Communication from the Commission to the Council and the European Parliament - Mid term review of the fourth fisheries protocol between the EU and Greenland
Date: 2002-12-03
Institutions: European Commission
Subjects: Greenland, catch quota, economic situation, fishing agreement, negotiation of an agreement (EU), overseas countries and territories

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 3.12.2002
COM(2002) 697 final

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

MID TERM REVIEW OF THE FOURTH FISHERIES PROTOCOL
BETWEEN THE EU AND GREENLAND

INTRODUCTION

The fourth protocol of the fisheries agreement with Greenland  entered  into  force in  January
2001  and  is  subject  to  a  mid-term  review  clause,  according  to  which  the  Commission  will
have to submit proposals no later than the end of February 2003.

The aim of the present communication is to explain why this review, far from being a routine
operation,  requires  addressing  now  the  political  challenge  facing  the  future  of  European
Union - Greenland relations (Part 1).

It then lays down the main features of a political commitment between EU, Greenland and the
Danish  Kingdom,  ensuring  that  after  2007,  the  relations  will  be  based  on  a  comprehensive
partnership for sustainable development (Part 2).

Lastly,  it  sets  out  a  framework  for  negotiation  between  the  Commission  and  the  Greenland
authorities with the view of adjusting the fourth protocol on fisheries within the expected time
schedule of the mid-term review (Part 3).

1. 

SHORTCOMINGS AND OPPORTUNITIES OF THE PRESENT EU - GREENLAND
RELATIONSHIP

1.1. 

Background

Greenland, a region of Denmark, became part of the Community alongside its mother country
in 1973. The internal status of Greenland  was changed  by  the Home Rule  Act, which  came
into force on 01.05.1979. In a consultative referendum in February 1982, 52 % of voters were
in  favour  of  withdrawal  from  the  Community.  Consequently,  Denmark  proposed  to  modify
the  Treaties.  On  1  February  1985,  the  Treaty  of  withdrawal  of  13  March  1984,  or
"Greenland Treaty"1, came into force and granted to Greenland the status applicable to the
Overseas Countries and Territories (OCT) associated with the Community2.

The  Greenland  Treaty  also  emphasises  co-operation  and  development  aspects.  In  its
preamble,  it  refers  to  “arrangements  being  introduced  which  permit  close  and  lasting  links
between  the  Community  and  Greenland  to  be  maintained  and  mutual  interests,  notably  the
development needs of Greenland, to be taken into account”. Furthermore, the preamble states
that, whilst OCT status is deemed to provide an appropriate framework for the relations with
Greenland, “additional specific provisions are needed to cater for Greenland”.

A  Protocol  on  special  arrangements  for  Greenland  attached  to  the  treaty  of  withdrawal
states that Greenland shall enjoy unrestricted and duty free access to the Community market
for its fisheries products on condition that the Community is granted satisfactory possibilities
for access to the Greenland waters under a fisheries agreement.

1

2

Treaty amending, with regard to Greenland, the Treaties establishing the European Communities, OJ No. L 29/19,
of 1. 2. 1985, p. 1
Articles 182-188 of and Annex II to the EU Treaty

2

                                                
1.2. 

The legal framework - fisheries

The  fisheries  relations  between  the  Community  and  Greenland  are  governed  by  the
“Agreement on fisheries between the European Economic Community, on the one hand, and
the  Government  of  Denmark  and  the  local  Government  of  Greenland,  on  the  other”3,  or
Fisheries Agreement - , the negotiation and conclusion of which were intrinsically linked to
Greenland’s withdrawal from the Community and the conclusion of the Greenland Treaty.

The Fisheries Agreement was concluded for an initial period of ten years, after which it may
be tacitly extended for additional six-year periods  unless terminated  by  either Party through
notice  of  termination  given  at  least  nine  months  prior  to  the  expiry  of  each  period.  It  is
implemented by successive protocols.

The  Fisheries  Agreement  draws  upon  the  principles  of  the  Greenland  Treaty.  Its  preamble
explicitly refers to both “the spirit of co-operation resulting from the Community’s decision to
grant the status of overseas territory to Greenland” as well as the aforementioned Protocol on
special  arrangements  for  Greenland.  Furthermore,  the  preamble  acknowledges  “the  vital
importance  to  Greenland  of  fisheries,  which  constitute  an  essential  economic  activity”  and
emphasises that “for the Community, the maintenance of the fishing activities, in Greenland
waters,  of  vessels  flying  the  flag  of  a  Member  State  plays  an  essential  part  in  the  proper
functioning of the common fisheries policy”.

