GloucesterTimes.com, Gloucester, MA

May 19, 2011

NOAA's permit 'bank' funding plan draws fire

By Richard Gaines
Staff Writer

The region's largest industry group, the Northeast Seafood Coalition is warning against a pending NOAA plan to create a federal fisheries banking system for New England linked to state permit banks with National Oceanic and Atmospheric Administration revenues.

The Gloucester-based coalition used blunt language to critique the idea as a dangerous power grab, and hinted at a federal lawsuit to stop it.

Such a system — somewhat analogous to the Federal Reserve System — would shift influence over policy from the New England Fishery Management Council to the central "banker" — NOAA administrator Jane Lubchenco, the coalition's executive director Jackie Odell, said Thursday in a telephone interview.

Odell said she is concerned that the system would allow NOAA to leverage the power of the purse into unfettered influence over the coastal states, perhaps to reshape the industry according to the central banker's values.

Coming to government from a background as an academic research scientist and an officer of the Environmental Defense Fund, Lubchenco has written and spoken out against trawling, the dominant form of commercial fishing from the main ports of Gloucester and New Bedford, and for less intense fishing methods.

The potential power grab was but one of many objections to the proposal filed by the coalition with NOAA on Wednesday, the deadline for public comments.

The idea for a federally funded permit banking system, the draft of which goes before the regional council's Groundfish Committee at a meeting in Danvers next Thursday, came from NOAA, not the council, the arm of NOAA that works more on the grassroots level and develops ideas and innovations.

"The impetus came from (NOAA's) National Marine Fisheries Service," said Tom Nies, a fisheries analyst at the council, said in a telephone interview Thursday. "Is this a power shift and a power grab? I can't comment."

The proposal, formally known as Amendment 17 to the Northeast Multispecies Fisheries Management Plan, is preliminarily scheduled for debate and possible vote at the council's June meeting in Portland, Maine.

In its lengthy commentary and critique of Amendment 17, the coalition, an industry group of about 250 members including boat and shoreside businesses from all Northeast coastal states, wrote that the legislation would make existing and any new state permit banks major players in the permit-bank market that is developing slowing within the groundfishery, now in its second year as an allocated catch share market organized into fishing cooperatives or sectors.

The executive summary of the amendment states that the "NOAA sponsored, state-operated permit banks would be allocated" as part of the total allowable catch, and "authorized to provide" that allocation to sectors and independent boats operating under days-at-sea effort controls "for the purpose of enhancing the fishing opportunities...."

But to do so, these state permit banks would be required to comply with "terms and conditions" set down in MOAs — or memorandums of agreement — between NOAA and the states, the draft amendment reads.

The coalition's public commentary asserts that the proposal would allow state governments to "use federal tax dollars" to introduce state competition into "what was originally intended to be a private sector marketplace in transactions that are fundamental to the financial survival" of fishermen of the private sector.

A third concern in the coaltion critique is that the proposal would mean "the amount of competition the states may exercise is unlimited, and cannot be predicted or adequately analyzed."

"Amendment 17 provides blanket council approval for the future operation of state-operated permit banks with an unknown level of funding and permit acquisition capacity and, therefore, an unknown impact on the permit market and fishing industry," the seafood coalition filing states.

Vito Giacalone of Gloucester, chief analyst for the coalition and the founder of a $10 million permit bank for the Gloucester community, said he's concerned that the idea of a federally funded fisheries banking system with state bank branches would compromise the perspective of the states, which now have seats on the New England council and are assumed to act judiciously on behalf of the complex of fishing interests in their states.

The coalition critique made the same point.

"The fact that these same state representatives will continue to vote on future actions that their banks may have a fundamental financial interest in is disturbing," the coalition statement reads. "The fact that they will continue to vote on future actions that directly affect the financial business interests of fishermen that will be forced to compete with these banks in the private sector permit market is downright alarming."

Giacalone said he expected skepticism of the motive for his position based on his innovation of a community permit bank for Gloucester. But he noted that the funding came as mitigation for the off-shore siting of a liquified natural gas transfer platform.

Morevoer, he said, the impetus for the community bank was the devastating impact of the regulatory actions in the last decade that effectively halved the available days at sea, and would have crippled the Gloucester fleet.

Finally, Giacalone said, the Gloucester community permit bank is unconnected to any federal funding pipeline.

He described permit banks as the "ultimate consolidators, the super consolidators," and added that his community permit bank could have gone that route but didn't.

NOAA began introducing state permit banks in February 2010, just before the onset of catch share fishing. The idea had not been proposed but rejected in the construction of Amendment 16, which installed sectors as the recipient for catch shares.

Later that year, with the catch share system up and running, NOAA also gave seed grants to Rhode Island and New Hampshire to get them into the state permit bank business.

Richard Gaines can be reached at 978-283-7000, x3464, or at rgaines@gloucestertimes.com.