Faroese Communities, Businesses Feel Pinch from Port Closure for Russian Fishing Vessels

Russian vessels berthed at Tórshavn's Fort Wharf, April 21st, 2023. Image credits: Bui Tyril.

Tiny Faroe Islands have at last caved in to shoot themselves in the proverbial foot by joining the band wagon of economic sanctions against Russia following the giant country’s invasion of Ukraine in 2022.

After months of back and forth over the socioeconomic danger of embarking on an exercise in potential self-hurt, the Faroese Government a month ago announced a measure of significant port closures to reduce the activities of Russian fishing vessels in the island nation.

“The Government of the Faroe Islands has imposed further restrictive measures against Russia by considerably limiting port access for Russian fishing vessels,” the Prime Minister’s Office stated, calling the Russian Federation’s so-called special military operation an “illegal attack on Ukraine” with some largely symbolic responsive measures initiated in June 2022. 

“These measures have been amended with executive order number 89 of 6 July 2023, entering into force on 12 July 2023,” the Government stated on July 7th. 

Under this executive order, harsh restrictions imposed on Russian fishing vessels, controversially, make their operations in Faroese ports impossible for all intents and purposes. 

“Since 5 July 2022, [merchant] vessels registered under the Russian flag have not been provided access to Faroese ports,” the Government statement added. “During this period, fishing vessels have been exempted from Faroese restrictive measures. With the new measures only Russian fishing vessels exclusively conducting fisheries under the bilateral agreement between the Faroe Islands and Russia will be allowed to enter Faroese ports. These Russian fishing vessels may continue to conduct crew change, bunkering, provisioning, landing and transshipment.”

A main argument cited in the Faroes for abstaining from implementing sanctions on fishing vessels, is the fact that the United Nations Secretary General has unambiguously advised against sanctioning food to avoid causing food scarcity anywhere in the world.  As it turns out, however, that argument has now been overruled essentially without explanation.

Shortly after the public announcement of these new anti-Russian measures, Russian vessels vanished out of sight, perhaps unexpectedly for those who somewhat naively may have imagined that the vessels would continue to call at the ports despite the virtual blanket ban—after all, these are generally vessels with mixed holds and it would be all but impossible for them to separate their fish caught in Faroese waters from fish caught in international waters nearby. 

Their sudden disappearance has caused a stir in places where Russian vessels were most commonly seen, most notably Runavík, Fuglafjørður, and Klaksvík, and to an extent Tórshavn as well.

“It looks eerie to me seeing the Port of Runavík completely void of ships,” said Magnus Rasmussen, a member of the Løgting. “Not a single vessel in sight along the extensive quayside of Runavík, this demonstrates very tangibly how the consequences of the current policies affect us in the Skálafjørður region. This is a hammer blow to this area, inasmuch as port related business has generated substantial amounts to, amongst others, service providers and the municipal council’s treasury.”

Jógvan á Lakjuni, director of the Port of Klaksvík, confirmed the dim impression conveyed by others. “This is not looking good,” he noted. “Quite a few providers are losing business.”

Fuglafjørður, the main place to go for bunkering plus other essential services, is loosing substantial amounts as well. As for Tórshavn, with a more diversified port business, the revenue loss will be relatively less severe. And yet the problem could potentially spiral to affect the two factory trawlers registered there. 

Already, the likes of Faroe Agency, a port agency squarely focused on serving Russian vessels, can be expected to go out of business in short order—an otherwise reputable, profitable business with ten employees now redundant and three workboats idle.

Combined, the port business and provision of related services to Russian vessels alongside the Barents Sea fishing business is estimated to generate an annual 1.2 billion DKK (161 million EUR) for the Faroe Islands—a large chunk of the economy of a merely 54,000-strong population. Of that turnover, the port business and related services represents an estimate one-third with fishing representing the remaining two-thirds.

Short memory

According to industry representatives, the new executive order to close Faroese ports to Russian fishing vessels carries the risk of becoming highly self-defeating. A microstate dependent on seafood exports, the Faroes has a large portion of its distant-water cod and haddock fisheries taking place in Russian waters in the Barents Sea under a bilateral fishery treaty that has been in force uninterupted for about 47 years. 

That treaty could now be in jeopardy, as since its inception the provision of services to Russian vessels in the Faroes has been integral to it. 

The Faroese government, meanwhile, has argued that it has not decided to withdraw from the fisheries agreement with Russia, suggesting that the treaty is still on track for routine negotiations for the regular one-year extension in due course, that is later in the autumn. Indeed, all the political parties forming the current government coalition, unanimously, prior to the recent general election publicly made a point of intending to maintain the fisheries cooperation with Russia. 

Yet today there is palpable uneasiness over the treaty’s future, perhaps for good reason. Three top-notch new trawlers at 350 to 420 million DKK (47 to 56 mln. EUR) a piece have been built for Faroese fishing companies within the last year or so, with the newest still to be delivered. Without access to Russian waters, these vessels, along with a couple of older ones, would essentially lose their commercial basis with the risk of putting a total of about 200 crew on the Barents Sea trawler fleet out of work.

“Our prospects would look bleak without access to Russian waters in the Barents Sea,” said Kaj Johannessen, CEO of Havborg, owner-operator of newly delivered trawler Emerald. 

Explaining the linkage between the Faroe Islands’ Barents Sea fishing industry and the now elusive port services and related offerings for the Russians, Karl-Erik Reynheim, CEO of Faroe Agency, in a widely publicized article of October 2022 warned: “All trade relations are about give and take. Although for the time being some people seem to have a hard time understanding this, the business activities of Russian vessels in Faroese waters and ports and the fishing operations of Faroese factory trawlers in the Barents Sea are inseparately  connected. Our services and provisions to the Russian vessels are essential for their fisheries in our waters and associated shipments of fish products. If we were to close this, it would no longer be viable for Russian vessels to fish and make transshipments in our waters; their incentive for retaining a pelagic fish quota in the Faroes would of course disappear as well, which at the same time would mean that the Faroese catch quota for whitefish in the Russian sector of the Barents Sea would be lost, too.”

Meanwhile, in a sign that the government coalition may not be on politically firm ground on this issue, Sigrid J. Dalsgaard, a prominent member of the Republican Party, on August 8th publicly asked for clarification as for when the anti-Russian measures can be expected to be lifted.

As sloganeering slowly gives way to economic reality, the Faroese are set to find themselves confronted with a rather bitter realization: that big talk is cheap and so-called allies and friends, once they’re needed for help and support, will perhaps not be as readily available as imagined. When push comes to shove, as recent history suggests, they may have no qualms sanctioning the Faroese to hell should they not behave as told, whether on disputed fishing rights, the killing of whales or anything else running afoul with certain crowds. As late as only a decade ago, the Russians literally saved the Faroese economically by providing much-needed market access amid severe boycotts imposed on the islands by the EU including even the Danes, and the Brits as well as the Norwegians, all of whom closed off their ports to Faroese fishing vessels over a catch quota dispute. Sadly, the Faroese appear to have a rather short memory.