Washington's Department of Natural Resources says Cooke Aquaculture has 60 days to fix problems with its net-pen operation off Bainbridge Island, or it risks losing its lease.

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Just a week after the state Department of Fish and Wildlife approved shipment of 1 million more farmed Atlantic salmon to Cooke Aquaculture’s fish farm near Bainbridge Island, another state agency says it has found a hole in the nets and corrosion in the structure of the facility.

The Department of Natural Resources on Monday notified Cooke that it is in default of the terms of its lease at its Rich Passage operation. It ordered the facility repaired within 60 days, or the department may cancel the company’s lease for the facility, which operates over public bed lands.

Cooke will proceed with the stocking the fish, company spokeswoman Nell Halse said in an emailed statement. “We are meeting all permit requirements.”

A portion of the same company’s Cypress Island fish farm collapsed on Aug. 19, releasing tens of thousands of farmed Atlantic salmon into the Salish Sea between Anacortes and the San Juan islands. The company had scheduled those net pens for total replacement because of corrosion and other problems, and had already made emergency repairs to the facility one month before they came apart. The company had intended to make repairs after taking its harvest of 305,000 adult fish.

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Instead, about 100,000 of the Atlantic salmon escaped and infiltrated waters all over Puget Sound and beyond in one of the worst fish-farm disasters in state history. The rest of the fish were captured by Cooke or by tribal and non-tribal fishers.

Cooke is required to maintain its property in good order and repair under the terms of the lease. “An inspection contracted by DNR returned information that some of the surface structures of the Rich Passage net pens fail to meet that standard,” DNR said in a statement about the decision to find the company in default. “Specifically, inspectors found a hole in netting and severe corrosion on several components of the facility’s above water inspection.”

Rich Passage is south of Bainbridge Island.

Hilary Franz, Commissioner of Public Lands, said, “Given the failure of the Cypress Island facility, we have to be extra vigilant in making sure Cooke’s other existing aquaculture facilities are structurally sound.

“We cannot tolerate any risk that more Atlantic salmon will be released in Washington’s waters.”

Franz said the inspection was part of a series of close looks she has launched at all of Cooke’s eight operations to ensure they are in compliance with the state’s lease terms since the Cypress Island fish escape. “DNR has made a commitment to the public to increase our oversight,” Franz said.  She added that she continues to have grave concerns as to whether Atlantic fish farming is in the best interest of the state given the challenges native species already face in Puget Sound.

A wide range of species, from endangered orca whales, to threatened Puget Sound chinook, are in the state’s care.

The defects were documented in an inspection of the Rich Passage facility by the engineering firm of Mott McDonald.

Halse, in response, said the company intends to satisfy DNR’s requests, but noted that an engineer with DNR had already inspected the facility and concluded that it is safe and suitable for restocking.

“The issues raised by this letter do not impact the structural integrity of the facility and were already being addressed when the engineer was on site last month,” the Cooke spokeswoman said.

Joe Smillie, spokesman for DNR, said Monday that while the agency did not find the farm structurally unsound, “the engineer’s report showed that there are issues, such as several instances of topside corrosion, which need to be addressed per the terms of their lease, regardless of the soundness of the structure.”

The Department of Fish and Wildlife a week ago authorized Cooke to transport 1 million salmon fry into the pens. “Current laws and administrative rules do not give state regulators the authority to deny Cooke’s permit to move healthy fish into an existing pen,” the agency stated.

The Cypress Island fish-farm escape is still under investigation by state agencies, and Gov. Jay Inslee had asked Cooke to withdraw its request to move the fish into the Bainbridge-area facility. But Cooke insisted, saying the fish had reached a state of maturity that demand a move from its freshwater hatchery facility in Rochester, Thurston County, to saltwater.

Cooke, in a letter from its lawyers, said it had done more than required in hosting inspections of its facility to show it was secure from risk of potential escape, and that it must tend to ongoing business operations.

The privately owned Cooke group of companies, with headquarters in New Brunswick, Canada, announced Friday it is paying $500 million to buy Omega Protein of Houston, a producer of fish-based refined specialty oils and animal feeds. Cooke also owns Seattle-based Icicle Seafoods, which catches and processes wild Alaskan salmon, other fish and crab.

The fish-farm escape has sparked calls by tribes, conservation groups and some state lawmakers to end open-water Atlantic salmon fish farming in Washington — the only U.S. state on the West Coast where such aquaculture is practiced. California and Alaska ban it and Oregon has no operating Atlantic salmon farms in its waters.

“The decision to allow the transfer of 1 million non-native salmon to the net pens off Bainbridge Island is an improper use of our ancestral waters,” Leonard Forsman, chairman of the Suquamish Tribe and president of the Affiliated Tribes of Northwest Indians, wrote in a statement last week.

“We have too many threats to the health of Puget Sound to allow this industry to continue. Now is the time for Washington to get out of the Atlantic salmon aquaculture business and focus on restoring our native fish populations.”

Forsman and others were disappointed that the state approved Cooke’s permit to grow up to 1 million more Atlantic salmon in Puget Sound. “It was easily within the state’s power to deny the permit,” Forsman said.

“A comprehensive review of the net pen failure near Cypress Island … has yet to be completed. At best, approving the transfer permit when there are no definitive answers about the Cypress Island pen failure is irresponsible.”

The Northwest Indian Fish Commission, made up of tribes across Western Washington with treaty fishing rights all over the Salish Sea, has also called for a shutdown of the industry.

“We believe the state’s permitting requirements, oversight and response planning for Atlantic salmon net pen farming are seriously inadequate,” stated Lorraine Loomis, chair of the Northwest Indian Fish Commission.

Forsman and other tribal leaders have called for a reconsideration of the permit for stocking the pens at Clam Bay. “Work with us to eliminate Atlantic net pens so that treaty resources are here in the future for our grandchildren and great-grandchildren,” Forsman stated.

Tim Ballew II, chairman of the Lummi Indian Business Council, has also called for an end to Atlantic salmon net-pen farming. Lummi Nation declared a state of emergency as the salmon infiltrated the tribe’s treaty protected fishing grounds, and some tribal fishermen worked to get the Atlantics out of the water.

“We understand the Lummi Nation’s concerns around potential impacts of farmed salmon on the native fish in the Lummi’s usual and accustomed fishing waters and are extremely grateful for their assistance in our recovery effort,” Halse, the Cooke spokeswoman, wrote in an email to The Seattle Times last week.

Cooke has paid $1.3 million to the tribe to compensate fishermen for those efforts, Halse wrote.

Ballew, of the Lummi Indian Business Council, noted that Cooke created the problem and needed to pay the cost to clean its spill.