Fight over America’s Finest vessel part of bigger processor battle

  • Two 40-year-old factory trawlers owned by Fisherman's Finest, the American No. 1 and U.S. Intrepid, are seen in Captains Bay at Dutch Harbor this year. A $74 million vessel intended to replace the two is in limbo at a Washington shipyyard embroiled over a needed Jones Act waiver and a longer-running fight between the on- and offshore sectors of the Pacific cod fishery. (Photo/Jim Paulin/For the Journal)

UNALASKA — The mothershippers are fighting with the groundfish shoreplants in a politicized Bering Sea commercial fishing tussle reaching all the way to Washington, D.C.

The battle over Pacific cod pits the factory trawlers of the Amendment 80 fleet against Alaska shoreplants and local governments.

And in February, it pitted two local governments against each other. A delegation of municipal and business leaders from Anacortes, Wash., traveled to the Aleutian Islands to ask the Unalaska City Council to reverse itself but didn’t change anybody’s mind.

The brand spanking new factory trawler America’s Finest remains stranded in an Anacortes, Wash., shipyard, unable to fish in the United States because it hasn’t received a waiver from the Jones Act.

The ship was built with too much foreign steel in its hull, a Jones Act violation, and it may be sold at a loss, probably to Russia. The Jones Act, which is intended to protect American ship-building and jobs, allows for no more than 1.5 percent foreign steel in a vessel. The America’s Finest has 7.5 percent.

The visitors from Washington state asked the Unalaska City Council to stop asking the U.S. Congress to prohibit the stranded factory trawler from buying cod at sea in a practice known as mothershipping.

Earlier, Unalaska Mayor Frank Kelty sent the Alaska congressional delegation a letter urging “sideboard” restrictions on offshore cod deliveries from catcher vessels attached to any Jones Act waiver.

Now, the state-of-the-art $74 million flatfish factory trawler commissioned by the company Fishermen’s Finest can’t fish in the U.S., unless it gets a waiver.

If the vessel can’t fish in the U.S., the fishing company won’t pay, leaving the shipyard with a huge loss and major negative impacts on the Anacortes economy, especially the 375 “family wage” welder and other skilled jobs in Anacortes.

The visiting delegation included the mayor of Anacortes, Laurie Gere; the president of Fisherman’s Finest, Dennis Moran; and Dick Nelson, the owner of the shipyard Dakota Creek Industries.

Nelson said the error occurred after shipyard officials overlooked “fine print” in federal rules that he said were “almost impossible to find.”

Mayor Gere said Unalaska and Anacortes share a common bond in the boat business, citing the various vessels that work in the Bering Sea that were built in Anacortes, including the Aurora, Auriga, Nordic Viking, and Starbound.

“We truly are connected,” she said.

Moran said that Unalaska’s request for cod restrictions could block the waiver. He asked the city to reconsider, and allow the issue to be worked out at the North Pacific Fishery Management Council. The floor of the U.S. Senate, he said, is a bad place to solve fisheries problems.

Bigger battle

The America’s Finest’s problems are part of a bigger “food fight,” as shoreplants and communities including Unalaska and the Aleutians East Borough oppose the fleet of about 17 Amendment 80 factory trawlers acting as motherships, buying cod from catcher boats offshore at the expense of local government revenues and shoreplant profits.

(The groundfish fleet is known as the Amendment 80 fleet for the amendment in the Bering Sea fishery management plan that divided up the harvest for the many species among the bottom trawlers that target them.)

The Amendment 80 flatfish factory trawlers are different from the larger American Fisheries Act pollock factory trawlers.

The shoreplants were well represented at the city council meeting, sending in delegations of top officials and subordinates from Unisea, Westward, Alyeska and Trident.

Don Goodfellow of Alyeska Seafoods in Unalaska said that he was sympathetic to Anacortes, but wanted to close a “loophole” in the American Fisheries Act to stop factory trawlers from mothershipping cod.

Chris Riley of Trident Seafoods said the factory trawlers are already benefiting from rationalization through Amendment 80, which limits access into their fisheries.

They harvest yellowfin sole, rex sole, Greenland turbot, Atka mackerel, Pacific Ocean perch, and idiots and other rockfish.

He said rationalization programs aim to curb abuses of overcapitalization, now being perpetrated by the mothershippers. He said Trident strongly supports Congressional restrictions.

“We think it needs to be done now,” Riley said.

Sinclair Wilt of Alyeska Seafoods complained of cod catcher vessels stopping deliveries to shoreplants mid-season, and delivering offshore. That caused shoreplants to shut down cod processing lines early, he said.

Speaking in support of the America’s Finest were Mark Horn of Sundance Stevedoring, of Unalaska, and Layton Wolf of Coastal Transportation, which operates a fleet of freighters with a big local dock.

Wolf said Dakota Creek Industries is vital to maintaining the Bering Sea fishing fleet. Fishermen’s Finest Chief Vessel Officer Kristian Uri praised the new high-tech factory trawler as a necessary upgrade to the company’s aging two-boat fleet.

