Knowles turns down request for Russian salmon processors

Posted: Friday, May 10, 2002

A Southeast Native group, concerned some fishermen won't have buyers for pink salmon this year, wants Gov. Tony Knowles and U.S. Sen. Ted Stevens to find a way to let Russian processors into state waters.

The laid-off fishermen would miss out on a fishery that was worth about $27 million in Southeast last year.

Knowles turned down such a request in March, and on Wednesday denied a Seattle company's application to bring Russian fish processing ships into state waters near the Alaska Peninsula and in Cook Inlet.

Global Seafoods North America, based in Seattle, wanted to use two Russian ships to process up to 4 million pink salmon and 150,000 chum salmon this year for the Russian and Eastern European markets.

Federal law allows foreign processors to work in state waters only if the governor determines in-state processors won't handle all of the harvest.

That was the basis for Knowles in March to turn down the company's request to use nine foreign ships to process pink and chum salmon in Southeast, Prince William Sound and Kodiak.

Although a state survey of processors said it appeared "significant processing capacity shortages" exist for pink salmon in the Alaska Peninsula and Cook Inlet, Knowles, in his letter Wednesday to Global Seafoods, said he was concerned the Russian ships wouldn't agree to follow state and U.S. labor laws.

Knowles said, "I will not allow a foreign-owned business to operate in Alaska, in direct competition with Alaska businesses, with the unfair advantage of paying far below minimum wage."

Global Seafoods had argued, in a letter to the state, that an agreement between the United States and Russia didn't require the Russian ships to follow state labor laws.

"We're just disappointed that (Knowles) chooses to consider six Seattle (processing) corporations more important than thousands of coastal Alaskans and the Alaska commercial fishermen," said Don Kubley, a Juneau consultant to Global Seafoods.

He was referring to seiners and gillnetters who can't find buyers this season, and the economic effect on their crew members, families and support businesses. The state faces a smaller anticipated pink salmon run after several years of big runs that created a large inventory of canned salmon.

Many of the pink salmon are canned for the U.S. market, but the roe is sold to Japan, and there are growing exports of frozen pinks to reprocessing countries such as China and Taiwan, said Chris McDowell, project manager of the Salmon Market Information Service.

This year's estimated available harvest statewide is 87 million pink salmon, down from 126 million last year.

The Southeast Alaska Inter-Tribal Fish and Wildlife Commission is concerned that about 70 pink salmon seiners in Southeast were laid off by processors, out of a fleet of about 400 boats. An unknown number of gillnetters also may not have markets. And one processor has capped catches of its fishermen at various levels.

Bob Loescher, former Sealaska CEO and a commission member, said affected fishermen stand to lose their boats, gear and state limited-entry permits.

"What I'm saying is these things are real," Loescher said. "This is happening to real people and families. A lifetime investment is going out the window because they were terminated."

Luke Demmert, a crew member on his father's seiner in Klawock, said his father, Arthur James "Mac" Demmert, had been fishing for Wards Cove Packing Co. for at least 20 years, but was told he wouldn't be needed this year.

"They cut us off after all these years we fished for them, and we don't have anyone to process our fish now," he said. Selling to the Russian processors "would have been really good," Luke Demmert said.

But others say the Russians could have undercut Alaska processors, thanks to cheaper labor costs.

The Southeast Alaska Seiners Association conditionally supported Global Seafoods' applications, said director David Bedford, but only if they operated on a level playing field that didn't undermine existing processors.

"We need to make sure anything we do in the short term is good in the long term, too," Bedford said.

In any case, Knowles' spokesman Bob King said the governor has given his final decision to Global Seafoods and it's "no." And Stevens' press secretary Melanie Alvord said the Magnuson-Stevens federal fishery act "rightfully defers to the state on this issue."

Global Seafoods also is trying to work out a deal to bring four or five Russian processors to waters near Metlakatla that are Indian property not governed by the state, Kubley said. Metlakatla Mayor Victor Wellington Sr. couldn't be reached for comment.

The state doesn't object to an arrangement between Global Seafoods and Metlakatla, because it's a tribal and federal matter, King said.

Loescher asked Knowles last week to persuade processors to take on more fishermen. King said the governor has contacted many of the companies and encouraged them to do what they can.

Processors were trying to save money by reducing their fleets, King said. With fewer boats to serve, the companies can use fewer tender vessels to pick up catches at sea, and won't have to front as many fishermen in their expenses to gear up for the fishery.

"What they're trying to do is accommodate the high cost of operating in order to preserve something of a profit margin," King said.

The long-term answer may be to create more products with pink salmon and find new markets, said Glenn Haight of the state Department of Community and Economic Development.

Kake Tribal Corp. said it will buy pink salmon from its hometown fleet of six boats and maybe six other vessels. Some of the fish will be frozen and exported to Europe, the roe will be sold to Japan, and the poorer quality flesh will be turned into gardeners' compost and sold in the Lower 48.

"We're trying to do something different from the industry norm," said Kake Tribal President Sam Jackson.

Eric Fry can be reached at efry@juneauempire.com.



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