Islands of Resilience
Comparative Model for Energy, Connectivity and Jurisdiction
Realizing European ICT possibilities through a case study of Iceland
Smári McCarthy and Eleanor Saitta
1
Prepared at the request of:
on behalf of Members of the European Parliament
Christian Engström, Indrek Tarand, Carl Schlyter, Sandrine Bélier, Karima Delli, Eva Lichtenberger, Raül
Romeva i Rueda, Heide Rühle, Judith Sargentini, Bas Eickhout and Marije Cornelissen
Prepared at the request of The Greens / European Free Alliance
Authors:
On behalf of Members of the European Parliament:
Smári McCarthy
Christian Engström
Eleanor Saitta
Indrek Tarand
Carl Schlyter
Contributing Researchers:
Sandrine Bélier
Guðjón Idir
Karmima Delli
Jason Scott
Eva Lichtenberger
Paül Romeva i Rueda
Heide Rühle
Judith Sargentini
Bas Eickhout
Marije Cornelissen
Produced by:
International Modern Media Institute
Laugavegur 3
101 Reykjavík
Iceland
2
Distributed under the terms of the
Creative Commons Attribution-Sharealike 3.0-unported License
3
Abstract
Locale is rapidly becoming one of the most important competitive differentiators in the
provision of cloud-based information technology services. Broadly speaking, three
categories of issues define a locale's fitness for hosting the cloud: energy, connectivity, and
jurisdiction.
Energy is the largest cost center for most cloud hosts. Beyond price per kilowatt hour,
hosting companies must consider redundant network availability, power grid resilience,
environmental sustainability, climate, and equipment cooling requirements as core parts of
their energy strategy.
Connectivity is clearly essential for hosts, and differentiating factors here include total
installed bandwidth, current utilized bandwidth, hub redundancy, international uplink
redundancy, round trip latency, traffic shaping and network neutrality.
Jurisdictional issues are an area of emerging concern and awareness for cloud hosts, where
the landscape is shifting rapidly. Hosting companies are deeply affected by intermediary
liability, hosting liability, state and corporate surveillance, state and corporate censorship, the
accessibility of and cost of interacting with courts, corruption, and socioeconomic stability.
This report considers Iceland's relative competitive advantages and drawbacks as a hosting
locale relating to these issues.
4
Table of Contents
Abstract
Introduction
Energy
Energy Sources
Energy Utilization and Pricing
Grid Resilience and Redundancy
Climate and Cooling
Connectivity
Submarine Cables
Installed and Utilized Capacity
Domestic Network
Round Trip Latency
Network Security
Future Connectivity Developments
Jurisdiction
Commercial Issues
Overview of Icelandic Information Regulation
Compatibility with European Union Directives
Intermediary Liability Limitations
Surveillance
Censorship
Data Protection
Human Resources
Icelandic Modern Media Initiative
Source Protection
Freedom of Information Act
Network Neutrality
Communications Protection and Communications Data Retention
Intermediary Liability Limitations
Libel Tourism Protection
Libel Reform and Publishing Liability Limitations
Whistleblower Protection
Prior Restraint Limitations
Virtual Limited Liability Companies
Selected Bibliography
5
Introduction
This preliminary study is intended to give a birds-eye view of the primary factors pertaining
to energy, connectivity and jurisdiction in Iceland, as applicable to ICT1 growth in general
and cloud hosting in particular.. It is necessarily narrow in scope and largely based on
aggregating publicly available information. As a result, some inaccuracies may exist, largely
due to poor information made available by private actors. A more in-depth follow up study
will remedy this by seeking out more detailed expert insights, detailed statistics, and
comparing against sourced cases.
Regardless, this report clearly shows the advantages Iceland has in relation to ICTs, as well
as showing some of its potential weaknesses and possible remedies.
Iceland’s key strengths are:
●
Cheap and abundant energy generated from green, renewable, sustainable and
resilient energy sources, distributed over a well designed and resilient power grid.
