Subdivision (a)(4) of Section 4 requires that a permit holder must be an U.S. resident or other U.S. organized business entity. This requirement can be waived (under certain conditions not relevant here), thus allowing non-citizens and foreign corporations to hold ocean fish farming permits. On the same day that Senators Stevens and Inouye introduced the bill they also introduced an amendment that removed the waiver provisions. It would seem that this is a distinction without difference since a foreign corporation could simply set up a U.S.-based shell corporation to qualify.
The bill provides that site and operating permits may be submitted and reviewed at the same time. While it may be hard to argue with this “good government” provision, it does have the effect of speeding up the process and of lumping the site considerations together with the operating aspects of any particular project. This is in contrast to the proposed California system, currently pending in the State Senate, that requires appropriate sites be inventoried before specific operations are considered.
The Secretary must also rule on a permit application within 120 days of completion of all applicable statutory and regulatory requirements. Extra time is allowed at NOAA’s request (but not at the public’s), under certain circumstances. Requiring a ruling on permit applications within 120 days is solely for the protection of the fish farmers by protecting them from regulation by delay. NOAA’s Analysis indicates that this 120-day requirement is “needed to ensure an efficient permitting process in which applicants receive decisions on proposed operations within a reasonable time frame.” This, of course, only highlights the bias of the bill by the failure to acknowledge the time needed to prepare a response to any application.
Several provisions of the bill confirm that the bill does not supersede other Federal laws and regulations (except the Magnuson-Stevens Act, as discussed below). Under the preemption doctrine, however, state law applies unless it is in conflict with Federal law. Thus, for example, a state ban on salmon farming would still apply in state waters, but since the Federal fish farming bill allows salmon farming in Federal waters the state ban would have no effect on Federal actions in Federal waters. State laws protecting their offshore resources thus become irrelevant outside state territorial waters.
Vessels owned or used by a permit holder in furtherance of the fish farm operation are “exempt from the requirement for documentation or a fishery endorsement” normally required by the Jones Act. The documentation and fishery endorsement requirements govern who can fish. This appears to be an attempt to make allowances for foreign owned farms and/or foreign owned vessels. More research will be needed to put these exemptions into context, but it does not appear to be a blanket exemption from the Jones Act that several people suspected. On the same day that Senators Stevens and Inouye introduced the bill they, along with Senator Snowe, also introduced an amendment that deleted this exception.
The subsections that address site and operating permits give the Secretary total discretion regarding the permits terms, conditions and restrictions. The only requirement for a site permit is that it must specify “the duration, size and location of the [fish farming facility].” The operating permit must additionally indicate the species to be raised. Thus, the Secretary is given the legislative equivalent of carte blanche regarding the site and operation permit conditions, except for the few obvious and non-controversial details listed just above. This is one place in the bill where standards might be placed, but the only standards are incorporated by reference. Those references to environmental protection are: (1) in the incorporation of pre-existing environmental law; (2) in the ‘Criteria’ section (Section 4(d), discussed just below), and; (3) in the Environmental Requirements section (Section 5, discussed below).
The site permit subsection also compels the permits to have a duration of 10 years and be renewable in 5-year increments. The duration of permits for facilities that are also covered by a lease issued under the OCSLA (e.g., offshore drilling platforms) is determined by the Secretary of Commerce in consultation with the Secretary of Interior. Leases for “demonstration projects” are also not included in the 10- year/5-year requirements and could go on indefinitely.
Elsewhere in the bill, the Secretary of the Interior is given authority to enforce lease, permit and OCSLA requirements and to issue emergency orders over fish farming that occurs on or within one mile of drilling platforms. This again confirms the possibility that fish farms will be authorized at or near a producing oil or gas drilling platform. It also repeats earlier provisions that grant Interior some concurrent authority over fish farms on and near these platforms.
The site permit subsection also compels holders of a site permit to “remove all structures, gear, and other property from the site as may be prescribed by the Secretary” when the permit term is complete. As a part of those removal provisions, should a fish farmer not be able to remove the farming facilities from a drilling platform, the owner of the platform could be responsible for those costs. This subsection also provides further confirmation that fish farms are contemplated on and near drilling platforms.
