February 2, 2004

Pacific Coast Shellfish Growers Association Issue Brief:

Army Corps of Engineers: Permit Requirements for the Shellfish Industry Shellfish farmers are seeking clarification and consistency regarding what additional permits, if any, are needed for their operations, other than the Army Corps’ Nationwide Permit #4. This issue is being driven primarily by new and onerous permit requirements being imposed by the San Francisco District of the Army Corps of Engineers on a single shellfish company in Humboldt Bay, California. The Corps actions in California have the potential of becoming a precedent for the industry on the West Coast as well as nationally.

The Background: Last spring, the west coast industry engaged the Northwest and South Pacific Division offices in an effort to cooperatively work through issues relating to Corps permit requirements. However, just as those cooperative efforts were beginning, the San Francisco District Corps office issued a Cease and Desist Order to Coast Seafoods Company in Humboldt Bay ordering Coast to cease certain oyster mariculture activities until it applied for an individual permit under the Clean Water Act (CWA) and the Rivers and Harbors Act (RHA). Compounding these permit issues are further requirements that are triggered under the Essential Fish Habitat laws and the Endangered Species Act, which falls under the jurisdiction of the NOAA Fisheries and the U.S. Fish and Wildlife Service.

To put the Coast permit into perspective, at the behest of the various state and federal resource agencies, Coast volunteered in 1997 to move all their bottom oyster culture operations to an off-bottom, long-line culture system. The state and federal agencies asserted that off-bottom method would result in less impacts on the environment, although no Environmental Impact Statement or Biological Assessment had been, or has been, conducted to provide a basis for this assertion. Nonetheless, Coast acquiesced to the pressure brought to bear by these regulatory agencies, and at considerable cost (~$500,000) retrofitted their farming operations from largely on-bottom and some off-bottom (long-lines) to entirely off-bottom systems. It was only after Coast completed this retrofit, over a period of six years, that the Corps issued its cease and desist order for failure to have permits under the CWA and RHA. Until now, no such permits have been required for molluscan shellfish farming.

The ability to comply with permit conditions being imposed on Coast would put most companies out of business. Just responding to the comments that have come in on the San Francisco district’s Public Notice will run well over $50,000. This is a significant (additional) burden for Coast, which is one of the two largest shellfish companies on the West Coast, but entirely beyond the means of the rest of the industry, which is made up almost entirely of small family-run farms, most of which go back several generations.

Setting the significant economic considerations aside, we question the environmental benefits of forcing Draconian conditions upon a business that has been operating successfully in Humboldt Bay for more than half a century. The fact is, the bay is widely recognized by the environmental community as one of the healthiest in the State of California, and among the most biologically diverse along the West Coast. How could this be, if in fact Coast’s operations, which have been going on at roughly the same intensity for over fifty years, have been wreaking devastation upon this marine ecosystem, as is alleged?

Looking for Resolution: As a result of the situation in Humboldt, for the past several months PCSGA has been working with the Corps headquarters and Division offices to determine what, if any, additional permits may be required of the industry. Despite these attempts at cooperation and coordination, the San Francisco district has continued to insist on an individual permit for Coast's operations. A Public Notice on Coast’s proposed permits was issued on September 24, 2003; comments were due on November 24; and at this time, a deadline has been set for Coast to respond to all comments received by March 1, 2004.

A group of shellfish representatives met with Assistant Secretary of the Army John Paul Woodley (civil works) on December 16, 2003, to ask for clarification on permit requirements and how they are being applied from region to region. Consistency is one of the core issues we asked him to consider. For example, in the Chesapeake, where the cultivation of oysters is encouraged, and even funded with over $1 million in federal grants, the Norfolk district of the Corps has indicated that permits for some oyster culturing methods are not needed. This runs counter to the San Francisco District’s determination that oysters constitute “fill” under the Clean Water Act.

With the clock ticking, and facing the considerable expense associated with preparing responses to the 50 + comments received on the Public Notice, Coast has requested that the San Francisco District allow an extension of time to respond to the comments on the Coast application, which would allow PCSGA to work with the Corps on national policy for permit requirements for shellfish farming.

