Gulf Coast Small Businesses Worried About Their Futures

In a four-part series, Black Enterprise.com is looking at how the BP oil spill is affecting small businesses, the environment, tourism, and the future of offshore drilling in the region. In today’s installment: small business.

The water means everything to the black fishermen who make their living harvesting shrimp and oysters along the Louisiana Gulf Coast. It not only supports their families, but also provides a primary staple of their diet. This was going to be the year, many believed, that would enable them to fully recover from Hurricane Katrina, which severely dwindled their numbers. But in the aftermath of the BP’s April Deepwater Horizon spill, their present as well as their future is as murky as the oil’s greasy residue.

“The oysters and shrimp had come back 100% good with the catch and the price, so I was looking at a very, very good season,” said Roland Phillips, 60, whose family has been fishing for four generations. At the start of the season, he was earning about $12,000 per week and poised to do even better. Since the spill, he and his two sons have each received two $5,000 payments from BP and an offer to participate in the cleanup, which he prays will come to fruition.

– Related reading: How to File a Claim Against BP for Oil Spill Damages

“Fishing is something I hope to do till I die, but in our situation if there’s a chance where BP says it will see to it that we can make a living and some money, I’d be stupid to not take it,” said Phillips.

Byron Encalade, 56, president of the Louisiana Oysters Association, thinks it could be five years before a decent crop of oysters can be harvested and that a heavy investment in limestone will be required to achieve the proper level of salinity.

Interaction with BP has been an exercise in frustration, said Encalade, who was particularly angry that the corporation hired out-of-town contractors and workers to cleanup the spill rather than seeking out the fishermen who have a far more intimate understanding of the area. Rep. Maxine Waters (D-California) and Rep. Sheila Jackson Lee (D-Texas) had to intervene on their behalf so that they could be compensated and participate in the cleanup.

“I think our misery would

be compounded 30 times. Without them, I don’t know what situation we’d be in,” Encalade said. “They saw people starting to suffer, as with The Road Home, and put pressure on BP.” In addition, thanks to the aid of his parish president, 25 boats and 50 people in the community recently became part of the Vessels of Opportunity program.

Still, Encalade remains skeptical, and rightly so. BP has decided it will no longer fully pay 40,000 people who’ve filed payment claims because their claims files were allegedly incomplete, improperly filled out or missing corroborating state records deemed acceptable to BP. Nichols also outlined other problems, such as the fact that at the end of June, the number of claims reported was double the number of payments made, and called for greater transparency.

In a letter to claims administrator Kenneth Feinberg, Louisiana Department of Family Services Secretary Kristy Nichols wrote that the move, which she believes will be “devastating” to claimants “is irresponsible and in complete contrast to BP’s repeated promise that they will ‘make things right.’”

“I’m not buying into whatever we hear. There’s been so much deception and anger, it’s pathetic,” he said. “BP says they’re going to make us whole again; we’re here and waiting to see. But we’re not the type of people to rely on other people to feed us.”

Seedco, a nonprofit community development organization that has deployed just under $30 million in loans and grant funding in the area over five years, is operating a fisheries assistance program in Plaquemines Parish that provides business and technical assistance to fishermen and directly affected businesses such as restaurants. Approximately 54% of its lending in the area has gone to minority owned fisheries.

Lesia Bates Moss, president of Seedco Financial, said that in addition to helping people complete compensation claims forms and get access to other resources, her firm has instituted a program that allows fisherman to defer for up to six months the principal and interest on their loans. “We’re also helping them identify other sources of income so they can continue to feed their families and pay their obligations,” Moss said.

Karl Turner, founder of A La Carte Specialty Foods, is luckier than most. Last year, his firm, which specializes in the manufacture and marketing of heat and serve seafood products, earned $2 million in sales last year. Still, the spill has had a harmful impact on his brand. There has been a

precipitous drop in sales of a product called Sauté Your Way, which he cobranded with the famous chef Paul Prudhomme, who developed gourmet sauces to accompany the gulf shrimp. It is sold in 300 grocery stores across Louisiana and in 200 Kroger’s in Indiana.

Research had shown that consumers viewed Gulf shrimp as a highly valuable and sought-after product, Turner said. “Now those words don’t necessarily mean that anymore and there’s consumer resistance to that brand,” he added. There has been a 75% drop in sales of the product, which represents about 30% of total sales of his lines.

Turner said that he hopes to continue selling the product but will have to wait to see if it will be possible. BP has awarded a $5 million grant to the state and the Louisiana Seafood Promotion and Marketing Board, which he served as executive director for 12 years, to conduct marketing and consumer confidence building.

“We’ll have to see how that unfolds in the market,” said Turner, who plans to file suit against BP because his brand has been damaged.

In tomorrow’s installment, Experts Still Determining Extent of Spill’s Damage to Ecosystem and Human Health