1
Introduction

In 1992, the North Pacific Fishery Management Council (NPFMC) established a new program to help bring social and economic development opportunities to coastal villages in rural western Alaska. The new program, called the Community Development Quota (CDQ) program, allocates a portion of the annual fish harvest of certain commercial species directly to coalitions of villages, which, because of geographic isolation and limited access to sources of income, have had limited economic opportunities. In its first year, the council allocated 7.5 percent of the total allowable catch of Bering Sea pollock to be harvested exclusively by coastal communities of the Bering Sea region (or by those fishing partners authorized by the communities in exchange for royalties), and in subsequent years portions of other Bering Sea fisheries such as halibut, sablefish, crab, and assorted groundfish also were allocated to the communities. The goal is to enhance both economic and social development—that is, to help the communities develop the infrastructure and trained personnel necessary to support long-term participation in the fisheries industry and, along the way, build a stronger economic base and more vigorous communities.

In the Magnuson-Stevens Fishery Conservation and Management Act of 1996, Congress mandated that the National Academy of Sciences review the CDQ program in Alaska and evaluate its applicability to the western Pacific. A committee was set up to accomplish this task, and this report is the result of that review. Chapter 1 provides a brief description of the program, the committee's charge, and the approach taken. Chapter 2 describes the natural and social history of the Bering Sea region, while Chapter 3 provides a detailed description of the CDQ program. Chapter 4 provides the committee's review of the CDQ program,



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 5
--> 1 Introduction In 1992, the North Pacific Fishery Management Council (NPFMC) established a new program to help bring social and economic development opportunities to coastal villages in rural western Alaska. The new program, called the Community Development Quota (CDQ) program, allocates a portion of the annual fish harvest of certain commercial species directly to coalitions of villages, which, because of geographic isolation and limited access to sources of income, have had limited economic opportunities. In its first year, the council allocated 7.5 percent of the total allowable catch of Bering Sea pollock to be harvested exclusively by coastal communities of the Bering Sea region (or by those fishing partners authorized by the communities in exchange for royalties), and in subsequent years portions of other Bering Sea fisheries such as halibut, sablefish, crab, and assorted groundfish also were allocated to the communities. The goal is to enhance both economic and social development—that is, to help the communities develop the infrastructure and trained personnel necessary to support long-term participation in the fisheries industry and, along the way, build a stronger economic base and more vigorous communities. In the Magnuson-Stevens Fishery Conservation and Management Act of 1996, Congress mandated that the National Academy of Sciences review the CDQ program in Alaska and evaluate its applicability to the western Pacific. A committee was set up to accomplish this task, and this report is the result of that review. Chapter 1 provides a brief description of the program, the committee's charge, and the approach taken. Chapter 2 describes the natural and social history of the Bering Sea region, while Chapter 3 provides a detailed description of the CDQ program. Chapter 4 provides the committee's review of the CDQ program,

OCR for page 5
--> and Chapter 5 considers the advantages and disadvantages of a CDQ approach to fishery allocation and management. Chapter 6 addresses the applicability of the program to the western Pacific. Chapter 7 summarizes the study and offers recommendations. The Bering Sea Fishery The Bering Sea occupies an area of approximately 800,000 square kilometers, and is bounded by the Aleutian Islands on the south, the Bering Strait on the north, Russia to the west, and the coast of western Alaska (Figure 1.1). Largely due to the presence of an extensive continental shelf area, this region is one of the most highly productive marine systems in the world and supports some of the largest and most lucrative commercial fisheries conducted in U.S. waters. Commercial fishing operations harvest pollock, Pacific cod, sablefish, king and tanner crab, several flatfish species, rockfish, Atka mackerel, halibut, and salmon. The value of fishery harvest in the Bering Sea region was worth over $1.2 billion in 1996 (Alaska Fisheries Science Center, 1998). Figure 1.1 The Bering Sea occupies roughly 800,000 square kilometers, from the Aleutian Islands on the south, the Bering Strait on the north, Russia to the west, and the coast of western Alaska.

