January 23, 1998
(Fisheries and Aquaculture)

Task Force Report Released

Fisheries and Aquaculture Minister John Efford today released the report of the Task Force that was appointed to review and assess the effectiveness of the Fishing Industry Collective Bargaining Act as a mechanism for negotiating fish prices.

The 140-page report makes 27 recommendations, as well as suggestions relating to quality issues in the crab fishery. The appointment of the Task Force was announced in September 1997 by Mr. Efford and Oliver Langdon, Minister of Environment and Labour. The Task Force had been given a deadline of Jan. 15, 1998 to submit its report so as to allow time for Government to review the report and consider the options for the 1998 fishery, to help facilitate an early start to the crab and shrimp fisheries.

Mr. Efford and Mr. Langdon agree that the report "could herald the beginning of a new era in industrial relations in the industry." Because of a previous commitment, Minister Langdon could not attend the news conference when the report was released today.

In releasing the report, Mr. Efford noted that the appointment of the Task Force was prompted mainly by circumstances in the crab fishery, with price disputes having created serious disruptions in that fishery several times in the past five years. However, the mandate of the Task Force was not restricted to crab.

"In fact," Mr. Efford said, "the principal mandate of the Task Force was a broad one."

He explained that the Task Force was asked to assess the Fishing Industry Collective Bargaining Act and recommend whether the Act should be modified, repealed or replaced with another statute that would better serve the general public interest and the interests of the parties to the negotiations. It was also asked to look at other models as approaches that could be used to settle prices and to determine whether an alternative approach might avoid or reduce the prospect for industrial disputes in the fishery. It was further directed to look at price dispute settlement mechanisms in effect elsewhere in Canada and in other nations, and to inquire into the causes of frequent price disputes in our crab fishery, as well as evaluate the reasons for differences between crab prices paid in this province and those paid in other provinces and countries.

Mr. Efford said that both the Fish, Food and Allied Workers Union and the Fisheries Association of Newfoundland and Labrador worked closely with the Task Force, and many harvesters, processors and other stakeholders provided the Task Force with their opinions and suggestions. He further noted that the first step taken after he received the report was to provide copies to both the FFAW and FANL so they can now seek the views of their members through a formal process.

"Government will not take a final position on the report until both parties have received the views of their members," he said.

Highlighting some of the report's recommendations, Mr. Efford noted that the Task Force examined a variety of models that could be used for negotiating fish prices. Based on their findings, the Task Force has recommended a new model.

"This model is one that is designed to improve the effectiveness of the existing collective bargaining framework, rather than make fundamental changes to it. Minister Langdon and I are hopeful that the new model can form the basis for more harmonious industrial relations in the fishing industry," he said.

He pointed out several features of the proposed model:

-It was the result of a consultation process that involved a large number of people, including the representatives of harvesters and processors. A wide range of views heard by the Task Force are addressed in the report.

- The proposed model would facilitate an early start to the fishery, and could provide for any disputes to be resolved before the target starting date for opening of a fishery.

-The collective bargaining process recommended in the model is one that would minimize the role of Government and "place control where it belongs, namely in the hands of the parties themselves." Government's role would only be to facilitate the process after hearing from the parties as to whether they endorse the proposed model.

Directed to recommended how pilot projects could be used to experiment with any proposed price setting mechanism, the Task Force recommends several pilot projects.

Among these is a bargaining model that can be tested in the form of a pilot project over the next two years. This pilot project is proposed to be undertaken for a two-year period covering 1998 and 1999, with a provision for a review at the end of the first year, at which time either or both parties may recommend to Government that the process be discontinued and replaced either by the current system or some other process the parties may feel to be more beneficial and better serve their needs.

The Task Force looked at a range of options for a new model of collective bargaining for the province's fishery, from an auction system similar to the one used in Iceland to a fully open market system such as in Nova Scotia. Another that was considered was a price settlement board like that in place in Quebec.

"In the final analysis, the Task Force found that any new model should recognize the wishes of fish harvesters to be represented collectively as one unit, as was demonstrated in their vote in 1988. Accordingly, the proposed new model is based upon the present collective bargaining system, with a number of modifications. The proposed model maintains the right of the parties to bargain collectively," Mr. Efford said.

The proposed model would "to the greatest extent practical, be driven by the stakeholders and minimize the role of Government. The stakeholders would be responsible for setting the time limits for discussions and would have the freedom to select the core of professionals who would work with them in their negotiations. The parties would also be free to agree on the sources of independent factual information to assist them."

The proposed model would apply to all species for which prices are negotiated. It is also sufficiently flexible so as to adjust to the changing dynamics of the industry, Mr. Efford said.

