In an interview with TC media, Morley Knight, regional manager of licencing with DFO of licensing for Atlantic Canada, said many fishers who had controlling agreements with a third party, have complied with the department’s deadline to end these agreements.
In 2007, DFO asked fishers throughout the region to declare whether or not they had such agreements.
Those who declared themselves to be party to such deals were given a deadline, 2014, to get out of the agreements.
Knight says about 700 fishers declared controlling agreements and almost all of them have complied with the department’s policy.
He added that since 1979, the department’s policy regarding controlling agreements has been clear.
A policy to preserve the owner/operator rule — simply that the holder of a commercial fish licence is the person who has control of the management and operation of the fishing enterprise — was enacted in 1979, during the tenure of former fisheries minister Romeo LeBlanc.
“DFO has never deviated from that policy,” he said.
Still, many fishers entered into agreements with third parties — fish processing companies and other business enterprises — that saw control of the fishing enterprise go to those companies.
These scenarios developed, especially, in fisheries of value — crab and shrimp in this province, and around the lobster fishery in the Maritimes.
Knight explains it this way.
“Those licences were valuable. So if John Doe was selling out of the fishery — because a company put a big number in front of them — then the company had to put the fishing licence in someone else’s name.”
DFO regulations deem that a commercial fishing licence can only be held in the name of a bonafide fish harvester, and not in the name of a company.
“People were selling their enterprises because of the enormous value of the licence and companies were offering to buy.”
In some cases, cheques for half a million to a million dollars or more were written as third parties bought up those licences.
To transfer the licence, however, under DFO policy a bonafide fisher had to be the licence holder.
So the company would do a deal with another bonafide fisher to hold the licence, in their name.
The company that wrote the cheque for the purchase would have the new licence holder sign a legal agreement, essentially stating that the licence was held “in trust” for the company.
Basically, the company had paid the money for the licence and the ‘trust agreement’ meant that while the fisher was recognized as the licence holder by DFO, in the eyes of the law he did not have legal ownership of the licence if, for any reason, there was a dispute about that ownership.
And there were many disputes.
In this province, many battles were fought in Supreme Court when things turned sour between fishers and the controlling companies.
A search for “controlling agreements” and “fishing” at CanLii.org (a website that posts Supreme Court decisions from across Canada) shows that in this province many court battles have been fought over “who owns the licence?”
And in many cases, the bonafide fisher came out on the wrong end of the decision, because of the legal agreement signed with the controlling company.
Now, 10 years after DFO made its play to crack down on controlling agreements the department appears to be satisfied that the owner/operator principal is being upheld.
The rationale behind that principal, explains Knight, is to ensure that benefits (profits) from the fishing licence flow back to the communities and regions that are homeport to those licences.
If a third party owns the vessels and licences, he said, then it’s just a business with employees and the major benefits from the licence could end up anywhere.
Knight acknowledges that there is some thought among those in the industry that the controlling agreements have not ended, but have simply “gone underground.”
He says DFO has taken many steps to weed out those who may be in violation.
“The thing that I’d like to stress, is that now every (licence holder) has to sign off every year stating they are not in a controlling agreement.”
He says the department has a process of licence review, as well as spot checks and audits of fishing enterprises.
If they find evidence to suggest the licence holder is in a controlling agreement, after having declared they are not, the penalty is severe, said Knight.
“Anyone who is in a controlling agreement today is taking a really big risk; they are risking losing those fishing licences.”