Mr. FASCELL. In view of the great disparity of costs here and effort to be competitive, why wouldn't everybody transfer to a foreign flag? Mr. FELANDO. That is what I am trying to show in exhibit 2. There have been a lot of transfers lately. This factor of the less cost of operation Mr. FASCELL. What is going to stop it? Mr. FELANDO. We are getting much more competitive in our equipment. Mr. FASCELL. This legislation is not going to stop transfers to foreign flags. Mr. FELANDO. I think it will increase it. Mr. FASCELL. In other words, the great difference in profit, as I see it, is the incentive to transfer to foreign flags. Is there anything that mitigates against it? Mr. FELANDO. The other incentive is this: If you can transfer your flag to Peru, and operate in Peru, as a U.S. citizen-even though I will probably get a lower price for my fish, and I will have probably a cheaper crew, I will have more problems in handling that crew and more problems in handling my vessel, but I also know that the enforcement of any regulations on the production would be quite less than the trouble I would get in operating in the United States. Because under this foreign-flag arrangement, if I have a foreign flag, let's say Panama, or I have a Peruvian-flag vessel, I have to follow the Peruvian law and the Peruvian law doesn't have the same type of provisions as S. 2568, then I have a little better setup than the fellow who operates from the United States under the law. Mr. FASCELL. I don't know anything about fishing. It would seem that normally you would follow your source of production to get as close to the base of operations as you could and you would normally get the cheapest labor costs and normally get the highest sales price for your product. Those would be the factors and all the others would be supplementary. Regardless of the law, wouldn't these factors determine where your fleet is going to be and how they are operating and under what laws? Mr. FELANDO. I will give you another look at this thing. At one time there were 6 canneries in San Diego with 6 vessels, and now there is 1 cannery and 90 vessels. This is the competition that we have from Japan. Mr. FASCELL. You say "the competition from Japan." Are you talking about Japanese tuna that came in under another label Mr. FELANDO. Frozen and fresh tuna Mr. FASCELL. Under their own labels? Mr. FELANDO. Frozen and fresh tuna is not canned. It comes in fresh or whole frozen. There are no quota restrictions on it. Mr. FASCELL. Who eats it? Mr. FELANDO. I don't know what kind of tuna you are buying right now. I Mr. FASCELL. I don't know. But I am buying canned tuna. don't know whether it is Japanese or not. That is the point I am making. Mr. FELANDO. It is very difficult and it is costly for our vessels to travel 200 miles back and forth from San Diego and San Pedro to unload our catch. Frankly, we like to live in the United States. We have our facilities in San Diego. We have lived there all our lives. We started in business in southern California. There are other attractions in other locations. There are other lower costs. It is probably a much more efficient way of catching the fish. But we do a pretty good job as it is and we like to keep on operating from the United States. The only thing is it gets pretty rough when you not only have to outfish somebody but you have to outrun gunboats. Mr. FASCELL. I don't blame you for sticking to what you have. I don't blame you at all. Mr. SELDEN. Mr. Mailliard. Mr. MAILLIARD. What would be the difference in the price you would get for your fish in the United States as against South America. Mr. FELANDO. At the present time, let's take some comparison figures. The price of skipjack landed in the United States is $250 at the present time. The price of skipjack landed in Puerto Rico is $20 less, $230. The price of skipjack based on what information I can get in Ecuador, the cannery pays in Ecuador $60 a ton. Mr. FASCELL. What do they do with that fish? Mr. FELANDO. They import it in the United States. Mr. FELANDO. They have a cannery there. They also send frozen fish from Ecuador to Puerto Rico. Mr. FASCELL. It is under an American label. They couldn't sell an ounce of Ecuadoran fish in the United States unless it had an American label? Mr. FELANDO. I don't know why people buy things. I know they are buying a lot of tuna. The sources of supply are very many. Mr. FASCELL. I am trying to find out actually whether or not, taking Ecuador as an example, whether or not you have an Ecuadoran trademark on canned tuna in the United States. Mr. FELANDO. No. We found out that we might as well set up a cannery, in order to offset Japanese competition, so we established an American Tuna Can Co., a group of boat owners, with the idea of― this is American-caught tuna. I understand the albacore