Looking for Consensus

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pp30-31

A multifaceted struggle over fishing rights and resource rent in a fisheries based nation: linking Brexit and Greenland’s 1985 exit from the EEC to the Faroe Islands’ shrinking fish industry workforce in the face of legislative reform — and the declining relative importance of trade with the EU.

[Jógvan Mørkøre]

pp30-31

Brexit is not the first exit. With Britain voting in favor to withdraw from the European Union a year ago, a four-decade intertwined economic and political association is about to come to an end.

In the aftermath, Scottish first minister Nicola Sturgeon stated that, as a consequence of the United Kingdom’s June 2016 referendum on its EU membership, the option of a second independence referendum remains on the table for Scotland. A similar reaction came from Republicans in Northern Ireland.

One of the ideas discussed in Scotland was the “reverse Greenland” option. In the debate the ideas discussed included possible models based on the fact that several states have some parts in the EU and some outside—as in the case of EU member state Denmark and its non-EU territory Greenland; and you could add the Faroe Islands as well.

With the reality of Brexit, the case of Greenland’s opt-out from the European Economic Community (EEC) several decades ago thus became topical again. Actually the Greenlandic opt-out was the first exit from EEC/EU long before it became popular to frame similar possible exits by Greece and UK, Grexit and Brexit.

There is perhaps some precedent for the proposed federal system. The Kingdom of Denmark is made up of three countries: Denmark, Greenland, and the Faroe Islands. Denmark joined the European Economic Community, the predecessor to the EU, in 1973. By 1979, Greenland gained autonomy from Denmark and seceded from the EU in 1985. The Faroe Islands have also chosen to remain outside the EU.

However, the idea of pursuing a “reverse Greenland”  may not represent a realistic option. Scotland has 100 times the population of Greenland or the Faroe Islands and, in the reverse scenario, it would be England, 10 times bigger again, playing “Greenland” to Scotland’s “Denmark”; whereas in other states having differing internal relations with the EU, it is minority regions, not the main state, which is outside.

Nevertheless, there is a lesson to be learnt from Greenland’s and Faroe’s early history with the EEC.

In the early 1970s, the situation for Greenland was quite different compared to that facing Scotland today. Greenland had not yet received Home Rule and was therefore acting as an integral part of the Kingdom of Denmark. Before joining the EEC, the issue of membership was put to referendum in Denmark and in Greenland in 1972, but not in Faroe, which already had its home rule, thereby allowing the archipelago within the kingdom to abstain from participating in the referendum.

The results of the two participating parts of the kingdom were different in each country. Denmark was in favor of membership, whereas Greenland voted against it. However, Greenland, along with Denmark, joined the EEC in 1973.

The Faroe Islands, with its Home Rule status, chose to remain outside the EEC. One of the primary reasons concerned the European Community’s fisheries policies. At the same time, events at the ongoing UN Conference on the Law of the Sea made it clear that there would be worldwide extensions of the exclusive economic zones at sea—EU membership and an extended fisheries zone under Faroese jurisdiction were mutually exclusive options. A strong internal demand for Faroese self-determination on issues concerning access to fisheries settled the question.

As a consequence the Faroe Islands in 1977 gained an extended 200-mile fisheries zone, while the rest of the kingdom became constrained within what became common EEC waters. Based on these new realities the Faroese decided, by national consensus in the parliament, the Løgting, to base their industrial development on utilization of fishery resources primarily in the new home waters. A national fisheries management system was created.

These developments prompted Greenlanders to raise questions about the legal situation of their country. Calls for greater self-government grew and, in 1979, a Home Rule arrangement similar to the Faroese was implemented in Greenland. A new referendum on EEC membership was called in Greenland and took place in 1982. As 52 per cent of Greenlanders voted in favor of withdrawal from the EEC, Greenland left the EEC in 1985.

From a political perspective, it could be said that the Løgting took a nationalist position in order to assure Faroese jurisdiction over fish resources in Faroese waters. Another option—a unionist one—placed emphasis on the value of relations with Denmark and fishing rights in foreign waters. When the decisions was made, however, fishing rights in home waters were considered more important as a consensus was established in the Løgting based on the nationalist option.

In hindsight it was not only a nationalist option at a time when European integration within the EEC and later EU was praised as the only way forward to meet the international challenges of globalization—it was also a populist project to secure Faroese fish for Faroese fishermen and keep foreign fishing vessels from countries such as the UK and Germany out of the new territory.

So Greenland’s exit from the EEC/EU was actually the first, long before the coining of concepts like Grexit and Brexit.