Considerations: There are several legal, policy and consistency issues involved here. One of the core issues we believe must be addressed is the Department of Commerce/NOAA policy to “grow aquaculture five-fold by the Year 2025.” Commerce has called for the development of environmentally and economically sustainable aquaculture to help offset the $7 billion seafood trade deficit that currently exists. The shellfish aquaculture industry is uniquely poised to help realize this goal, and the environmental benefits of shellfish culture to the marine environment are widely recognized. For example, in the Chesapeake, it is now common knowledge that the health of the bay has been directly and devastatingly affected as a result of insufficient populations of oysters and the biofiltering function they serve. Now millions of dollars in federal aid is being used to reseed the bay with “billions and billions of oysters.”

The Clean Water Act was written with the intention to protect activities such as shellfish farming – a premise recently clarified and emphasized by the Ninth Circuit Court in APHETI v. Taylor Resources, where the Ninth Circuit held that shellfish aquaculture operations do not release pollutants into the environment and therefore do not require a Clean Water Act permit. To require shellfish farmers to get CWA permits for their operations under the premise that shellfish constitute fill contravenes this intent, as well as the Ninth Circuit's decision. In fact, shellfish farming has been going on along the West Coast since the mid-1800s, from Washington to California, and it is no coincidence that shellfish farming is only found today in the cleanest estuaries remaining on the Coast – also among the cleanest in the U.S. Conversely, most terrestrial-based agriculture, even those with activities proven to degrade water quality, have been allowed to continue under “grandfathering” clauses, and others fall under an “Agricultural Exemption” called out specifically in the CWA under Section 404 (f).

Shellfish farming must also be considered within the larger context of other activities which require permits under the CWA and the RHA. Extraction industries, such as oil drilling and mining, or other terrestrial-based agricultural activities, are NOT required to cease all activities prior to issuance of biological assessments or environmental impact determinations. In most cases, where the potential for environmental harm is suspected, or even widely acknowledged as fact, these enterprises have been allowed to continue operations while studies are being conducted and mitigation measures debated. In the case of Coast Seafoods, there is a dearth of science proving long-term irreparable harm and ignorance of scientific studies that show environmental benefits accrued by shellfish farming. Yet, they have been issued a Cease and Desist order and are now being forced to bear the cost of disproving alleged negatives. Why is Coast, and potentially this entire relatively small industry, being singled out and held to impossibly high standards when the environmental impacts have not yet been determined?

The ability to grow wholesome food domestically and to provide family-wage jobs are two other national priorities that must be considered. These benefits must be brought into the equation when considering what conditions are appropriate to place upon these farming enterprises.

To summarize: the ramifications of the policy decisions being made in isolation right now at the district level in San Francisco may have long-reaching national implications, affecting our ability to grow food, our ability to provide family wage jobs in rural coastal communities, and the ability to continue accruing environmental benefits to coastal ecosystems through the cultivation of these natural biofilters.

What we Need: The industry requests that our representatives in Congress support our stand that shellfish farming is of benefit to the environment and the economy, and that national and regional policies must reflect this beneficial use of marine waters. On-the-ground regulations and permits should align with these policies to ensure the protection and support of our unique industry.

At this time, we ask that the Army Corps’ San Francisco district office be required to cease the development of an individual permit for Coast Oyster in Humboldt, and instead, work cooperatively with the other Army Corps districts, divisions and headquarters to determine what, if any, additional permits are required of the shellfish industry. If additional permits are determined to be required, or if the Nationwide Permit #4 is determined to require amendments, then the Army Corps and the shellfish industry will cooperatively work to develop the appropriate mechanisms to ensure the industry is in compliance with appropriate environmental and navigational laws and not preemptively and unnecessarily be put out of business. Further, the burden of proof that shellfish farming does not impose negative environmental impacts should not fall to one company or one region, but be borne by the regulatory agencies charged with protecting the public good.