168 



anese fishing companies, Nippon Suisan and Taiyo, own 80 percent of the shoreside 

 pollock processing capacity in Alaska, (see Attachment 1). 



Therefore, the "shoreside preferences" allocation approved by the Commerce De- 

 partment guarantees access to more than one-third of the largest U.S. fishery to 

 these two Japanese companies at the expense of two dozen companies, mostly small 

 businesses, operating 65 U.S.-flag at-sea processing vessels. 



The Commerce Department approved this rule even though the department's own 

 cost/benefit analysis indicated net national losses greater than $100.0 million. Also, 

 the Justice Department commented that the proposed rule violated the Magnuson 

 Act, and the Commerce Department' Office of the Inspector General (IG) found the 

 North Pacific Fishery Management Council's analysis of the rule to be inadequate 

 and recommended against approval of the allocation scheme. 



The Commerce Inspector General even conducted a criminal investigation of mem- 

 bers and staff of the North Pacific fishery Management Council because of the con- 

 flicts of interest among council members, for example, the chairman of the North 

 Pacific fishery Management Council is the paid lobbyist of the Japanese shoreside 

 processing interests. (You might remember that the shoreside processors' association 

 hired political consultant and Bush campaign official, Charles Black, to push for the 

 adoption of this rule). 



Surimi, a fish paste, is the primary product form for pollock and Japan is the 

 principal market for U.S. surimi products. Since the advent of the shoreside alloca- 

 tion, surimi prices have sharply declined. Japanese surimi prices were over $2.00/ 

 lb. prior to the adoption of the rule. Currently, U.S. producers are receiving less 

 than $1.00/lb. Furthermore, the shoreside allocation has robbed fishermen of the op- 

 portunity to sell their catch to the highest bidder. Fishermen forced to sell to a 

 handful of on-shore processors are receiving less than half the price they received 

 before the shoreside allocation went into effect. 



As I pointed out in my testimony, Western Alaskans participate in the pollock 

 fishery through the Community Development Quota (CDQ) program and the Bering 

 Sea Commercial fisheries Development foundation. Low pollock prices mean lost 

 revenues to the Native communities as well as the Nation as a whole. 



We appreciate your interest in this matter and urge you to direct the Commerce 

 Department to review the shoreside preference policy. Please let me know what ad- 

 ditional information 1 can provide to assist in your study of this issue. Thank you 

 again for visiting with us and listening to the concerns of Western Alaskans. 

 Sincerely yours, 



Harvey Samuelsen. 



Ownership of Principal Shoreside Pollock Processing Plants in the Bering Sea/Aleutian 



Islands Area 



[Japanese shoreside plants are set up almost exclusively to produce surimi for export to Japan ) 



Source Legislative Research Agency 



[The Seattle Times, Section D, Aug. 31, 1993) 



Too Many Fishermen, Not Enough Fish 



(By Leah Harrison, Seattle Times Business Reporter) 



While most of Seattle's fleet of 65 Dory trawlers are in the Bering Sea, hauling 

 in 100-ton nets teeming with Walleye pollock, diners at the restaurants at Lee 

 Union's south end this summer have a good view of two boats sidelined from the 

 frantic fishing season. 



Creditors seized Pacific Orion's 275-foot flagship trawler in June, and the compa- 

 ny's blue-hulled Royal Prince has filed for bankruptcy. 



