State weighs Russian fish processor's application

Concern expressed that pinks might be cheaply canned, resold in U.S.

Posted: Sunday, February 16, 2003

An application by a Seattle company to allow Russian fish processors into state waters is pending as the state wildlife agency surveys Alaska processors to determine how many pink salmon they will process this season.

Global Seafoods North America has submitted an application to buy up to 250 million pounds of pink salmon for processing by Russian vessels and distribution in Russia and Europe. The governor has the power to grant a permit, but first the state must determine whether the salmon run can be handled by Alaska processors.

Given a large pink salmon forecast - more than 92 million, according to the Department of Fish and Game - and the closure of Wards Cove's salmon processing operations, supporters of Global Seafoods are arguing that the processors won't be able to handle the run.

"There's nobody to buy a vast majority of this fish," said Don Kubley, a Juneau consultant to Global Seafoods. "The existing processors don't want it because they don't make money canning pink salmon."

Global Seafoods President Oleg Nikitenko met with members of the administration last month to lobby for his proposal. He characterized the meetings as positive but said there is concern that his processors will take the fish to Asia to can it on the cheap, then bring it back to the United States to compete with domestic processors' products. He said he has no intention of canning the pinks. He points to a huge undersupplied market for frozen whole salmon in Russia, where housewives use the entire fish.

The federal Magnuson-Stevens Conservation Act prohibits the governor from allowing foreign processors into state waters if domestic processors indicate they have the capacity and the intent to process the resource.

Doug Mecum, director of Fish and Game's commercial fisheries division, said the agency expects to complete its processing survey by mid-March. He said it's too early to tell whether the processors have the ability and the intent to harvest the salmon run.

"We know that some of the processors are going to be increasing their processing capacity as a result of the Wards Cove closure," he said.

Murkowski spokesman John Manly said the governor is still evaluating Global Seafoods' permit application.

"I don't think he has any inclinations at all at this point. He's waiting for more information," Manly said.

Global Seafoods applied for a processing permit last year, but then-Gov. Tony Knowles denied the request.

NorQuest President Terry Gardiner said he is concerned about the effect of bringing in foreign processors on the industry's standards.

"We have to comply with American environmental laws, safety laws, unemployment and workers' compensation, all kinds of regulations. Once we bring in foreign companies we're going to have to throw out the American standard of living to compete," Gardiner said.

Gardiner said opening the door to foreign processors won't solve the salmon problem, pointing out that the effect of measures considered by the legislative salmon task force such as fleet reduction and tax incentives remains to be seen.

Others say that, while foreign processors are not a long-term solution, there is room for them in the short term.

The Southeast Alaska Intertribal Fish and Wildlife Commission sent a resolution to the governor this week in support of Global Seafoods' petition.

Commission Vice Chairman Bob Loescher said that if the processing survey finds the salmon run won't be taken care of, the governor should allow Global Seafoods to come in.

"It would be a great opportunity not only for Southeast people but for Kodiak and Cordova to have a new market that would not compete with any of the products coming in from the onshore American processors who are processing the pink salmon. It probably could create better pricing for the fishermen and would allow them to fish without any restrictions from any processors," he said.

Dave Bedford, executive director of the Southeast Alaska Seiners Association, said his group also supports the Russian processors.

"We favor having Russian processors come in provided that there's a need for them and provided that they're paying a competitive price and provided that they're marketing the fish that they take in a fashion that doesn't undermine the markets that our onshore processors depend on," Bedford said.

Global Seafoods' proposal isn't the only one on the table.

The State Committee for Fisheries of the Russian Federation sent a letter to Murkowski earlier this month to inquire about a permit. In the letter, dated Feb. 4, the committee proposes to fish and process pink salmon for canning, but with the provision that it would not be sold on the American market. The letter also proposes to buy fish from Alaska fishermen and freeze it using coastal facilities leased or rented for that purpose. The letter specifically mentions the possibility of using a Wards Cove plant.

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