OCR for page 5
--> Until 1976, when the first steps toward creation of the exclusive economic zone (EEZ) of 200 miles were taken, not all harvests in the Bering Sea were managed, although several treaties attempted to bring some measure of control over harvest levels. Large foreign fleets dominated many Alaskan fisheries. But establishment of the EEZ brought a large portion of the Bering Sea under the jurisdiction of the United States. Congress delegated authority over the newly created zone to the NPFMC while retaining State of Alaska jurisdiction inside of 3 miles. The National Marine Fisheries Service (NMFS) manages the fisheries based on policy recommended by the council, including technical and enforcement activities. Congress charged the NPFMC and other regional fishery management councils to recommend policy for governing the harvest, with the intent of regulating harvesting to sustainable rates. Once the Fishery Conservation and Management Act was passed in 1976, and the 200-mile zone was established, a transition from foreign fleets to American fleets began in the North Pacific Ocean fishery. Financial incentives such as low interest loans for building fishing vessels and processing facilities increased the pace of this transition. As the fisheries became more heavily capitalized, a dispute arose concerning the allocation of the pollock harvest between the fleet that used offshore processing and the fleet that used on-shore processing facilities. NPFMC members from Alaska introduced the idea that part of the allocation of the pollock resource be awarded to communities of western Alaska, and this suggestion in time gave rise to the CDQ program. Historically, the exploitation of Bering Sea resources from distant centers of industrial production has generated substantial wealth, but that wealth generally did not flow to indigenous people. While some Alaska Natives were participants in the development of this fishing industry, this is not true for many of the residents in the communities served by the CDQ program. The continued commercialization of Bering Sea marine resources tended to exacerbate the exclusion and marginalization of Alaska Natives from the commercial fishery and, to some degree, from their traditional resource-based lifestyle because, in part, they generally lacked the capital to participate. The concerns provided part of the impetus behind the creation of the CDQ program. The Community Development Quota Program The Community Development Quota program is a unique quota-based fishing1 management regime and not one of the traditional options used in fisheries management in the United States. In the CDQ program, a portion of the overall 1   The committee uses the term "quota-based fishing" to describe harvest privileges that allocate a specific quota to an individual or community. The phrase "rights-based fishing" is more common in fisheries management, but the committee believes that term can be misleading. The concept of rights (versus privileges) can invoke an inappropriate sense of ownership or entitlement to a public resource.

OCR for page 5
--> total allowable catch (TAC)—or community development quota—is allocated to communities. The quota is not a total amount of fish but rather a share of the total annual amount allowed to be harvested—7.5 percent in the case of pollock at the time this study was undertaken.2 The 7.5 percent CDQ pollock allocation is drawn from the "total allowable catch" (TAC) established annually by the North Pacific Fishery Management Council. The nature of the CDQ allocation has both biological and political significance. Biologically, the CDQ allocation is not an allocation of additional harvest beyond the TAC. Politically, the CDQ allocation represents a reduction in the portion of the TAC that is available to the non-CDQ commercial fishery. Operationally, the CDQ allocation is drawn from a 15 percent harvest "reserve" established by the National Marine Fisheries Service as an aid to in-season management of the commercial fishery. Prior to the inception of the CDQ program, the full 15 percent reserve was, ultimately, released for harvest by industry. The CDQ allocation effectively reduced the reserve to 7.5 percent, thus ultimately reducing open-access harvests. In recent years, percentages of the halibut, sablefish, crab, and other groundfish fisheries have been allocated to the CDQ communities as well. The CDQ quota is divided among six community organizations, which are themselves alliances of villages near the Bering Sea (Figure 1.2). Five of these six community organizations are nonprofit corporations organized under Alaska law. The sixth organization began as a for-profit corporation, but has changed its status to a nonprofit corporation. Each CDQ group uses the royalty payments received for access to its share of the CDQ pollock quota as a source of funds for community development projects. The original policy of the NPFMC and subsequent policy require that the income gained be used on community development projects that tie directly to fisheries for fishery-related activities or to support education. Funds can, however, be invested outside the communities in financial instruments until they are ready to be used for community development. Projects funded by the CDQ quota can include construction and maintenance of infrastructure, such as ports and processing plants; purchase of fishing gear, such as lines, nets, and communications equipment, or investments in vessels; and training in fishing industry jobs, such as fish quality control. Both the terms of the sale of the CDQ quota and the community development plan that allocates the funds are overseen by the State of Alaska, with review by the National Marine Fisheries Service. Details about the organization of the CDQ program are provided in Chapter 3. Some features of the CDQ program were based, in part, on lessons learned from the creation of village and regional corporations under the Alaska Native Claims Settlement Act (ANCSA) (43 U.S.C.A. numbers 1601-1628). In contrast 2   According to Conference Report HR4328, effective 1/1/99 the pollock community development quota will be 10 percent of the total allowable catch.