In this vein, the Fisheries Agreement is designed to provide the Community with both catch
quotas  in  Greenland  waters  as  well  as  a  special  priority  on  access  to  supplementary  catch
possibilities  in  Greenland  waters  in  return  for  the  payment  of  a  financial  compensation  to
Greenland. The Fisheries Agreement also provides that the Community catch quotas may be
taken  by  non-Community  vessels  to  the  extent  to  which  this  is  necessary  for  the  proper
functioning  of  fisheries  agreements  between  the  Community  and  third  countries.  The  latter
possibility has allowed the agreements on reciprocal access with the Faeroe Islands, Iceland
and Norway to be balanced either in full or in part without adversely affecting existing quota
allocations within Community fishing waters.

In line with the object and purpose of both the Greenland Treaty and the “Protocol on special
arrangements for Greenland”, the Fisheries Agreement was not confined to fisheries matters
but it  also intended to  serve the purposes  of  co-operation  in  the  development  of  Greenland.
More particularly, Greenland continued to receive the same amount of money as it received in
financial  assistance  when  it  was  part  of  the  Community  and  these  funds  have  been  made
available to Greenland only by way of the Fisheries Agreement.

1.3. 

The legal framework - The OCT status.

The OCT status extended to Greenland by the treaty of withdrawal is laid down in the current
Articles 182 to 188 of the EU Treaty, which also cover other territories  linked with  France,
the  Netherlands  and  the  United  Kingdom.  Those  Articles  are  implemented  by  means  of
successive Council Decisions, of which the last one is the 'Overseas Association Decision' of
27  November  20014.  They  define  the  global  relationship  between  the  20  OCTs  and  the
European Community, with the notable exception for Greenland of the special provisions on
fisheries outlined above.

3

4

OJ L 29 of 1.2.1985, p. 8
Decision 2001/822/EU of 27.11.2001, OJ L 314, 30.11.2001, p.1

3

                                                
Because  of  that  exception,  although  Greenland  has  been  covered  by  the  different  Council
Decisions  pertaining  to  the  association  of  the  OCT’s,  financial  assistance  from  the  EDF
cannot be provided during the period of application of the successive fisheries protocols. This
situation has in practice prevented Greenland and the Community from co-operating in many
areas covered by the Decision. Instead, Greenland has managed its own development policy
in an autonomous way.

However,  other  instruments  of  the  OCT  association  are  available  to  Greenland.  The  most
important  is  the  non-reciprocal  trade  regime,  the  most  generous  granted  to  any  Community
partner,  which  has  in  particular  ensured  the  unlimited  duty  free  access  to  the  Community
market for their fisheries products.

The EC programmes and budget lines open to all OCTs also offer valuable opportunities e.g.
in  the  areas  of  scientific  research  and  technological  development,  environment,  NGO,
education, culture and training.

1.4. 

Overall picture of the Greenland situation

In the spirit of the Greenland Treaty, which specifies in its preamble that "the Treaty should
permit close and  lasting links  between the Community  and Greenland  to  be  maintained  and
mutual interests, notably the development needs of Greenland, to be taken into account", the
fourth protocol on fisheries must be assessed considering the overall picture of the Greenland
situation.

At  a  first  glance,  the  economy  of  Greenland  is  confronted  with  a  long  lasting  and  severe
crisis. According to the last OECD assessment  5 the GDP has been flat in real terms for the
last ten years, and major structural adjustment is needed to create the basis for a recovery.

This  situation  is  largely  due  to  the  crisis  of  fisheries,  as  fisheries  are  the  backbone  of  the
economy  of  Greenland:  not  only  do  they  form  the  main  component  of  private  domestic
activities,  but  fisheries  also  ensure  90%  of  the  foreign  balance  of  payment  in  external
resources, in a country which is almost totally dependent on imports.

The  crisis  of  fisheries  itself  draws  attention  on  the  huge  environmental  damage  caused  to
Greenland by the accumulation of impacts related to global unsustainability: the reduction of
fish  stocks,  perceptible  in  the  early  70's  has  been  accelerated  by  the  combined  effects  of
excessive fishing in the North Atlantic area and changes in water temperature. In addition, the
global  pollution  (persistent  organic  pollutant  and  heavy  metals)  is  now  affecting  animal
species and human health and eating those species is progressively regulated, if not prohibited
by the Greenland authorities. Plans for increased oil and gas activities in the Arctic Sea create
a growing concern for potentially harmful environmental effects.

