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ment structure not only fashions a new system of access to the resource, it creates 

 a new business climate and threatens to artificially alter capital flow. ITQ systems 

 which fail to initially include all existing sectors of a fishery will fundamentally and 

 unfairly choose the winners and losers. Unless every sector of a fishery participates 

 in the initial granting of quota shares — the ability to compete and produce quality 

 seafood products will have little to do with who remains in the long run. All cur- 

 rently competing industry sectors should be treated equally through initial access 

 to quota shares, or the changes brought on by implementation of ITQs will be the 

 result of unfair discrimination between competing sectors. Selective awarding of 

 rights to the resource will promote extreme resistance to the system which could 

 be avoided through a fair system of initial allocations. 



Although there will be winners and losers between the members of any industry 

 actor, entire groups of processors or fishermen should not be artificially disadvan- 

 taged through selective grants of initial ITQ/privatized shares in the resource. Con- 

 gress would be wise to ensure that fairness remains paramount where Councils 

 move to implement ITQ/resource privatization systems. A new National Standard 

 added to 16 U.S.C. 1852, section 301(aX5), and applicable to implementation of ITQ/ 

 resource privatization management systems, should require "that no existing sector 

 of a fishery, including competing fishermen or competing processors, shall be^dis- 

 advantaged by initial implementation of an ITQ/resource privatization system". In 

 this way artificially created economic advantages between competing sectors will be 

 avoided. This will reduce controversy in the process while promoting the fundamen- 

 tal fairness and equal protection Congress sought when crafting the Magnuson Act. 

 Current sectors of any liable domestic fishery should have an equal and fair oppor- 

 tunity to continue participating in their fishery. 



This concludes my prepared testimony. I appreciate having had the opportunity 

 to appear before you today, and I would be pleased to answer any questions. 



Prepared Statement of Kate Graham, Executive Director, American High 



Seas Fisheries Association 



Mr. Chair and Members of the Committee, I am Kate Graham, executive director 

 of American High Seas Fisheries Association. Ours is an association of trawl catcher 

 vessels, all of which are U.S. owned, built and crewed. Our members are 

 homeported in all four West Coast states and take part in a variety of groundfish 

 fisheries in the Bering Sea, the Gulf of Alaska and along the Pacific Coast. We were 

 part of the joint venture fleet that pioneered the harvesting of groundfish in these 

 waters. We are proud of the contribution we made toward realizing the original goal 

 of the Magnuson Act — the Americanization of our nation's fisheries. We sell our 

 catch to both shorebased and floating processors and are equally proud of the part 

 we play in providing food for people both in the U.S and around the world. 



We have been able to accomplish these things because of the Magnuson Fishery 

 Conservation and Management Act. The existence of a strong commercial fishing in- 

 dustry along our Pacific coast is a direct result of this farsighted legislation, and 

 we are grateful to have the opportunity today to offer you our ideas regarding reau- 

 thorization of the Act. 



In general, we believe the fishery management system that is outlined in the Act 

 is a good one. When it functions properly it is probably the best system in the world. 

 Some interest groups have suggested that the Act requires major changes if our na- 

 tion's fisheries are to survive into the future. This view seems to be held most often 

 by newcomers to the process. Those of us who were pioneers in the industry have 

 developed confidence in the Act. Having watched this system operate for many 

 years, we have come to see that most problems stem from the frailties of human 

 nature, rather than flaws in the legislation. Nonetheless, the structure isn't perfect, 

 and we have some suggestions to offer that we believe would improve fisheries man- 

 agement. 



BALANCE OF AUTHORITY 



One of the aspects of the Act we like best is the regional fishery management 

 council system. We think the current balance of authority between the Secretary of 

 Commerce and the councils is appropriate and should not be chafiged. Because the 

 councils are composed of human beings, they are not infallible and do not invariably 

 make decisions that are in the overall best interest of the resource or the nation. 

 For this reason we want the Secretary to continue to have the ability to reject or 

 partially reject council actions. On the other hand, we think local concerns can usu- 

 ally be resolved best where they occur, so we would not want the Secretary to be 



