Eric Olson, Chairman
Chris Oliver, Executive Director
SUBJECT: Title
Crab ROFR Contract Terms - Initial Review
end
ESTIMATED TIME:
2 hours
ACTION REQUIRED: Recommended Action
Provide initial review of an addendum to RIR/IRFA of Modifications to Community Provisions
Body
BACKGROUND:
To protect community interests, the Bering Sea/Aleutian Islands Crab Rationalization Program required holders of most processor shares to enter into agreements granting community-designated entities a right of first refusal (ROFR) on certain transfers of those shares. In February 2013, the Council recommended a package of changes to the ROFR provisions in the FMP and in Federal regulations. These changes were intended to improve the ability of community entities to exercise ROFR and maintain crab processing activity in their community. Among these changes the Council considered revising the application of ROFR to apply only to the processor quota shares (PQS) (Alternative 2), or to PQS and assets based in the community (Alternative 3). At the time, the Council chose to maintain the status quo for these two alternatives, in which current ROFR provisions in the BSAI Crab FMP require a community entity exercising the ROFR to accept all terms and conditions of a proposed sale of PQS to a non-ROFR buyer.
In June 2013, the Council received public testimony from ROFR community representatives indicating that some PQS and ROFR holders were considering the use of private contractual agreements to address remaining community protection issues, including contractual provisions that would limit the assets to which the ROFR would apply. The community representatives asked the Council to clarify whether current ROFR provisions authorize private contractual agreements with provisions that differ from the required ROFR contract terms. In response to this testimony, the Council requested that staff prepare a discussion paper examining this question.
In December 2013, the ...
Click here for full text