Sea Change - The fishing industry is the base on which the villages that dot Iceland’s coastline are built. What happens when it leaves town?

The fishing industry is the base on which the villages that dot Iceland’s coastline are built. What happens when it leaves town?

Angelica Aquino moved from the Philippines to the East Iceland fishing hamlet of Djúpivogur over a decade ago. Enticed by a job in a factory owned by a fishing and fish processing firm called Vísir, Angelica, whose name has been changed for this article, immediately put down roots in her new home, starting a family and integrating herself into the community.

So when Vísir announced this spring that it would be shutting its operations in Djúpivogur, as well as in Þingeyri in the West Fjords and Húsavík in the North, it put Angelica in a tight spot. She could either choose to take a job at the company’s main factory in Grindavík, on the other side of the country, or she could stay behind and look for new work—which can be hard to come by in a village of only 500 people. “If I can keep the same job, I don’t have to be worried about the future,” she said. “But I’m starting to get worried because of what’s happening now. We didn’t expect this, and it’s all coming so quickly.”

Indeed, few foresaw Vísir’s actions. The company has always prided itself on being an attractive, stable employer for its workers, many of them immigrants like Angelica. In recent years it has grown on multiple fronts, buying a fishing company in Canada, establishing facilities in Germany and even expanding its Djúpivogur plant. That era of expansion, it seemed, was coming to an abrupt close.

Angelica was not sure if she would relocate with the company, but she was certainly sure about one thing: her sense of belonging in Djúpivogur. “Why do I have to go?” she asked. “I love the people here, I love the place. It’s the situation that’s forcing me to go.”

The market speaks

According to Pétur H. Pálsson, Vísir’s general manager and the son of its founder Páll H. Pálsson, the consolidation of the company’s fish processing facilities is the result of economic ripples coming from southern Europe. The region has always been the largest market for Vísir’s highly profitable salted fish products, but as a result of the continuing recession in Italy, Greece and Spain, the prices have dropped somewhere between 20-30%. As demand for Vísir’s product went down, so too did the company’s incentive to produce it in more than one factory.

In order to strengthen the company’s position in the shifting export market, all signs pointed toward consolidation. Pétur was adamant, however, that the transition could be made with minimal disruption to the lives of Vísir employees. Though it stopped short of guaranteeing jobs in the new Grindavík factory for all its workers, the company intended on making place for as many of them as possible, knowing that some—mostly homeowners and those with children—would choose to stay behind. Twenty out of a total of fifty workers from Djúpivogur will make the move, as will forty-two out of the sixty workers in Húsavík.

Vísir also planned on finding buyers for the three factories that it was leaving, in order to secure jobs for the communities. “We are not closing the factories in Þingeyri or Djúpivogur; that’s a big misunderstanding,” Pétur said. “We are moving our production out and are finding new owners to come in with their own fishing quota and continue running the factories.” Though buyers have not yet been found for those two locations, Pétur is optimistic about an eventual sale, especially for the Djúpivogur plant, since it will retain the production lines for fresh and frozen fish.

Meanwhile, the factory in Húsavík has already been sold. For a while Vísir floated the idea of having it converted into a hotel—its location on the village’s waterfront would have been ideal for whale-watching tourists—but eventually sold it to a meat processing company owned by Norðlenska, which could provide jobs to the twenty-odd Vísir employees there who don’t move to Grindavík.

Pétur even saw a silver lining to the consolidation. The company didn’t own enough quota to keep all four factories running year round, so as fisheries shifted and seasons changed fish would wind up at certain factories; the others, meanwhile, would temporarily have to halt production. Pétur thought that by concentrating quota in Grindavík, employees would have steadier work. If true, it’s sure to be good news for those who relocate, and cold comfort for those who don’t.

“It’s all political. I think it’s mostly because we’re not friends with people in high places.”