fishermen tried the same thing, called the American Pack. Competition is rough in the canned tuna game. Both efforts failed. Mr. MAILLIARD. Most of the Japanese tuna was brought in frozen and not canned? Mr. FELANDO. That is correct. Mr. MAILLIARD. This is not I gather true of the South American tuna? A great deal of that is canned? Mr. FELANDO. No; that is not necessarily true. As you see in my exhibit here, on the import statistics, you see that quite a bit of frozenfresh or frozen tuna is imported from Mexico, Peru, and Ecuador directly to canners, principally Puerto Rico. I believe there is very little tonnage brought into southern California this year, the first 8 months. Most of the fish that you see on this exhibit 6 has been sent to Puerto Rico. Mr. MAILLIARD. Canned in Puerto Rico- Mr. MAILLIARD. Then it operates on a complete par with that canned in the continental United States? Mr. FELANDO. Yes. Mr. MAILLIARD. This amendment that you suggest, as I understand it, it merely gives another cause for which the Secretary can impose this embargo? Mr. FELANDO. That is correct. He has two other ways of placing an embargo on fish from other sources as contained in the bill. Mr. MAILLIARD. How in the world would you enforce this provision, "of such fish which were denied entry shall be continued to be denied entry"? Mr. FELANDO. My only answer is that I believe there is contained in the record an explanation of how the Department of the Interior intends to enforce that provision. That is merely a duplication of the language contained in subsection (c). Mr. MAILLIARD. I think it would be hard to identify a can of tuna Mr. FELANDO. That is one of our principal objections-there was a lot of compromise in this thing. I spent quite a few days here in Washington arguing about legislation. One of our principal objections is how are you going to tell yellowfin tuna once it is in a can whether it is caught in the Indian Ocean, Atlantic Ocean, central Pacific or elsewhere. It is hard for us to tell, and we have been in the fishing business for a long time. Mr. MAILLIARD. Do you think this bill if amended as you suggest is really going to be beneficial, or are you just sort of willing to accept. it? Mr. FELANDO. We think that this is the best we can get right now, Congressman. This Commission has been in existence for 12 years. We believe in the management of fisheries. We think it is the proper idea. There are objections by fishermen as to the conclusions reached. We feel we have to back up the man who has been doing the job for 12 years. He has come out with this decision and we hope for the best on the decision. The Japanese have some objection to the basic proposal. I do not think it is wise, personally, to set a line in the eastern tropical Pacific and say that the species of yellowfin is concentrated, is only concentrated in this area. The Japanese believe that the yellowfin specie of tuna goes east-west. The Commission apparently is of the belief, based on what evidence they have received, that it goes north and south. Other species of tuna-albacore, skipjack, and other fish travel in a circular motion. I believe the Tuna Commission should be established for the Pacific, rather than try to isolate various areas in the entire Pacific. I think tuna is common in the entire Pacific Ocean, not just merely to the eastern tropical Pacific. Other people do not have this opinion. We believe we should support the Commission. We think that our amendment is proper and consistent as to the intent and purpose of the original treaty as it was written. We are in a difficult position at this time because we think that if you get-to bring out a proper conservation program you also have to have some way to see to it that we have a right to catch the fish. It is a long answer to your question, but we think if this amendment is in there we will be satisfied with the bill and try to live with it. Mr. MAILLIARD. That is all. Mr. SELDEN. Any further questions, Mr. Fascell? Mr. FASCELL. I am trying to maybe this has already been put in the record the percentage of total tuna production in this exhibit. I think you touched on it. Maybe I don't understand it. The California tuna fleet has produced 69.1 percent of the total skipjack and yellowfin tuna caught in the eastern tropical Pacific Ocean. That is one of the areas. Mr. FELANDO. The eastern tropical Pacific Ocean, as the original treaty states its coverage, includes the eastern Pacific Ocean. That is the area geographically from the tip of Chile to California. That is what we call the eastern tropical Pacific Ocean. Mr. FASCELL. You say that area is established by the original convention? Mr. FELANDO. The language in the original convention is not that clear. It merely states that the convention applies to the waters of the eastern Pacific