●
Increasingly good connectivity to the outside world with reasonable redundancy
and a large amount of unused capacity available for expansion, and a very highly
developed internal network with high resiliency.
●
An advanced and stable jurisdiction, with clear information rights and regulations,
well structured administration, and well informed governing bodies.
Iceland’s main weaknesses are:
●
Scale discrepancies both in energy generation and consumption which could
potentially threaten grid resilience in extreme cases. This can be improved with
further diversification of energy consumers, such as large-scale ICT deployments.
●
Iceland’s data connectivity is provided by a relatively small number of submarine
cables connecting to the outside world, creating some network precarity. This is
currently being improved with the addition of new cables.
●
International data transport bandwidth through submarine cables is currently
expensive. This could be mitigated by further investments, subsidies, or other
methods to reduce the price for connection, with the intention of increasing the
overall usage.
●
Iceland has similar issues with blanket communications surveillance as in the EU,
which make it less attractive for hosting than countries where communications are
not monitored. This is hard to fix without political will in the EU.
●
Wildcard properties exist in the implementation of the e-Commerce directive,
connected to injunctive powers that district sheriffs still have. This can be solved by
clarifying the instances under which injunctions can be made, and restricting the
issuing authority to courts.
Together Iceland’s key strengths form a very sound basis for the expansion of ICT in
Iceland, especially cloud hosting. Most of the weaknesses in Iceland’s position are either
1 Information and Communication Technologies
6
structural weaknesses common amongst all EU member states or are relatively trivial issues
which can be resolved easily.
Energy
Energy is the largest cost center for most cloud hosting companies. Beyond price per
kilowatt hour, hosting companies must consider redundant network availability, power grid
resilience, environmental sustainability, climate, and equipment cooling requirements as
core parts of their energy strategy.
In our analytical model for energy, we asked the following questions:
How prevalent are renewable energy sources in current electrical production?
1. Less than 3% of all energy production based on renewable energy sources.
2. Between 4 and 40% of all energy production based on renewable energy sources.
3. Between 40 and 60% of all energy production based on renewable energy sources.
4. Between 60 and 97% of all energy production based on renewable energy sources.
5. More than 97% of all energy production based on renewable energy sources.
How much can current electrical production be increased without the construction of
new (not currently planned) power plants?
1. By less than 5% of current average power use.
2. By less than 25% of current average power use.
3. By less than 50% of current average power use.
4. By more than 75% of current average power use
5. By more than 100% of current average power use.
What is the annual average price per kiloWatt hour for a commercial customer using
less than 2 GWh/year, including generation and distribution?
1. > €0.20/kWh
2. > €0.14/kWh
3. <= €0.14/kWh
4. < €0.09/kWh
5. < €0.07/kWh
Iceland's national energy plan was last updated in November of 2011.
Energy Sources
7
In 2009, Iceland’s total energy utilization was roughly 240 PJ2 of primary energy sources,
which equates to roughly 67 TWh3. The primary energy sources were, in order of magnitude:
geothermal, hydroelectric, oil, and coal. Geothermal energy use was greater than all other
energy sources combined, while coal use was relatively minuscule. Energy use in Iceland
has risen substantially since the 1940’s with the industrialization of the country, which up
until roughly 1960 was almost entirely rural.
A vast amount of geothermal energy is used for house-heating (45%), followed by electricity
production (39%). In addition, it is used for snow-melting, swimming pools, fish farming,
greenhouses and for industrial purposes. In 2009 a total of 22.3 PJ of geothermal energy
was used for electricity production.
Only 18% of Iceland’s primary energy utilization comes from petrochemicals, of which
90% is oil and 10% coal. The majority of the coal is used by the iron smelting plant at
Grundartangi, with other industrial processes consuming the remainder. Almost no natural
gas is used in Iceland. Roughly 660 thousand tonnes of oil were used in Iceland in 2009,
of which 41% went to powering cars, 18% for aircraft, and 29% for fishing. Petroleum use
for cars has increased by 64% since 1990 in Iceland, contributing to the overall increase in
use. Oil is not used for electricity production except for some emergency backup generators.
