By Bob Tkacz
For the Journal

The North Pacific Fishery Management Council has confirmed this season's Southeast bag limits for charter boat halibut anglers and set out a schedule of work to establish a system that would allow rights to harvest the high-value fish to be sold or leased between the commercial and charter fleets.

Meeting in Sitka, June 6-12, the council directed its staff to have analyses of a range of options for the quota-trading system ready for initial review at its Oct. 1 session. It scheduled final action on “charter halibut allocation/compensation” for its Dec. 3 meeting, but stakeholders from all interest groups, as well as the state Department of Fish and Game, said that target is ambitious.

Even if the council meets its own deadlines, some of the options would require action by Congress, the Alaska Legislature, or both; and few participants in the debate expect a long-term fix to be in place before 2009 at the earliest. None would describe the council's plan as a permanent solution.

Moving toward a quota system

The decisions at a crowded council meeting in Sitka, June 7, gave Southeast Alaska charter boat skippers some immediate, if temporary, certainty, but a spokesman for their stakeholders' organization warned that the new plans, coupled to a previously approved moratorium on new guide licenses that is expected to take effect by 2010, could mean a grim future for those still moving into the business.

“I think it's to the point now where businesses are going to start going under,” said Rick Bierman, spokesman for the Juneau Charter Boat Operators Association, following the council meeting.

Commercial harvesters, struggling for more than a decade to staunch the continuing loss of their harvest shares were hopeful that the forthcoming quota-trading system would satisfy charter sector demands.

“We've kind of learned over the past 14 years that the charter industry will continue to fight for more fish through the regulatory process, and we're going to be in knock-down, drag-out fights in front of the council every year unless there's some mechanism that allows them to make business decisions,” said Linda Behnken, a former council member, commercial harvester and executive director of the Alaska Longline Fishermen's Association.

Alaska's steadily growing charter fishing fleet has been operating under a largely unenforced guideline harvest level for several years. Last year the Southeast quota of 1.4 million pounds was surpassed by 42 percent, or 620,000 pounds, while the Southcentral take was 328,500 pounds, or 9 percent over its GHL of 3.65 million pounds. Because the total U.S. take of Pacific halibut is controlled by a treaty with Canada, the charter overage forces a reduction in the commercial fleet's harvest, and charter operators knew the bottom line of the Sitka session would be fewer fish for their clients to catch.

“It was a pick-your-poison set of options,” Bierman said. “There wasn't an option in there to give us more fish. We were going to come out of there hurting.”

For the current season, the council confirmed federal regulations that took effect June 1, limiting the statewide charter bag limit to two halibut per day, including one no longer than 32 inches. For Southeast, charter anglers were placed under a season limit of four fish, expected to reduce their total catch by approximately 518,000 pounds. The rules replace a one fish per day limit for charter anglers that was proposed by the International Pacific Halibut Commission and reviled by charter operators as a season killer.

The options now under analysis provide a variety of methods to give the charter fleet more of the annual harvest quota either by creating a pool of poundage for their collective use or by allowing individual businesses to buy quota shares directly from commercial skippers.

Under the highly successful, decade-old individual fishing quota (IFQ) system used by the commercial fleet, individual skippers were originally awarded quota shares based on their past participation in the fishery. Quota shares (QS) are not a number or poundage of fish, but a percent of the harvest quota set each year by the IPHC. Within limits on the number of QS a single skipper may own, they are continually bought and sold within the commercial fleet. Although the price of a single QS is currently in the $20 range, the system allows newcomers to the fishery to buy their way in.

A conversion rate of about 20 pounds of quota share equating to one fish has been created.

Pool vs. IFQ

Neither sector has yet settled on a preferred alternative because of the wide range of options that are being analyzed and the possibility that the council could add new twists to the proposals it receives in October.

Bierman said two schools of thought are dominant within the charter community. Established operators, including him, generally prefer the IFQ system. Bierman's family business operates a single boat and lodge with clients who pay $500 per day for the chance to catch two halibut. For the past 12 years his clients have landed an average of 150 to 200 fish per season.