Fisherman’s Finest owns two aging factory trawlers, the U.S. Intrepid and the American No. 1. The America’s Finest was intended to replace the two aging vessels, each about 40 years old, according to the company, which complains that Trident Seafood is in weak position to criticize Jones Act waivers.

Both the company and Horn said Trident’s yacht, the Annandale, received a Jones Act waiver. The company calls the pleasure craft a “lobbying vessel.”

Unalaska Mayor Kelty, with the city council’s approval, sent the state’s congressional delegation a letter urging “sideboard” restrictions which would keep the America’s Finest from receiving at-sea deliveries of Pacific cod from catcher vessels.

“Alaska’s fishery dependent communities depend on catcher vessel deliveries to shoreplants,” Kelty wrote.

During the pollock battles of the 1990s, the onshore and offshore sectors would encourage their various vendors and contractors to provide lobbying support. The pollock inshore-offshore battles ended with the passage of the American Fisheries Act, which established permanent quotas for the various sectors and guaranteed 50 percent of the pollock harvest would be delivered to shoreside plants.

In a case of history repeating itself, one of Fisherman’s Finest’s local contractors in Unalaska is stepping up to the plate for the company.

Horn, owner of Sundance Stevedoring, said the company is a major customer of his Unalaska cargo handling business. Horn said he’s spent $250,000 on new equipment to offload the state-of-the-art vessel. He views the restrictions sought by Kelty as part of an attempt to stifle competition by the big processing companies onshore.

Unalaska Vice Mayor Dennis Robinson urged the denial of any waiver, saying the Jones Act protects communities. Horn countered that the community of Anacortes stands to lose big if the Dakota Creek shipyard fails should the vessel not be allowed to fish in the U.S.

Horn said he’s been lobbying Congress in support of the America’s Finest. More recently, Horn, a Wasilla resident, said he plans to run for U.S. Sen. Dan Sullivan’s seat, because of the factory trawler issue.

The factory trawler company has recently posted vessel jobs on local bulletin boards in Unalaska.

The same proposed sideboard restrictions favored by shoreplants opposed to Amendment 80 factory trawlers serving as cod motherships are also under consideration by the North Pacific Fishery Management Council.

Fishermen’s Finest fires back

Unalaska opposes a loss of local fish tax revenues from offshore cod processing. Kelty is also angry about Fisherman’s Finest’s efforts to repeal the state’s resource landing tax, a 3 percent tax imposed on factory trawlers and split between the state and local governments.

“This tax has been very important to communities such as Unalaska that are impacted by the offshore fleet’s use of area jobs, roads, docks, airports, clinic and jails,” Kelty said in the letter to Sullivan, Sen. Lisa Murkowski, and U.S. Rep. Don Young.

Fisherman’s Finest complained that their tax appeal was leaked to the news media in a statement from a Seattle public relations firm.

“Regarding the tax issue, Fishermen’s Finest’s engagement with the Alaska Department of Revenue is, like all tax cases, confidential and not subject to public disclosure under Alaska statutes, and disclosure of any such information by an agent of the state subjects the perpetrator to a punishment of two years in prison and $5,000 fine,” the company stated. “Mayor Kelty knows this. Further, Mayor Kelty knows full well that he is using confidential tax documents that were illegally stolen from the files of the Alaska State Department of Revenue to unfairly advance his personal position on this issue. The entire matter is still subject to a protective order and Mayor Kelty knows perfectly well he should not be discussing it.”

But the company does have its issues with the fish tax.

“However, on the general subject of fish taxes: Mindful of the importance of the revenue from the landing tax to the State of Alaska, Fishermen’s Finest has advocated that the Fisheries Landing and Business Taxes be repealed in favor of a single Commercial Fisheries Marine Fuel Tax,” the company stated. “The current fisheries landing and business tax structure has deep flaws, including exorbitant compliance cost, rampant cheating, uncertain revenue due to variable fish pricing, and the fact that very little of the revenue actually goes to the Alaska Department of Fish and Game to pay for fisheries management costs.”

The statement went on to call the shoreside plants and the vessels the companies own a “cartel.”

“The America’s Finest is an Amendment 80 replacement vessel and Amendment 80 is a rationalized fishery. These vessels are prohibited by existing law from mothershipping pollock in the Bering Sea, cod and pollock in the Gulf of Alaska. In any case, mothershipping requires the cooperation of independent catcher vessels. Eighty-three percent of the catcher-vessel fleet is either owned or controlled by foreign-owned and Seattle-based shoreside processor companies who would never deliver fish to an Amendment 80 mothership.

“That means we’re only talking about 20 independent vessels, so there is no real threat to shoreside Alaska communities. The sideboards would force these vessels to deliver to the shoreside cartel, at lowball prices dictated by that cartel.”

Jim Paulin can be reached at [email protected].

Updated: 
05/23/2018 - 10:54am

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