Fisheries Minister Darin King is saying no to OCI's proposal to ship unprocessed fish out of the province.

"The provincial government sees no other option but to reject the groundfish proposals submitted by Ocean Choice International," King said Thursday.

"This decision is based on consideration for what is in the best interest of the people of this province."

OCI president and CEO Martin Sullivan said it's unfortunate the two sides couldn't reach a deal. He said the company will now ponder its options.

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Martin Sullivan (left) and Blaine Sullivan of Ocean Choice International react to the provincial government's decision Thursday. (Zach Goudie/CBC)

"Now that we have government’s decisions on our proposals at hand, Ocean Choice International will determine the next steps for its business," said Sullivan.

"Last fall OCI made its position on the future of the fishing sector very clear. If we are to meet consumer demands and explore new markets, we need to embrace change, a change in product offering and a change in how we do business. It's the right thing to do for a sustainable fishery in our province. The message is the same today."

Sullivan said OCI's proposals were reasonable ones.

In December, OCI sought permission to export 75 per cent of its yellowtail flounder catch, without any processing done on land.

In return, the company pleged to process the remainder of its yellowtail quota — a total of seven million pounds — in Fortune, doubling the workforce there to 110 and making the operation year-round.

OCI also asked for a continued exemption on redfish.

The government previously rejected OCI's request for permanent exemptions, but said it would consider temporary ones.

That answer came Thursday, when King said no.

"We recognize that this is a difficult situation for OCI," King said. "Their predecessors, Fishery Products International, faced similar challenges and had comparable financial results. The economic circumstances for yellowtail and redfish remain challenging, particularly with the appreciation of the Canadian dollar and high fuel costs."

Open to new proposals

He indicated the government would be willing to entertain new proposals from OCI.

According to King, the province wanted the company to process 10 million pounds of fish in Fortune, instead of seven million.

He also said OCI wanted to end landing obligations associated with the company's licence, when an agreement with the province expires in five years.

That, King said, could lead to quotas leaving the province altogether, with fish being landed elsewhere.

Union reaction

Immediately after the decision was announced, Greg Pretty of the Fish, Food and Allied Workers union called it a "remarkable victory for the workers, the working men and women, and the communities of Newfoundland and Labrador."

But after further analysis, the union gave a thumbs down to the government's counter offer to OCI.

The FFAW's Dave Decker said he was "shocked" that the province would consider any kind of exemptions for the company, considering the fact it is currently using replacement workers on the Newfoundland Lynx.

That ship left port early Thursday morning, after a standoff that lasted several days. The blockade ended following police action to shepherd replacement workers across picket lines in Bay Roberts.

Later in the day Thursday, unionized workers shifted their picketing efforts to OCI headquarters in Paradise.