With the model proposed by the Task Force, the two parties may engage in interest based bargaining through a joint technical committee, with the assistance of a mutually agreed facilitator. Negotiations would begin with a fact finding and issue identification phase.

An arbitrator-in-waiting would be appointed at the beginning of the negotiations and would be kept abreast of all information exchanged in the collective bargaining process. If the parties did not reach an agreement, they would have to refer the dispute to an arbitrator.

Mr. Efford noted that unlike the standard approach whereby an arbitrator is selected only at the conclusion of the bargaining process, in this case the arbitrator would be selected by mutual agreement at the beginning of the process.

The proposed model provides that there be no strikes or lockouts as a consequence of a price dispute during the two-year period of the pilot project, in 1998 and 1999. Mr. Efford noted that it was developed in full consultation with the FFAW and FANL who will take it to their membership for approval.

In addition to the new model for collective bargaining, the Task Force recommends another pilot project for the purpose of experimenting with a fish auction. This recommendation proposes that a pilot auction system be planned in 1998 for implementation the following year, and that it involve cod on the south and west coasts.

"Considering the magnitude of their mandate and the relatively short period of time they were given to complete their work, it was no small feat for the Task Force to meet the Jan. 15 deadline," Mr. Efford said, in thanking Task Force chair David Vardy, member Joe O'Neill, legal counsel David Jones, secretary and researcher Brian Delaney, and secretary Rose Ledwell. He also thanked the many harvesters, processors and other stakeholders who provided input.

During its four months of work, the Task Force held meetings and consultations in response to expressions of interest from fish harvesters, processors and others who wished to make submissions. These were held in Clarenville, Harbour Breton, Grand-Falls-Windsor, Deer Lake, St. Anthony, Mary's Harbour, Bay Roberts and St. John's.

Contact:

NOTE TO EDITORS: A copy of the Summary of Findings and Recommendatins and quality suggestions from the Task Force are available from Communications and Consultation Brach at (709) 729-3610 or on Government's website at www.gov.nl.ca under What's New.

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EXECUTIVE SUMMARY OF THE TASK FORCE REPORT

1. On September 17, 1997, Government appointed a Task Force to assess the effectiveness of the Fishing Industry Collective Bargaining Act as a mechanism for negotiating fish prices. The Task Force was mandated to examine other dispute settlement mechanisms. The Task Force was asked to make recommendations as to how pilot projects could be utilized to experiment with any proposed price setting mechanisms. The Task Force was to enquire into the causes of price disputes in the crab fishery. Also, the Task Force was asked to evaluate the reasons for differences in prices paid to fish harvesters in Newfoundland and Labrador compared with prices paid in other areas.

 

2. The Task Force was comprised of: David Vardy, Chair of the Public Utilities Board, as Chair of the Task Force; Joseph O'Neill, Assistant Deputy Minister of Labour Relations, as Member; David Jones, Solicitor in the Department of Justice, as Legal Counsel ; and Brian Delaney, Industry Planning Supervisor, in the Department of Fisheries and Aquaculture, as Task Force Secretary and Director of Research.

 

3. The Task Force finds, on the basis of our consultations, that the Fishing Industry Collective Bargaining Act was neither an obstacle nor a help in reaching a negotiated price for crab/fish. However, amendments are recommended to accommodate the new model for collective bargaining proposed by the Task Force.

 

4. The Terms of Reference directed the Task Force to identify pilot projects as a means of testing new price setting mechanisms. The Task Force found, in our consultations, that there was a willingness to try new approaches.

 

5. The Task Force examined a variety of alternative mechanisms for price setting in the harvesting sector. These models included: an open market system as in Nova Scotia; a system of fish auctions like those commonly found in continental Europe; as well as a price settlement board similar to the Farm and Food Marketing Board in Quebec or to the price settlement board which operated in Iceland prior to 1991. Rather than recommending the kind of complete transformation which the adoption of any of these models would entail, the Task Force recommends instead that Government introduce modifications to the existing collective bargaining system and, at the same time, experiment with an auction system. The Task Force notes that auctions and other free market systems are common elsewhere.

 

6. These modifications are presented in the form of a new model within a collective bargaining framework. The model was the result of a consultation process involving fish harvesters, processors and the representatives of both. The proposal for a pilot project to experiment with a fish auction was, similarly, the result of a consultative and consensus building process.

 

7. The proposed changes to the collective bargaining system are recommended in the form of a pilot project. A parallel pilot project is proposed in the form of an auction conducted electronically for cod on the South and West coasts. This pilot project would be planned this year, for implementation in 1999.

