COMMON PROPERTY

RESOURCES ARE HUMAN RIGHTS

Thorvaldur GylfasonPresentation at Nordic House,

Torshavn, Faroe Islands, 2 March 2012.

OVERVIEW1) Iceland story2) Efficiency and fairness3) Constitutions4) Human rights5) Look to Norway

ICELAND STORY I Restricted access to fishing grounds in 1984 made

catch quotas valuable, and thus created wealth By international law, and later also Icelandic law,

this wealth belongs to the people Even so, politicians decided to give quotas to boat

owners gratis based on catch experience 1981-83 Boat owners drafted the legislation themselves

This was ruled discriminatory and unconstitutional by Supreme Court in 1998 and by UNHRC in 2007 Violation of ICCPR and human rights

So, I say to you: Do not follow Iceland’s example First the fish, then the banks, then the crash in 2008

Look to Norway’s oil management instead

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ICELAND STORY II Valuable common property catch quotas were

handed out free of charge to vessel owners from 1984 onward

Quotas became freely transferable by law in 1990, so many quota holder sold out and made a killing

Those who had objected to fishing fees accruing to the state or to the people had no objection to fees accruing to boat owners If the banks paid politicians, as documented by the

parliament’s SIC report, how about boat owners?Fishing fees accruing to the state were introduced

into law in 2002, but they were quite low

EFFICIENCY AND FAIRNESS Good fisheries management must be both

efficient and fairEfficiency means maximizing revenue from

fisheries and minimizing cost by allowing efficient (i.e., low-cost) operators to buy quotas from inefficient (i.e., high-cost) ones

Fairness means that, to insure equality, everyone must have a seat at the same table

Hence, free transferability of quotas is acceptable only if the initial allocation of quotas is fair If not, universal principle of equality is violated, a

principle enshrined in binding international legal agreements as well as in national constitutions and laws

Here in lies the fatal flaw in the Icelandic system

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SERIOUS CONSEQUENCES In Iceland, free allocation of fishing

quotas created a small class of rich boat owners who through their wealth and political clout changed the balance of power In politics, it is “suicide” to rise against

themBoat owners now own Morgunblaðið,

Iceland’s Dimmalætting, and use it to fight reform of the quota system as well as EU membership

They used quotas as collateral in bank deals with serious consequences No one should ever be allowed to use other

people’s property as collateral Illegal for foreigners to own Icelandic quotas

CONSTITUTIONS Violations of the universal principle of

equality bring constitutional issues into the picture

Every constitution declares that we are all equal before the law, ruling out any kind of discrimination among individuals on whatever basis

Faroese constitution bill does this beautifully

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TILFEINGI OG UMHVØRVI (1) Myndugleikarnir varða um tilfeingi

landsins (2) Tá vunnið verður úr landsins tilfeingi,

skal landið antin krevja viðurlag ella tryggja øllum vinnurætt

(3) Margfeldið á landi og á havleiðum landsins, sum privat ikki eiga, er tilfeingi og ogn fólksins

(4) Landið tryggjar, at bæði almenna og privata tilfeingi landsins verður umsitið á sjálvberandi hátt við umsorgan fyri umhvørvinum

Faroes constitution bill

WHAT THIS MEANS The resources are the property of the

people (article 3) The people charge for the utilization of

the resources or grant everyone equal access to them (article 2)

The utilization and treatment of the resources and the environment must be sustainable (article 4)

The authorities are the custodians of the resources on behalf of the people (article 1)

Faroes constitution bill

HUMAN RIGHTS Key distinction between state ownership and

national ownership State ownership (e.g., public office buildings)

means that the state can sell or pledge such assets National ownership (e.g., cultural assets like

Thingvellir or natural assets like fish and energy) means that the state cannot sell or pledge such assets

Like our cultural assets, we have inherited our natural resources from earlier generations and must preserve them for future generations We do not have the right to squander them

Hence, special chapter on Human rights and nature

NATURAL RESOURCES I Iceland’s natural resources which are not in

private ownership are the common and perpetual property of the nation. No one may acquire the natural resources or their attached rights for ownership or permanent use, and they may never be sold or mortgaged.

Resources under national ownership include resources such as harvestable fish stocks, other resources of the sea and sea bed within Icelandic jurisdiction and sources of water rights and power development rights, geothermal energy and mining rights. National ownership of resources below a certain depth from the surface of the earth may be provided for by law.

Iceland constitution bill

NATURAL RESOURCES II The utilization of the resources shall be guided

by sustainable development and the public interest.

Government authorities, together with those who utilize the resources, are responsible for their protection. On the basis of law, government authorities my grant permits for the use or utilization of resources or other limited public goods against full consideration and for a reasonable period of time. Such permits shall be granted on a non-discriminatory basis and shall never entail ownership or irrevocable control of the resources.

