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FISHING VESSEL SAFETY: Blueprint for a National Program 7 External Influences on Safety The committee considered three external influences on safety: fisheries management practices, insurance, and environmental conditions. Although neither fisheries management practices nor insurance directly causes vessel or personnel casualties, each contributes to an economic environment that has a potential impact on fishing vessel safety. FISHERIES MANAGEMENT INFLUENCES ON FISHING INDUSTRY SAFETY Fishing has been romanticized as the last frontier, a natural environment where fishermen see themselves as hunters who work independently and have life-styles outside of traditional occupational patterns. The implied freedom from outside interference and influences is a myth. While the work takes place in relative isolation, harvesting of most fisheries is highly regulated (Sutinen et al., 1989a,b; Chandler, 1988; Mollet, 1986; Nies, 1986; National Oceanic and Atmospheric Administration [NOAA], 1986; Pontecorvo, 1986; Frady, 1985; Grasselli and O'Hara, 1983; Maiolo and Orbach, 1982; Browning, 1980). Fishery regulations are enforced through vessel-boarding programs conducted by the National Marine Fisheries Service (NMFS) and the U.S. Coast Guard, and in cooperation with state authorities (Sutinen et al., 1989a,b; Chandler, 1988; NOAA, 1986; Nies, 1986; Nies and Carney, 1985; Sutinen and Hennessey, 1986; Grasselli and O'Hara, 1983). The eight regional fisheries management councils (FMCs, described in Chapter 2) have had difficulty accommodating effective conservation and conflicts over fishery allocations and
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FISHING VESSEL SAFETY: Blueprint for a National Program Coast Guard boarding officer checking mesh size. (PA2 Robin Ressler, U.S. Coast Guard) safety. The management system's inability to match harvesting capacity to biological productivity of fishery stocks has resulted in a highly competitive operating environment in which fishermen may take unnecessary risks to maintain their livelihood. This practice has resulted in overcapitalization in some fisheries and more marginal operators who find it economically difficult to adequately maintain and equip their vessels to improve safety in a hostile environment (Wiese, 1990; Chandler, 1988; Pontecorvo, 1986; Lassen and Van Olst, 1986; Couper, 1985). Furthermore, early closures, short seasons, and selective gear allocations have caused many operators to abandon the fisheries their vessels were designed for and enter fisheries far from home port, change to new fishing gear, or enter entirely new fisheries. Under these circumstances the vessel operator and crew may face new risks and potential safety problems. Under the regional council system established by the Magnuson Fisheries Conservation and Management Act (MFCMA), comprehensive fisheries management plans (FMPs) are prepared using the concept of optimum yield (OY) as the standard. OY is defined as maximum sustainable yield (MSY) modified by economic, social, and political factors. In virtually all cases in which OY was determined to achieve sustainable yield, the target MSY has been subsequently raised to accommodate fishermen's needs. This practice increases pressure on fish stocks and results in short-term overfishing and decline in abundance (see Gordon, 1989; Siegel and Gordon, 1989; Chandler, 1988; NOAA, 1986). There
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FISHING VESSEL SAFETY: Blueprint for a National Program have been few effort-limitation schemes to balance harvesting capacity to biological production in the United States, and they have been narrowly applied (see Mollet, 1986). The management councils are also charged by the MFCMA to consider safety in their FMPs. Section 303(a)(6) of the MFCMA as amended states [that the FMCs] “consider and may provide for temporary adjustments after consultation with the Coast Guard and persons utilizing the fishery regarding access to the fishery for vessels otherwise prevented from harvesting because of weather or other ocean conditions affecting the safety of vessels.” The FMCs clearly have the opportunity to address safety factors related to weather or ocean conditions within each management plan. Yet, in virtually every case, safety has been subordinated in favor of economic interests. Where conservation decisions and use determinations are combined, constituents exert pressure to serve more users (see Chandler, 1988; NOAA, 1986; Lassen and Van Olst, 1986). Competition intensifies as returns decrease, fishing time is reduced to achieve quotas, and more fishermen compete for fewer fish. With stiffer competition for dwindling resources, more fishermen take risks and accidents increase. Similar occurrences are associated with certain internationally managed fisheries, involving in-season, time, and area openings and closures. For example, short, inflexible openings associated with halibut and salmon in the West Coast and Alaska regions (i.e., “derby-” or “olympic”-style fishing) have at times effectively forced fishermen to work