Reykjavík Grapevine - 03.06.2011, Síða 14

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SUPER JEEP & SNOWMOBILE TOURS
14
The Reykjavík Grapevine
Issue 7 — 2011
Iceland | Justice
Many people find the sub-
ject impossibly boring,
but it is always simmering
under the surface of Icelan-
dic society. Many do not understand
it, but others are totally obsessed by
it. We are talking about fish—or more
specifically, the system under which
Icelanders manage their fisheries. Now
things are coming to a head with the
government’s proposals to transform
the system.
THE COD WARS
"Life is saltfish", is an old Icelandic say-
ing. And it is true that Icelanders have
been very dependent on fish. There
was an economic boom connected to
the great herring fishing in the early
20th century, commonly referred to
as "the herring adventure". This finally
collapsed in 1967 due to overfishing,
and the result was a severe economic
crisis with ensuing unemployment and
emigration.
And possibly the greatest moment
of our small republic was when we had
the better of the British in a series of
"cod wars", lasting from 1948 to 1976.
There, we managed to drive a huge
British fleet of trawlers from the wa-
ters around Iceland and establish a 200
nautical mile economic zone around
Iceland.
FISHERIES AND THE WEAK KRóNA
One of the main tasks of Icelandic poli-
tics has been to diversify the monoto-
nous industries of the country. In the
sixties, aluminium was seen as the al-
ternative, and it still is to some. Tourism
is of course a growing industry, but the
most interesting experiment was when
Iceland was to become an international
financial centre. This succeeded for a
while. In 2007, it was noted that when
fishing quotas were cut severely it had
no impact at all on the Icelandic stock
market. People truly thought that Ice-
land had entered a new phase—that we
were no longer a nation of fishermen.
A year later the banks came tumbling
town; now these dreams of financial
glory just leave a bad aftertaste.
So we are basically back to fishing
and society has had to adapt to that.
For example the Icelandic króna’s ex-
change rate is now impossibly low for
the general population of Iceland. But
for the fisheries this is very beneficial.
The fish fetches a high price in foreign
currencies. This makes it possible to
service all the foreign debt amassed
in Iceland during the boom years. A
change is not foreseeable in the near-
est future. So money is rolling into the
fishing industry, while many other parts
of society are suffering.
THE ORIGINS OF AN UNPOPULAR
SYSTEM
So why change the system now? The
left wing govern-
ment, which came
into power after the
crash, promised to
make very ambi-
tious changes to
Icelandic society. It
was going to right
old wrongs. One of
these is the quota
system on which
the fisheries are
based. In the begin-
ning it was set up to
manage dwindling
stocks. In the early
1980s Icelanders,
after an extensive
modernisation of
the fleet, was fish-
ing up to 400 thou-
sand tonnes of cod
every year. In the
last years it has
sometime been as
little as 130 thou-
sand tonnes. In
some ways higher
prices make up for this, fish is now an
expensive commodity—it is not sold
anymore, frozen into a block, to be con-
sumed in American prisons.
The quotas were allocated to fishing
vessels, so their keepers became the
ship owners, not the fishermen them-
selves or the towns where the fisheries
operated. After a piece of legislation,
that no one seemed to notice at the
time, the fishing quota became trans-
ferable which started a lively business—
vessel owners, large and small, started
selling their quotas. Soon they started
falling into fewer hands, now a few
dozen people "own" most of Iceland’s
fishing quotas. This pitted neighbour
against neighbour, the solidarity of the
fishing towns was broken—suddenly
the man next door had become fabu-
lously wealthy from selling his quota,
which up to then had been a common
good for the society. The quota might
then have been transferred to another
town—leaving the townspeople without
work and income, their houses gradu-
ally becoming worthless.
NEOLIBERAL AGENDA
So this was not only a question of pre-
serving the fishing stocks, there was
also an economic neoliberal—agenda,
even though few realised this at the
time. It was claimed that by this quasi-
privatisation, the fisheries would be-
come more efficient. But soon the ben-
eficiaries of this system started using
the quotas—i.e. the fish in the sea—as
collateral, taking out huge loans that
didn’t necessarily go back into the
industry. Much of the sudden quota
wealth was used for private consump-
tion, for building of shopping malls in
Reykjavík, or simply moved out of the
country.