Iceland constitution bill

INTERNATIONAL COVENANT ON CIVIL AND POLITICAL RIGHTS (ICCPR) ICCPR was made in 1966 to fortify the UN Human

Rights Declaration from 1948 Rules on effective remedy for victims of human rights

violations 165 signatories Non-signatories: China, Cuba, Malaysia, Pakistan, Saudi-

Arabia, Singapore, Vatican plus some very small countries Iceland signed ICCPR in 1968 and ratified it in 1979 The opinions of the UN Human Rights Committee

(UNHRC) are binding, and cannot be appealed However, UNHRC cannot enforce its opinions It can only name and shame violators

Human rights are absolute rights and cannot be swayed or subordinated to other interests

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ICCPR AND HUMAN RIGHTS Article 1 of ICCPR defines

common property resources as human rights by stating that

“All people may, for their own ends, freely dispose of their natural wealth and resources …”Article 1 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) is identical

ICCPR 2007 OPINION ON ICELAND I 12 of 18 human rights specialists on

UNHRC ruled that Iceland’s fisheries management system violates article 26 of the ICCPR stipulating that “All persons are equal before the law”

Article 26 of the ICCPR is essentially the same as the equality article 65 in Iceland’s constitution from 1944

ICCPR 2007 OPINION ON ICELAND II UNHRC cites Icelandic fisheries

management law from 1990 that states that fishing banks around Iceland are the common property of the Icelandic nation

UNHRC declares that the discriminatory allocation of quotas initially, in 1984, based on catch experience 1980-83, may have been based on reasonable and objective criteria as a temporary measure

ICCPR 2007 OPINION ON ICELAND III However, says UNHRC, with the law of 1990

this measure “became not only permanent … but also transformed the original right to use and exploit a public property into individual property”

“Allocated quotas no longer used by their original holders can be sold or leased at market prices instead of reverting to the State for allocation to new quota holders in accordance with fair and equitable criteria”

Icelandic state “has not shown that this particular design and … implementation of the quota system meets the requirement of reasonableness”

ICCPR 2007 OPINION ON ICELAND IV UNHRC concludes:

“Property entitlement privilege accorded permanently to the original quota owners, to the detriment of the authors [i.e., the two fishermen who sued], is not based on reasonable grounds, … a violation of article 26 of the Covenant”

“… State party is under an obligation to provide the authors with an effective remedy, including adequate compensation and review of its fisheries management system”

“… Committee wishes to receive from the State party, within 180 days, information about the measures taken to give effect to the Committee’s Views”

ICCPR 2007 OPINION ON ICELAND V UNHRC did not find it necessary to consider if

the allocation of quota rights to limited resources conforms to the ICCPR in general

However, in this particular case where quotas were allocated permanently to the original quota holders, against the interests of the two fishermen suing the state, it is not possible to consider such a system based on reasonable grounds

Accordingly, the majority of the UNHRC concluded that the system constitutes a violation against the equality principle in article 26 of the ICCPR

ICELANDIC SUPREME COURT 1998 VERDICT Fisheries management law leads to

discrimination in violation of equality principle in article 65 of constitution and freedom of employment article 75 that states: “Everyone is free to pursue the occupation of his

choosing. This right may however be restricted by law, if such restriction is required with regard to the public interest.”

Together, articles 65 and 75 mean that any type of restriction of the freedom of employment in the public interest, including restrictions on the access to fisheries, must be compatible with equality and human rights

OBJECTIONS Prof. Sigurður Líndal maintains that the

property rights clause in the constitution justifies the quota system

UNHRC rejects this view on the grounds that the quota system “transformed original rights to use and exploit a public property into individual property,” deeming the system inequitable, discriminatory, and, hence, unconstitutional

THE WAY TO GO: NORWAY I From the beginning, the oil and gas

reserves within Norwegian jurisdiction were defined by law as common property resources, thereby clearly establishing the legal rights of the Norwegian people to the resource rents

On this legal basis, the government has absorbed about 80% of the resource rent over the years, instead setting most of its oil revenue aside in the state petroleum fund the name of which was recently changed to pension fund to reflect its intended use

THE WAY TO GO: NORWAY II Government laid down economic/ethical

principles (commandments) to guide the use and exploitation of the oil and gas for the benefit of current and future generations of Norwegians

Main political parties have from the beginning shared an understanding that national economy needed to be shielded from an excessive influx of oil money to avoid overheating and waste

The Central Bank, granted increased independence from the government in 2001, manages the oil/pension fund on behalf of the Ministry of Finance, maintaining a healthy distance between politicians and the fund

CONCLUSIONTHE END Fisheries policy need not and must

not be allowed to violate human rights Do not repeat mistake that Iceland made

in 1984 Make sure that the Faroese people’s

right to their natural resources, a human right proclaimed in primary documents of international law as well as in many national constitutions and laws, is also enshrined in your new constitution