under extremely adverse environmental conditions or not at all. Vessels and lives have been lost as a result (see Parker, 1990; Alaska Fisherman's Journal 1987; Fishermen's News, 1988; Sitka Sentinel, 1987; Lassen and Van Olst, 1986). The data and anecdotal information are inconclusive about whether the number of incidents for olympic-style fishing is significantly higher than might have occurred during an extended season. The multitude of accidents in some fisheries has prompted reconsideration of safety. Some regional councils attempted to improve safety by revising management practices; for example, by adding fishing days to accommodate bad weather, such as in the Atlantic surf clam fishery. The rationale is that additional fishing days contribute to safety if vessels limit their exposure to adverse weather. However, there are no data to evaluate the effectiveness of this practice (see Lassen and Van Olst, 1986). Other management innovations to improve economic conditions have been or are being considered; for example, limited-entry programs that restrict the number of licenses and individual transferable quota (ITQ) systems that redefine targeted fisheries as quasi-private property and award percentage shares of annual fishery quotas to individuals or firms. Generally, economic measures have been approached on a fishery-by-fishery basis (see Mollet, 1986; Frady, 1985). Measures that do not restrict vessel conversions could create or aggravate redundant harvesting capacity in other overcapitalized fisheries, potentially shifting safety problems from one fishery to another. Furthermore, there are
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FISHING VESSEL SAFETY: Blueprint for a National Program no guarantees that vessel owners who experience improved economic returns as a result of fishery management innovations will invest in safety training or equipment or in improving the physical condition of their vessel, nor is there any federal requirement to do so. A full examination of these concepts and other fisheries management practices and related economic factors that contribute to accidents is beyond the scope of this study, but the three alternatives that follow (continuing the sequential numbering begun in Chapter 3) could provide improvement in safety opportunities. Alternative 26: Establish Flexible Season Openings This alternative builds on the existing movement in some regions to incorporate flexibility in season openings to provide alternative fishing days when marginal or adverse weather is forecast or occurs during openings. Implementation of this alternative could make managing those fisheries more complex, however, and might increase infrastructure requirements, particularly monitoring to support decision making. The alternative's benefits are that once the implementing authority and arrangements are in place, it could be activated quickly. It is not a widespread solution, as it applies to a specific issue in only a few fisheries that are seasonal in nature, such as Pacific salmon. Alternative 27: Establish a Voting Position for a Marine Safety Organization on Each Fishery Management Council Safety issues are represented in regional councils by a nonvoting Coast Guard representative, typically a staff officer below flag rank. Providing a voting member of high seniority from a marine safety organization on each of the eight regional councils could upgrade attention to safety as an important element of fishery management. This alternative envisions making a Coast Guard flag officer a voting member on each of the councils for the express purpose of addressing safety issues. Alternative 28: Expand Safety Emphasis in Fishery Management Plans Although the MFCMA was amended to provide for safety considerations because of weather or oceanic conditions, councils in general have not fully accommodated safety in recommending management regimes to the Secretary of Commerce. As more and more fisheries approach maturity, fishermen are constrained by conservation provisions of the management plans, and economic pressures on them mount. Faced with escalating costs and a near-stable or declining resource base, they are frequently forced to minimize maintenance, which has implications for safety. Councils tend to consider management on a
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FISHING VESSEL SAFETY: Blueprint for a National Program fishery-by-fishery basis and do not look at the broader aspects of total fishery management regimes. This alternative envisions that safety be upgraded to National Standards status within the MFCMA to require greater attention to safety issues. It further envisions that this could lead to managing fisheries in ways that would create economic opportunities that support safety improvement as a secondary objective. Achieving secondary objectives through programs whose principal objectives lie elsewhere is not uncommon in federal policy. The data provide an insufficient basis to support fishery management regimes for safety purposes alone, but as FMCs are charged to consider safety aspects, greater effort could be made to evaluate