Source: "Whaling in the North Atlantic - Economic and Political Perspectives," Ed. Gudrun Petursdottir, University of Iceland, 1997, ISBN 9979-54-213-6. Proceedings of a conference held in Reykjavik on March 1st, 1997, organized by the Fisheries Research Institute and the High North Alliance.
Authors: Trond Bjørndal Professor of Fisheries Economics and Director of the Centre for Fisheries Economics, Norwegian School of Economics and Business Administration, Jon M. Conrad Professor of Resource Eonomics, Cornell University and Anders Toft former Researcher at the Centre for Fisheries Economics

On the resumption of the
Norwegian minke whale hunt*

The Background

In June of 1993, Norway resumed the commercial hunt for minke whale, from a stock in the Northeast Atlantic which migrates along the coast of Norway into the Barents Sea. This was not an easy decision for the government of Norway. The International Whaling Commission (IWC) had met in Reykjavik, Iceland in 1991, in Glasgow, Scotland in 1992, and in Kyoto, Japan in 1993, and on all three occasions voted to continue the moratorium on commercial whaling, which it had introduced in 1986. The stated intention of Norway to resume whaling in 1993 brought protests from various environmental and animal rights groups, threats of economic sanctions from nonwhaling countries and threats to boycott the Winter Olympic Games, scheduled in Lillehammer, for February of 1994. What could have caused the government of Norway to risk its status as a world environmental leader, to invite the possible imposition of trade sanctions and to chance the tarnishing of the Olympic Games? Obviously, the citizens and leaders of Norway must have had strong feelings about the legitimacy and importance of whaling. For Norway, whaling is considered a management issue rather than an environmental issue.
At the Reykjavik meeting in 1991, Norway, Iceland and Japan all presented evidence that certain unit stocks might be classified as large enough to support a managed harvesting, under the prevailing IWC classification scheme. In the southern hemisphere, the stock of minke whales was estimated in excess of 600.000 animals [Woods Hole Oceanographic Institution, 1989]. In the North Atlantic, the IWC recognized four unit stocks: the Canadian east coast stock, the west Greenland stock, the central North Atlantic stock, and the Northeast Atlantic stock. The adult population in the Northeast Atlantic stock had been estimated by Conrad and Bjørndal (1991) at just under 60.000 animals.

Norway requested a resumption of commercial whaling in 1992. Japan proposed a commercial hunt for the minke whale in the southern hemisphere, and Iceland sought to resume the commercial harvest of fin whales within its territorial waters. The IWC rejected all three proposals on the grounds that its scientific committee was developing a new stock assessment procedure and that the decision to resume commercial whaling should await additional information and reclassification.

Iceland withdrew from the IWC in December 1991, feeling that the Commission had been captured by preservationists who would continue the moratorium, regardless of the mounting scientific evidence that certain stocks could be safely harvested. When the moratorium was extended again at the Glasgow meetings, Norway announced its intention to resume commercial whaling in 1993.

The decision of the Norwegian government to resume whaling was premised on two assumptions: (1) that the stock of minke whales was abundant, and (2) that they could be harvested on a sustainable basis, without risk of extinction. Given these two assumptions, the government decided to design a hunt that would be modest in the overall level of harvest, and equitable in its distribution.

An international group of scientists appointed by the scientific committee of the International Whaling Commission (IWC) in May 1996 reached a consensus on an estimate on a total stock in 1995 of 112.000 minke whales in the Northeast Atlantic, with confidence limits of 90.000 to 135.000 (High North Alliance). However this estimate has not yet been officially approved by the scientific committee of the IWC.

In the remainder of this paper we review simulation results that show, indeed, that the actual harvests over the 1993-96 period were modest, and that the stock would continue to increase through the year 2010 if harvests were fixed at 600 whales per year for 1997 through 2009. We then examine economic aspects of the 1993-1996 hunts.

Stock Development

The results of a simulation by Bjørndal and Conrad (1997) are shown in Figure 1. From an adult population of 82.100 in 1938, the comparatively high harvests in the post war period caused the population to decline to 51.900 adults in 1973. From 1970 to 1983, however, harvests ranged tightly around an average of 1.720 whales, and the population stabilized between 51.000 and 53.000 adults. After 1983, harvests drop sharply and the stock increases from 52.500 in 1983 to 63.000 in 1995.

Based on this simulation Bjørndal and Conrad (1997) conclude that there were three stages in the hunt for the minke whale in the Northeast Atlantic. The first, from 1938 to about 1970 was a mining or depletion stage, where the stock of adults was driven downward from its pristine population of about 82.000 to about 52.000. From 1970 to 1983, harvests, averaging about 1.800 whales per annum, stabilized the population between 51.000 and 53.000 adults. Both these stages might be consistent with an open access model of the industry. Since 1983 the reduced commercial harvests, and the relatively insignificant scientific harvests during the moratorium, have allowed the stock of adults to increase to 63.000, by the beginning of 1995.

As part of their simulation, Bjørndal and Conrad (1997) took their base-case and explored the consequences of harvesting 600 adults in each year, beginning in 1997 and running through the season in 2009, in addition to the actual harvest for earlier years. This harvest seems consistent with the expected quotas for the near future. The simulation is shown in Figure 1.

