Mackerel War Called Off?

In November 2013 we wrote about a remarkable WTO dispute initiated by Denmark against the EU (The ‘Mackerel War’ Goes to the WTO). The case is remarkable because it has pitted one EU Member state against the other 27. Denmark, a member of the EU, brought the case “in respect of the Faroe Islands” which are part of Denmark, but not of the European Union.

The dispute concerns fishing quotas jointly managed by the Faroes, Iceland, Norway, Russia, and the EU under the Atlanto-Scandian Herring Management Arrangements. In annual negotiations, the parties decide on the division of the total allowable catch (TAC). In 2013 parties were unable to reach agreement, largely due to refusal to accommodate the Faroe Islands request for a larger part of the Total Allowable Catch (TAC).

When the Faroe Islands unilaterally decided to increase their catch, the EU responded by prohibiting import of herring and mackerel from the Faroe Islands. Denmark then brought a WTO dispute as well as arbitration proceedings under Annex VII of UNCLOS. In its request for consultations to the WTO, Denmark claimed the EU’s response to be in breach of GATT Article I:1, V:2 and XI:1. Denmark also reserved its rights under UNCLOS.

The parties have recently settled their dispute in respect of mackerel. On 12 March 2014, the Faroe Islands, Norway and EU concluded a joint arrangement for the conservation and management of the North East Atlantic mackerel stock for the next five years. The arrangement allocated 13% of the TAC between the parties (not including Russia and Iceland) to the Faroe Islands. This is a sizeable increase compared with the 5% that had been previously allocated to the Faroese, and the proportion is set to increase again next year.

The WTO dispute, however, is centered on herring, whereas the new agreement only deals with mackerel. Pending an agreement on herring, the WTO complaint and the UNCLOS Annex VII arbitration continue, and EU Regulation 793/2013, establishing sanctions against the Faroe Islands, remains in force.

A negotiated solution seems the most likely outcome. The day after the conclusion of the mackerel agreement the EU and the Faroe Islands reached another agreement on reciprocal exchanges of fishing opportunities in each other’s waters for 2014. This agreement did include herring.

These recent developments, however, have not involved all parties of the Atlanto-Scandian Herring Management Arrangements, as Iceland and Russia are not parties to the joint agreement on mackerel. The Icelandic Minister of Fisheries and Agriculture issued a press release, denouncing that Iceland had been “excluded” from the agreement, and that EU, the Faroe Islands and Norway should take “full responsibility” for overfishing. The Minister claimed that the allocation envisioned in the arrangement exceeds the advice of the International Council for the Exploration of the Sea (ICES).

ICES preliminarily recommended that landings in 2014 should be no more than 889 886 tons. The new agreement between the Faroes, Norway and the EU, instead, sets the limit to 1,045 560 tons, i.e. 17% above the advised level, without even including the catch of Iceland and Russia. The new agreement raises concerns over the sustainability of the agreed quotas, even though it asserts that, starting with 2015, the TAC will be “based on the levels advised by ICES” (cf. point 7.2).

Concerns about the mismanagement of fish stocks have long attracted international attention and engendered a long series of diplomatic skirmishes. According to the OECD, almost 30% of global fish stocks are estimated to be overexploited or depleted. As recently as February 2014, the European Environmental Agency warned that Europe’s marine ecosystems might be irreversibly damaged if they continue to be exploited beyond sustainable limits.

These concerns were behind the adoption of the latest EU Common Fisheries Policy, entered into force in January 2014. The EU Commissioner for Maritime Affairs and Fisheries, Maria Damanaki, heralded the joint arrangement between the EU, the Faroe Islands and Norway as a “landmark agreement” that “testifies to the EU’s commitment to sustainable fishing at home and abroad.” But as the agreement significantly exceed ICES’s advice and does not include Russia and Iceland, it seems likely that we will be hearing more about this issue.