EU increases pressure on Iceland's fishery

The negotiations between the EU and Norway on the one hand and Iceland and the Faroes on the other hand over the fishing of mackerel stocks in the North Atlantic are deadlocked. An agreement on the allocation of the fishing quotas is not in sight. This unacceptable situation is a risk to the sustainability of the mackerel fishery and presents to the world an example which could hardly be worse. Despite years of negotiations, civilised European states still haven’t managed to solve a fisheries conflict to the satisfaction of both parties.

It was to be expected that the effects of climate change would not be the same for everybody: there would be losers, and there would be winners. The warming of the North Atlantic is causing mackerel shoals to migrate much further north than they used to. This provides a welcome source of income for Iceland’s fishery which readily helped itself to a large piece of the lucrative cake – the total value of the mackerel fishery in the North East Atlantic being estimated at one billion euros. Iceland considered themselves entitled to take this step because they had been excluded from the management of the mackerel stock which is traditionally in the hands of the EU and Norway. Since 2008 Iceland (which previously hardly caught even 2,000 t of mackerel) has set its national fishing quotas unilaterally. And these quotas were not inconsiderable: last year, for example, 147,000 t. And if Iceland can do that, so can we, was the opinion on the Faroe Islands, which then took for itself a similar share of the stock. Last year the Faroese allotted themselves a quota of just below 149,000 t. That was five times higher than in 2009 when Faroese fishermen only caught 27,830 t mackerel. Their government claims that they are entitled to do this because the mackerel graze in the fishing zone of the islands every summer and during this time put on more than 50 per cent of their weight. These unilateral decisions seem to be setting an example: Greenland set itself a quota for the first time for 2012.

These unilateral decisions led to Iceland’s now being invited to take part in coastal state negotiations on the mackerel quota. But this has not brought any noticeable success, for so far nothing has been achieved. The two opposing parties have become firmly entrenched in their positions. The catch recommendations of ICES for 2012 were based on the long-term management plan. The unilateral quotas undermine this concept, however, and the stock is no longer being managed according to the principle of sustainability. If every fishing nation fishes its quota to the full, this would amount to 45% more fishes being removed from the stock than the sustainability principle allows. As long as the disputing parties cannot agree to a sustainable total allowable catch (TAC) within the framework of the management plan the anarchical conditions in the North Atlantic mackerel fishery will prevail. If the fishery is continued at its current level the mackerel stock is likely to be outside of safe biological limits by 2014 at the latest.

Each party soon decided who was to blame for this dilemma. Iceland was behaving like a pirate, is the opinion of Martin Howley, an Irish trawler owner. The Icelanders were putting a valuable resource at risk to find a short-term solution to their financial problems. “The EU and Norway are constantly making new offers to enable a breakthrough but Iceland and the Faroes refuse to budge even one centimetre from their standpoint”, commented Ian Gatt, the Chief Executive of the Scottish Pelagic Fishermen’s Association, annoyed by the course the negotiations were taking. Friðrik Arngrímsson, the Managing Director of the Federation of Icelandic Fishing Vessel Owners, countered that they would be only too happy to agree to maximum catch levels within the framework of the ICES recommendations but that the other party was preventing this. And the Association of Icelandic Fishermen is of the opinion that Iceland as a sovereign state is naturally entitled to set the mackerel quota in its own waters. They had after all wanted to negotiate with the EU and Norway but these had, in spite of numerous offers to talk, refused to listen to reason and had continued to exclude Iceland from the negotiation rounds. The situation is quite complicated: one party refuses to give up any of their fishing quotas, believing them to be their birthright. The other party considers its claims to be equally just and so simply creates a fait accompli. Even Scotland’s Fisheries Minister Richard Lochhead recognizes the fact that the mackerel schools today often penetrate Icelandic waters… which did not, however, mean that Iceland could just help itself to them opportunistically. Presumably it has been forgotten that the Scottish fishery also once benefited when the mackerel shoals remained further east a few years earlier. At its core, the dispute boils down to a simple question: Who do the mackerel belong to and who has the right to catch them?

The conflict over mackerel does not bode well for the future and it may be just the beginning of further global controversies if stocks redistribute.

MSC has temporarily suspended mackerel certificates

What is particularly absurd about this year-long dispute is the fact that all parties really know how this conflict could be solved in a reasonable manner. The total catch volume would simply have to be divided up between all participating countries, taking Iceland more strongly into account than previously. But: how much “more strongly than previously”? What would be a fair quota for Iceland?
Agreement will not be possible as long as one side is not prepared to forgo anything and the other side fears that they will get a raw deal. It seems to be of no interest to both sides that they are taking far too many fishes out of the stock and that their fishery is not sustainable. Iceland even accepts that its sustainability logo “Iceland Responsible Fisheries” will forfeit some of its credibility. The text describing the standard claims that sustainable, responsible fisheries management is a principal pillar of the Icelandic fishing industry. This doesn’t seem to apply to the mackerel fishery, however.