From a stock of 63.000 in 1995, the adult population exhibits monotonic growth reaching 70.700 by the year 2010. Thus, a harvest of 600 adults per year would appear in no way to threaten the continued recovery of the minke whale population.

External Effects of the Resumed Hunt

The resumption of Norwegian whaling led to international protests from environmental and animal rights groups such as Greenpeace and Sea Shepherd, threats of economic sanctions from the United States and boycotts of Norwegian industry and the Winter Olympic Games in Lillehammer, in February of 1994. The actions were in the form of consumer boycotts, as welll as the threat of economic sanctions from the United States. The boycotts were partly directed at consumers, attempting to influence them to stop buying Norwegian products. Actions were also directed at firms importing, processing or distributing Norwegian goods. Furthermore, tourist travels to Norway were discouraged.

The effectiveness of boycotts depends on a number of factors. These include the form of the boycott (consumer boycott vs. government sanctions), the duration of the boycott, attention from mass media and resources “invested” in the boycotts. Although Norwegian whaling commanded substantial international attention in 1993, the interest for the issue gradually faded as did any effect of the boycotts.

The composition of exports in terms of e.g. bulk goods or branded goods is also important. The fact that a very large share of Norwegian exports consists of raw materials (e.g. oil, gas and fish) and semi-finished products, made Norway less vulnerable to boycotts.

To what extent rival firms and rival products as well are boycotted is important for the market share the producer may loose. Lack of a boycott of rival firms can be an important reason for large costs due to a boycott, but there are exceptions. One important exception is fish and fish products. The supply of unprocessed fish, which is the basis for the processing industry, is to a large extent given, at least in the short run. The quantity produced is therefore to a great extent determined by nature and government regulations. If for instance a boycott in Germany caused the competing nations to increase their market share at the expense of Norway, then they have to reduce their market share in other markets, and as a result, new markets would open for Norwegian fish. In this situation the costs of a boycott are limited to the costs connected with change of market.

Finally, due to increased publicity, boycotts may have a positive effect, e.g. for tourism. Actually, tourism from Germany and the United Kingdom, the two countries where boycotts were most prevalent, showed a positive development. However, it could also be the case that negative effects due to whaling were counterbalanced by a positive effect due to the Olympic Games at Lillehammer.

On the basis of complaints submitted to the Norwegian Ministry of Foreign Affairs, Bjørndal and Toft (1994) investigated 41 firms that might have suffered losses due to boycotts. Fourteen instances of likely losses were found; seven related to sales to Germany, four to the United Kingdom and the remaining three to the United states. Total losses - reduced profits and increased costs attributable to the boycotts - for the 14 cases were estimated to be in the range 6.1-9.8 million NOK. The authors found that losses were mainly of a short run nature. Evidence of long run losses was not found.

Under the Pelly Amendment to the Fishermen’s Protective Act, the United States may impose trade sanctions on countries that conduct fishing operations that threaten an international managed fishery. In such cases, the Secretary of Commerce is to “certify” such a fact to the President. Upon receiving a letter of certification, the President has the discretion of directing the secretary of the Treasury to prohibit the import of fish or wildlife from the offending country. Within 60 days of receiving certification the President must report to Congress on the action taken or the reasons for inactive.

On August 5, 1993, pursuant to the Pelly Amendment, the U.S. Secretary of Commerce certified that Norway’s resumption of whaling undermined the effectiveness of the IWC’s international conservation regime. Obviously, this caused great concern in Norway, in particular with regard to fish exports to the United states. However, President Clinton, while being opposed to whaling and expressing that U.S. trade restrictions would be justified, decided that “our objective can best be achieved by delaying the implementation of sanctions until we have exhausted all good faith efforts to persuade Norway to follow agreed conservation efforts.” (Ek and Buck, 1996). Notwithstanding this decision, both the House of Representatives and the Senate agreed on condemning commercial whaling.

The Future

In our assessment, the “first steps” in the resumption of commercial whaling were conservative and responsibly taken. We suspect that the next steps will be responsible as well, ensuring a sustainable harvest. The effects of consumer boycotts were short lived. Gradually, the international community has accepted Norwegian whaling. Further increases in harvest quotas will be based on market conditions.

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References

Conrad, J.M., and T. Bjørndal. 1991. Economics and the Resumption of Commercial Whaling. Norwegian School of Economics and Business Administration, Centre for Fisheries Economics, Helleveien 30. N-5035, Bergen-Sandviken, Norway, 36 pp.
Conrad, J.M., and T. Bjørndal, 1997. A report on The Norwegian Minke Whale Hunt. Norwegian School of Economics and Business Administration, Centre for Fisheries Economics, Helleveien 30. N-5035, Bergen-Sandviken, Norway, 32 pp.
Bjørndal, T. and A. Toft, 1994. Økonomiske verknader av boikottasksjonar mot norsk næringsliv grunna norsk kvalfangst (Economic Effects of Boycotts of Norwegian Industry due to Norwegian Whaling). Mimeo, Bergen, February 28, 1994. (In Norwegian)
Ek, C. and E.H. Buck. 1996. Norwegian Commercial Whaling: Issues for Congress.
Congressional Research Service - Library of Congress, CRS Report for Congress, December 31, 1996.