Provincial lawmakers passed changes to the act governing Newfoundland’s largest seafood company with the intent of limiting  the influence of the two major shareholders on the board. Also at the end of May, the provincial fisheries department charged Fishery Products International (FPI) with two unspecified counts of violating the terms and conditions of its fish processing license.

In June FPI announced it was changing the name of its U.S. Division, based in Danvers, MA, from Ocean Cuisine back to FPI after changing the division’s name two years ago to position it for sale.

Since before the mid-May breakdown of labor negotiations between FPI and the Fish, Food and Allied Workers union (WWF June 06), the premier of  Newfoundland, Danny Williams, has engaged in a war of words with  board member and controlling shareholder, John Risley, who is one of  three board members currently running the company. When the FPI Act was amended to increase the number of board members  to 13, thereby diluting Risley’s influence, Risley told the Canadian  Broadcasting Company (CBC) that “frankly, having more members on the board I don’t think is going to change anything, other than cost the  company more money.”

“If Mr. Risley and/or others are going to be in your face and not  treating the workers of the province in a fair manner, then they can  expect a fastball at the side of the head from this government,” Williams retorted, referring to the breakdown in union negotiations  and FPI’s wish to reduce its labor force.

Changes to the FPI Act also require a majority of board members to  live in Newfoundland, and that a majority of the directors must be  independent of associations with significant shareholders. “Significant” is defined as someone holding eight percent of shares. Right now, only two directors fall in this category, John Risley with  nearly 15 percent, and George Armoyan, with around 10 percent.

Changes to the act also say a majority of any committee appointed by  the board must reflect the same composition, meaning that Risley and  Armoyan are legislated into minority status on the board and committees. The revised legislation puts FPI more firmly under government  control, and clearly expands provincial ability to restrict sale and  restructuring plans. Observers have long believed that re-naming  FPI’s U.S. division to Ocean Cuisine two years ago represented a plan  to sell it off.

Restructuring attempts, including the recent announcement of cutbacks in  labor at three plants, are unacceptable to Williams and the cause of breakdowns in union negotiations. “People are coming in here and using valuable resources that are the  people’s resources,” Williams said. “The people of the province have  a right to a fair return, and that’s all we’re asking.” Although the fisheries agency declined to detail the two charges against the company since an investigation is continuing, observers  believe they are related to shipping yellowtail to China for  processing.  Williams has repeatedly and publicly accused FPI of  illegally exporting fish cutting to Chinese plants.

Following the most recent flare-up over FPI’s status and practices, Danny Williams, the Newfoundland-Labrador premier, said the province is entertaining the possible sale of some FPI plants to The Penney Group, a Newfoundland service and construction consortium, with more than 60 companies in four Canadian provinces.