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Monday, June 05, 2006

Government Powers Bring May Showers?

Surprise, surprise, John Risley, the biggest shareholder of Newfoundland and Labrador based Fishery Products International (FPI), says he doesn’t believe the province’s moves to limit control of the company by individuals from outside the province is a good one. Well, who would have thought he’d feel that way? Jeeze, I had no idea.

Last week the Newfoundland and Labrador legislature unanimously voted to amend the FPI Act in order to ensure that the majority of the company’s directors are residents of the province. The move was made after months of tension between government and the company that has seen plants close, towns destroyed and criminal charges laid against FPI for allegedly exporting unprocessed fish without the required permits.

As things currently stand FPI’s major shareholder, John Risley is often recognized as the man in charge and many feel he is not running the business in the best interest of provincial or company stakeholders. Why is this so? Probably because the value of FPI shares have plummeted since he arrived on the scene. Probably as well because Mr. Risley is not only the major shareholder of FPI, he also sits on the board that oversees the company’s operations and is the principal shareholder of Nova Scotia based Clearwater Fine Foods, a direct competitor of FPI. Mr. Risley has held this position since spearheading a shareholder revolt and essentially seizing control of the company in 2001. Since then things have gotten progressively worse at the company, in the local fishing industry and for shareholders.

The Province has not tried to hide their plans to modify the FPI act over the past few weeks, nor has it hidden its discomfort with Mr. Risley control of FPI. Yet for some strange reason Risley seems almost taken aback by the changes to the ACT. It’s almost as if he didn’t see them coming. Maybe he was too busy sneaking truck loads of fish across the gulf every evening to see the news reports, who knows. Whatever the reason, after the legislature unanimously voted to modify the Act, he had the audacity to say that he “believes he is one of the targets of the legislative changes.” Gee John, do you really thinks so? Sorry to disappoint you pal but wrong again. You were not “one of the targets”, you were “THE TARGET”, plain and simple.

I agree with John on one thing, the changes to the Act won’t make all of the problems in the fishing industry go away, but I’m sure Mr. Risley knows as well as I do that at the very least it will help limit his actions and that can’t be a bad thing for anyone, except Mr. Risley himself.

When FPI was setup as a corporation it was given a mandate to benefit the Newfoundland and Labrador fishing industry, not to act as a chop shop for Mr. Risley and his cronies so they could rape and pillage the company in pursuit of their own agenda. As a direct competitor, having Mr. Risley in control FPI is like putting Bill Gates in charge of Apple Computers (Whoops, bad analogy), but you get the point. With FPI under his control Mr. Risley has the power to ensure that his stake in Clearwater Fine Foods grows and prospers. He has access to rich quotas of species off the coast of Newfoundland and Labrador that I suspect he would love to quietly ship elsewhere for processing and he has the ability to essentially cripple one of his biggest competitors. Not bad for a days work.

For John Risley to complain about the value of amendments to the FPI act, amendments that are intended to keep him in line is laughable at best and gut wrenching at worst. In reality the only way to truly ensure that John Risley does no further harm to FPI or the province is to get rid of him completely and that can’t happen unless enough shareholders align against him (or he slips on the soap in the shower). That unfortunately is very difficult to arrange, the shareholder thing I mean, not the shower. Especially since Mr. Risley and his friends control so much stock, difficult yes, but not impossible. Come to think of it, neither is the slip in the tub, so let’s all keep our chins up and our fingers crossed. Maybe there IS hope! How’s your personal hygiene these days John, feeling a little sweaty good buddy?

10 comments:

Patriot said...

Thanks NL.

Robert said...

Few issues:

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says he doesn’t believe the province’s moves to limit control of the company by individuals from outside the province is a good one. Well, who would have thought he’d feel that way? Jeeze, I had no idea.
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Why couldn't a non-Newfoundlander run a company as well or better then a Newfoundlander? Do you think a Newfoundland operator would be unwilling to close fishplants? Leaders of a company must be concern with the bottom line...simple as that. FPI is a corporation not a co-op, yet no one seems to realize the difference!