Some towns have backup generators capable of sustaining basic operations throughout the
town temporarily, but the redundancy of the electricity grid renders this use minimal.
As a result, the electricity production in Iceland is almost exclusively from geothermal and
hydroelectric primary energy sources. The theoretical maximum energy production in Iceland
is 64 TWh per year from hydroelectric sources and between 10 and 30 TWh per year from
geothermal sources. However, for natural protection purposes substantial regions of Iceland
have been classified as natural reserves, parks, or other protected areas. In addition, certain
areas have been classified as energy reserves that will not be used in coming years, in part
for sustainability reasons. This lowers the effective energy available for production.
The current installed production capacity is 12.3 TWh per year for hydroelectric power,
and 4.6 TWh per year for geothermal power. After subtracting the protected and reserve
production categories, the total available hydroelectric and geothermal energy available for
future expansion is 11.91 TWh per year.
Variability of energy pricing and availability is a critical issue for data centers. As Iceland has
little or no hydrocarbon-based electricity production, electricity prices are largely unaffected
by fluctuations in the oil, gas, and coal markets, and will not be affected by supply chain
interruptions in these markets. This provides a critical level of energy resilience for the
Icelandic electrical system at the supply end. Cheap, reliable, resilience, and predictably
priced energy sources are, in combination, a significant advantage for potential hosting
companies.
2 Petajoules. 1 PJ = 1015 J
3 Terawatt hours. 1 TWh = 1012 W·h
8
(Primary energy sources in Iceland 1940-2009. Inset: Proportional use. Top to bottom: Coal,
oil, geothermal and hydroelectric. Source: Orkuáætlun 2011)
Energy Utilization and Pricing
In 2009, 74% of produced electricity in Iceland went to the aluminum industry, with roughly
4.9 TWh/year to Alcoa Fjarðarál, 4.0 TWh/year to Rio Tinto Alcan, and 4.0 TWh/year to
Norðurál. 6% of produced electricity was used in the services industry, 5% for iron smelting
plants, 5% for household appliances, 4% for utilities, 4% for general industries, and 1% in
agriculture.
9
(Electricity use 2009. From top to bottom: Fisheries, agriculture, general industries, district
heating, home use, steel mills, services and aluminum industry. Source: Orkuátælun 2011)
Energy use for household appliances accounted for 627 GWh in 2009, accounting for 7.1
B ISK (€44.3 million) in consumer use, including VAT. Average household electricity costs
in Reykjavík are 11.30 ISK/kWh, or €0.07/kWh. This rate is substantially higher than the
price for industry. In the case of the aluminum smelters, these rates are 30% lower than
the European average4, although the energy prices for aluminum smelting have been
confidential. Alcoa Fjarðarál reportedly paid between 28-35 USD/MWh in 2006, or roughly
€0.044/kWh at 2006 exchange rates.
(Main power lines and power plants. Source: Landsnet. For realtime energy distribution
figures, see http://landsnet.is/raforkukerfid/kerfisstjornun/aflflutningurnuna/ )
Grid Resilience and Redundancy
Power grid resilience in Iceland is fairly high. The 61 power stations in Iceland are connected
with a circular grid which goes around the country, providing basic redundancy. In addition,
most power stations on the southwest corner have further grid redundancy simply due to the
higher population density and related network effects.
There are 50 hydroelectric power stations in Iceland, mostly small. There are 7 geothermal
power plants, and 4 fueled power plants—one that generates power through garbage
incineration, two diesel powered, and one methane plant.
4 http://www.mbl.is/greinasafn/grein/1026890/
10
Some parts of the country, most notably the western fjords, are very poorly connected into
the grid and frequently get disconnected during the winter months due to poor weather
conditions. Power availability is maintained primarily with diesel generators when this
happens. Similarly, Flatey and Grímsey, two populated islands off the Icelandic west
and north coasts, respectively, are not connected to the main power grid, but are instead
powered by diesel generators.
