1. 2007 Sea Urchin Summit Workshop Proceedings Marriott Pinnacle Downtown March 6, 2007

2. Sea Urchin Summit2 Welcome & Introductions Welcome to 2007 Sea Urchin Summit 45 attendees Fishermen, harvester groups, processors, buyers, science, management, international directorate, AAFC, Province All the players are here A day of productive dialogue Gain a common understanding the present situation with a view to effecting positive change

3. Sea Urchin Summit3 Today’s Focus Sea Urchin Benchmark Study Prepared by Explorations Unlimited Funded by Agriculture and Agri-Food Canada Part of Seafood Value Chain Roundtable initiative –Securing an enduring competitive advantage for Canada in international markets Gaining a better understanding of the red sea urchin fishery on the Pacific coast of Canada Red sea urchins an interesting case study

4. Sea Urchin Summit4 The “Case” of Red Sea Urchins Uni a valuable delicacy sold in Japan A successful small scale fishery in BC –Well managed –Sustainable –Generating wealth for participants and coastal communities Industry suffering from global trade competition from the Russian IUU fishery Benchmark study commissioned to foster improved understanding of the red sea urchin fishery

5. Sea Urchin Summit5 Purpose of Summit Bring everyone together Understanding the current situation (the “problems”) Consider challenges and opportunities in Benchmark Report Jointly develop strategies for improving the competitiveness of the BC sea urchin industry

6. Sea Urchin Summit6 Today’s Program First Part – speakers –Harvester perspective –Presentation of Benchmark Study –Processor perspective –Science perspective –Japanese market perspective –Federal response to Russian IUU situation –Brand Canada information Second Part – work groups –Brainstorm ideas for positive change

7. Mike Featherstone President, PUHA History of BC Sea Urchin Fishery Events Leading to Summit

8. Sea Urchin Summit8 Mike Featherstone History of the Fishery Early days 1971-1993 - slow growth of fishery, then explosion in landings in 91- 92 (max 29m lbs) Deteriorating prices, quality, safety – “race for fish” Voluntary IQ program 94-95, order restored Full IQ program from 1996- present; co-management Prices firmed until 2002, then stabilized; improved safety, high level of economic benefits Per licence contribution to management & science $5,500/licence; costs aligned with revenues Russian IUU fishery spells market collapse Current situation: PUHA cannot meet obligations; only 60/110 licences active; inadequate revenues. No way to recoup funds. Challenge – where to go?

9. Geoff Krause Explorations Unlimited Summary of Benchmark Study Findings

10. Sea Urchin Summit10 Geoff Krause Summary of Benchmark Study Japan is major market BC one of several suppliers BC fits in “mid-tier” of quality/price in Japanese market BC rates high on sustainability; a costly science/mgt program vs. other jurisdictions BC quite efficient thanks to high CPUE Setbacks in market change BC competitive picture Russian IUU most serious problem facing legitimate producers Cascading effects in Japanese market BC fishery cannot be considered sustainable when the economic picture is so bleak

11. Industry Panel Current State of Sea Urchin Industry Processor & Harvester Perspectives

12. Sea Urchin Summit12 Industry Panel Current State of Industry Kiku Fisheries – devastated by Russian Fishery. From biggest BC processor to one of smallest. Cut staff by 60%. Needed to make drastic change in hurry. Grand Hale Marine – sales dropped from $1.2m/yr to $30k. Was 130 jobs… now no meaningful employment. Current trend… no fishery soon. Hi-To Fisheries – from 100 workers to 30. Many causes for downturn. Need more value-added product. Very concerned about future. Territory Seafoods – from 75 employees to 20. Biggest factor is Russia IUU. Drastic change needed. Industry is on life support.

13. Sea Urchin Summit13 Industry Panel Current State of Industry continued Michael Callow (Green Urchin Assoc) – no fishery by next year. Problem is IUU, period. Only harvest 12% of TAC this year. Bob Hegadus (fisherman) – affects on fishermen dramatic. Fewer divers, tenders, crewmen. Costs are up and prices are down. No young divers recruiting to fishery. Safety is compromised (smaller crew sizes) Pete Halney (California Urchin Commission) – California can compete with legitimate players. BC and California should take joint approach… interests are shared.