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and criminal charges laid against FPI for allegedly exporting unprocessed fish without the required permits.
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Do you have a news link to this?

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Probably because the value of FPI shares have plummeted since he arrived on the scene.
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Cause and effect or could there be other factors involved and you are over simplifying to prove a point?

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When FPI was setup as a corporation it was given a mandate to benefit the Newfoundland and Labrador fishing industry,
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As a corporation they have a duty PRIMARLY to their shareholders. They have an obligation to function as a profitable company.

Patriot said...

Robert Said:

Why couldn't a non-Newfoundlander run a company as well or better then a Newfoundlander? Do you think a Newfoundland operator would be unwilling to close fishplants? Leaders of a company must be concern with the bottom line...simple as that. FPI is a corporation not a co-op, yet no one seems to realize the difference!

You are correct that corporate leaders have an obligation to meet the bottom line. That said, I believe a leader from this province is more likely to look for creative ways to do it and still limit the impact to local workers where possible. There is no reason Mr. Risley could care less about people here.

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Do you have a news link to this? (criminal charges laid)

Not off hand but news reports are certainly not hard to find. In fact if you have kept up on the news from NL over the past month you couldn't have missed it.

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Cause and effect or could there be other factors involved and you are over simplifying to prove a point?

Not at all. The quotas in place today are the same as they were when Risley took over. Yes, the economics have changed but if you track FPI stock since the take over you will find that even when the situation was sound the stock fell as a direct result of Risley and his cronies.

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As a corporation they have a duty PRIMARLY to their shareholders. They have an obligation to function as a profitable company.

It is clear you are not familiar with the mandate of FPI or why it was setup in the first place. It is also clear you are unfamiliar with the FPI act. Why do you think an FPI act even exists? It doesn't for other corporations. Those buying shares in FPI are (or at least should be) aware that it is not like most other corporations in that it has an objective beyond simple profit margins.

Robert said...

I think you put too much faith in business leaders, unless business 101 is different at Memorial don't expect anything different from a NLer at the helm.

I'm playing with words here but an infringment of the fish processers act isn't punishable under the criminal code as such they do not face criminal charges, illegal yes but not criminal. Prove me wrong, but that's how I understood the charges.

I think you are trying too hard to boil down the issue. The fishing industry on the eastern seaboard is facing huge problems this is unrelated to Risely's actions. The issue seems more black and white when you find a bad guy but it simply isn't the case. Show me failure on his watch and I'll buy your story hook line and sinker.

I know nothing about the FPI act, I do know how a corporation is supposed to work. If this "FPI act" prevents the corporation from working like any other, perhaps it is time to axe the act.

Don't handicap the horse and expect to win the race.

NL-ExPatriate said...

Stop Destroying/Dragging the habitat

Get a grip on the seal populations and how the first come first serve quotas work

No more Fish(GIVE)aways.

Custodial management continental shelf in accordance with art 76 UNCLOS we have until 2013?

Fishery science
Replace dragging
stop high grading
stop by catching throwing back DEAAAD unwanted species
Stop taking the life blood capelin ROE and throwing back the DEAD MALE CARCASSES

Promote recovery
manmade reefs. Used tires or limestone rock.

For NL's part once the above have been taken care of no make work EI plants full time work. If we have to regionalize so be it.

Ghost towns make attractions too but only after we stop giving away our adjacent resource and implement a REAL recovery plan.

Anonymous said...

Promote recovery
manmade reefs. Used tires or limestone rock.

Great suggestion (grin). Which species would use a reef environment in the cold water shelf ecosystem? How would a reef (should one even form) assist in the recovery of the commercial species of newfoundland? and one slight chemical problem, review the calcium compensation depth. What happens to limestone after it exceeds a certian pressure?

You suggestion is like building a mountain in an effort to save the prarie grasslands!

Anonymous said...