Ocean. Mr. FASCELL. In the interpretation of this language, where does the line come, from the coastline all the way up and down? Does it vary according to each Mr. FELANDO. There is a map. I believe that it would indicate the markings of the area. Mr. FASCELL. Is the major part of the tuna production inside that line or outside that line? Mr. FELANDO. The major part of the production is in the eastern tropical Pacific, at least as to the California fleet and the other fleets located in that area. There are also Japanese Mr. FASCELL. You say "in that area." Inside the line; between the coast and the line? Mr. FELANDO. That is right. Mr. FASCELL. That would be south of California basically? Mr. FELANDO. Yes. It is a tropical tuna, and we have to go to the tropics to catch it. There is one qualification here. The Japanese long liners operate in and around the lines. We do not know the production of this Japanese fleet. It has been estimated that the annual production of yellowfin tuna is from 1,500 to 5,000 tons. You have to realize that fishing production power doesn't discriminate between yellowfin and skipjack tuna. Mr. FASCELL. This coastline we are talking about-is that agreed to in the convention or subsequent agreement, or is this by declaration by each country? Mr. FELANDO. It was designated by the Director of Investigations of the Commission, and accepted by the commissioners of each country, the members of the Commission. Those countries are the United States, Panama, Costa Rica, and Ecuador. Mr. FASCELL. These figures in exhibit 7 indicate the comparative amount of production by the U.S. fleet as against other fleets in that area? Mr. FELANDO. That is not true. Mr. FASCELL. That is what I am trying to get at. What is it? 88007-62-6 Mr. FELANDO. These figures were supplied to me by the InterAmerican Tropical Tuna Commission. And I have an information sheet from the Bureau of Commercial Fisheries. During the period of time January 1 to August 18, 1962, with the exception of the Japanese production, they estimated the total landed yellowfin and total skipjack by all fleets in that area came to 115,729 tons. In order to compute, in order to find out just what our fleet in California is producing, we refer to this Fisheries Product Report that is issued by the Bureau of Commercial Fisheries in San Pedro, Calif. It tells us that the landings in California by our domestic fleet came to-as to yellowfin-came to 49,449 tons. There is a transshipment figure of 1,680 tons. The "transshipment" means this fish was caught basically off Peru by American-flag vessels, but these American-flag vessels have changed flag by FebruaryFebruary or March. So these are basically foreign-flag vessels, and that is why they are considered transshipments. The total yellowfin caught by other fleets came to 13,121 tons. There are a group of boats that deliver in Puerto Rico. We don't know the exact production of those vessels in Puerto Rico, but I don't believe it exceeded 3,000 or 4,000 tons. These are American-flag vessels that operate from Puerto Rico, operate through the canal, and operate in the Pacific, and then return to Puerto Rico or to the United States. This is the explanation of this exhibit 7. I can only figure out pretty closely what the California tuna fleet has produced, and basically I have computed a percentage figure of 69.1 percent. Mr. FASCELL. Thank you. I appreciate your explaining that. Mr. SELDEN. Mr. Felando, has this harassment of U.S. fishing vessels increased greatly in the last 6 months? Mr. FELANDO. Yes. I have had problems now with four different seizures since January 1961. Unfortunately we did not establish a program that upon the return of each vessel to interrogate the skipper and find out what happened to him. You will find, in the affidavits, there are many statements where an Ecuadoran vessel will stop an American vessel, order the master to leave the ship and go to the Ecuadoran vessel and show his papers. In some instances this was done while a vessel was fishing. We have now instructed our captains not to leave their vessels, to let a boarding party come aboard but not leave the command of your vessel. We have noticed within the last 6 months we have had more and more problems, particularly off the coast of Ecuador. The reason we are having problems off the coast of Ecuador is that our fleet is concentrated off Ecuador. I am afraid when our fleet starts moving down the coast later on this year toward Peru and Chile, we will have more problems. We see agitation being built up in Peru. Mr. SELDEN. Did you testify on this legislation before the Senate committee? Mr. FELANDO. Yes; we had six skippers who also testified. Mr. SELDEN. Did all of them testify favorably? Mr. FELANDO. Subject to the fact that we would have proper amendments to the bill. |