Reluctant Rim

Other countries along the North Atlantic Rim, such as Iceland and Norway, also took a nationalistic stance as they turned their back on the EEC; Norway at referenda in 1972 and 1994 and Iceland by withdrawing its membership application in 2013.

In all four cases—Faroe, Greenland, Iceland, Norway—it was concern for the fishing industry that prompted these countries to pursue nationalistic strategies to secure fishermen and vessel owners exclusive rights within the expanded fisheries zones. In Norway it was the regions outside the area around the capital Oslo that secured a majority vote against EEC/EU membership, especially regions in the west and the north, where domestic fisheries were crucial for future economic development. In the Norwegian case there was likewise concern for an expanding oil industry perceived to be in jeopardy should the country join the EEC/EU.

In Greenland, Iceland and the Faroe Islands, the fishing industry was the main industry, whereas in Norway it had a similar status in some regions in the West and in the North.

Exclusive Economic Zones in the Northeast Atlantic [map]. pp32-33

Looking at a map showing the EEZs of the North Atlantic gives a clear picture demonstrating that the northwestern part of Maritime Europe resents the idea of being part of an integrated Europe that is subdued to a hated Common Fisheries Policy and centralized power in Brussels and Continental Europe. Instead these countries, all having experienced some kind of colonial past, have pursued nationalistic strategies with emphasis on staying in control of the resources off their coasts while empowered to deny foreign fishermen on foreign fishing vessels access to the countries’ respective domestic waters.

Old great powers in North Atlantic fisheries, like the UK, Germany, France and Spain, have been restrained from access to what was once claimed to be Mare Liber and nowadays remain restricted to only fractions of the vast areas of sea formerly open to their activities.

With Brexit looming the prospects for coordinated EU sanctions become less likely against Northeast Atlantic countries that are seen to be undisciplined in their claims to their share of migratory fish stocks. In general the balance is tipping in favor of the maritime northwestern regions of the Northeast Atlantic, while it becomes less evident that the EU should have a say in negotiations on straddling stocks.

On its heels?

It should not be taken for granted, though, that these nationalistic strategies have never been challenged since the 1970s. We saw Norway negotiating twice to become member of the EEC/EU, then having the negotiated access treaty rejected by referendum in 1972 and in 1994, respectively. In Iceland opinion polls showed a majority in favor of EU membership for a brief period of time following the financial crisis in 2008 which led to a virtual meltdown of the economy. This in turn prompted the government to apply for membership, however Iceland later withdrew its application with a subsequent government stating that EU membership was not a viable option.

In the Faroes, meanwhile, the 1970s political consensus that the country should abstain from EU membership is being contested. Politically the sentiment tends to go along the same fault lines as unionism versus nationalism in the relations to Denmark with unionist-leaning political parties and voters ever more susceptive to be encompassed by Denmark’s EU membership. More recently this positive attitude towards the EU is also reflected among traditionally nationalist voters, but only as a sovereign member state; meaning the issue has to await secession from Denmark.pp34-35

These changes in attitudes toward the EU have been reflected in opinion polls, where an overwhelming majority around three quarters against EEC/EU membership has dwindled down to approximately a half or even in one case one-third. The Yes side has simultaneously gained momentum, going from merely non-existing to a force to be reckoned with, equalling or even, in some polls, outnumbering the No side.

These changes in attitudes toward the EU are partially the result of changes within the fishing industry and society as a whole. The traditional autonomy of the fishing industry has slowly been undermined from the other end of the value chain. With the extended fisheries territory an industrialization process based on domestic fish resources took off. The seafood processing industry expanded rapidly both in capacity and in number of filleting plants. With this expansion followed a split in interests between those catching the fish and those processing it; the latter expressing a wish to get behind the EU’s customs barriers.

Alongside this development, the growing aquaculture industry has reached a level equal to the traditional fishing industry in export value.

The changing pattern within overall employment also reveals that the organizational strength and political clout of fishermen as a group has diminished considerably. From encompassing more than half of the workforce in the early 1970s, this group has been downsized to as little as five percent; in actual numbers fishermen are less than one-fifth as numerous as back in the glory days when the Faroes truly was a fishermen’s society. Accordingly, the status of fishermen and the respect around their occupation has generally declined and they find it increasingly harder to have a say in political debates, not just in fisheries-related topics but even in the EU-related debates where topics such as education and research are given more emphasis.