fisheries for such considerations. INSURANCE Fishing vessel safety and insurance have become inextricably linked. When fishermen are distressed that they cannot buy insurance at affordable prices, they are acknowledging that their collective safety records have reached intolerable levels, because the losses that comprise those records determine insurance costs. It must be noted that insurance does not reduce or eliminate losses; it reduces only the financial risk associated with them. An insurance buyer purchases protection from risk by paying a premium—in essence, his share of the redistribution of losses over all those who have sought similar protection. Thus, risks are mitigated, but losses are not. They remain an economic drain on society, and the premiums that reflect this aggregate drain rise or fall with the losses. Some form of insurance is needed by commercial fishing vessel owners to protect themselves against loss or damage to their vessels and potential financial liabilities that can result from injuries or damage to others, including their own crew members. Coverage may be obtained from commercial insurers or through membership in mutual associations, exchanges, or “clubs” formed for group self-protection (Nixon, 1986; Nixon et al., 1987). The aggregate premium paid for any one class of business (e.g., fishing vessels) should reflect the cumulative losses within that class. Assureds with records of low claim frequency and severity may be rated more favorably than those whose records reflect higher losses, but all must contribute toward the funding of major casualties, that is, those of such magnitude that they cannot be borne by a single assured. Insurance premiums take into account not only this redistribution of losses but also administrative overhead expenses, the profit element (whether from underwriting results or investment returns), and competition in the insurance market. It is against this backdrop that the problems associated with fishing vessel insurance emerge.
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FISHING VESSEL SAFETY: Blueprint for a National Program Availability and Affordability of Insurance During the past three decades, concerns about insurance availability and cost to fishing vessel owners led to government studies (Danforth and Theodore, 1957; Lyon and Theodore, 1976) and to the formation in 1978 of the National Council of Fishing Vessel Safety and Insurance (NCFVSI). The council was established by representatives of the fishing industry, marine insurers, and others from universities and the private sector. Its goals are to improve the safety of vessels and personnel and to reduce insurance costs to the fishing industry (Lassen, 1985). Beginning in 1984, joint concerns about commercial fishing vessel safety records and the cost and availability of liability insurance led to enactment of the Commercial Fishing Industry Vessel Safety Act of 1988 (CFIVSA, P.L. 100-424) and this study. From the fishing industry's standpoint, the primary concern has centered around availability of insurance at affordable prices (Nixon, 1985, 1986; Pacific Fisheries Consultants, 1987). The fishing industry as a whole has presented underwriters with marginal to unsatisfactory losses. However, many people in the fishing industry believe that insurance companies have not paid adequate attention to differences in quality among fisheries, fleets, and owners in establishing equitable rates. Moreover, fishermen believe that the insurance industry has not provided stable, dependable rates and availability of insurance, particularly during the 1980s (Nixon et al., 1987; Nixon, 1986; Sullivan, 1984a,d; Clendinen, 1984). From the underwriter's perspective, early 1980s market forces disrupted competition in the insurance industry and exacerbated already deteriorating market conditions. Marginal underwriting results occurred before 1980, yet competition kept fishing industry insurance rates depressed. Serious underwriting losses followed. The American Institute of Marine Underwriters (AIMU), whose 120 insurance company members underwrite about 90 percent of marine insurance in the United States, estimated that fishing vessel insurance represented only about 5 percent of its members ' marine premiums. AIMU observed that many companies writing fishing vessel business were not among its members. Nevertheless, as the only national marine insurers' organization in the country, it undertook a survey of members writing fishing vessel insurance. It found that between 1980 and 1984, underwriting losses and expenses amounted to 156 percent of premiums received (against an overall marine insurance loss ratio of 107 percent). Moreover, the fishing vessel loss ratio was never less than 138 percent in any one year, evenly spread among regions (AIMU, 1985). This imbalance was intolerable to some insurers, and a number withdrew from the market. Those who remained concluded that rate correction could not be postponed. The result was a smaller, more select, higher-priced insurance market (Pacific Fisheries Consultants, 1987; AIMU, 1985; Glickman, 1984; Sullivan, 1984a,d; Mohl, 1984).