The  specific  structures  of  the  Greenland  economy,  characterised  by  a  large  public  sector
(where  most  technical  assistance  is  provided  by  the  Danish  civil  servants)  and  adverse
conditions of climate and population dispersion make it impossible for the weak local private
sector  alone  to  achieve  the  necessary  investments.  Large  scale  public  interventions  are  still
needed 
industry,  modernisation  of
communication, training and care of a population whose life expectation is 12 years less than
the OECD average.

the  restructuring  of 

to  cope  with 

the  fishing 

5

OCDE – Greenland’s economy: building a strategy for the future; DOC.DT/TDPC (99)10

4

                                                
In the short term, these  economic difficulties result in public finance fragility, rendering the
Greenland  government  highly  dependent  on  the  block  grants  issued  by  the  Danish
government  (about  40%  of  GDP)  and  on  the  EU  financial  compensation  paid  under  the
fisheries protocols(4% of GDP). From a cultural and political point of view, Greenland enjoys
profound historical linkages with the Kingdom of Denmark  and therefore  also with the  EU.
There  are  signs  of  a  further  devolution  of  responsibility  from  Denmark  to  the  Home  rule
government  of  Greenland.  This  perspective  should  be  seen  in  a  triangular  relationship
between Greenland, Denmark and the EU.

1.5. 

Inadequacies of the fisheries agreement and protocols.

A  broad  assessment  of  the  past  achievements  should  first  recognise  that  the  fisheries
agreement, concluded  almost 20  years ago, has ensured the continuation  of  a  high  financial
support  to  Greenland  after  withdrawal  from  the  Community,  and  the  OCT  Decision  has
granted the free access of Greenland products into the community market. Reciprocally,  the
Community has obtained stable fishing quota and a preference on surplus stocks against the
payment of a financial compensation. The fisheries agreement also played an important role
in the relation to the agreement with Norway, the Faeroe Islands and Iceland, facilitating the
balance  in  the  reciprocal  exchange  of  fishing  possibilities  between  the  EU  fleets  and  those
countries.

Nevertheless,  a  realistic  evaluation  of  the  fisheries  protocols  should  also  consider  the
persistent and growing shortcomings of their implementation:

From the beginning, the quantities of fish available under the Protocols have been worth very
much less than the level of financial compensation. Although the Greenland authorities have a
more  positive  evaluation  of  the  situation;  already  at  the  time  of  the  conclusion  of  the  first
Protocol in 1985, there was virtually no cod available and only low abundance of  redfish in
Greenland waters.

This  situation  is  confirmed  by  the  figures  for  the  first  year  of  implementation  of  the  fourth
protocol. With the exception of capelin, redfish, shrimp and Greenland halibut, the utilisation
by Community vessels of the quotas available under the Protocol is extremely low. In 2001,
barely  19%  of  the  redfish  quota,  less  3%  of  the  catfish  quota  and  less  than  1%  of  the
roundnose  grenadier  quota  was  taken.  Of  the  cod  quota  of  2000  tonnes,  the  catches  by
Community vessels amounted to 225 tonnes. Not only the financial compensation foreseen by
the  4th  protocol  at  the  level  of  42,8  million  Euros  exceeded  the  value  of  the  fishing
possibilities,  estimated  by  the  Commission  to  be  around  28  millions  Euros,  but  even  those
possibilities  have  been  far  from  being  reached.  This  is  partly  explained  by  the  discrepancy
between  the  scientific  advice  on  the  state  of  the  stocks  and  the  setting  of  quotas  that  are
unrealistic  with  respect  to  this  advice.  The  most  striking  example  is  for  cod,  where  the
scientific  advice  is  for  a  zero  catch  but  where  the  Community  continues  to  be  allocated  a
quota of 2000 tonnes under the Protocol.

Successive  protocols  have  aimed  at  adjusting  the  financial  compensation  to  reflect  nominal
increases  in  catch  quotas  and  to  allow  for  inflation.  Unlike  the  fisheries  protocols  recently
concluded with other countries the fourth protocol is entirely lacking in any specific provision
for  targeted  actions  on  structural  measures  to  support  Greenland’s  efforts  to  modernise  or
restructure its fisheries sector. Both the Court of Auditors and the European Parliament have
argued for the need for transparency (i.e. clear identification of the payments corresponding to

5

effective fishing possibilities) and compliance with the usual budgetary rules on development
co-operation, also emphasised in the Commission’s Green Paper on fisheries.(section 5-8-2)6

These  shortcomings  are  largely  due  to  the  need  to  strike  a  compromise  overcoming  the
constraints  created  by  the  withdrawal  of  Greenland  from  the  European  Community.
According to this assessment, the mid-term review should provide an opportunity to engage in
a process leading to a more transparent relationship as to the cost of the fisheries agreement
and at the same time, to a streamlining of the development co-operation.

