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    • Fishing Terms Glossary

Blue Harvest inks deal to acquire 35 Rafael groundfish vessels for $25m

November 26, 2019 — One of the most anticipated forced sell-offs in the history of US commercial fishing – the unloading of Carlos Rafael’s fleet in New Bedford, Massachusetts — looks to be on the verge of completion.

Blue Harvest Fisheries, a US scallop and groundfish supplier backed by New York City-based private equity Bregal Partners, has signed a purchase agreement to buy at least 35 vessels and skiffs and all of their associated permits from Carlos Rafael for nearly $25 million, documents obtained by Undercurrent News confirm.

The deal includes millions of pounds of quota for at least eight types of fish in the Northeast multispecies fishery, including cod, haddock, American plaice, witch flounder, yellowtail flounder, redfish, white hake, and pollock.

Read the full story at Undercurrent News

JOHN SACKTON: The Winding Glass: Can we stop IUU fishing by thinking outside the box?

November 21, 2019 — SEAFOOD NEWS — Campaigns against IUU fishing by both the industry and environmentalists continually run up against a problem:  government enforcement.

Enforcement is not as much of an issue for rich countries with well-developed fisheries management systems, and strong enforcement histories.

In these cases, when IUU fishing happens, it can be successfully exposed, prosecuted and ended.

For example, in 2012, three Scottish fish factories and 27 skippers pleaded guilty and were fined more than £1 million for illegally harvesting mackerel in excess of EU quotas.

Carlos Rafael, the largest owner of scallop vessels in New Bedford, went to jail in 2017 over falsifying sales records to hide illegal landings.

Similar enforcement has happened in Australia, New Zealand, Norway, Japan, France and elsewhere.

But too often governments are not able to effectively enforce against IUU, either because of lack of will, lack of resources, or simply poor ability to manage fisheries.

Our story today about the Vaquita porpoise in Mexico is a case in point.  Although Mexico is part of an international agreement to close fishing in the Northern Gulf of California, vessels were detected fishing in the closed zone this month.

The response of the UN CITES commission is to monitor the situation and take another look in 2020, a year from now.

There is another way we might approach IUU fishing, using supply chains to bypass governments that are ineffective or too weak to prevent the mixing of legal and illegal catch.

That is a blockchain system.  Last week at the International Coldwater Prawn Forum in St. John’s, Dan McQuade, Marketing Director for Raw Seafoods, a scallop company operating out of Fall River, MA, presented the blockchain system his company developed in partnership with IBM.

It was one of the clearest examples of a blockchain that I had seen.

Block I represents each scallop bag processed onboard a boat.  It is tagged with a printed label giving information on time and date, where caught, boat name, and other parameters as needed, even hold temperature.

Block 2 represents the receiving of this at the scallop packing plant.  Scallops are graded, repacked for distribution either at foodservice or retail.   Block 2 incorporates the link to Block 1, but details processing date, grade, size, license no., etc.

Block 3 represents the distributor, in this illustration, Santa Monica Seafoods.  This tag includes the date received, location, size, and date shipped to their customer.

Block 4 represents the restaurant, which includes date received, size, sell-by date if any, and various consumer marketing materials.

By scanning a QR code, the restaurant customer (or any participant in the supply chain) can bring up all the connected information at each step in the process.  The blockchain is in effect a guarantee that the original raw, untreated scallop, was never mixed with treated or adulterated scallops during its passage through the supply chain.

The technology of the blockchain involves public and private key cryptography, which makes it impossible to alter any of the blocks in the chain, once they are registered.

Raw Seafoods is promoting this as a marketing strategy with IBM to increase customer trust and satisfaction with their all-natural scallops.

But imagine a similar system applied to an area with significant IUU fishing, such as the upper Gulf of California.

In this case, fishing co-ops would be the originators of the first block, detailing product, date caught, and location.  Processors and receivers would be the second block, detailing date received, product, pack, ship date.  Importers to the US would be the 3rd block, again showing date received, customs data if needed, size, count, pack etc.  The buyer, whether a retail or foodservice user of shrimp would be the 4th block, registering the product into their system.

The cost of this would include computers, printers, bar code readers, the cloud computing services, and programming necessary to make it work.  But once in place, it is scalable at a remarkably low cost.  The transaction cost for the entire supply chain could likely be reduced to one or two cents per lb.

Obviously, the system relies on each party putting accurate information into their block.  However, because the record is permanent and instantly traceable, it lends itself to low-cost audits as needed.  For example, if the fishing co-op itself were suspected of laundering illegal catch, data controls like GPS location and date could be added, to make this more difficult.

When IUU fish or shrimp is comingled with legal product, it becomes infinitely harder to track.

The benefit to fighting IUU fishing is that the blockchain tag could become a buying or importing requirement into the US.  This would not eliminate IUU fishing going to underground or other markets, but it would allow non-government entities to provide the resources to control their own supply chain requirements.