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FISHING VESSEL SAFETY: Blueprint for a National Program Over the years, in the face of similar cycles, some fishing vessel owners banded together to establish mutual associations for self-protection. Several such mutuals were formed, usually with support from commercial reinsurers to protect against large, catastrophic losses that would financially strain the group. Most important to their long-term success is the ability to find and maintain members whose vessels and operations present similar risks and who have similar attitudes on safety and loss prevention. Like-minded members possess a peer review capability that can generate strong incentives for enhanced risk-management activity, including adopting and using common operating and maintenance standards and inspection requirements (Melteff, 1988; Nixon et al., 1987; Nixon, 1986). Good safety performance results for hull and machinery insurance are reported for several self-insurance pools. These pools' strict technical and outfitting requirements (Hamilton, 1989) sometimes exceed Coast Guard requirements (National Transportation Safety Board [NTSB], 1987; Pacific Fisheries Consultants, 1987; Nixon et al., 1987). Equipment aboard vessels in such pools has contributed to survival in major accidents like fires and sinkings (Yoder, 1990). Despite the best prevention efforts, however, accidents will occur. Resultant injuries and fatalities involve medical costs, which have increased steadily over time. For many years, medical costs to commercial fishermen and other mariners aboard U.S.-documented vessels were subsidized by the federal government. The U.S. Public Health Service (USPHS) conducted physical examinations, issued fit-for-duty certificates (often required by fishing vessel owners prior to taking an individual aboard as a crew member), and treated injuries at no direct cost to the fishing industry (Wiese, 1988). The elimination of USPHS medical facilities and services beginning in 1981 removed the opportunity in some ports for physical screening after hospitalization or treatment and aggravated the impact of medical costs borne by the private sector (commercial insurers, self-insurance pools, and individual vessel owners). Moreover, liability exposures, particularly for pain and suffering, continue to threaten both commercial underwriters and self-insurance pools because of the potential size and unpredictability of jury awards. A significant portion of liability claims are associated with federal court cases where litigants can take advantage of both the doctrine of unseaworthiness, which utilizes strict liability standards, and the Jones Act—even for short-term temporary disabilities (Nixon, 1986, 1985; Nixon and Fairfield, 1986; AIMU, 1985). Loss-Prevention Leadership In regional assessments, some fishing industry representatives expressed disappointment that underwriters have not assumed a national leadership role in establishing standards for “safe” vessels. Underwriters of fishing vessels
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FISHING VESSEL SAFETY: Blueprint for a National Program believe that government agencies and the fishing industry itself are better poised to assume such leadership. Their reasoning is that if they were to assume the initial costs in setting and enforcing standards, they would have to pass them along to their customers. A practical concern is that this would be difficult in the recurrent competitive atmosphere of international insurance markets. Marine property and casualty business today generates less than 3 percent of premiums written by U.S. property insurance companies (Best's, 1988). This segment of the business is having difficulty maintaining its identity as a distinct class of business in some companies (AIMU, 1988). Moreover, the market is fragmented. As noted earlier, members of the only national marine insurers' organization underwrite only a small fraction of the country's fishing vessel business. In a competitive climate, what one underwriter may require as a standard, another may not. Companies who are now insuring the fishing industry tend to favor leaving decisions to local underwriters, who know their customers and the risks and improvement opportunities applicable to their locale. In summary, the underwriting community does not consider itself in a position to exert cohesive, national leadership in the field of fishing vessel safety. Unresolved Problems Affecting Underwriting Underlying problems associated with fishing vessel insurance can be grouped into three areas: the safety record, the data bases, and the tort system. Regarding the safety record, underwriters acknowledge the high risks inherent in fishing, but have expressed the following specific concerns (AIMU, 1985): the so-called “moral