1.6. 

Opportunities in development and foreign policy areas

As pointed  out  in  the  assessment  of  the  overall  economic  and  social  situation  of  Greenland
(point 1.2. above), a number of promising issues for co-operation and development could be
raised  in  the  context  of  European  Union-Greenland  relationship,  even  beyond  the  fisheries
related concerns.

Co-operation  could  be  developed,  in  a  broad  framework  of  supporting  sustainable
development in the arctic region, as a matter of mutual concern, both for Greenland and for
the European Union.

In  Greenland  itself,  several  critical  issues  concerning  sustainable  growth  and  employment
creation have been brought up by the Greenland authorities  as possible  areas for  assistance:
veterinary  controls;  alternative  possibilities  for  oil  and  minerals;  sound  water  management;
improved communication and housing facilities  provided to dispersed population; education
of the labour force; scientific co-operation using the opportunity of the unique “laboratory on
climate change” provided by Greenland.

More broadly, Greenland has a key role to play as an Arctic partner, within the broader circle
including  Sweden  and  Finland,  as  well  as  Iceland,  Norway,  Russia,  Canada  and  the  United
States. In this context, the European Commission will work to strengthen the co-ordination of
our sectoral initiatives in the Arctic, in order to ensure a consistent overall approach to matters
such as the environment, research, and sustainable development questions in both our internal
and external policies. In the specific field of our external relations, Arctic matters will already
be mainstreamed in the second Northern Dimension action plan (2004-2006, currently under
preparation),  and  this  focus  will  certainly  be  maintained  in  the  continuing  evolution  of  this
key policy area. The importance of Greenland in the perspective of the Arctic Window of the
Northern  Dimension  was  indeed  particularly  highlighted  during  the  recent  Northern
Dimension ministerial meeting in Ilulissat in August 2002.

The sustainability concern, whose strategic importance has been underlined by the adoption in
Gothenburg  of the  European sustainable development  strategy,  commends  the  promotion  of
the arctic co-operation, including a pro-active and supportive participation of Greenland.

6

COM(2001) 135 du 20.3 2001

6

                                                
1.7. 

Short and long term inter-relations

By assessing the present stage of the EU-Greenland relations, the Commission believes that:

– 

– 

– 

there is a clear need to adjust the implementation of the 4th Fisheries Protocol,
ensuring  greater  transparency  and  consistency  with  the  overall  community
ruling on budgetary and development policy;

there  is  also  a  strategic  need  to  broaden  and  strengthen  the  future  relations
between  the  EU  and  Greenland,  linking  it  with  the  mutual  interest  in
sustainable development in the Arctic area;

the short and long term requirements are inter-related: taking into account the
specific nature of the fisheries protocol and also the structural problems facing
Greenland, an immediate adjustment of the protocol should be based on a long
term  political  joint  commitment  by  the  EU,  the  Kingdom  of  Denmark  and
Greenland.

2. 

PROPOSAL  FOR  A  NEW  PARTNERSHIP  ON  SUSTAINABLE  DEVELOPMENT  BETWEEN
THE EU AND GROENLAND

2.1. 

The scope of a sustainable development partnership

The  Commission  considers  that  it  would  be  appropriate  to  base  the  future  of  the  EU-
Greenland relationship on a comprehensive partnership, where three dimensions are pertinent
to sustainable development:

– 

– 

– 

Sustainable  fisheries  continue  to  be  a  matter  of  common  interest.  Like  all
future agreements with third countries, they should therefore be placed in the
context  of  a  partnership  for  the  development  of  responsible  and  sustainable
fisheries, as described in the Commission's communications "Towards a world
partnership for sustainable development". Moreover, like in all other fisheries
agreements the level of financial compensation should reflect the real level of
fishing possibilities, leaving the non-fisheries aspects to be dealt with by other
instruments;

sustainable  growth  and  employment  should  be  promoted  on  the  basis  of  a
development  strategy  closely  co-ordinated  with  Danish-Greenland  common
policies  and  with  the  economic,  social  and  cultural  challenges  facing  the
Greenland Inuit population;

the  effective  participation  of  Greenland  and  the  protection  of  important  EU
interests  in  the  framework  of  an  international  arctic  co-operation  should  be
ensured

7

2.2. 

Options for a new legal framework

Article 188 of the EC Treaty, which grants the OCT status to Greenland, also specifies  that
the only exception to such status concerns fisheries. Therefore, if the Community decides to
enter into other, that is non-fisheries sectoral  or  global agreements concerning  Greenland, it
would need to modify the EC Treaty itself.