Issuing Ocean Farming Operational Permits
Section 4(d) is entitled Criteria for Issuing Permits. This subsection requires the Secretary to “consult as appropriate with other Federal agencies to ensure that” a permitted ocean fish farm “meets the environmental requirements established under section 5(a) and is compatible with the use of the Exclusive Economic Zone for navigation, fishing, resource protection, recreation, national defense (including military readiness), mineral exploration and development, and other activities.” Unfortunately, this provision borders on meaningless for ensuring any protection of the marine environment.
The first requirement, that ocean fish farming only meet the very minimal environmental requirements of Section 5 of the bill will be discussed below. This “criteria” subsection, moreover, only requires that NOAA “consult as appropriate” with other agencies to insure compatibility with the other listed uses, not that it actually protect other listed uses. As a part of that consultation, fishing and resource protections are accorded the same weight, if any, as navigation, recreation, national defense, mineral exploration and development, and “other activities.”
A second part of this “criteria” subdivision compels the Secretary to “consider risks to and impacts on natural fish stocks, the coastal environment, water quality and habitat, marine mammals and endangered species, and the environment, as identified by the Secretary and other Federal agencies.” Again, risk and impact consideration is the only thing required here. Once those risks and impacts are considered, the Secretary is still free to ignore them. This consideration requirement adds no protections that are not already required by the National Environmental Policy Act (“NEPA”). There is no requirement that those risks be minimized or balanced against other aspects of an ocean fish farm. There is also no requirement that the process of that consideration be public. These “criteria for issuing permits,” therefore, do nothing to assure any ecosystem protections.
The final subdivision under 4(d) requires NOAA to “periodically” review the criteria for permits and to modify them “based on the best available science.” This is also such a vague standard as to make it unenforceable and meaningless. “Periodically” and “best available science” are so vague that the subdivision essentially gives complete discretion to NOAA. The language, moreover, does not compel NOAA to change the criteria based on that review.
Subsection 4(e) excludes the permitting system set up under this bill from the Magnuson-Stevens Act. Whether permits under this bill should be governed by the Magnuson- Stevens Act and its regional councils may be subject to debate and full discussion of that issue is beyond the scope of this article. Some of the points to consider, however, are that Magnuson-Stevens, at least, requires some balancing of competing interests and transparency of the process. This bill does neither.
The bill also requires that the Secretary consult with the local Regional Fishery Management Council prior to issuing a permit and to “ensure, to the extent practicable, that offshore aquaculture does not interfere with conservation and management measures promulgated under the [Magnuson- Stevens] Act.” Requiring consultation may be a positive step, but without requiring that action be taken based on that consultation or, better yet, requiring that the regional council also permit farming facilities, the consultation requirement is hollow.
Finally, this portion of the bill authorizes, but does not require, the Secretary to require ocean fish farmers to “track, mark, or otherwise identify” the farms’ product. Tagging farmed fish should be required.
Not Paying Their Way
A “Fees and Other Payments” subsection authorizes the Secretary to set application and permit fees and to waive those fees for research or hatchery facilities. The Secretary is also required to demand a bond to insure payment of unpaid fees, the cost of removing the farming facilities at the end of the permit period, “and other financial risks as identified by the Secretary.” The worst part of this section is that there is no requirement for royalty payments for use of a common public resource.
Most statutory schemes that allow extraction of a public resource also require some sort of a lease or royalty payment to the government. Oil, gas and coal extraction, for example, requires a royalty, while grazing requires a lease payment. These are paid to the Federal government to help compensate for the value lost to the public and/or for the damage that the activity does to the environment.
This bill, on the other hand, gives away large plots of ocean to private corporations, without requiring either royalty payments or a compensating high level of employment/economic benefit to coastal communities. Adding a lease or royalty payment requirement would be the fair thing to do because: 1) it would be consistent with most other Federal laws; 2) it would more fully internalize the true environmental costs of the operation, and; 3) it would compensate the public for the loss of a public resource.
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