U.S. Regulation of Offshore Aquaculture: Can We Compete In a Global Market?

W. Richard Smith, Jr.

Robinson & Cole LLP

280 Trumbull Street, Hartford, CT 06103

(860) 275-8218

wrsmith@rc.com

www.rc.com

Preface

• This presentation is intended to facilitate a discussion of the issues presented and does not constitute legal advice. Any questions regarding specific legal issues or facility operations should be reviewed with a lawyer engaged by you for that purpose.

Objective: Produce marketable food fish species in federal waters in compliance with operating standards.

Requirements:

• Legal right to occupy an EEZ location;

• Reasonably obtainable permits and approvals;

• Reasonable expectation of continuity;

• Reasonable facility operations regulations;

• Authority to grow food fish as inventory; and,

• Competitive operating costs.

Fish Markets vs. Fish Management

• Marketable products defined in regulatory terms:

– Right fish (market dictates species);

– Right size (reasonable possession controls);

– Right time (no season-based restrictions); and,

– Right price (competitive production costs).

Some of the Issues to address:

• Jurisdictional limits

• CWA Discharge permits – which programs apply?

• Coastal Zone Management Act standards

• Fee issues

• Magnuson-Stevens Act (SFA) issues

• Other applicable laws issues

1. Jurisdictional limits

• Drawing the state-federal lines

• Manner of state participation

• State regulation in federal waters?

– Environmental standards

– Other factors

• Can states bar federal approvals in EEZ?

– Do states get a veto?

– Regulation by strangulation – where do you land?

– Regulating land operations – range of considerations?

1. Jurisdictional limits cont.

• Presidential proclamations and agency rulemaking

– Territorial sea – 3 to 12 to 24 n.m.

– Contiguous zone and “oceans" definitions – how affected?

– Incorporating changes in rulemaking – U.S.C.G. example

– Judicial interpretations of specific statutes

• Question: did Congress intend a statute to be affected by changes to “territorial sea” definition or other definitions?

2. Discharge permits – which programs apply?

• Federal Water Pollution Control Act

– effluent limitations guidelines (sec. 402)

• Proposed BMPs (2004 due date)

• Enforceable BMPs (how – permits?)

• Will Best Professional Judgment cover gaps?

• Where do “waters of the US” end?

– Did Congress mean 3 miles?

– What happens if ELGs don’t apply?

2. Discharge Permits – which programs apply? cont.

• Ocean discharge permits and permit criteria

– Ocean must mean ocean, correct?

– “no unreasonable degradation” or “healthy oceans”?

– Sec. 402 vs. 403 (additional or substitute?)

• “Aquaculture discharge permit” (sec. 318 – is it what it says?)

• State regulations

– Water quality standards

3. Coastal Zone Management Issues

• Impacts evaluations (sec. 307(c)(1)(A))

– What limits for socioeconomic impact analysis?

– Do we outlaw consumer-favorable competition or market impacts?

• Frustration of federal policy

– NOAA’s Year 2025 targets ($5B products, 600,000 jobs)

– Do we need marine aquaculture, or kill it and move on?

– Will a shortage of 4th grade classrooms stop a fish farm?

• Competition between states

– Could states oppose offshore facilities in neighboring states?

4. Fee Issues

• How to address State or Federal fees?

– Minerals vs. mutton snapper? They are not the same.

– “Produced” from public lands? Who put products there?

– A single model is not appropriate.

• Avoiding “payback” approaches?

– Aquaculture will not address complaints over range fees.

5. Magnuson-Stevens Act (SFA) Issues

• Food fish vs. stock enhancement – is there is a difference?

• Should aquaculture remain in “fishing” definition?

• Role of FMCs

– Veto vs. providing expert comments?

– Veto by conditions – death by a thousand cuts?

– Aquaculture representation on councils?

• Are competition and market impacts proper decision criteria?

6. Other laws applicable to offshore operations

• Labor, safety, products liability, environmental standards?

• State law, maritime law or new legislation?

• Specific laws for aquaculture operations?

• Draft NOAA Code of Conduct*: How does it apply?

– *”The [Pirate’s] Code is what you call guidelines more than actual rules.”, Captain Barbossa to Miss Elizabeth Swann in Pirates of the Caribbean

– “Codes” vs. “Laws”: do labels matter?

– A mandate by any other name.

How could legislation provide solutions?

• Maximize legislative answers and reduce uncertainty

• Recognize the public policy value of offshore aquaculture

• Confirm laws applicable to offshore aquaculture

• Resolve potential agency jurisdiction conflicts

• Avoid broad and numerous “veto” authorities

• Acknowledge the “fish not fees” objective

• Create objective standards of approval and operation

• Avoid and eliminate duplicative or conflicting federal standards

• Don’t leave policy issues to rulemaking or permitting