It is generally considered that this
was a prelude to the big economic
bubble that finally destroyed Iceland’s
economy. The price for a kilo of un-
fished cod was constantly being inflat-
ed so that the ship owners could take
out ever higher loans. As a result, the
fishing industry is mired in debt, the to-
tal sum is about 500 billion ISK—in real-
ity creditors are the de facto owners of
much of the industry.
But there has always been a catch.
Firstly, the laws on fishing state that the
stocks are the property of the nation.
Secondly, using quotas as collateral
for borrowing is forbidden. But this has
simply been ignored—and now we have
a huge system that is terribly hard to
unwind.
A BIT OF FEUDALISM
There are many sources of discontent-
ment within the system. One is that
the fishing towns have
suffered. Another is
that many ship owners
actually do not fish the
quotas themselves, but
rent them out at high
prices to fishermen
who do not have quo-
tas. Up to 42 percent
of the quota is rented
out in this way. So in
this aspect the system
is almost feudal. Very
little of the money sees
its way into the cof-
fers of the government.
There is a resource
tax, but it has always
been nominal. In a
recent article it was
compared to renting a
flat in Reykjavik for 100
Euros per month. Some
attempts have been
made to patch up the
system, for example by
augmenting the fisher-
ies of small boats close
to the coast. But this in turn has been
changed into quotas—with ever grow-
ing complexity.
MUDDLED PROPOSALS
So now there might be time for a show-
down. The government made lofty
promises when it took over, but now its
proposals seem very confusing—they
come as a disappointment to many. This
is a compromise between the Social
Democrats, who have been of the opin-
ion that the quotas should be gradually
taken over by the state and then rented
out, and the Left Greens, who favour a
system that is more regionalistic. Gen-
erally in polls, more than 70 percent of
the nation is against the present sys-
tem. Most people seem to favour more
radical changes than the government
proposes.
But there is strong opposition. The
Federation of Icelandic Fishing Ves-
sel Owners is maybe the most power-
ful lobby group in the country. They
have access to parliamentarians, trade
unionists and local politicians who
tremble before them. They are also very
strong in the media. Two of the largest
newspapers are on their side. The lead-
ership of the right wing Independence
Party, traditionally the largest party in
Iceland, is against all change, even if
many party members might be vehe-
mently against the quota system. And
the banks, which have a stake in much
of the fisheries through loans, are using
their clout behind the scenes, claiming
that any changes would be disastrous
for the economy. There is talk of expro-
priation, nationalisation and Mugabe-
like policies.
BEST SYSTEM IN THE WORLD?
Some claim that we have the best fish-
eries system in the world. Most of the
ship owners would of course say so, but
also some politicians and academics. It
is sometimes compared to the failure
of EU fishing policies. Still the Norwe-
gians and the Faroese have a different
system with quite good results. There
is a widespread sense that great injus-
tice was perpetrated when the quotas
were given out—and with the ensuing
speculation. Thus, almost overnight, a
new overclass was created. The fisher-
ies have amassed a lot of debt and the
stocks haven’t really grown. There is
also a UN Human Rights Commission
ruling from 2008 stating that the quota
allocation system is discriminatory and
thus unlawful.
This matter has been like a fester-
ing sore on the body politic for more
than two decades. Sometimes it seems
it might disappear, but it has a way of
popping up again—most often before
elections. Napoleon Bonaparte once
said that men will fight more deter-
minedly for their interests than for their
ideals. We might be in for a bitter fight
over the quotas—not a cod war this time
but a civil cod war—but while most of
the population wants to overturn the
system, power definitely favours the
capitalists. In fact, most likely they will
prevail.
Words
Egill Helgason
Illustration
Lóa Hjálmtýsdóttir
Have you given any thought to Iceland's fishing quota system? Do
you think it's something worth spending your thoughts on? Or is it all
worthless pap that grown-ups should worry about. TELL US.
A CIVIL (COD) WAR?