitable longterm program.

When and if allocations might occur, MSA §303(c.)(5)(a) requires a fair and equitable allocation based on a supporting record for the employment in processing sectors and investments and dependence upon the fishery. In previous testimony Global Seafoods had provided you with clear cut evidence that our investment of over $8 million was injured by the RPP. We clearly demonstrated that harm was about $750 thousand in annual losses to our company (to date, over $2 million), and caused job losses for our employees in Kodiak. We and they got nothing!

We also provided on the federal record sound evidence of a plan devised in January 2000 by some of the architects of the RPP to enact a fleet boycott of Global Seafoods in order to deliberately cause harm to us as a competitor. The Council should call for a Justice Department and Federal Trade Commission review of the antitrust and restraint of trade consequences of RPP, which was wholly allocative in its design. Federal laws demand protecting competition itself, not specific competitors.

While in fact RPP should end today and compensation be made to Global Seafoods for its unwarranted losses, the Council should at minimum allow the RPP to expire and revert to LLP management. This program was never intended to be a pilot program at all. It is a precedent setting measure to implement allocations to a specific gear group, in order to favor certain trawl vessels and the larger closed-class processors against whom businesses like ours compete. It will have further foreclosure effects upon our business if this RPP or a similar anti-competitive program continues.

Sincerely,
Oleg Nikitenko, President and owner
Thomas Hennessey, Chief Financial Officer