Purpose and Need

In 2007, Amendment 80 was established to facilitate the formation of cooperatives in the non-American Fisheries Act (non-AFA) trawl catcher/processor sector. NMFS originally issued a quota share (QS) to a vessels that had an established catch history of the six Amendment 80 species and met the criteria specified by Congress in the Capacity Reduction Program (CRP). Under Amendment 80, qualifying non-AFA vessels receive cooperative quota, which are exclusive harvest privileges for a portion of the fishery. Most participants in the Amendment 80 sector had successfully established a cooperative in the first year of the program. However, some participants expressed concern that over the long term, cooperative formation standards could have disadvantage them, and they would have been constrained from establishing cooperative relationships, receiving an exclusive annual harvest allocation, and end the “race for fish.” Smaller vessel owners with limited quota shares likely had weakened negotiating leverage as the groundfish retention standard increased if they could not be competitive in the limited access fishery and options in the GOA were not viable. Participants of any size would likely have found it difficult to receive the benefits of cooperative management if an unattractive outside option, or a cooperative is able to derive some benefit from forcing an entity into the limited access fishery. Relaxing cooperative formation standards either by reducing the number of quota share permits that must be assigned, or the number of owners required, or by requiring that any otherwise eligible member be accepted by a cooperative subject to the same terms and conditions as other members was thought to: 

1) provide additional opportunities to quota shareholders to form cooperatives, because more relationships are possible 

2) diminish the negotiating leverage of vessel owners who may be necessary to meet the threshold requirements under more stringent cooperative formation standards 

3) reduce the potential risk of any one company being unable to negotiate settlement and be able to fish only in the limited access fishery; and 

4) reduce the incentive for members of a cooperative to attempt to create conditions that are unfavorable for certain fishery participants to form a cooperative.

Analysis

A 12-page EA and 89-page RIR analysis were prepared for the amendment that analyzed five action alternatives and two sub-options. All action alternatives explored ways to make cooperative participation and formation more inclusive. In February 2009, the Council expressed concern that modifications to the Amendment 80 cooperative criteria could alter the nature of the program to the point of necessitating a new LAPP. In response, the analysis clarified that the alternatives presented did not fundamentally change the nature of the Program and would only address one aspect of it. Ultimately, the Council supported Alternative 4 and two sub-options.

Regulation Summary

Amendment 93 consists of two changes to the Amendment 80 Program: 

1) the number of persons and licenses required to form an Amendment 80 cooperative was reduced from three separate QS permit holding entities and nine QS permits to two separate QS permit holding entities and seven QS permits. 

2) the amendment changed the Amendment 80 Program to require a quota share holder to assign all quota share permits to a cooperative or the limited access fishery. The regulation also allows the groundfish retention standard (GRS) to be applied in aggregate, to all cooperatives if the calculation meets or exceeds the GRS.

Results

In the year immediately following implementation of Amendment 93 and all years since, no Amendment 80 qualified vessels participated in the limited access fishery and all active Amendment 80 vessels are members of one of two established cooperatives.