Concerning  financial  support,  the  present  OCT  framework,  as  recently  revised  by  the
Overseas  Association  Decision  (covering  the  period  2001-2011),  does  not  allow  for  an
allocation comparable with that presently granted through the fisheries protocol. Under the 9th
EDF OCT decision provisions, Greenland would receive no more than about a tenth of what it
receives under the current financial compensation.

The question whether a new agreement would complement or totally replace the OCT status
of Greenland should also be addressed. Two distinct options might then be considered:

– 

– 

According  to  the  first  option,  “OCT  plus”,  the  treaty  amendment  would
complement  the  basic  OCT  provisions  with  a  specific  arrangement  covering
not  only  fisheries  but  any  bilateral  and  arctic-related  issues  not  yet  covered
under  the  OCT  status  and  allowing  for  a  more  sound  form  of  EC-budgetary
financing than is the case at present.

In the second option, “EU-Greenland partnership”, an ad-hoc agreement would
have to be negotiated, taking over  and building upon all the facilities  granted
by the OCT status and by the fisheries agreement.

The  first  option  would  not  entirely  remove  the  ambiguity  from  the  Greenland  status,  but  it
might even worsen it and possibly put into question the balance of the entire OCT framework
for the sake of a very specific situation. Also, the visibility of the EU-Greenland relationship
must  be  enhanced.  For  these  reasons,  the  Commission  considers  that,  if  Greenland  and
Denmark so request, the second option should be preferred.

2.3. 

Proposed political commitment

Considering  the  need  to  place  the  adjustment  of  the  4th  fisheries  protocol  between  the
Community  and  Greenland  in  the  context  of  a  future-oriented  and  reliable  comprehensive
partnership,  the  Commission  invites  the  Council  of  Ministers  to  express  to  the  Greenland
authorities and to the Danish government their political commitment to:

– 

base  the  future  relationship  of  the  Union  with  Greenland  after  2006  on  a
“partnership  for  sustainable  development”,  which  would  follow  on  from  the
present  fisheries  agreement  and  OCT  status,  in  the  light  of  the  CFSP’s
priorities after the next enlargement;

– 

amend consequently the EC Treaty in due course.

Within  the  next  financial  framework  of  the  European  Union,  orientate  future  financial
commitments  on  their  present  level,  while  taking  into  account  the  specific  needs  and
constraints of Greenland as well as financial contributions from other parties.

8

3. 

THE MID TERM REVIEW OF THE 4TH FISHERIES PROTOCOL

In the light of the present strategy for a long term relationship between the EU and Greenland,
the  Commission  believes  that  the  Greenland  authorities  should  consider  a  significant
modification of the 4th fisheries protocol from 2003 onwards.

3.1. 

Streamlining the 4th fisheries protocol

Considering that the annual financial compensation foreseen by the protocol until the end of
2006 should remain unchanged, the Commission will propose to the Greenland authorities:

– 

– 

to agree on catch quotas that are in line with fishing possibilities estimated on
the basis of scientific advice, even though this will accentuate the discrepancy
between  the  value  of  fishing  possibilities  and  the  amount  of  the  financial
compensation;

to amend the protocol in order to earmark some of the financial compensation
for  the  structural  reform  of  Greenland's  fisheries  industry  and  to  promote
responsible fishing in its waters. The measures envisaged to do this would be
programmed, implemented monitored by Greenland, which would produce an
annual statement of the cost and benefits of the measures financed.

3.2. 

Paving the way for a sustainable development partnership agreement

Both for the needs of the short and long term proposals outlined above, it would be necessary
to support the transition to a more articulated form of co-operation, to be outlined in a country
strategy paper.

During the transitional period, financial aid should continue to be provided along the lines of
a  budgetary  support;  thereafter,  the  most  appropriate  instrument  will  be  used.  As  soon  as
possible  and  in  any  case  2005  at  the  latest,  the  specific  needs  and  constraints  of  Greenland
relating  to  human  resources  and  institutional  aspects  should  be  assessed,  with  a  view  to
ensuring  that  Community  aid  achieves  the  best  possible  efficiency  and  sound  financial
management, as it is normally done when the Community grants funds in this form.

Recalling  the  preamble  of  the  Greenland  Treaty  which  specifies  that  ”  (the  agreements  )
should permit a close and lasting link between Greenland and the Community”, considering
also that seventeen years later, the Danish government has given a clear encouragement to an
even closer link in the form of an EU-Greenland partnership, the Commission considers that
the  perspective  of  a  “sustainable  development  partnership  between  EU  and  Greenland”  is
consistent both with the initial spirit of the Greenland Treaty and with current developments.

9