The Marine Stewardship Council did the only right thing and, on 30 March 2012, informed the nine MSC-certified mackerel fisheries in the North East Atlantic that their certificates were provisionally suspended. This means that mackerel from these fisheries that were caught after the deadline are, pending further notice, no longer permitted to bear the blue and white label for good management and sustainability. Nearly 1,400 mackerel products, whether fresh or smoked, canned or frozen, are likely to be affected by this decision. Numerous fishermen and fisheries companies that went through the time-consuming, expensive certification process and have now lost the logo through measures decided on by others are frustrated, and quite a lot of them see this step as unfair. But the MSC had no other choice here. It has to suspend the certificate if the capacity of the whole mackerel fishery is not taken sufficiently into account, in order not to forfeit customer confidence in the logo.

The significance of this conflict in the meantime goes far beyond the fisheries sector and it is having a negative effect on political relations between the countries involved. Let us recapitulate:
In the first nine months of the year 2008 when the global financial crisis was raging, the value of the Icelandic krona fell by 35% against the euro and the island’s banking system collapsed. Suddenly the financial security of EU membership seemed so attractive to a lot of Icelanders that they pushed their previous concerns aside. Quite a few of them believed that this would be the quickest way to stabilise their currency and to restore credibility to their country among loan creditors. In July 2009 the Icelandic government submitted to Brussels its application for EU membership. Minister President Johanna Sigurdardottir and her pro-European social democrats assumed at that time that the negotiations would not last longer than one and a half years and that Iceland would already be a member of the European Union by 2011. In the meantime, no one is talking about this anymore.

Officially, the accession procedure is still on schedule and the first of 33 negotiation chapters have been completed. However, the facts are that the process has come to a standstill since the chapters that have been dealt with without problems were really only a formality because Iceland already fulfils the conditions anyway through its EFTA membership. The “big chunks” are yet to come, and agreement is a long way off. One contentious issue is recovery claims that Great Britain and the Netherlands made to Iceland on account of non-fulfilment of bank accounts with the savings bank Icesave. Both EU countries stepped in within the context of national bank guarantees for liabilities of the Icelandic Landsbanki which had collapsed under the financial crisis. Thousands of British and Dutch Icesave customers would otherwise have lost their money. The Icelanders at that time stated in a referendum that tax money should not be used to pay for Icelandic banks’ unsuccessful business. Because the EU Commission is a participant in the action before the EFTA Court some Icelandic parliamentary parties are already demanding the termination of the negotiations with Brussels. Iceland would actually in the meantime be able to afford the repayment of those 5 or 6 billion euros. The economic crisis now seems to be largely overcome. Iceland’s economy grew by 2.7% in 2012 and 3% growth is expected for 2013. Unemployment figures are falling and the budget deficit was reduced from 14% in 2008 to about 1.5% in 2012. The restructuring process with rigorous austerity measures and tax increases was painful to many but the Icelanders have focused on their strengths and are managing their money competently.


Approval of EU accession fading in Iceland

The Icelandic fish industry must also be thanked for the fact that Iceland’s economy has got back on its feet so quickly. It provides 40% of Iceland’s export revenues, and eight per cent of the workforce are employed in this sector. The trade surplus for fish and fishery products is about one billion euros. If this is viewed in relation to the population, per capita earnings from the fishery are in Iceland about a hundred times higher than the average for EU citizens. Fishing thus has a disproportionately large significance for Icelanders compared to “normal” Europeans. And that is why the country is fighting so bitterly for its mackerel fishing quota in the North Atlantic, even accepting that the “mackerel war” might endanger EU accession. As regards domestic policy, political parties can currently score points with voters, for the country’s economic recovery has tilted opinions against EU membership again. About two thirds of the population would today decide against membership in a referendum. The Icelanders’ fear of losing sovereign fishing rights in Icelandic waters is profound, although this has not even been negotiated yet in Brussels.