OCR for page 5
--> Figure 1.2 CDQ communities visited by committee and/or mentioned in the report.

OCR for page 5
--> to the ANCSA corporations, which have shares held and voted by individuals, the CDQ corporations are combinations of villages with the corporation boards of directors composed of representatives from the villages. A second critical distinction is the provision of oversight by the State of Alaska. The state approves community development plans and periodically reconsiders the allocation of the CDQ share of each fishery among the six CDQ groups, based on past performance and future plans. The Community Development Quota Program in the Context of Fisheries Management The CDQ program is a management system that can be described as a limited access system. Limited access means that some people have recognized harvest rights while others do not (e.g., license limitations, attachment of harvest rights to tidal land ownership, and individual quotas). In the CDQ program, the allocation is made specifically to the communities and the share (although not the actual quota) is fixed unless regulatory policies change. The remainder of the pollock fishery in the Bering Sea is managed as a controlled open-access regime, in this case because the total catch is controlled by establishing seasons. During the open season anyone can fish and once the total allowable catch is caught, the season is closed. As a result of the time constraint, there is pressure on all fishers to participate aggressively in the limited open period, which leads to a "race for fish" during the open period and, over time as everyone competes to increase their take during the season, to the construction of more vessels to rapidly harvest the available fish. One effect of there being two different harvesting regimes is that the CDQ groups, which fish in a different time period, can get good prices for their share of the pollock. Efficiency may also be improved because the CDQ groups often form partnerships with vessels that have just completed fishing another season. These vessels take advantage of the previous season to get gear functioning and process lines working at best efficiency. The use of the word "community" in the program title, "Community Development Quota," should not be taken to imply that the CDQ program is a type of community management. The CDQ program differs from community management, where communities have a direct role in decision making about management of the resource, such as timing of fishing seasons. The CDQ communities manage their business development plans and their harvest methods, but do not have a role in allocating quota. Quota is assigned by the North Pacific Fishery Management Council and the National Marine Fisheries Service. The Committee's Task In the most recent reauthorization of the Magnuson-Stevens Fishery Conservation and Management Act (PL 104-297), Congress mandated that the National