Pétur’s father Páll founded Vísir in Grindavík in 1965, and his grandfather, Páll Jónsson, operated a fishing company out of Þingeyri from 1932 until he drowned on a fishing expedition in 1943. So Pétur spoke with the pride of a third-generation fishing businessman when reflecting on the changes at Vísir. “We know this is a difficult case,” he said, “but there’s no reason to make it more difficult than it already is.”

Headquarters: Grindavík

On the cafeteria wall of Vísir’s Grindavík factory hang four photographs, beautiful aerial shots of the Icelandic villages out of which the company has operated until now. Vísir’s factories are plainly visible in each photo, tucked at the heart of their respective towns, right next to the glinting blue ocean. It’s a sad reminder of economic reality with the daily meal. But for Sigurður Jónsson, a foreman at the Grindavík plant, there’s nothing to mope about. “This is a situation we didn’t see coming,” he said, shortly before providing a tour of the facilities. “But if it’s going to happen, it’s going to happen. We will gladly take in the other employees here.”

The factory in Grindavík can process up to 40 tons of fish per day, according to Sigurður. In addition to producing salted fish, it has recently added lines for fresh and frozen fish products.

Though the town’s population will certainly swell with the relocated employees, Sigurður still thought Grindavík could absorb everyone. The combination of the town’s harbour and its proximity to the international airport, along with the abundance of fish in the waters off Iceland’s southwest coast, make it ideal for expansion. Sigurður also said the company would pay for the employees’ moving costs. “Some people are a bit pleased because they were thinking about moving closer to Reykjavík anyway,” he said. “Now they see the opportunity to move and not have to pay.”

Like his boss, Sigurður neither wanted to overplay nor understate what these changes mean to the company’s employees. “We are very sorry about all this, because Pétur was very proud of having Vísir’s presence all over the country,” he said. Surveying the workers on the processing line, he added: “This company does a lot for its employees. If you talk to them alone, nearly everybody is happy to work for Vísir.”

Berglind Jónsdóttir is one such employee. The 28-year-old Icelander grew up in Grindavík and has been working at the Vísir plant off and on since 2006, doing everything from gutting and brining the fish to packing them up in boxes. Both her parents as well as her brother and sister all used to work in the factory, too—many Vísir employees work alongside their family members, whether siblings, parents or children. “It’s the best company you can work for,” she said. “They take care of their people.”

“A quarter of the workforce”

Christian Mendoza is more apprehensive about his job. Christian, whose name has been changed for this article, came to Iceland from the Philippines seventeen years ago and has been working in Vísir’s Djúpivogur plant for around a decade. It’s been an industrious time for him. Since arriving, he started a family and bought a home. The prospect of moving to Grindavík makes him nervous. Since Christian wouldn’t want to sell off his hard-acquired real estate, he’d need to make enough money in Grindavík to both maintain a property far away and rent one to live in in his new, if only temporary, hometown. Such a scenario would only be feasible if the work in Grindavík were steady enough, something that no one can guarantee. “If they promise that there’s a lot of work for me, then I guess it’s okay,” he said. Still, he didn’t think relocating was in the cards for him and his family.

Native-born Icelanders are in the minority at the Djúpivogur plant, but many of the immigrants who work there have been in the country for upwards of fifteen years and are naturalized Icelandic citizens. Vísir’s situation in Djúpivogur is complicated largely by the fact that most Icelandic employees in the village own their own homes, and that most immigrants are so integrated that they don’t want to leave. Largely for these reasons, only twenty of the plant’s fifty employees will accept new positions in Grindavík.

“I think there is a consensus in the country that we want to maintain the smaller fishing villages and the people living there.”

For those who stay behind, the best-case scenario would be that the plant finds new owners and remains in the fishing industry. The municipality has been investing in fish farming in recent years. It will take time to establish itself, but if this sector eventually takes off, salmon and trout raised in Berufjörður could be processed in the factory. It’s important to remember, however, that Vísir is not just pulling out of the village; it’s also taking its fishing quota with it. Without a quota, fishermen can’t catch anything, much less dock and process their catch. So for the building to remain a fish factory, its new tenants will have to bring their own quota with them.