The biggest problem that has to be tackled and with which the Icelanders have difficulty reconciling themselves – if at all – is Article 17(1) of the Council Regulation (EC) 2371/2002 on the Common Fisheries Policy of the EU: “Community fishing vessels shall have equal access to waters and resources in all Community waters.” The Icelandic government accepts that the goals of the Common Fisheries Policy are basically in agreement with their own national interests but does not consider them to be very suitable for the special conditions in the North Atlantic: the Common Agricultural Policy of the EU was after all not developed for the Arctic. That was why the EU Commission should safeguard the particular needs of regions where local populations were especially dependent on fisheries. As a key to solving the problem the principle of relative stability presents itself. This guarantees all EU fishing nations stable shares of the fishing quotas in the context of the Common Fisheries Policy. If this principle also applied to the new EU member Iceland after accession everything could be left as it is at the moment. The Icelanders’ dream is of a kind of “special fishing zone”: Iceland’s exclusive economic zone would then become a special management area in which the Icelandic authorities alone would be responsible for fisheries management and the setting of fishing quotas.

Icelandic- and Faroese- caught mackerel is no longer welcome in the EU.

Whether this will ever come about, remains to be seen particularly since the Icelanders show little willingness to compromise. The problem of Icelandic whaling is also still unresolved and the unilateral increase in the mackerel fishing quota was not very helpful either. In order to substantiate the national claim to the mackerel shoals Iceland’s Food and Veterinary Authority MAST even has DNA samples taken for analysis from mackerel samples from Canada, Iceland, the Faroe Islands and Norway. Perhaps – and that is what they hope – the mackerel off the west coast of Iceland belong to a different stock than the fishes from the controversial jointly managed European stock. Then Iceland would not be obliged to take other countries into account when setting fishing quotas. And because the disputes over Icesave accounts and mackerel are unpopular with a lot of people the government recently hired a British PR agency to analyse the conflicts professionally and offer appropriate advice.


EU approves sanctions against Iceland and the Faroes

The negotiations between the EU, Norway and Russia with Iceland and the Faroes about the mackerel quotas and their allocation are in deadlock. Last year the delegations from these countries met several times in London, Bergen and Reykjavik, without coming to any useful conclusion. Hardly anything was reported to the public about the specific content of the negotiations so that only speculations could be made about whether the parties had moved any closer together. It seems, however, that they are still a long way from a compromise. As each meeting ends with no helpful outcome every party claims for itself to have been the more reasonable delegation, the one who had been more willing to compromise. After the three-day meeting in London at the end of October 2012 Iceland’s Minister for Economic Affairs Steingrimur J. Sigfússon was noticeably disappointed by the rejection of his proposition to considerably reduce the fishing volumes of all coastal states. It seemed that the Icelandic initiative envisaged a 15% reduction of the national mackerel quotas which would have enabled the total fishing volume recommended by experts of annually about half a million tonnes of mackerel. However, no one was willing to swallow this bitter pill, in the end not even the Icelanders themselves. They had demanded a 16% share of the total fishing quota in the North Atlantic. Measured on this, the minister found the 7% which the Europeans allegedly wanted to give them absolutely unacceptable.

The European Union and Norway on the other hand put all the blame on Iceland and the Faroes for the failure of the negotiations so far. Particularly Scotland and Ireland, for whose fisheries mackerel is extremely important, insisted that the EU should at last turn words into action and take measures against the unilateral procedure of the two “troublemakers”. The EU was even obliged to do this, for the IUU directive demanded that all countries which did not recognisably practice sustainability in the management of fish stocks should be excluded from trade with the Community. After the EU had made only threats for many months it finally took action in September 2012. The European Parliament adopted a series of sanctions against Iceland and the Faroes which prohibit or at least substantially restrict the import of mackerel from both countries. Vessels from the two countries are no longer permitted to land their mackerel catches in EU ports, something which has applied to Norwegian ports for some time already. These restrictions can also be extended to other fish species which are caught as by-catch during the mackerel fishery.

The decision of the European Parliament authorises the Commission to implement the threatened measures soon. Then, at the latest, what is currently still a “cold mackerel war” with the opposing parties taking it in turns to utter accusations and warnings could probably develop into a real conflict with entrenched sides. A lot of people see the EU’s resolution on sanctions rather as an urgent warning to Iceland and the Faeroes to give up their rigid stance in the coming negotiations and show more willingness to compromise. What a fair deal in the dispute over mackerel could actually look like is, however, still not recognisable. Iceland’s government initially appears to be not very daunted by the resolution and has explained that they never intended landing mackerel outside of Iceland in another European port anyway. So it looks very much as if the curtain will soon be raised for the next act in this European tragedy. The conflict over the mackerel does not bode well for the future and it is perhaps even only the beginning of further global controversies about the reallocation of fish resources… should the territorial distribution of other stocks, too, shift as a result of climate change.