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Greenland and the EU

Fishing, it’s not just an industry, it’s our lifeblood

Greenland is – in general – very satisfied with its relationship with the European Union. Except maybe for a lack of understanding of its economic situation

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The address below was delivered duribg the “Growth and welfare – scenarios for the development of Greenland” seminar in Brussels yesterday. Check against delivery.

Mr Ambassador; dear Greenland Home Rule members and other representatives of Greenland and the EU; ladies and gentlemen.

Thank you for inviting me to this seminar.

I am very pleased to have the opportunity, here in Brussels, to talk about “Growth and welfare – scenarios for the development of Greenland”. In this context I will focus on Greenland’s main industry, which is fishing: an industry upon which we as a society are more dependent than ever – no matter what you may otherwise have heard here in Europe about the prospects for mining or other large-scale projects in Greenland. I will return to this point.

My name is Henrik Leth. I originally took an MA in Political Science at the University of Copenhagen, but for the past 27 years I have lived and worked in Greenland, both in the public administration and in the business world. Throughout this period, I have mainly worked with the fishing industry; both as a senior civil servant, and as managing director of Royal Greenland and other companies. I am currently board chairman of Polar Seafood, Greenland’s largest privately-owned export business, and I am chairman of the employers’ and special interest organisation Greenland Business, which represents 80% of the country's total industrial economy, including all of its ocean fishing. I also have the honour to be chairman of Sustainable Fisheries Greenland – a part of the global organisation that works to ensure the sustainability of the fishing industry by, amongst other things, undertaking the certification of Greenland’s fisheries under the international MSC scheme. This commitment is an example of how we in Greenland take sustainability seriously – something that we earnestly urge all other nations to do, too. Preferably with the EU acting as locomotive.

Greenland is facing a wide range of challenges that will have to be overcome if we as a society are to even approach the average standard of living of the countries around us – and the EU. In addition to our special climatic and geographical conditions, we are also struggling with a fragile economy, great social inequality and low levels of education among a large part of the population. What’s more, we, like other Western societies, have fewer and fewer people of working age as the number of elderly people rises. These are problems that will form a vicious circle and become self-reinforcing if we do not find sustainable solutions soon. Indeed, very soon! This means solutions in relation to the economy, social rehabilitation, welfare, education, business development, infrastructure and the need for a more efficient public administration, etc.

Several reports have highlighted the problems and have identified the key areas where political reform is needed. In its latest report, from 2014, Greenland’s Economic Council states that reform efforts are still lagging behind, and that the economic situation is becoming critical.

So we are fully aware of the problems, and we know that they are serious. We naturally also realise that it is our responsibility to remedy the situation. But we must also recognize that we will need support from outside, if we are not to abandon people along the way. Especially our children and young people, many of whom do not at present acquire educational qualifications.

We need solid and stable collaboration with Denmark and other countries – and not least the EU. Let me emphasise that we in Greenland are very satisfied – in general – with our relationship with the EU. But unfortunately I do not think the EU is fully aware of the extent of Greenland’s economic challenges. And how difficult these problems are to remedy for a population of just 56,000 people living scattered over an area the size of western Europe.

In this context, better international fisheries agreements would be an extremely important lever for the economy of Greenland. From our point of view in the Greenlandic fishing industry, we do not feel that our cooperation with the EU in this area is quite fair. We would wish that the spirit of the general partnership agreement also applied to our fisheries agreements.

In the following, I will therefore concentrate on the subject that I have called “Fishing in Greenland is not just an industry, but the lifeblood of our society”. Because that’s exactly what it is. Fishing is not just Greenland’s dominant industry – it is actually Greenland’s only export industry. Consequently, we are much more dependent on income from the fishing industry than other countries in the western world.

It is a problem for Greenland that international fisheries policy is too heavily based on historical rights. The fact is that many of these rights stem from a bygone era and have never really been properly communicated to the fish in the sea, who, as a result, are not aware of them. In particular, migratory stocks such as blue whiting, herring and mackerel act only in response to changes in the natural environment – and they respect neither historical rights, territorial boundaries nor other man-made regulations.

Fish swim where they want. They take no notice of negotiations conducted in the corridors of power, but are to a far greater degree controlled by developments in the biological food chain, ocean current temperatures and changes in climate, which in the Arctic, in particular, are changing the living conditions of both animals and human beings.

These facts should, in our opinion, be taken seriously by politicians in the EU. Future agreements should respect Greenland’s territorial rights and the actual stocks in international, regional and local waters, and no longer rely on quotas applied to individual species in the past.

I mentioned previously that fishing is Greenland’s only export industry of economic importance. For many years to come, fishing will therefore remain the country’s industrial locomotive – and will thus drive the development of society. Consequently, fishing not only needs good framework conditions from our own politicians, but also to a great degree greater understanding on the part of the EU.