OCR for page 5
--> Academy of Sciences conduct a review of the CDQ program in Alaska and evaluate the potential application of the program in the western Pacific (see Appendix A). The Committee to Review Community Development Quotas was established to perform this task. Specifically, the committee was asked to report on the performance and effectiveness of the community development quota programs that have been implemented under the authority of the North Pacific Fishery Management Council. For those Alaskan fisheries with adequate CDQ experience, the committee was asked to evaluate the extent to which such programs have met their objectives, such as providing communities with the means to develop ongoing commercial fishing activities, creation of employment, attraction of capital, development of infrastructure, and general promotion of positive social and economic conditions. The committee also considered what lessons could be learned to improve the design of new or proposed CDQ programs in Alaska and the western Pacific for accomplishing the purposes of CDQs. In essence, the committee was asked to judge whether the CDQ program has been effective in achieving its goals of economic development and thus, whether it warrants continuation or expansion. The committee's members were selected to bring expertise in economics, marine ecology, anthropology, the fishing industry, sociology, Native Alaskan society, and other issues of relevance to this study (see Appendix B for biographies of committee members). No one on the committee has any direct relationship to the CDQ groups or to management of the CDQ program and all members and staff abided by standard National Research Council procedures to ensure the quality and independence of this report. The charge to the committee occurred in the midst of a policy debate about how to address the overcapitalization caused by open-access fishing for pollock. In addition to the CDQ program, this debate has sparked careful analysis of the concept of individual fishing quotas as a particular way to limit entry and "rationalize" the fishery by reducing overcapitalization. The same legislation that created this committee also created the Committee to Review Individual Fishing Quotas to provide Congress with advice about the IFQ alternatives and that committee is expected to produce its report in late 1998. This report considers the relationship between individual fishing quotas (IFQs) and CDQs in Chapter 5. The Committee's Approach The CDQ program is new, and there is little literature available to form a basis for review. Therefore, the committee made a special effort to talk to people in the affected regions to learn about the program first-hand. The full committee held four meetings: Girdwood, Alaska; Seattle, Washington; Honolulu, Hawaii; and Molokai, Hawaii. Meetings were advertised in local newspapers, fishing industry trade publications, and on the World Wide Web site of the National Research Council. The committee received information from many sources (see

OCR for page 5
--> Appendix C), including invited speakers as well as interested parties at "open microphone sessions" at each meeting. Invited speakers included individuals such as state and federal fishery managers, inshore and at-sea processors, fishermen's organizations, Native Alaskan organizations, CDQ groups, and experts on community management. Additional written material was considered throughout the committee's deliberations. In addition, small groups of committee members traveled to each of the CDQ regions and visited representative communities in each region and spoke directly with participants (Table 1.1). In most cases the committee members met with community leaders as well as with informal groups of community members. Finally, the committee contracted with a consulting anthropologist to spend time in several communities. The consultant talked in more depth with a wide range of the local populations about their participation in the program and their knowledge of the CDQ program and its benefits. The Broad Policy Context To evaluate the CDQ program, it is important to understand the logic of U.S. fisheries policy over the past quarter century, especially four key elements. First, TABLE 1.1 CDQ Locations Visited By Subcommittees Date Locations Visited August 8, 1997 Nome, Alaska August 9, 1997 Emmonak/Nome, Alaska Alakanuk, Alaska September 9, 1997 Dutch Harbor, Alaska Akutan, Alaska Hooper Bay/Mekoryk, Alaska September 10, 1997 Dutch Harbor, Alaska Atka, Alaska September 15, 1997 Dillingham, Alaska September 16, 1997 Togiak, Alaska St. Paul, Alaska September 17, 1997 Naknek/Egegik, Alaska September 18, 1997 King Salmon, Alaska