The growing interest in the EU has resulted in a number of reports being published on how to address the EU; but the Faroe Islands is not in the same position as Norway or Iceland to simply submit an application to the Union—either it has to accept entry as part of the Kingdom of Denmark, or it has to await secession from Denmark to be in a position to apply for membership as a full-fledged sovereign state. However, the Yes side is split on the issue of which route to take, making it unlikely that the Faroes will be part of the EU in the near future.

Meanwhile, recent events like the Brexit referendum and the Faroe Islands’ dispute with EU over herring and mackerel fishing quotas, which led to an EU boycott of Faroese fish products, have cooled down the Faroese interest in EU membership. Also the confidence in Denmark as a guarantor of Faroese interests within the EU has slipped considerably amongst those who have hoped for a doable way to join; those voices have been silenced in the last couple of years. At the same time, the EU’s boycott of the Faroes revealed that the EU market isn’t that important after all.

One to two decades ago, 80 percent of the Faroese exports went to the European market. This and the ever-growing number of EU member states was causing some anxiety over being left outside. Yet fruitful efforts to address alternative markets to compensate for losses incurred by the EU’s boycott, have encouraged the Faroese to target and utilize new opportunities like Russia and China. The downward dipping trend as to the importance of the EU market, which had already reached a low of 50 percent before the boycott, has now reached an all-time low since Denmark joined the EEC alongside UK and Ireland, of little more than 40 percent.

Populism left and right

With the Union struggling to survive, the Faroese consensus to stay out of the EU appears to be restored—at least for now. But the stance can hardly anymore be described as resulting from nationalist populist sentiments. The tone and the rhetoric are not anti-imperialistic as in the 1970s, when the perceived foe was EEC, a non-democratic, bureaucratic body representing multinational companies eager to take away the marine resources around the Faroes, preventing the coastal fisheries from gaining prosperity and a decent livelihood while blocking the opportunities for community-based fish processing plants around the islands.

What could previously be called nationalist populism turned against the EU, has been replaced by right-wing and leftist populism quite similar to what is found on both sides of the North Atlantic. Nonetheless, fisheries issues remain at the heart of the debates, fueling contentious clashes in domestic politics between the two sides.

pp36-37This follows a remarkable recovery of the fishing industry after its total collapse in the early 1990s with a melt-down of the Faroese economy as a whole.

In this recovery process all the basic elements of the old management regime of the 1980s—with emphasis on subsidies referred to as reallocation to the main industry with a corporatist involvement of the parties in the industry—have been abandoned. Instead the debates have sought new solutions to the challenges of how to manage an expanding industry by, for example, considering neoliberalist ideas such as individual transferable quotas to replace the days-at-sea regime in domestic fisheries and the political allocation of quotas in external waters.

On the left a somewhat paradoxical obsession has developed for so-called market oriented solutions with emphasis on public auctioning of fishing rights as a central tool and principle. The trend appeared shortly after the turn of the century, when the idea was launched to have the basis for taxation broadened with the resource rent now emanating from the more and more prosperous fisheries. The emphasis was never on the necessity on having that resource rent extracted in order to optimize fisheries; rather it was based on an assumption that a ‘market’ would assure equal access for newcomers to fisheries and thus secure some kind of justice by avoiding monopolies and concentration of power in few hands. The rhetoric has sharpened in recent years as the New Year 2018 deadline for suggested reform approaches, with the existing fisheries licenses running out.

In recent proposals for a fisheries reform, an anti-trust legislation has been included, which would seem logical at least for the semblance of an effective auction of fishing rights serving its purpose. Mainstream media have supported this discourse by focussing on high income levels within the fisheries and profits among vessel owners, especially when deriving from trading fishing vessels with lucrative licenses attached.

This rhetoric has given the political parties on the left some support in the urban capital with its increasing number of employees within the public sector and in the liberalist centre with support among companies in the private service sector.

On the other side, a defensive and aggressive right-wing populism has taken shape. Long gone are the days when fishermen could claim that they were the people; but they can still claim that, although they have been reduced into a small fraction of the population, they remain the producing class on which the unproductive classes in the capital are depending. In this rhetoric they take aim at neoliberalist economists and fisheries scientists, whom they perceive to be allied with a new political class that is basing its political support on voters whose jobs are being paid for by the resource rent earned from the fisheries. Opposing the reform that is currently in the pipeline is crucial in their views for the more traditional fisheries based towns and villages to survive and thrive.

Given this contentious split in the Faroes, it appears difficult to find common ground for a consensus on a longterm fisheries policy. Regardless of all the rhetoric about sustainable fisheries associated with the upcoming legislation, it looks increasingly likely that whatever the political outcome at this point—even if presented as a glorious reform—the resulting framework will not survive beyond the next general election.