I would like to appeal today to the EU to ensure that in the coming international fisheries negotiations, we take our starting-point in reality, rather than in time-honoured traditions and old agreements. Future agreements should take much more account of the populations that are most dependent on fishing.

A specific example: If we in the Greenlandic fishing industry do not feel that the latest fishing agreement with the EU is fair, it is amongst other things because we have lost the minimum quantities necessary to ensure the industry’s survival. We have had to allocate EU prawn quotas in West Greenland, even though the TAC is far below the minimum criteria of 75,000 tons that we previously had. The EU received 2,600 tonnes of prawn, for which it pays less than we do in the Greenlandic fisheries. This is in itself is a very bad deal for us, but in our opinion, it is also unreasonable towards a small community that is struggling with a seriously threatened economy.

Now, we are not naive – we know that Greenland’s national treasury needs this agreement with the EU. But we note that the EU is once again flexing its muscles and bullying smaller nations with whom they ought to co-operate. We have for example seen this in the context of mackerel fishing, where the EU has placed all kinds of obstacles in the way of Greenland, and does not even live up to its own agreements on experimental fishing and joint ventures. And now we are seeing it again in connection with the aforementioned agreement, in which the EU is putting unreasonable pressure on us in order to obtain better terms. So all this talk about co-operation and partnership apparently only applies in those areas where Greenland does not itself have very much to offer. It is no exaggeration to say that in our view, it seems as though the EU is trying to prevent the development of Greenlandic fishing.

Allow me to mention another example: As a small country in terms of population, we are in principle satisfied with the freedom from tariffs that we enjoy in the EU. In principle, at any rate. Because its value has in recent years been eroded by the increasing practice of allocating similar tariff quotas to other countries. To put this slightly polemically, one might say that when an advantage is given to all, it is no longer an advantage. Consequently, this matter should also be included in the next round of negotiations between Greenland and the EU.

Despite difficult conditions, Greenland has developed efficient and competitive businesses, with companies that have the strength to assert themselves internationally. The EU must respect this. But, as mentioned, we do not always feel that the EU does so. As a small nation, we often find ourselves being left out when decisions are taken in matters that directly concern us. We can no longer accept this, as Greenland today is an independent fishing nation that can both exploit the fish and shellfish in its own waters and import raw materials from other countries. With respect to the latter, the import of raw materials, we are dependent on a tariff quota from the EU which in effect makes it possible for us to earn money by processing imported raw materials in our factories. It is therefore disappointing that the EU has reduced the previous quota from 2,100 tons to 500 tons. This is costing jobs at our prawn factories, which are already under pressure. And I need hardly remind you that stable workplaces are one of the keys to economic prosperity, social welfare and personal development.

To put it briefly: Precisely in the area of fishing, where Greenland has proved that it can develop itself, we need the EU to back us up instead of putting a spoke in the wheel.

I promised to return to the question of minerals and mining. For some years, we have been hoping that Greenland could generate new income by exploiting its rich deposits of underground raw materials and minerals. But one of the reports I previously mentioned unfortunately makes it clear that the prospects are distant before these resources will be able to finance a substantial part of the economic development that we so badly need. This is primarily due to the international financial crisis, which has caused the world prices of minerals to drop dramatically.

We are a young society that has had only a few decades in which to develop a parliamentary democracy and associated well-functioning administrative systems. This is also reflected in our business life, which of course is a prerequisite for growth. In the economic structure of Greenland, the vast majority of the commercial economy is driven by the public sector – including infrastructure, supply, etc. It sometimes causes problems for an otherwise active and growing construction industry to be 100% dependent on public sector funding and, not least, on the planning of the authorities.

We are therefore working diligently to develop new sectors such as tourism and a number of niche businesses, but it will naturally take a long time before such industries are economically viable enough to be able to make a significant contribution to the country’s economy.

All of this means that our export hopes are mainly pinned on fishing, and only secondarily on raw materials and tourism. But how do we create the right conditions for investing in new businesses, regardless of the industry? At the recent business conference “Future Greenland” in Nuuk, these issues were discussed by both Greenlandic politicians and business people, and by relevant speakers from other countries. Here, too, it became clear that Greenland has a great need – and is greatly interested in – strengthening its international relations.

For myself, I would like to stress that I consider it desirable that such co-operation should include strengthened ties with the EU. But this demands that we can look forward to fairer results from both bilateral and international fisheries negotiations. The current agreements show that Greenlandic society is willing to pay the price that co-operation costs, but we could wish that the EU looked at things in a more equal context. That the EU, in other words, showed a willingness to pay the political price for co-operation with Greenland. Rather than – as at present – settling for the easiest solution, namely paying its way out of the internal political costs that genuine cooperation on the development of Greenlandic fisheries might possibly entail.

Thank you for the invitation, and for allowing me to speak to you today.

The author is the chairman of Polar Seafood.