14. Don Christian D&D Monitoring Programs

15. Sea Urchin Summit15 Don Christian Monitoring Programs History of fishery, pre-IQ to today Roles of DMP; many elements and objectives (not just enforcement) 100% industry funded program 61 red urchin licences active currently (out of 110); 41% of TAC caught (vs 85% at this time normally) Green urchins – less than 7% caught (season virtually over) DMP costs have risen per pound of harvest, while prices have dropped Industry cannot afford current cost burden D&D willing to look at ways to re-structure costs

16. Juanita Rogers DFO Management Biologist Science and Management

17. Sea Urchin Summit17 Juanita Rogers Science and Management Explanation of the “cycle” of fishery review, stock assessment, and fishery management The relationship between DFO and urchin harvesters is key BC a far-flung area, five regions are assessed; estimating biomass to set quotas The fishery management toolkit: min size, limited entry, IQ, area licensing, area quotas Activities are funded through a Joint Project Agreement We’re here for the long haul, need to explore alternative ways of gaining information needed to manage the fishery (at lower cost) Need to work urgently to assess where we’re going.

18. Masao Hashimoto President, Kokusai Boueki Company Japanese Market and Russian IUU Situation

19. Sea Urchin Summit19 Masao Hashimoto Japanese Market, Russian Situation Based in Sapporo Has worked with Russians for 20 years, has an understanding of the problems IUU is a big problem, not just in urchins, but in other fisheries like salmon and crab Problem is oversupply into Japanese market Last three years, imports of urchins to Japan from Russia have exploded Aware of discussions between Canadian, Japanese, and Russian governments. It’s an international problem. Much of responsibility on Japan side Has some ideas to discuss privately.

20. Gorazd Ruseski DFO International Trade and Integration Branch Federal Response to Russian IUU Situation

21. Sea Urchin Summit21 Gorazd Ruseski Federal Response to Russian IUU IUU fisheries worldwide are problematic – est value $4-9 billion/yr. There is opportunity to engage Russia and Japan on many “fronts.” Several forums in next few months Both bi-lateral and multi- lateral discussions w/ Japan and Russia Russia is working on its own internal plan of action Seems to be strong case that Japan can validate landings at ports more stringently Japan has obligations under international agreements to which it is signatory Japanese harvesters now feeling impacts, which will help apply pressure UN/FAO – port state scheme – may become binding APEC Regions – sustainable development – Canada will put forward sea urchin case study

22. Terry Glavin Author, Journalist, Adjunct UBC Professor “The Collapse of Order in the Russian Far East”

23. Sea Urchin Summit23 Terry Glavin The Collapse of Order in Russian Far East Since the fall of communism, massive events in Russia have been largely ignored In the far east “everyone’s a poacher” out of simple necessity Russia now like the “wild west” Commerce dominated by small-scale (poachers) and organized crime A huge percentage of the Russian economy is controlled by criminals Lack of control over harvest of natural resources threatens numerous species Harvest are clearly not sustainable The situation is in spite of the best intentions or ordinary Russians Opinion: something is going to “give” in Russia’s far east

24. Janice Vansickle AAFC Brand Canada

25. Sea Urchin Summit25 Janice Vansickle Brand Canada PUHA has signed on to Canada Branding initiative Benefits of a strong brand The brand “promise” –We are committed to earning our customers’ trust in Canadian agriculture and food products every day through our relentless pursuit of excellence in all that we do A “template” for how agri-food producers can exploit the Canada brand, generically, and at a company level, was provided.

26. Urchin Summit Part II Brainstorming in Work Groups Recommendations for Improvement

27. Sea Urchin Summit27 Breakout Groups Given the economic crisis described today, we must develop and implement strategies to effect positive change Both short term and long term We’ll organize you into working groups to tackle four broad topics.