If low stock levels force an overall reduction in harvest for the season, the trading system could allow Bierman to buy the QS he needs to satisfy his clients from a commercial skipper. It could also eliminate the 32-inch size limit on the second fish.

“My people pay top dollar for a day on the water with me. They're not greedy people, but a 32-inch fish, 6 or 7 pounds of meat, that's not much to take home ... If I can buy enough quota to satisfy my guests then I'm taken care of,” Bierman said.

No one from either business sector or government would venture a guess as to how high such a system would drive the cost of QS, and Bierman acknowledged that it would be difficult for fishing guides offering less expensive charters.

“It's going to be expensive. It's going to be real expensive. It's not a secret that some people are already buying quota shares in anticipation. I don't necessarily need cheap. I need reliable. I'm in it for the long run,” Bierman said, noting that he was not speaking for the association on this point.

The pool alternative would provide a volume of QS, held “in trust” by the state or federal government, that would be available to the entire charter fleet. Funds raised by a mandatory marine charter stamp would pay for the reallocations from the commercial quota, but would not give individual charter operators the same ability to assure themselves of sufficient fish to meet their needs. Also, all would suffer if the pool were not sufficient to meet a season's total demand.

Bierman said this system could leave Juneau charter businesses and others who operate “upstream” of their competitors in a vulnerable position. In Southeast's case, the Sitka charter fleet would have an unrestricted shot at the pool fish moving in from the ocean before they reached Juneau waters. “They can suck that quota up and then I'm looking at mid-season closures,” Bierman explained.

The pool system, in his view, would also mean stamp fees paid by clients of established operators would underwrite their competitors' season. “If it goes into a pool, then basically I've done my advertising and the building of my business to help the new guy coming in,” Bierman said.

The issue is simpler for the commercial fleet. “We are vehemently opposed to reallocations that are not between willing buyers and willing sellers,” Behnken said. Her longliners' association wants any system to be market-driven that recognizes the cost of reallocations to the commercial sector.

“It is extremely important that there are direct costs associated with impact, that charter operations have to pay or they won't be regulated,” Behnken said.

Behnken said the commercial fleet was particularly upset that Commissioner Denby Lloyd included on the list for analysis an option that would allow commercial quota to be reallocated to charter boats without compensation. Among the hundred persons who testified at the meeting, commercial skippers unanimously opposed that option. Both the stakeholders committee, dominated by the charter fleet and the council's stand industry advisory committee supported elimination of that option.

Doug Vincent-Lang, the state's Sport Fish Division special projects coordinator, noted that even though commercial quota shares are used as collateral for loans, by law, they carry no property rights and can be reallocated without compensation. Lloyd added the option to the analysis list to assure its ramifications are identified and placed in the record.

Behnken noted that a halibut stamp system or a sport fishing tax to fund a charter quota pool would give the charter fleet a potentially huge fund commercial harvesters could not match. “If commercial boats have to bid against a revenue stream off charter licenses, then it could substantially inflate the cost of commercial shares and have dramatic, negative effect,” Behnken said.

Regulators face a different set of practical and legal issues, including trying to make a management system designed for one harvest method fit another that is very different. Commercial boats can react quickly to sizable increases or decreases in stock abundance fairly quickly and easily by fishing more or less gear.

Charter boats can deal with drops in stock volumes with lower bag limits, but not increases. “With increased abundance charters can't throw out more gear. They need to put more clients on vessels and they can't do that right away,” Vincent-Lang said.

In addition, state law requires that the holder of commercial halibut quota shares must be onboard the vessel when those shares are being fished, but the skippers on many charter boats are hired employees. The business owners may not only not be on board, but could be corporations, which are not allowed to own quota shares, Vincent-Lang noted.

In recent years, the Alaska Legislature has refused to amend state law to allow corporate ownership of fishing rights within the commercial sector and the question of whether and how it would give that ability to the charter fleet is wide open.