Implementation of a system like this in an area with high IUU fishing would not depend on government enforcement action but instead would use the blockchain technology to validate the product from its point of harvest right through to its point of consumption.

This would allow buyers to actually avoid purchasing fish or shrimp that had co-mingled IUU product.

Enforcement to require only legal product, like with toothfish, for example, can be quite successful at reducing and eliminating IUU fishing.  With toothfish, it took years of concerted action by both the legal toothfish industry, governments in the fishing nations, a UN port state agreement and backlisting of IUU vessels, and US laws regulating imports of toothfish.  There simply is not the money or will in the international community to replicate this wherever IUU fishing is taking place.

Investment in a blockchain designed to reduce or eliminate IUU fishing from a regional hot spot could be a far less costly technological solution that does not depend on the enforcement budget of the governments involved.

However, it would depend on the commitment of the legal fishing parties at all levels of the supply chain.  Unless the harvesters at the first level buy into the system, it will not work.  But here, the provision of incentives would be far less costly than a broken enforcement system.

As these chains begin to be implemented for marketing purposes, it may be worthwhile to explore what a real IUU focused blockchain would look like as an alternative to the painstaking diplomatic process of governments convincing each other that they have to spend the resources and act.

This story was originally published on SeafoodNews.com, a subscription site. It is reprinted with permission.

Sacred Cod, Sustainable Scallops

October 31, 2019 — “I am a pirate,” Carlos Rafael once told a group of federal regulators at a Fisheries Management Council meeting. “It’s your job to catch me.” And they did.

Rafael, aka the Codfather, was one of the most successful fishermen on the East Coast. He owned more that 50 boats, both scallopers and ground-fishing vessels, in New Bedford, the #1 value fishing port in the U.S. All the boats were emblazoned with his trademark “CR.”

Scallops sit in the sand underwater in the Nanatucket Lightship area. This photo was taken duringIn 2016, after an undercover sting, he was arrested on charges of conspiracy and submitting falsified records to the federal government to evade federal fishing quotas. In addition to his boats, the Codfather owned processors and distributors on the docks. When he caught fish subject to strict catch limits, like cod, he would report it as haddock, or some other plentiful species. He got away with it, at least for a while, because he laundered the illegal fish through his own wholesalers, and others at the now defunct Fulton Street Fish Market in New York City.

“We call them something else, it’s simple,” Mr. Rafael told undercover cops who feigned interest in buying his business. “We’ve been doing it for over 30 years.” He described a deal he had going with a New York fish buyer, saying at one point, “You’ll never find a better laundromat.” Caught on tape, the jig was up. In 2018, Rafael, 65, was convicted on 28 counts, including conspiracy, false labeling of fish, bulk cash smuggling, tax evasion and falsifying federal records. CR? Caught red-handed!

Read the full story at Medium

Carlos Rafael scallop boats to stay in New Bedford

September 26, 2019 — Eleven scallop boats from the fleet of convicted fisheries violator Carlos Rafael will keep working out of New Bedford under local ownership, a victory for industry advocates.

Charlie and Michael Quinn, the father and son co-owners of Quinn Fisheries, appeared at the docks Tuesday afternoon with New Bedford Mayor Jon Mitchell to announce they had closed on a deal to buy six of the boats.

The Quinns paid about $40 million, said Michael Quinn. Mitchell, who with other Massachusetts political and industry leaders pushed to keep the boats in New Bedford, said the other five vessels and their permits are also now going to new owners based in the city.

Rafael is serving a 46-month federal prison sentence for tax evasion, falsifying fisheries landing reports and related offenses. The so-called “Codfather” controlled a large share of the groundfish and scallop fleets, until he was brought down by undercover federal agents.

Read the full story at National Fisherman

Forced sell-off of Rafael assets begins

September 24, 2019 — A father-and-son team from Massachusetts and other buyers are acquiring scallop fishing boats owned by a disgraced fishing magnate nicknamed the Codfather, signaling the beginning of the former mogul’s forced exit from fisheries.

The sale of Carlos Rafael’s 11 scallop boats, and their associated permits, is part of a civil settlement Rafael agreed to with the federal government that will result in his permanent removal from the U.S. fishing industry.

Rafael, once the owner of one of the largest commercial fishing operations in the U.S., was sentenced to nearly four years in prison for dodging quotas and smuggling profits overseas.

Scallopers Charles Quinn and son Michael Quinn are buying seven of Rafael’s scallop boats and selling one of them, their attorney, Andrew Minkiewicz, told The Associated Press. Court documents state the Quinns paid about $46 million for the boats.

Rafael’s attorney, John Markey, of New Bedford, confirmed the other boats have also sold, but declined to disclose the other buyers or purchase prices.

Read the full story at The Associated Press

Quinn Fisheries finalizes deal for six Rafael scallop vessels

September 24, 2019 — The following is an excerpt from a story originally published by Undercurrent News:

Quinn Fisheries, a 33-year-old, New Bedford, Massachusetts-based scallop operation, has closed its deal to purchase six of Carlos Rafael’s 11 scallop vessels and their related permits, sources told Undercurrent News.

