Democracy Center - Ideas behind Iceland's fishery control

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In January 1962 the Icelandic society Frjals menning (Congress for Cultural Freedom) organized a conference in connection with the plans of the EFTA-states to join EEC. The conference was held to discuss what stance Iceland, not being an EFTA-member at that time, should take. Later the discussion was published. On that occcacion the discussion on resource taxation in Iceland, which is still going on, began, by the following contribution by the economist Bjarni Bragi Jonsson: „EEC should be able to understand that we are the owner of these resources and that we need them, and that we in some way need to limit the exploitation of them and to tax this resource. As a matter of fact we have done just that by the tariff policy. Therefore, I will maintain that if we become a member of the federation which I would mean should be as an associated member, it would be realistic to raise the price of foreign currency somewhat to offset the reduction of customs duties, and simultaneously take a corresponding part of the foreign exchange income from the fishing industry and view this as a resource tax for the benefit of the nation.“ — Raising the price of foreign currency is normally called devaluation.

             In 1975 Bjarni Bragi Jonsson further elaborated on the subject for the Icelandic public in an article (Resource taxation, industrial development and the economic future of Iceland) in the periodical Fjarmalatidindi (Financial review), published by the central bank of Iceland. There it turns out that he is supported by top government officials in economics. Just in 1975, Iceland was gaining control of most of the fishing banks around the country. Consequently, a certain point of his cause had to be decided on, i.e. control of the utilization of the fishing banks. In this connection he refers to articles, which became fundamental for the discussion on the economic control of fishing, by Gordon (1954) and Scott (1955). However, they refer to the regulation of the input for economic exploitation of a common resource, but the discussion on this case, and in general, refers to the control of taking (catch); nevertheless the views by the two Britishmen are taken as support.

            A second point by Bjarni Bragi Jonsson in his article was that it was only fair that the owner of the common resource, which he meant was the nation, used his authority (i.e. the state in this case) to impose a tax on those who utilized it. Thus, the thought that the fish stocks constitute the resource became a fixed part of the discussion. This is not the case, however. It is the environment, the marine biosphere, that provides the fish with nourishment, which is the resource, in the same way as the forest is the resource, not the wood.

            The third point is implied by the words industrial development and the economic future in the referred title of the article in Fjarmalatidindi, to provide that the oceanic resources, which are limited, should not impede the industry which can increase. Bjarni Bragi Jonsson wanted this to be done by the state collecting some of the fishing industry foreign currency by imposing a resource tax, as he calles it.

            At the conference in 1962 it was maintained, on the one hand that Iceland in connection with her affiliation to EEC would strive for keeping the control of the fishing banks (the fishing limits were then 12 nautical miles), and on the other hand that all EEC enterprises would have the same fishing rights around Iceland, provided that the Icelandic state would sell fishing rights to the highest bidders, ensuring that Iceland would keep the yield of the resource. The rights referred to were always catching rights.
            After 1980 one could observe in the discussion steadily growing demand for fixing by law that the fish resource being possessed by the nation in common, and it was talked for that the state should put up the catch rights for sale; this was exerted by the same persons. These people wanted Iceland to join the EEC by all means as was evident to anyone who cared to note during those years.
         Seen from this angle one cannot but realize that the right to carry on transactions with catch rights was introduced step by step. In this connection Halldor Asgrimsson, as minister, was most important. Since 1972 he was of the opinion that Iceland belonged in EEC. He became a member of parliament for the Progressive Party in 1974, without his party colleagues having a clue of his attitude–nobody in the party was known to share this view at this time, and soon he became vice-chairman and then chairman. He was a member of parliament 1974-78 and 1979-2006, a minister 1983–1991 and 1995-2006 (minister of fisheries 1983-1991). It was not until 18 August 2006 that people first heard of his early attitude in an interview he gave to the newspaper Morgunbladid, immediately after he had resigned from all positions. In his article, Lydrædisbrestir islenska lydveldisins. Frjalst framsal fiskveidiheimila (Cracks in Icelandic Democracy: Unrestricted transfer of fishing rights) in the periodical Skirnir, autumn issue 2013, Svanur Kristjansson shows how intense Halldor Asgrimsson was in this cause, free transfer of fishing rights.

           Thus, one can also understand why those who wanted Iceland to be a part of EU, were so strongly opposed to a recent proposal of resource tax in the fishing industry based on the enterprises' profits instead of catching. Such an arrangement could, as a matter of fact, never form a basis that would match all enterprises in EU as adequately as a catch rights basis would.

            Furthermore, when things are viewed in this context one can understand why those who want Iceland to join EU have fought so relentlessly for the inclusion of a paragraph in the constitution declaring the nation to be the owner of the fishing banks. Such a paragraph would be of use during the ascencion talks. Iceland could maintain that all enterprises, Icelandic or belonging to EU states, had equal status when buying catch rights in Icelandic waters.

Morgunbladid 30th July 2015 [translated from the Icelandic, modified version]