OCR for page 5
--> there has been a commitment to ''Americanize" marine fisheries so that the benefits of ocean-based natural resources accrue to the American people rather than to foreign fishing nations. Second, within the mandate to Americanize coastal fisheries, there has evolved a presumptive entitlement for those individuals who have a historic tradition of using marine resources. Third, the development of specific fisheries policies has been motivated by a recognition of the potential benefits that may arise from regional control of natural resource use. Finally, there has been the affirmation that fisheries management programs offer important benefits—both socially and economically—to those local communities with a tradition of fisheries use. The establishment of the exclusive economic zone (EEZ) was the necessary condition to Americanize coastal and offshore fisheries resources. Within that new resource management regime, regional fisheries management councils were created to implement policies and programs in explicit recognition of: (1) historical use; (2) local participation in management decisions; and (3) the social and economic benefits to accrue to local people and places. In summary, the CDQ program in Alaska can be understood as a part of the Americanization of coastal fisheries resources. For thousands of years, people of the north have lived off the sea. This exploitation was not limited to coastal resources; people traveled far out to sea to hunt and fish with many different types of capture devices. This region is home to one of the oldest and most sophisticated continuous maritime cultures in the world. This was not merely subsistence exploitation; the northern people have a long history of trade in marine resources. During the past century, exploitation of Bering Sea resources from distant centers of industrial production has generated significant wealth. But because indigenous peoples were not typically participants in the development of the commercial fisheries, many did not have access to these economic opportunities. Nor were many Alaska Natives incorporated as labor into these fisheries. Moreover, some actions designed to protect marine species, such as the International Whaling Commission mandated cessation of North Alaskan bowhead whaling, limit the access of Alaska Natives to traditional sources of subsistence and trade goods. The CDQ program can be seen as consistent with the general emphasis of American fisheries policy. The concern for management of aquatic resources and the key role of governmental organizations and institutions in providing program oversight are central components of the CDQ program. The primary emphasis on regional management places the CDQ program in the mainstream of contemporary fisheries policy. The focus on the "community" as an important element in the CDQ program raises the obvious question as to what is meant by that term. As indicated above, the establishment of the EEZ introduced a form of community management into American fisheries. Prior to the EEZ, fishery resources falling between 12 and 200 miles of the American coastline were exploited by a variety of foreign nations. Fisheries management within 12 miles was the province of state and federal regu-

OCR for page 5
--> lators. Disputes over fish harvesting fell to the State Department as part of U.S. foreign policy and was rarely addressed effectively. With the coming implementation of the EEZ in 1976, all foreign fishing was brought under the control of American political structures. The fisheries management councils—consisting of industry and governmental representatives—became the operational means for managing coastal fisheries. The creation of the EEZ represented a transfer of wealth—in the form of the value of fish biomass—away from foreign fishing nations and to Americans who had previously fished, or who could claim some legitimate interest in harvesting activities in the newly established zone. Investments associated with this newly Americanized asset (the fish) continue to come from a range of nations, but the management of the fishery resources is now clearly under American jurisdiction. Once the EEZ was in place, it became necessary to create management structures and processes under which the TAC for certain species could be determined and allocated among the newly endowed American fishing interests. The fishery management councils perform this management function. Potential council members are appointed by the Secretary of Commerce from lists provided by the governors of the coastal states from a variety of different fishing interests. For example, the North Pacific Fishery Management Council has members from the states of Oregon, Washington, and Alaska, including various industry groups based in these three states. With the creation of the CDQ program, there is a specific asset allocation—allocation of biomass of various species to a specific group—this time to the residents of coastal Alaskan villages on the Bering Sea. With the creation of the CDQ program, there was a specific biomass allocation to a specific group—the residents of coastal Alaska—in the form of corporations composed of clusters of villages. Within this new regime, and under the general parameters established by the North Pacific Fishery Management Council and the state of Alaska, the groups of fishers themselves are responsible for the development of specific business plans for their share of the fisheries. They can choose to exploit the fishery themselves, or they can join with other partners in those endeavors. These parameters allow the CDQ associations to undertake particular managerial actions to support collective goals. Oversight by state and federal agencies assures that the well-being of the fishery resources takes precedence over other objectives. That is, economic development, job creation, or investment programs can only be implemented if they are consistent with the overarching goal of protecting the health and resiliency of the fishery resource. The CDQ program can be seen as one component of a nested hierarchy of management structures and processes that operates in the North Pacific. It offers economic opportunity to residents of rural coastal Alaska that would otherwise be absent, while operating according to the biological imperatives developed and overseen by the North Pacific Fishery Management Council.