hazard,” a concern that the vessel will be sunk, stolen, or burned in order to claim the insured value (such losses have occurred and other attempts have been alleged; Lazarus, 1990a; Providence Journal, 1990; Letz, 1986; see Salit, 1989; Clendinen, 1984; Sullivan 1984c,d); risks of fishing in adverse weather and seas; vessel stability; utilization of vessels in fisheries other than originally intended; inadequate maintenance of vessels and equipment; lack of design, construction, or safety feature standards; lack of inspection requirements other than those imposed by the underwriters, who do not see themselves as enforcers of standards or inspection requirements; and lack of licensing requirements or other evidence of professional competency. The lack of uniform statistics and reliable data bases is another major problem in analyzing claims. However, the NCFVSI, in conjunction with the Marine Index Bureau and volunteering underwriters, has begun a comprehensive data base of vessel casualty and personal injury statistics, known as the Commercial
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FISHING VESSEL SAFETY: Blueprint for a National Program Fishing Claims Registry (CFCR) (see Appendix D). It is in a formative stage and of very limited utility for this study. However, the CFIVSA mandates a system to compile marine casualty statistics from underwriters' data, so a nationwide uniform data base appears to be on its way toward implementation. Whether similar meaningful data will be obtained from uninsured and self-insured interests or from underwriters internationally is uncertain, but any data base will be seriously deficient without that input. Further, the data base output capability needs to be carefully structured to be most useful. Recognizing that individual input sources may need to remain confidential, output that will permit regional, local, and even fishery-specific analyses could be most beneficial to underwriters. It is not within the scope of this assessment to make recommendations concerning the U.S. tort system or legal remedies for maritime injuries. Indeed, Congress has considered this subject on many occasions, most recently in hearings on the CFIVSA. What cannot be ignored is that the current legal framework for compensating seamen's injury claims has had a serious impact on the capability of insurers to establish rates and provide liability coverage for the fishing industry. As previously mentioned, the size and unpredictability of awards are among concerns expressed by underwriters. No change is likely to occur in the legal system in the foreseeable future. Thus, fishermen who must insure against potential liability should be motivated by that realization alone to do whatever they can to reduce the likelihood of accidents. Improving Communications Reductions in insurance costs can only follow reductions in vessel losses and crew claims. Recognizing these economic considerations should be a major motivation for vessel safety. There is evidence in the industry—particularly in self-insurance pools—that this correlation has occurred and that fishermen are capable of taking corrective measures, at least as far as vessel hull and machinery claims are concerned. Spreading this word throughout the fishing industry is logical and beneficial (alternative 14). The NCFVSI has already established this goal, but expanding the effort through education and training programs (alternative 19) has merit as well. One new alternative directly related to insurance remains to be discussed. Alternative 29: Mandate Compulsory Insurance During this study, the idea of compulsory insurance was suggested as a way to motivate attention to the material condition of vessels and equipment. The logic is that to obtain insurance, owners would have to upgrade the condition of their vessels to acceptable standards. There are insufficient data to evaluate this alternative; however, there are several major implementation issues. As
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FISHING VESSEL SAFETY: Blueprint for a National Program discussed in this chapter, the insurance industry does not regard itself as having, or being in a position to assume, a central role in improving safety in the fishing industry. Additionally, as a practical matter, the structure and condition of the insurance industry are such that implementing this alternative could be very difficult. MARINE WEATHER SERVICES A storm at sea is an awesome occurrence, and adverse weather has been an element in many fishing vessel casualties (see Waage, 1990; Zimmerman, 1989; Fishermen's News, 1988; Alaska Fisherman's Journal, 1988b; NTSB, 1987; Sitka Sentinel, 1987; Ball, 1978). Yet, weather was not implicated as a major cause of fishing vessel accidents in the Coast Guard main casualty (CASMAIN) and search and rescue (SAR) data. The majority of SAR incidents, over 66 percent, occurred when winds were under 20 knots and seas not greater than 3 feet; 88 percent occurred when winds were less than 20 knots and seas not greater than 10 feet. SAR data list environmental conditions as the principal cause of under 4 percent of the cases. CASMAIN attributes less than 4 percent of all commercial fishing casualties to weather and sea conditions. One reason the data do not implicate weather more strongly is that they focus on primary rather than ancillary causes. Weather as an element in accidents is poorly tracked, but anecdotal information suggests that while it may not have been the proximate cause, it was clearly an important contributing factor in many casualties. Information on how weather forecasting influences decision making by fishermen is scarce. However, a recent National Research Council (NRC) study found that fishermen generally view forecast services as adequate (NRC, 1989a). Fishermen supplement this information by exchanging weather observations with other vessels, and they rely heavily on their own instincts and interpretations, which vary with experience and local knowledge. For example, vessel captains operating in the Aleutian Islands, Alaska, or transiting Puget Sound, Washington, need to know about currents and wind speed and direction, which can create effects like severe surface turbulence. On the Atlantic and Pacific coasts, operators must be cognizant of weather conditions that make bar crossings extremely treacherous. Reliable weather information is thus particularly important when a storm system is approaching and conditions are changing rapidly. The value of local weather information is vividly demonstrated by services provided in the Kodiak Island and Dutch Harbor, Alaska, areas initiated voluntarily in the mid-1970s by a Kodiak fisherman 's wife, Mrs. Peggy Dyson, in cooperation with the National Weather Service (NWS). Fishermen credit her locally revised forecasts with providing them information in time to seek
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FISHING VESSEL SAFETY: Blueprint for a National Program shelter to prevent major damage or loss of their vessels during rapidly changing weather conditions. Mrs. Dyson has provided a vital service to Coast Guard rescue forces by interpreting weather data to approximate locations and on-scene conditions in potentially life-threatening situations (Rostad, 1989a). Local weather broadcasts are available in varying degrees in other locations as well, including fishing ports in New England, the mid-Atlantic, the Gulf Coast, and northern California and Oregon (Westcoast Fisherman, 1989b). Opportunities to improve marine weather services for the fishing industry were identified in a 1989 NRC report (NRC, 1989a). The committee 's collective experience is that environmental conditions are an important contributing factor in fishing vessel casualties and that up-to-date weather information could be used by fishermen to improve their margins of safety. An alternative for improving safety is providing local weather services specifically designed to support the fishing industry. Alternative 30: Expand Fishing-Industry-Specific Weather Services The thrust of this alternative is to extend fishery advisory services containing weather information to cover fishing grounds and ports where such services might prove useful. Infrastructure needs include access to the NWS and pertinent weather data, a marine radio station, and funding. Services of this type could be provided by volunteers, the fishing industry, the government, or a combination thereof. SUMMARY Fisheries management practices and environmental conditions contribute to fishing vessel casualties, but the nature and scope of each as a causative factor are unclear. Local fishing-industry-specific weather services have been effective in improving the safety of fishing vessel operations. The availability and cost of insurance on fishing vessels are directly related to high losses. The fragmented insurance market for this class of business in a competitive economic climate has had difficulty establishing and maintaining a realistic rate base, partly because of lack of claims statistics and the uncertainty of liability awards. Increased interindustry communications, a better data base, and measures to reduce fishing industry losses are the most meaningful safety improvement options to employ. The alternatives (continued from preceding chapters) offered are: establish flexible season openings, establish a voting position for a marine safety organization on each fishery management council, expand safety emphasis in fishery management plans, mandate compulsory insurance, and expand fishing-industry-specific weather services.
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