Resilience is quite high on the southwest corner, where most economic activity is situated,
but the east coast has also improved substantially in recent years due to developments in
relation to the Kárahnjúkar dam project and the Alcoa Fjarðarál aluminum smelter.
The overall infrastructural elasticity on the power grid is high enough to handle most types of
outages due to line failures, power station shutdowns and disasters, but some very extreme
edge cases exist where grid resilience is threatened, notably sudden outages in production
units such as Kárahnjúkavirkjun, which could potentially lead to chain reactions of failures,
similar to the power outage at Itaipu power station in Brazil on 21 January, 2002. In general,
larger plants require larger transmission lines and inevitably cause more widespread
damage when they do fail. Similarly, larger consumption units may threaten grid resilience.
For instance, almost one third of Iceland’s total electricity consumption is used by a single
aluminum smelter, meaning that the unlikely edge case of an abrupt total disconnect would
momentarily increase the available electricity substantially. This kind of pathological outage
may however be mitigated by various means, not least the further diversification of power
production and consumption.
Climate and Cooling
Estimates for data center energy utilization from IBM5 suggest that roughly half of all energy
is used on cooling, and an additional fourth on heat waste, mostly due to internal electrical
resistance in system components. Therefore, a priori energy waste in typical data centers
is roughly 75% before any actual computation occurs. Mitigating this waste is clearly crucial
to the efficiency, cost-effectiveness and sustainability of any data center. The proportional
cost of cooling for data centers has risen dramatically over the past few years, relative to the
cost of hardware. Reduction in hardware deployments due to virtualization and increases
in system density have dramatically reduced equipment purchase costs as a proportion
of operating costs. As a result of this, component-level heat waste mitigation is a primary
industry research goal.
Increasingly, large data center operators have started to look to areas with relatively cold
climates. Cooling costs are significantly lower in cold areas, and most energy use in data
centers in those areas that goes to cooling is attributable to airflow management and de-
humidification rather than direct refrigeration. An example of this is the planned data center
that Facebook, Inc., is building near Luleå, Sweden6.
5 https://www-950.ibm.com/events/wwe/grp/grp030.nsf/vLookupPDFs/IBM%20BladeCenter%20
Product_Tikiri/$file/IBM%20BladeCenter%20Product_Tikiri.pdf
6 http://online.wsj.com/article/BT-CO-20111215-712478.html
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In this respect, Iceland's climate is clear benefit for cloud hosting providers even though
it’s not nearly as cold as some more northerly locales. The oceanic climate contributes to
relatively stable temperatures over the year. Apart from insolation, there is relatively little
seasonal variation in the factors that contribute to data center cooling. On the negative
side, Iceland’s climate is generally rather humid, with an annual average of roughly 70.75%.
In order for outside air to be used for cooling purposes some dehumidification would be
needed.
Variable
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Average temp. °C
-2.60
-2.59
-1.59
1.37
5.24
8.49
10.31
9.58
6.29
2.75
-0.04
-1.91
Insolation, kWh/m²/day
0.11
0.53
1.31
2.77
4.11
4.71
4.16
3.27
2.17
0.97
0.25
0.03
Wind speed, m/s
10.20
10.27
9.63
8.42
7.18
6.51
6.40
6.63
7.62
8.85
8.76
10.41
Humidity, %
80
78
71
69
66
66
63
61
67
72
77
79.0
(Reykjavík average temperature, insolation and windspeed, source: Gaisma.com)
Connectivity
Iceland’s connectivity to the outside world has improved substantially over the last two
decades. Since 1994, submarine fiber optics connections have existed to the Europe
and North America. Since 2004, domestic Internet connectivity has gone up from 81% of
households to 90%, compared to EU growth from 41% to 65%. Of the 10% of Icelandic
households not connected to the Internet, 40% (4% of the total) claim not to want an Internet
connection, whereas 25% (2.5% of the total) say it is due to price of connectivity.