Gauti Jóhannesson, a former teacher and principal at the local school who has served as the town manager for the past four years, put the matter in numerical terms. “If you take our whole community of 470,” he said, “around 70 are retired, 50 are in the countryside and 100 are school-aged children. That leaves you with 250. Then about 50 are off at university, college or working away from home. That leaves you with the village’s workforce of 200. What’s happening with the Vísir plant affects a quarter of the entire workforce. So it’s big.”

According to Gauti, Djúpivogur’s salvation lies in social services. “What we can do as a town is continue to provide good services and make this a place that people want to move to and live in,” he said. The town has an unusually high proportion of children between the ages of one and five: Gauti placed the figure at 8.2%, compared to the national average of 7.3%. “So providing good services to families with children has been our main goal for the last few years.” Most of these services are related to the local school, which encompasses kindergarten as well as primary, secondary and music school. Children don’t have to leave the village to get the education they need until they turn sixteen and go off to college, something that can’t be said of every village this small.

The other great hope for Djúpivogur, as it is for so many municipalities throughout Iceland today, is tourism. “Every year we have more and more tourists,” Gauti said. “We’re getting tourists at times where we didn’t have them a few years ago.”

The idea of transitioning to a tourist economy was met with ambivalence by numerous workers in the Vísir factory, however. Guðmundur Helgi Stefánsson has worked at the plant since 2005 and described the company as a “great employer,” but decided not to relocate so that he could stay in Djúpivogur, where most of his family lives. He acknowledged an increase in tourism in the village, but wasn’t sure how smoothly he could transition careers. “Maybe I’ll get a job in a hotel or something,” he speculated. “But I’ve always worked in fish factories. I’ve never worked with tourists before.” His preference, he made clear, was to stay in the same line of work if at all possible.

When it came to the fate of Djúpivogur, Pétur wasn’t worried. “I have no doubt about Djúpivogur,” the Vísir general manager said. “It has everything a small village needs to stay alive and grow. So even if you cut the number of jobs in one factory from 50 to 30, it’s not going to make or break the village.”

Case Study: Breiðdalsvík

Perhaps such a change wouldn’t make or break a village like Djúpivogur, but once the question of quota enters the equation, everything becomes more volatile. Elís Pétur Elísson is a fisherman and community activist who lives in Breiðdalsvík, a village to the northeast of Djúpivogur on the Ring Road. According to his account, there were around 1,500 tons of fishing quota located in Breiðdalsvík as recently as 1996. Vísir bought the majority share in the company that owned this quota in 1998, however, and relocated it to Djúpivogur, effectively draining Breiðdalsvík not only of its fishing industry, but of its very ability to support a fishing industry.

The ramifications for the village were severe: the local fish factory closed, the economy suffered and the population shrank. Today Elís Pétur sees the same cycle about to repeat itself in Djúpivogur. “In recent years Vísir has been buying up smaller fishing companies throughout the country,” he said. “And now they’re taking the quota, which is the main source of income for these villages, and leaving for Grindavík.”

“Maybe I’ll get a job in a hotel or something. But I’ve always worked in fish factories. I’ve never worked with tourists before.”

To add insult to Breiðdalsvík’s historical injury, there are plans afoot to possibly compensate Djúpivogur for the quota Vísir is moving back west—to the tune of 400 tons for three years. This irks Elís Pétur not only because Breiðdalsvík was left empty-handed by the government back in 1998, but primarily because the quota for which Djúpivogur would be compensated wasn’t all originally located in Djúpivogur: just under half of it, by his count, actually belonged to boats in Breiðdalsvík. “If the government does distribute quota to compensate Djúpivogur, I just hope it’s spread around,” he said.

