Hvalur Files Claim Against Icelandic State Over Whaling Ban

Iceland whaling Hvalur hf

The whaling company Hvalur hf. has filed a claim against the Icelandic state, citing significant financial losses due to a temporary whaling ban imposed by the Minister of Food, Agriculture, and Fisheries, Svandís Svavarsdóttir last year. The claim, supported by the Parliamentary Ombudsman’s conclusion that the ban lacked legal basis, seeks compensation for the company and its employees.

A right to claim damages

The whaling company Hvalur hf. has filed a claim against the Icelandic state, asserting that the decision to temporarily ban the hunting of fin whales last year — which was made by Minister of Food, Agriculture, and Fisheries, Svandís Svavarsdóttir — had resulted in substantial revenue loss and financial expenditures, RÚV reports.

The claim was sent to the State’s Attorney after the Parliamentary Ombudsman concluded that the decision by the Minister of Food, Agriculture and Fisheries to temporarily suspend whaling last year was not legally sound; Svandís’s ban took effect on June 20, 2023, and remained in place until September 1 of the same year.

In line with the Ombudsman’s findings

The claim begins by noting that Hvalur hf. had lodged a complaint with the Parliamentary Ombudsman regarding the drafting and implementation of regulation that barred the start of whaling in the summer of 2023. The claim subsequently cites the Ombudsman’s opinion on the matter, wherein the former concluded that the Minister of Food, Agriculture, and Fisheries lacked a sufficiently clear legal basis for the regulation to be considered valid.

In light of this, Hvalur hf. believes it has a right to claim damages from the Icelandic state for any financial losses incurred due to the ban. The claim acknowledges that any costs saved while the ban was active, particularly in labour expenses, should be considered for deduction.

The claim further notes that the Akranes Trade Union (Verkalýðsfélag Akraness) had declared that the employees of Hvalur had wage claims against the company for the period during which the ban was in effect. Similarly, the Association of Ship Captains (Félag skipstjórnamanna) voiced the same position for its union members.

Therefore, Hvalur considers it most practical for the Icelandic state to compensate the company’s employees and other affected parties in line with their income losses. The claim also asks for talks with the Icelandic state to settle this compensation based on the stated reasons.

Third-party assessment

Lastly, the claim suggests that the Icelandic state and Hvalur could agree on a third party to evaluate the company’s damages through an out-of-court expert assessment. However, this agreement would not be legally binding for either Hvalur or the Icelandic state.

Authorities Dispute Over Asylum Seekers in Iceland

asylum seeker deportations

Asylum seekers in Iceland continue to be caught in the middle of a dispute between the Icelandic state and municipalities on who should provide services to those whose applications have been rejected. Yesterday, the Ministry of Social Affairs and the Labour Market announced a temporary agreement with the Icelandic Red Cross to provide emergency assistance to the group and legal changes that shift responsibility for rejected asylum seekers to municipalities. Municipal leaders have called the Ministry’s decision “one-sided” and “disappointing.”

In Focus: Asylum Seeker Evictions

New legislation that took effect in July strips asylum seekers in Iceland of housing and services 30 days after their application has received a final rejection. The legislation was harshly criticised by human rights associations in Iceland, including the Red Cross, UNICEF, and Amnesty International. By August, some 53 asylum seekers had been stripped of services, some ending up on the street. Asylum seekers are not stripped of services if they agree to deportation, but many in this position are unable to travel, for example due to lacking a travel document or being stateless.

State and municipalities in deadlock

While the new legislation was still being reviewed in Parliament, Minister of Social Affairs and Labour Guðmundur Ingi Guðbrandsson stated that asylum seekers whose services and housing were withdrawn by the state would be able to seek services from municipalities according to the Social Services Act. In such cases, the municipalities can then send a bill to the state for the cost of providing the services.

Since the legislation took effect, however, municipalities in Iceland have argued that the Social Services Act does not apply to asylum seekers and that it is the state’s responsibility to provide services to the newly homeless group. Many detractors have also pointed out that requiring municipalities to provide services would cost taxpayers more than the system previously in place, with the state still footing the bill to a large extent.

Ministry makes changes to rules on reimbursements

In addition to the agreement with the Red Cross, the Ministry of Social Affairs and Labour has also made changes to the rules on reimbursements to municipalities for services provided to asylum seekers. The changes clarify which services are eligible for reimbursement from the state treasury. According to the government notice, municipalities can receive state reimbursement for providing “accommodation and food in accordance with what is generally customary in facilities for the homeless in Iceland.”

Municipalities protest

The Icelandic Association of Local Authorities has issued a statement criticising the Ministry’s actions. “In the opinion of the Association of Local Authorities, this unilateral action by the Minister of Social Affairs and Labour is a huge disappointment, as it is taken with the Minister’s full knowledge of the municipalities’ complete opposition to this measure,” the statement reads in part. In its last board meeting, the association reiterated its position that municipalities were neither permitted nor obliged to provide financial assistance to foreign nationals who have been stripped of state services following the rejection of their application for international protection.