The acquisition, which was confirmed by Michael Quinn, the operations manager and co-owner of the company with his father and founder Charlie Quinn, doubles the size of the Quinn Fisheries scallop fleet to 12 total vessels and will cost the company about $40 million.

The new vessels acquired include the Acores, Athena, Apollo, Gypsy Girl, Hera II and the Villa Nova Do II, Michael Quinn said.

Undercurrent News had earlier reported how the Quinns had a deal to buy seven of Rafael’s vessels for nearly $46 million, per an Aug. 29 purchase agreement. The deal later was confirmed by court documents related to a lawsuit filed against Rafael by the Buyers and Sellers Exchange (BASE), the New Bedford, Massachusetts-based seafood auction.

BASE’s owners Richie and Raymond Canastra attempted to block the agreement as part of an apparent attempt to acquire the same vessels, which also possess several groundfish permits. They argued unsuccessfully that Rafael violated the rules of groundfish sector 7 related to offering other sector members the right of first refusal.

However, Merita Hopkins, an associate judge in Bristol County, Massachusetts, blocked the temporary restraining order requested by BASE, freeing up the Quinns and Rafael to complete their agreement.

Read the full story at Undercurrent News

State judge’s order thwarts auction owners’ apparent last stab at buying Rafael vessels

September 19, 2019 — Raymond and Richie Canastra, the long-time owners of the Buyers and Sellers Exchange (BASE), the New Bedford, Massachusetts-based seafood auction, have made another apparent attempt to purchase some of Carlos Rafael’s commercial fishing vessels and again have been thwarted, Undercurrent News has learned.

This time the two brothers’ effort, which involved stepping in front of another buyer, has been done in by a state judge’s order.

Merita Hopkins, an associate judge in the Bristol County, Massachusetts, Superior Court, on Friday vacated her approval, given two days earlier, of a request by BASE for a temporary restraining order and preliminary injunction that would have stopped Rafael from selling seven of his 11 scallop vessels to Charlie and Michael Quinn, the father-and-son owners of Quinn Fisheries, a 33-year-old, New Bedford-based scallop operation with six vessels already harvesting, for nearly $46 million.

The move by the Canastras, whose auction handles roughly half of all the Atlantic scallops caught in New England as well as a considerable amount of groundfish, seems to have been a prelude to them making an offer themselves for the boats, which also come with some groundfishing quota.

Read the full story at Undercurrent News

Rafael sitting on $46m deal for 7 scallop vessels?

September 11, 2019 — New England’s commercial fishing industry has yet to see any kind of a public announcement regarding who will step up to buy Carlos Rafael’s 30 groundfish and scallop vessels or their 43 related permits, but documents —  copies of which were obtained recently by Undercurrent News — reveal he had a deal lined up almost two weeks ago for nearly a quarter of his fleet.

Whether the deal remains in place, however, remains unknown.

A seven-page purchase agreement, dated Aug. 29 and signed by Stephanie Rafael DeMello, daughter of the imprisoned former New Bedford, Massachusetts-based seafood mogul, show him selling seven of his total 11 scallop vessels, including the Apollo and Athena, and all of their related scallop and groundfish permits to an undisclosed buyer for $45,950,000.

Read the full story at Undercurrent News

Fishermen question settlement of convicted Carlos Rafael

August 23, 2019 — The penalties keep coming for New Bedford fishing mogul Carlos Rafael, the self-styled “Codfather” who once dominated groundfishing in the Northeast with one of the largest independently owned fleets in the country.

He is halfway through a 46-month federal prison sentence for violations that included falsely labeling fish, smuggling cash, tax evasion and falsifying federal records. He also was fined more than $300,000 and ordered to sell off two vessels and permits in that criminal case.

This week, Rafael was hit with more than $3 million in fines and a lifetime ban as part of a settlement agreement in a civil case brought against him by the National Oceanic and Atmospheric Administration.

Read the full story at the Cape Cod Times

MAYOR MITCHELL DISCUSSES NOAA LEGAL SETTLEMENT WITH CARLOS RAFAEL

August 22, 2019 — Mayor Jon Mitchell is expanding on his comments on the settlement reached this week between the National Oceanic and Atmospheric Administration (NOAA) and the imprisoned “Codfather” Carlos Rafael.

As part of the settlement, Rafael will have to give up all commercial fishing by December 31, 2019, and all scalloping by March 31, 2020. In addition, Rafael is ordered to a $3,010,633 civil monetary penalty and relinquish the seafood dealer permit issued to Carlos Seafood by September 1.

According to NOAA, Rafael I is required to sell his fishing vessels and permits and will be allowed to keep the proceeds. Free to sell his licenses to whomever he pleases, Rafael has indicated that he intends to keep all of them in New Bedford.

Read the full story at WBSM

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