Submarine Cables
As of November 2011, there are four fiber optics cable links to Iceland: DanIce, Greenland
Connect, FarIce, and CANTAT-3, in order of decreasing capacity. Several projects have
been proposed to increase the number of fiber optics links to Iceland; of them, Emerald
Express is the furthest towards completion.
Fiber optic cable
Owner
Total capacity
Installed capacity
Utilized capacity
CANTAT-3
Síminn
7.5 Gb/s
None
Decommissioned
FarIce
Farice ehf
720 Gb/s
Unknown
Danice
Farice ehf
5.2 Tb/s
~20 Gb/s
Greenland connect
TELE Greenland
1.9 Tb/s
Unknown
Emerald Express
Emerald Networks
58.6 Tb/s (planned)
N/A
Under construction
The CANTAT-3 was the first fiber optics cable connection to Iceland, greatly increasing the
country’s telecommunications capacity. Installed in 1994, it was disrupted in late 2006 and
was not returned to full capacity until mid-year 2007. The CANTAT-3 cable was retired in
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late 2010, due to age, operational costs, and low capacity.
Farice ehf operates two fiber-optic submarine systems as of late 2011. It is partially owned
by the Icelandic state and Arion bank, but a 20% stake is held by Faroese shareholders.
Their first system, FarIce, lies between Seyðisfjörður, Iceland and Dunnet Bay, Scotland with
a layover in Funningsfjørður in the Faroe Islands. From these locations it is backhauled to
Reykjavík, Edinburgh and Tórshavn respectively. It traverses a roughly 1,400 km route using
Dense Wavelength Division Multiplexing (DWDM) transmission technology. It has been in
use since 2004 and is currently Iceland’s main communications line. Currently only roughly
3% of FarIce’s total potential capacity is installed, according to available sources.
Farice ehf’s second system, Danice, was laid in 2008 and connects Landeyjarsandur in
Iceland to Blaabjerg, Denmark, with a planned expansion to Eemshaven, Netherlands.
Despite having significantly greater capacity than FarIce, it is much less utilized and mostly
used as a redundancy cable for FarIce.
The most recent fiber optic connection to Iceland is through Greenland Connect, installed
in 2009 and owned and operated by TELE Greenland. It connects Milton, Trinity Bay,
Newfoundland and Labrador, Canada, to Nuuk, Greenland, Qaqortoq, Greenland, and
Landeyjarsandur, Iceland. It contains two fiber pairs specified for 128 wavelengths carrying
10 Gb/s each. As its landing point in Iceland is co-located with the Danice cable, direct
bridging between them is possible.
The Emerald Express is a planned 6x100x100 Gb/s fiber optics cable from the United States
to Ireland with an offshoot to the Reykjanes peninsula in Iceland. Being constructed by
Emerald Atlantis, Ltd. and TE SubCom, Ltd., it is scheduled to enter service in late 2012 and
intends to facilitate ultra-low-latency connections to Europe and North America. Its Iceland
branch will presumably carry two pairs, one for connection to Ireland, the other to the United
States; the last pair connecting the US to Ireland directly.
Installed and Utilized Capacity
Total capacity of installed fiber optic cables is currently around 7.8 Tb/s, not counting the
CANTAT-3 cable. However, endpoint equipment has only been installed for a fraction of this
capacity. The installed capacity is not known, but conservative estimates put it close to 200
Gb/s, or around 2.5% of the total capacity.
Current utilized capacity is also unknown, but various estimates can be used to arrive at a
figure. The combined foreign connectivity of universities and secondary colleges in Iceland is
currently 16.5 Gb/s through RHNet. As RHNet typically accounts for between 14.2%-14.9%
of total traffic through the Reykjavík Internet Exchange, it can be estimated that total foreign
bandwidth consumption is close to 120 Gb/s. This number may turn out to be severely
understated, but more detailed data is not available.