 

8. The modifications to the collective bargaining process take the form of a pilot project proposed for 1998 and 1999. The project would be subject to review at the end of 1998. The proposed model would be driven fully by the stakeholders, rather than by Government. Indeed, in designing the model, one of the guiding principles was that government intervention should be minimized and responsibility should rest in the hands of the parties.

 

9. The proposed model provides that the FFAW/CAW and FANL engage in interest based bargaining through a joint technical committee with the aid of a mutually selected facilitator, beginning with a fact finding and issue identification phase.

 

At the outset, an arbitrator-in-waiting would be appointed, kept abreast of the negotiations and provided with all information exchanged in the collective bargaining process. This is one of the innovative features of the proposed mode of arbitration. If the parties do not reach agreement, then they must refer the dispute to the arbitrator, who will select the final offer made by one of the parties. FANL suggested the final offer selection approach, rather than regular arbitration, and the executive of the FFAW/CAW have agreed that they would be prepared to recommend acceptance of the model as proposed, using final offer selection as the form of arbitration. The decision of the arbitrator would have the same binding effect on the parties as would a negotiated collective agreement.

 

With acceptance of the proposed model there would be no strikes or lockouts as a consequence of a price dispute in 1998 or 1999.

 

10. The Task Force finds that the 1997 dispute on crab prices arose largely from mistrust among the parties. This mistrust was partly caused by the practice where a number of processors paid prices higher than the negotiated minimum price, immediately after industry representatives in the negotiating process had taken the firm position that no price higher than the minimum could be paid. The high expectations created by the prices paid for snow crab in 1995, along with the prices offered, or reputed to be offered, in the Maritimes and Quebec, were important contributing factors.

 

11. The Task Force was asked to evaluate the reasons for differences between crab prices paid in Newfoundland and Labrador and prices paid in other provinces and countries. The Task Force finds that differences in intrinsic characteristics are a major reason for the higher prices in the Maritimes and Quebec.

 

12. The Task Force also finds that controllable quality factors play a significant role and that there are a wide range of quality initiatives which can reasonably be expected to narrow the price differential, particularly with prices paid in Alaska. The Task Force presents a set of suggestions which can be used as the basis for consultations by Government with the parties.

 

13. The Task Force examined a variety of issues in an effort to explain these price differences. These issues included: the marketing effectiveness of the Newfoundland and Labrador
fishing industry; competition in the industry; and government regulations with respect to processing in the Province. The Task Force also found, that with greater ease of entry into the crab processing sector since 1996, there is now greater potential for competition among processors than before. This more open access is the result of the increase in the number of processing licences.

14. The Task Force examined whether harvesters should be able to sell crab for export in unprocessed form, through a repetition of the removal of the export restriction as was approved by the Minister in 1997, for a two month period. The Task Force recommends a controlled and closely monitored project and a full benefit cost analysis be undertaken in 1998 which would allow sales to outside buyers by fish harvesters in all regions, but with limits on the amount of unprocessed crab to be exported. These limits should be designed to prevent exports of unprocessed crab from any particular region impacting disproportionately upon processing employment in the region.

 

15. The Task Force recommends to the parties the development of a pricing structure that recognizes and rewards high quality crab.

 

16. The Task Force recommends to the parties that a price-to-market formula be used to reward quality and improve transparency.

 

17. In the interest of creating greater transparency and trust in dealings among processors and harvesters, the Task Force recommends that market price information on actual transactions be made available. This information would be audited by a third party.

 

18. Fish harvesters told the Task Force of increasing control being exercised by the processing sector over a number of fishing enterprises, particularly those in the large vessel fleet. The Task Force recommends a number of measures designed to strengthen the independence of fish harvesters and to reduce their dependence upon processors for financing. These measures include a review by Government to identify possible new sources of financing for vessels, to provide an alternative to dependence upon processors for financing.

 

19. The Task Force understands that the FFAW/CAW and FANL will need to explain the proposed new model for collective bargaining to their members and seek ratification of the pilot project.

 

20. The Task Force recommends that Government consult fully with the stakeholders on the recommendations of the Task Force with respect to the auction pilot project, quality and port services and facilities.

 

21. We are grateful for the full cooperation and support which we received from senior executives of the Union and FANL. The Task Force also expresses our appreciation to all of the stakeholders who took the time to meet with the Task Force in our consultations and made presentations to assist in its work. These consultations were of vital importance.

 

22. The recommendations in this report call for action to be taken on a timely basis. In seeking early and energetic action on our recommendations the Task Force is endorsing the views which were forcefully presented by concerned stakeholders.