Icelandic State Must Pay Compensation for Misallocating Quota

The Icelandic state must compensate seafood companies Vinnslustöðin and Huginn due to the misallocation of mackerel quota from 2011 to 2018, RÚV reports. The state has been ordered to pay ISK 1 billion [$7.1 million, €6.6 million] plus legal costs of ISK 25 million [$178,000, €166,000]. Vinnslustöðin CEO Sigurgeir Brynjar Kristgeirsson says the state could have avoided the expense by negotiating directly with the company but showed no interest in doing so.

“We were pioneers in this mackerel fishing, we found the mackerel and utilised it, and in legislation, it simply says that those who start and who find the fish, should get a larger portion when it comes to allocation and setting quota,” Sigurgeir stated. Both the Parliamentary Ombudsman and the Supreme Court of Iceland came to the same conclusion. “The conclusion was that it was taken from us and given to others, who hadn’t contributed from the beginning.”

The Reykjavík District Court ruled in favour of the seafood companies in the case on Monday morning. Seven companies had originally submitted the claim for damages but five withdrew their lawsuits.

The mackerel quota which the case addresses was allocated by then-Minister of Fisheries Jón Bjarnason in 2010. Rather than allocating the entire quota to those who had experience, some was allocated to small boat fishermen and others in a pool for mid-size ships. Many immediately cast doubt on the legality of the allocation and the Supreme Court ruled that the state had broken the law: only those with previous experience fishing mackerel should have received quota.

Growing profits in few hands

During the height of the coronavirus pandemic, the seven companies who had initially sued were criticised by government officials for demanding ISK 10 billion in compensation from government coffers in the midst of a recession. As a result, five of the seven companies dropped their cases in 2020.

In a Facebook post about this week’s Reykjavík District Court ruling, Minister of Finance Bjarni Benediktsson confirmed the state would appeal. If the seafood companies were to win the case, Bjarni added, he asserted that the compensation would be extracted from the seafood industry rather than taxpayers (presumably through raising taxes on seafood companies or similar measures).

The profits of Iceland’s 10 largest seafood companies grew by 50% in 2019 and continued growing throughout the pandemic, with the price of fish rising dramatically in the wake of the Russian invasion of Ukraine. Vinnslustöðin bought Huginn in 2021 and is among Iceland’s ten largest seafood companies. Just four companies hold around 60% of Iceland’s fishing quota, which has sparked debate on the distribution of wealth in recent years.

Fjaðrárgljúfur Purchase Offer Accepted

Fjaðrárgljúfur canyon

The Icelandic state needs to decide whether it will purchase Fjaðrárgljúfur canyon, a popular tourist site in South Iceland, Fréttablaðið reports. The canyon is up for sale and an offer from a private investor has been accepted, but the state has pre-emptive purchase rights to the land. The purchase price is estimated between ISK 300 and 350 million [$2.3-2.7 million; €2.2-2.5 million].

The canyon and surrounding area covering 315 hectares was put up for sale six years ago. A buyer has now been found, and the sale manager revealed that they were Icelandic and work in tourism. The state can step in and buy the land if Prime Minister Katrín Jakobsdóttir and Finance Minister Bjarni Benediktsson decide to do so, but they have a limited window of time.

Fjaðrárgljúfur has been managed by the Environment Agency of Iceland in recent years. The agency has closed the area for weeks-long periods in recent years when tourist traffic was causing damage to the fragile vegetation around the canyon. The spot was not well-known to foreign tourists until it appeared in a music video by Justin Bieber in 2015, which put it on the map.

Until now, there has been no admission fee for visitors to the canyon. It is not known whether the private purchaser aims to profit from the land by charging admission.

Five Seafood Companies Withdraw From Lawsuit Against Icelandic State

Fishing Harbour

Five seafood companies have decided to withdraw from a joint lawsuit against the Icelandic state due to a dispute over the allocation of mackerel quotas between 2011-2018, RÚV reports. Seven companies had decided to jointly sue the state, demanding over ISK 10 billion ($69.6 million/€63.9 million) in compensation. A statement from the five companies says the decision was made due to the impact COVID-19 will have on the Icelandic treasury.

Eskja, Gjörgur, Ísfélag Vestmannaeyja, Loðnuvinnslan, and Skinney-Þinganes are the five companies that have dropped out of the joint lawsuit. A statement from Supreme Court Attorney Sigurbjörn Magnússon on behalf of the five companies says the COVID-19 pandemic will have a profound effect on Iceland’s treasury and the entire Icelandic community.

“Widespread solidarity and mettle have characterised the community in the past weeks and months. Now everyone needs to work together,” the statement reads. “For this reason, the five undersigned fishing companies have decided to waive their claims against the Icelandic state.”

The seven companies (the final two being Vinnslustöðin and Huginn ehf.) filed the lawsuit last year, claiming that the state’s mackerel quota distribution between 2011-2018 was based on incorrect information and led to losses for the companies. Two Supreme Court rulings in 2018 recognised the state’s liability for damages Ísfélag Vestmannaeyja and Huginn ehf. believed to have incurred due to how the quota was distributed between 2011-2014.

Minister of Finance Bjarni Benediktsson stated earlier this week that he was optimistic the state would win the case, but in the unlikely situation that it did not, the damages would not be paid using tax money, rather would be financed via the fishing industry itself.