13
(Map of proposed Emerald Express cable. Source: Emerald Networks)
Uplink redundancy to Europe is good due to the FarIce and DanIce cables going separate
routes. However, redundancy to the US is poor, since the only reliable connection is through
Greenland. Currently, in the case of an outage, rerouting would have to be through Europe—
presumably London. US redundancy will improve substantially when the Emerald Express is
completed.
Overall uplink redundancy is becoming better, providing more infrastructural elasticity
and greater resilience. The older emergency satellite redundancy is slowly becoming less
relevant and is probably not realistically needed.
Domestic Network
The main domestic telecommunications hub is RIX (Reykjavík Internet Exchange), which is
operated by ISNIC. This hub connects the main Internet service providers and data centers
together.
In general, domestic fiber optics and copper networks are operated by Míla, Fjarski and
Gagnaveita Reykjavíkur. Míla is a subsidiary of the formerly state-run phone company (since
privatized, currently known as Síminn). It operates a fiber optics ring around the country
which were installed by NATO, but has expanded it substantially and introduced additional
redundancy. It also operates fiber and copper networks in most settlements.
Fjarki is a subsidiary of Landsvirkjun, the (mostly) state owned power company.
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Gagnaveita Reykjavíkur is a subsidiary of Orkuveita Reykjavíkur, the Reykjavík city
power company. It provides mostly fiber to the home connections but also operates some
communications backbones within the Reykjavík metropolitan area.
Round Trip Latency
Round-trip latency to Europe is generally low, but varies widely depending on destination city
and provider, origin location and provider, and various other variables. Generally speaking
the network latency has low stochasticity (“jitter”), averaging around 4ms (milliseconds),
suggesting natural latency rather than network congestion.
We did informal testing of multiple origin and endpoints on known locations to arrive at
some idea of latency trends. Typical round-trip times to London are close to 55ms; 31ms to
Copenhagen. Connections to Oslo trend around 70ms, Berlin around 71ms, and to Madrid
74ms. On connections closer to the uplinks, slightly better times were observed, while
household Internet connections showed slightly worse round-trip times. As such, none of this
was particularly unexpected.
The theoretical roundtrip time for a photon traveling over the big circle route from Reykjavík
to London is 12.64ms; to Copenhagen it is 14.02ms. Therefore the Copenhagen connection
is as close to reasonable expectations as is possible, while the London connection could
possibly be improved. The FarIce endpoint is in Edinburgh, so packets bound for London
must traverse potentially congested and slow UK networks after their initial arrival.
Network Security
No major network security incidents have occurred in Iceland. Denial of Service attacks
happen on a relatively small scale on a fairly regular basis, but are easily mitigated with
standard techniques. No large scale online attacks have occurred in recent years, although
in some cases competent attackers have been able to disable individual service providers
for a number of hours. This is not considered to be more frequent in Iceland than in the EU,
based on anecdotal evidence.
Individual servers and home computers are moderately well protected from security threats
compared to other countries, owing to a fair degree of awareness, a comparatively low
incidence of pirated operating system software, and generally well configured routers on
home connections. That said, many computers run outdated operating systems with severe
security vulnerabilities, and many websites operate outdated web platforms, in particular
Wordpress and Joomla, which are common staging grounds for attack.
The Icelandic government is acutely aware of the threats posed to the security of networks,
and in recently proposed amendments to the telecommunications act, provisions are made
for the establishment of a CERT (Computer Emergency Response Team). This should
increase multi-party coordination and responsiveness in the case of online attacks or other
ICT-related emergency, and thus overall communications resilience.
Future Connectivity Developments
A number of proposals have been made for future developments in connectivity in Iceland.
15
One example which has frequently been brought up is that Iceland’s geographical situation
makes it ideal for connecting the American east coast, Europe, and East Asia, due to
the receding polar ice cover. Such a connection could land in Longyearbyen in Svalbard,
and have connections to Murmansk, some settlements along northern Siberia, and either
connect to Yakutsk via the Lena river or go through the Bering strait and connect to Alaska
on the one hand and Kamchatka and Japan on the other hand.
