I want to thank the committee for providing me with this opportunity to express our serious concerns with the proposed reform of the At-sea Observer Program announced last year by FOC.
Biorex management and staff are strongly opposed to the proposed reform of the Program. We believe that its implementation will have very negative consequences for all the stakeholders, including fishermen, observers, the Department and observer companies like Biorex, and that it will go directly against the objectives of conservation and protection of Canadian fish resources.
There are many reasons why we make this statement and it would be difficult to explain them all in this short period of time. A document detailing all of our concerns has already been distributed to the members of the committee and I will therefore limit my presentation to two major aspects of the proposed reform, which are the integrity of the program and its cost.
Our main concern with this project is that it grants fishermen the right to choose who is going to observe their fishing operations. Therefore, the observer companies and the observers themselves will be in a conflict of interest. Indeed, competitive pressures between the companies that will try to obtain or keep contracts with the fishing industry will create a situation where industry will try to manipulate the system to its benefit.
Furthermore, as with the dockside weighting program, which is being used as a model for this proposed reform, the new system will allow the fishing industry to create and control its own programs.
Finally, at-sea observers will constantly have to make compromises between the requirements of the program and the desire of some fishermen that they ignore irregularities or manipulate the data. One should understand that an observer who ignores an irregularity or who falsifies some data could considerably increase the profits of fishing operations and that, with the new system, this might guarantee some future contracts to his employer or guarantee his own employment.
The problems affecting the credibility and integrity of multiple provider programs such as the one that is proposed are well-known by national and international experts and stakeholders. They have been highlighted in several international conferences and government reports mentioned in our brief. I would only mention the two most relevant examples.
First, an independent expert hired by FOC to look at the various options to reform the At-sea Observer Program recommended in 2000 to maintain the existing regional exclusivity system. Obviously, the proposed reform goes completely against this basic recommendation.
Second, out of the hundred observer programs existing in the world at this time, only two allow fishermen to select their own observers. Both operate in Alaska and both have credibility problems.
As a matter of fact, the American government is carrying out studies at this time in order to change this system and to make sure that fishermen will not have the right in the future to select their observers.
To conclude my remarks about the integrity of the program, the general consensus is that granting the industry the right to select the providers of observation services would be akin to hiring the fox to protect the chickens.
As far as cost is concerned, the government claims that it will save about 2 million dollar per year across Canada with the new system. Not only that, it claims that the cost of the program to fishermen will be reduced.
Our contention is that this is not based on credible estimates and that the economic impact of the reform on fishermen and on society in general would be negative, for the following reasons.
First, the 2 million dollar saving for the government would come from transferring to industry the cost of coordinating the program which at this time is paid by the department to observer companies. In the existing system, this amounts to a cost of 3 million dollars a year for the whole of Canada. Secondly, the government is forecasting an increase of one million dollars of its internal costs relating to the control of the new system. So, 3 million dollars minus one million dollars equals the 2 million dollars the government hopes to save.
Second, according to figures published by FOC, the cost of administering the program would increase by one million dollars per year. With the reform, the level of competition between observer companies is more likely to decrease than increase. As is presently the case with the dockside weighting program, observer companies that will be controlled by the fishing industry will end up with a monopoly to provide services to their own fleets.
Third, the proposed reform would include the fragmentation of the regional programs in smaller units, which will lead to a substantial loss of savings of scale as far as coordination is concerned and will increase the cost of moving observers between the ports of a registry of the ships.
Finally, we do not believe it is it realistic to claim that the implementation of the new system would lead to a cost reduction for fishermen and for society in general. What is more likely is that the negative impact of the reform on administration and coordination costs as well as on the cost of moving observers will create very strong pressures to cut the salaries of observers and to erode the data validation procedures, to the detriment of the quality of the program.
In conclusion, we cannot understand why some are willing to compromise the quality, the integrity and the effectiveness of the program for 400 000 dollars per region, especially since the savings that the government hopes to make would not really be savings at all for society but would rather be mostly a transfer of costs from the government to the fishing industry.
We believe that it would be a serious and probably irreversible mistake for FOC to implement this reform. In order to preserve the integrity and effectiveness of the program it is absolutely imperative to keep the contractual link between FOC and the observer companies and to preserve their exclusivity on a regional basis through their contracts.
In conclusion, we recommend that the costs of the program be recovered from the industry by FOC rather than by the observer companies through the fees for fishing rights. This change would significantly improve the program for the great majority of stakeholders.
Thank you very much, Mr. Chairman, this is at the end of my statement.