Recently, Elís Pétur and a few other fishermen in Breiðdalsvík started working together and pooling the profits earned by fishing their small individual quotas. They used the money to open a new fish factory in the village, which is owned collectively by the people of Breiðdalsvík. Instead of selling their catch to other factories, these fishermen are trying to process it themselves. “That way we keep the income and the jobs in Breiðdalsvík,” Elís Pétur said. The group has sought government support to help make the factory more stable and to employ more people, but according to Elís Pétur the authorities have been tight-fisted. He doesn’t know for sure why they were unsuccessful in their petitions, but he has a hunch. “It’s all political,” he said. “I think it’s mostly because we’re not friends with people in high places.”

As to the quota system itself, Elís Pétur is at once pragmatic and highly critical. Like many other small-scale fishermen, he sees some form of quota as a necessary means for regulating the amount of fish—something long thought of as the common property of all Icelanders—that are taken from the sea. In 1990, however, revisions to the law made quota a commodity that could be bought and sold on a free market. At this point it began concentrating in the hands of a smaller and smaller number of fishing companies mostly headquartered in Reykjavík, morphing the fishing industry into what Elís considers essentially a mafia.  “The few companies that own the quota can buy out anyone they don’t want in the industry,” he said. “They can gamble with it. They can go to the bank and take a huge loan, and the loan is supported by quota that they own.”

“I think there is a consensus in the country that we want to maintain the smaller fishing villages and the people living there.”

The way to fix the quota system, according to Elís Pétur, is to tie fishing quota to a particular geographic location. “If the government is going to take care of these different villages, they have to support the villages,” he said. “That means some of the income has to come from the quota being left in the villages, not only with these big companies in the Reykjavík area.”

Gauti echoed his opinion when discussing the plight of Djúpivogur. “I think there is a consensus in the country that we want to maintain the smaller fishing villages and the people living there,” he said. “The easiest way to do that is to make sure people can do what they’ve been doing throughout the years: fishing. It’s a political decision that has to be made.”

On the question of whether Djúpivogur might eventually suffer the same fate as Breiðdalsvík, Gauti grew solemn. “I would never dare to think like that,” he said. “I’m not going down that road. It’s that simple.”

Combining forces

One of the most important issues raised by Vísir’s withdrawal from its factories in Þingeyri, Húsavík and Djúpivogur is the distance to which Icelandic politicians and the public are willing to go to preserve smaller fishing villages. Gauti and Elís Pétur both support the idea of tying quota to particular fishing villages, so it can’t be sold to a new company on the other end of the country—or even, presumably, on the other end of a fjord. Elís Pétur goes even further in his recommendations, advocating for a partial nationalization of quota. “A large part of the entire quota each year could be owned and rented out by the government, instead of rented out by rich people in Reykjavik,” he says. “It’s crazy how much money these companies are making just by renting out quota and not fishing themselves.”

These ideas might indeed provide some relief to residents of smaller fishing villages, but if the price of this relief is forced inefficiency in the fishing industry, it could prove to be a Faustian bargain. Pétur sees technical progress behind all the strain being put on villages like Djúpivogur and Breiðdalsvík, especially when they find themselves in too close proximity—and therefore competition—with each other. “With all the advanced modern equipment used to process fish, you only need twenty or thirty people today to do the things that used to take many more people,” he said. “So it has nothing to do with the quota system. It’s just the technology.”

Gauti was of a different mind about what role the quota system, particularly the geographically unspecified nature of fishing quota, played in the plight of his village. “What the quota system does is make the villages very vulnerable,” he said. “We’re a village where the number of inhabitants has been growing. We have all these children, we have the school which is getting bigger and bigger. And up until this all happened, we did not look at ourselves as a vulnerable village at all.”

Though stopgaps might be found in tourism or fish farming or any number of other sectors, Gauti maintained that the easiest, simplest and most effective solution for Djúpivogur’s economy was also the most traditional. There is plenty of room for development in the fishing industry, he said, but this development has to happen where the boats dock and where the fish factories are located. “We are, first and foremost, a fishing village,” he said. “We have been a fishing village for hundreds of years, and until otherwise proven I like to think we will be a fishing village into the future.”