28. Sea Urchin Summit28 Breakout Groups 4 Topics 1.Government policy – Russian IUU Fishery 2.Government policy – Fishery Management/Science 3.Operational Efficiencies 4.Marketing

29. Sea Urchin Summit29 Operational Efficiencies This is our area of direct control What can we do to improve the bottom line, for example: –Quality –Yields –Costs –Transportation –Handling methods

30. Sea Urchin Summit30 List of Initiatives Operational Efficiencies (1) Quality and yield – areas, times; pay higher for higher yields (color charts, tray size) Need to respond to markets quickly – communication w/ boats, DFO, etc OGM replaced w/ electronic monitoring Proper handling, standardize containers (bag sizes that work well) Transportation – full truckloads, lower costs; more cooperation Transport as it relates to quality; more awareness of Krause project. Protocols on report… extent of adoption of report (logisitics study from grounds to processors)

31. Sea Urchin Summit31 List of Initiatives Operational Efficiencies (2) Sharing of transportation (trucks, etc); pursue more Handle product only once; bag out of water, product direct to tote (eliminate handling stages) Stagger production – avoid conflicts with Russian IUU Focus on fewer fishing areas? As cost reduction measure. Balance against conservation. Consolidate truckloads w/ other co’s, even fisheries EM as cost reduction DMP… creates extra handling; validate at processor vs grounds Qualitative color coding (like salmon) Transp & handling Quality from grounds (refrigeration) Track temp., water loss Organization, efficiency (trucks, packers Two-day loads – cost vs quality Tighter grading system (fewer grades); calibrate what we have.

32. Sea Urchin Summit32 Marketing & Value Adding Given the realities of the current Japanese market, what can we do to improve the marketability and values for our product? Specific initiatives, eg. –Market research –Product development –Customer service Recognizing current budget constraints

33. Sea Urchin Summit33 List of Initiatives Marketing, Value Adding (1) PUHA continue CAFI programs… Asia, networking More info on website to educate local & NA market Website as tool for Japan – get feedback from end consumer… what do they want? Promote locally on food shows/media MSC – expensive to gain certification… is it worth it? Japan retailers are aware. MSC trying to bring costs down. Greater effort on local (Cdn) mkt (Prov $ support) Consistent supply… we’re not there now (participation, weather) MSC cert. – it’s a growing movement, get ahead of it (traceability could help. Specialized marketing at boat level) Alternate product uses (eg today’s soup). Vancouver chefs develop, roll out to USA; more to China Processing Greens in Canada? Nutriceutical/health benefits – “ocean viagra”

34. Sea Urchin Summit34 List of Initiatives Marketing, Value Adding (2) More trade shows to promote (not just Japan) Control entry of CDN product on mkt (timing) Processors round the world discuss “supply management” Min. quality for export (only top grade) Value add; eg uni roll at local restaurants (frozen) Packaging methods; shelf life – vacuum, MAP, canning Domestic distributors… consolidate uni w/ other products Diversification – provinces, countries, domesic, buy local, traveling road show (fishemen to restaurant) Product development (soups, quiches, etc). Use lower grades for variety of products. “uni on a stick” Rolls, cones for lower quality product Yr-round supply… we’re a small producer… don’t try to compete w/ big guys Sell BC sea urchin… not just Japan YVR as dist’n point

35. Sea Urchin Summit35 List of Initiatives Marketing, Value Adding (3) Market research – global trade, where is it going? China potential growth area. China Seafood Show Promotion – product, fishery. Canada, France, EU Health aspects, functional food Research on alternate product forms Control packaging (less pack/re-pack thru to end user) Interest in Japan in origin of product (north or south BC… what vessel? Awareness of IUU fisheries, implications for consumers Pictures of smiling crews as promo material

36. Sea Urchin Summit36 Government Policy Fishery Management/Science Given the spirit of co-management in the BC urchin fisheries, list short term cost relief strategies not compromising sustainability

