Shetland seafood sector face payback order –

Shetland seafood sector face payback order Published:  21 November, 2007

A LARGE number of young fishermen and fishing vessels in Shetland, as well as a fish processing factory, have been ordered to pay back more than £1 million to the local council.

Yesterday, Shetland Islands Council (SIC) announced that the European Commission had ordered the money to be paid back after ruling that funding made over a 13 year period was in breach of state aid rules.SIC convener Sandy Cluness described it as “a devastating blow” and a threat to the future of the small island community.

However one fishing skipper said fishermen should not be expected to pay the money back and called on them to refuse.

The ruling came more than a year after an anonymous individual put in a detailed complaint about the council using its oil funds to support the local fish catching and processing sector.

After lengthy representations both in Shetland and Brussels, with support from MSP Tavish Scott, MP Alistair Carmichael and various MEPs, the EC finally ruled that three schemes supporting the local fishing industry breached state aid rules.

The schemes were the First Time Shareholder Scheme to help young men invest to become part of a fishing boat crew; the Fishing Vessel Modernisation Scheme and the Fish factory Improvement Scheme.

As a result, more than £1 million paid out to 78 young fishermen, 20

fishing boats and one fish processing factory must now be handed back to the council. The amount includes compound interest on the original funding, which could double the amount originally awarded.

Further complaints into loan schemes for fish farmers and fish processors, as well as funding for a proposed abattoir are still being investigated.

Yesterday Mr Cluness promised to fight the decision with every means at the council’s disposal.”We will fight this ruling in any way we can,” he said. “These investments were made by previous councils in good faith to encourage first time fishermen to get started, to assist in improving the standard of fishing vessels, and to help modernise our fish factories.

“I cannot believe that European politicians ever intended to use state aid rules in this way crippling the development of our traditional industries and threaten the sustainability of a peripheral community like Shetland.

“This is particularly galling in that individuals and businesses in our community are being punished for the council deciding to use its oil funds for the specific purposes for which they were intended.”

Mr Cluness said the council had co-operated fully with the investigators and had never envisaged a clawback on this scale would be ordered.

“Not only are we very concerned with this specific outcome, but for the consequences to other investment schemes currently being operated and unless we can find a way to use our oil reserves to assist the development of our local economy I fear for the future of this community.”

Last night James Anderson, skipper with the white fish boat Alison Kay, said five of the seven shareholders on his boat had taken advantage of the First Time Shareholders Scheme, which had given them between £5,000 and £7,500 each to invest in a new boat.

Mr Anderson did not think that many fishermen affected could afford to pay the money back, nor should they be expected to.

“I would think this was a difficult one to enforce. I don’t think anyone will want to pay that back or feel that they should pay it back even if they can, and a lot of men won’t be in a position to do that. A large percentage of the fishermen involved will be bankrupt,” he said.

“It wasn’t taxpayers’ money so you would have thought it was OK to use it in this way. I think it’s come to the point where a stand should be made and (they should) just quite blatantly say no. Take them on. This is getting ridiculous.”

The factory involved is the Shetland Fish Products plant on the isle of Bressay, which was granted around £100,000 from the council several years ago to modernise its operation.

The company has recently been taken over by Dublin-based IAWS, where no one was able to comment on the matter yesterday.

Shetland MSP Tavish Scott said he was “appalled” by the ruling, and would be raising the matter with Scottish fishing minister Richard Lochhead during the parliament’s fishing debate tomorrow.

“I cannot see how this action by Europe helps Shetland fishermen and the wider industry. What can be objectionable about supporting young men to become shareholders in their fishing businesses, and therefore retaining local control over their future?

“At a time when the French government helps their fishermen with fuel

prices and the Polish government allows fishermen to exceed their agreed quotas and ignore the Commission, once again this looks like there is one rule for our industry and another in continental Europe.

“The challenge to fish processing is also very worrying. Shetland has to work very hard to retain its position in an increasingly competitive market. Why our industry is being penalised for investing in quality that the marketplace demands seems bizarre.”

Chairman of Shetland Fishermen’s Association Leslie Tait said he was

“horrified” by the decision, especially with its timing.

“The industry is really just picking itself out of the mire and this is really the last thing we could do with. Anybody who is responsible for this has a lot to answer for.”

Lib Dem MEP Elspeth Attwooll, who is vice president of the European

Parliament’s Fisheries Committee said she “very much regretted” the EC


“I am sure I speak for my fellow MEPs in saying that we are ready to doanything we can to assist the council in this regard and in ensuring that future schemes are Commission proofed,” she said. is published by Special Publications. Special Publications also publish FISHupdate magazine, Fish Farmer, the Fish Industry Yearbook, the Scottish Seafood Processors Federation Diary, the Fish Farmer Handbook and a range of wallplanners.