Um. Nearly all species would use a reef environment on the Grand Banks.

Reefs aren't just found in tropical regions, they are found almost anywhere where sunlight can penetrate to the ocean floor. They've been making them for years off the coast of BC (which is about the same latitude as Newfoundland)

And as for the calcium compensation depth (which I think is actually called the carbonate compensation depth)... In the temperate Atlantic occean the CCD is about 5 000 metres. Considering the Grand Banks range from about 25 to 100 metres in depth... yunno.

NL-ExPatriate said...

The only reason I mentioned Limestone reefs is because from all of the investigating I've done so far on this Limestone reefs would sem to be the best route to follow in part for the neutrality it would afford to the acid rain and higher level in our oceans. This is one of the arguements DFO gies for the declining stocks and collapse of the continental shelf.

Personally I think it has more to do with the destruction of the bottom and killing of bycatch species for no reason other than to catch the marketable ones.

Basically the feds need accept responsibility for their mismanagement and abuse of the Continental Shelf.

Here are some of the sites I've referenced.

http://www.ecoreefs.com/artreefs.php
http://www.doc.state.nc.us/news/scrapbk/bonnietires/page4.htm
http://globalcoral.org/Tires%20artificial%20reef.htm
http://www.njscuba.com/reef_program/cape_may.html
http://www.ces.clemson.edu/arts/didyou.html
http://www.reefmaker.net/index.cfm
http://www.reefmaker.net/products.cfm
http://www.epa.gov/region02/water/oceans/artfishreefs.htm
https://www.denix.osd.mil/denix/Public/ES-Programs/Conservation/Legacy/Coral-Reef/Plan/implementation2.html
http://www.fishdept.sabah.gov.my/artreef.asp
http://www.dnr.state.md.us/naturalresource/reefs.asp
http://www.oar-reefs.org/about/Default.htm
http://maritime.haifa.ac.il/cms/newslett/cms26/cms26_10.htm
http://www.ces.clemson.edu/arts/didyou.html
http://www.epa.gov/region02/water/oceans/artfishreefs.htm
http://www.reefbeach.com/
http://www.nebraskarubber.com/enviro.htm
http://www.globalcoral.org/How%20to%20Build%20a%20Beach.htm
http://www.gsmfc.org/pubs/SFRP/Guidelines_for_Marine_Artificial_Reef_Materials_January_1997.pdf
http://www.gsmfc.org/pubs/SFRP/Guidelines_for_Marine_Artificial_Reef_Materials_January_2004.pdf
http://www.gsmfc.org/pubs/SFRP/Coastal_Artificial_Reef_Planning_Guide_1998.pdf
http://www.gsmfc.org/pubs/SFRP/Tires_Position.pdf
http://www.gsmfc.org/

Anonymous said...

The reef concept is a nice little pet project. Perhaps is NL wasn't one of the last developed nations using draggers there would need to be habitat reconstruction?

NL-ExPatriate said...

Geez i don't know why I respond to Annoy-nomouses.

http://www.hoa.gov.nl.ca/hoa/chapters/2004/0443.chp.htm
http://www.iucn.org/themes/marine/pdf/MattGianni-CBDCOP7-Impact-HS-BottomFisheries-Complete.pdf
http://www.fish4ever.org/
http://www.savethehighseas.org/
http://www.greenpeace.org/raw/content/international/press/reports/protecting-the-deep-stopping.pdf
http://ecologyaction.ca/gearshift/background.htm
http://www.greenpeace.org/download/windowsmedia/international/photosvideos/videos/seamount-destruction-unsubst/13-June-05-waiori.wmv
http://www.ecoshock.org/podcasts/010506GNOcean.mp3
http://www.imr.no/coral/fishery_impact.php
http://www.oceana.org/index.php?id=110
http://www.oceanlegacy.org/pdfs/NET_BROCHURE.pdf
http://www.fao.org/DOCREP/003/T4890E/T4890E00.HTM