37. Sea Urchin Summit37 List of Initiatives Fishery Management/Science (1) OGM monitoring at plant vs. dock level – water loss Mandating compulsory licence activation (PUHA reaches income) Or… Subsidy of non- activated licences Buyback of licences not being used (ATP inventory don’t generate revenue) Why OGMs on north and not in south? (70% of fishery in north) EM: EC vs WC parity Reduced DFO lic fees – values based on 90-93 incomes… re- evaluate Waive DFO lic fees if you pay the PUHA fee (incentive to participate) Sliding scale of science/mgt costs that reflect level of landings OGM – EC has EM run by DFO… WC no EM Budget OGM for high priority areas only (QCI, 3,4…) Can we get away with EM only, or do we need OGM 15% water loss reduction at dock… means recovery would go up… better for fishermen

38. Sea Urchin Summit38 List of Initiatives Fishery Management/Science (2) Validation at plant vs dockside EM Share salary cost of research staff amongst various fisheries Industry cannot afford programs it’s committed to Re-structure quota system to reflect participation? Incentives to participate, or benefit to those that stay in. Reds & greens – meeing w/ DFO to go over options (next couple of weeks, before season over)… what can be done? S.t. – adjustments to science and D&D payments… things to get through this yr & next yr Things have changed… make appropriate cost burden for level of fishery (we were about 7% of gross… now 25+ (Alaska legislate 7%) We need bridge financing from DFO to get through this year (political approach)

39. Sea Urchin Summit39 List of Initiatives Fishery Management/Science (3) We have to do something now… Big picture of science & mgt… need appropriate G&O… workshop? Outside of regular routine. Step back. Include DFO & industry. Science – density, biomass, population size info… is way we gain info appropriate? (in current economic environment) Better use of on-grounds knowledge (fishermen, real- time) Or… extrapolate info across coast.. FM toolkit – EM, more info from fewer areas Upshot – more meetings, don’t be frozen by inaction. Coalition of DFO and industry Consider – real time fishery info that is available vs pure science. Committ from gov’t to use fishermen knowledge

40. Sea Urchin Summit40 Government Policy Russian IUU Situation List specific strategies to influence positive change in the Russian urchin fishery and the Japanese market

41. Sea Urchin Summit41 List of Initiatives Russian IUU Situation (1) Intense pressure on Ottawa to apply pressure to Japan first, Russia second –Unified group, include California, Aka –Other fisheries, not just urchins Some degree of involvement of Japanese and Cdn environmental interests (activists) Two-front – reduce supply of IUU by working w/ AKA, CA, pressure govt; reduce demand by differentiating eco-friendly product from not IUU fishery not crashing… joint science program to look at resource… can it support this pressure? Ensure follow up of international forums (Gor’s presentation) Int’l summit like this Pursue anti-dumping Follow up on port validation req’ts “hollywood” production re: vision of sustainability; give them hope

42. Sea Urchin Summit42 List of Initiatives Russian IUU Situation (2) Gor’s… won’t get accomplished quickly… Russia not being quickly depleted –Work on Japanese landing port req’ts –Work w/ CA, Japanese harvesters to put pressure on own gov’ts Marketing strategy, fishing strategy to survive what’s currently happening. Make our supply consistent… don’t go head-head w/ Russians Pressure on Japan to follow port state protocol; provide solutions to Japan Maintain dialogue w/ Russia… don’t back them into corner CDN embassy in Japan… talk to Japanese fishermen… how are they affected? Disc w/ Russian fishermen… their views (working conditions, price) Get others onside, not just CDA Engage NGOs globally Roundtable in Ottawa – bring this forward

43. Sea Urchin Summit43 List of Initiatives Russian IUU Situation (3) Coordinated approach – w/in govt, externally (AKA) Work w/ Japan, not Russia Work w/ legitimate fishermen NGOs – focus on sustainability Keep today’s energy and momentum going!

44. Sea Urchin Summit44 Other Issues Sea otters – they’re here.

45. Sea Urchin Summit45 Next Steps Emergency meeting DFO & industry Ottawa – Roundtable – meet w/ MPs Request funding from Province for MSC pre-assessment Terry Glavin’s help – open avenues w/ Japanese environmentalists