This would shorten round-trip latency to East Asia substantially, as most current connections
go through the Mediterranean, down past India, and through the South China Sea. The
Longyearbyen connection would allow for redundancy to Norway through an existing
connection. Connections in Russia would help in Russia’s developing ICTs, as currently it is
estimated that 70% of Russian communications go through Sweden. However, it would be
vital to Europe’s communications security interests that such a connection have direct routes
to East Asia rather than an intermittent landing in Russia. There are numerous ways in
which such a proposal could be made beneficial to all parties, and it would open possibilities
for diverse applications from cross-continental high speed trading and currency arbitrage
to online gaming. For telephony applications, this connection would push the latency on
communications between Europe and East Asia down below the threshold of human
perception, itself a revolution in global telecommunications.
Less ambitious potential developments that have been proposed include construction of
large data centers on the Reykjanes peninsula, construction of further fiber optics links to
Europe and America, and the establishment of data caches and mediation centers in Iceland
for high availability applications.
(Example routes for a “polar express” cable; also shows autumn arctic ice cover)
16
The Russian Optical Trans-Arctic Submarine Cable System (ROTACS) project aims to do
just that. According to an article
(ROTACS telecommunication project outline; source: http://barentsnova.com/node/1737)
(ROTACS and Arctic Fibre; source: Laser Focus World7)
TODO: http://barentsnova.com/node/1737
7 http://www.laserfocusworld.com/articles/print/volume-48/issue-04/world-news/fiber-cables-to-span-the-arctic-
ocean.html
17
Jurisdiction
Iceland is a parliamentary republic which gained independence from Denmark in 1944. It
is a member of the United Nations, the Council of Europe (CoE), the European Economic
Area (EEA), the European Free Trade Association (EFTA) and the North Atlantic Treaty
Organization (NATO), amongst others. It is party to numerous international agreements
including Schengen.
Iceland’s membership in the EEA means that outside of a few limited areas, all EU
commercial directives take effect in Iceland. In addition, both for conformity and utility,
Iceland has adopted various non-EEA relevant directives. This tendency has been
increasing as part of the preparations and negotiations for EU membership. As of 12
December, 2011, eight out of 33 chapters have been closed in Iceland’s EU accession
negotiations. Of particular interest to this report, the chapter on information society and
media is considered to generally already conform to the EU acquis.
Commercial Issues
After the collapse of the Icelandic banking sector in 2008, the Icelandic Central Bank
(Seðlabanki Íslands) was authorized to put limitations on the flow of capital, in particular
those with no relevance to goods or services. The Central Bank is also authorized to require
domestic companies to deposit and exchange foreign currency. As of November 2009 all
restrictions have been lifted on new investments, and in practice trade from Iceland is not
hindered substantially by the capital restrictions.
VAT in Iceland is generally quite high, with most goods and services falling in the 25.5%
VAT category. However, law 163/2010 introduced new exceptions to the VAT law (law 50/
1988) which makes data processing and information provision, as well as “electronically
provided services” exempt from taxed capital flows.
Further, this law allowed an exemption from VAT for the importation of servers and related
equipment (i.e., equipment which is necessary for the functioning of the servers and is
only of direct benefit to the owners of the servers) in cases where the owners have official
residence in other member states in the EEA, EFTA, or the Faroe Islands, and do not
have fixed operations in Iceland in accordance with Icelandic tax law. This exception puts
more specific requirements, for example that the owners of the servers pay VAT in their
home country, that the purpose of the operations be of such a nature that it would require
commercial registration if it were domestic, that the servers were imported specifically for
the purpose of operation in a data center which their owner is in business with, that the
servers and other equipment are used only by the owners, but not for other purposes within
the data center, and that the servers be used from outside of Iceland. This exception is due
for reconsideration in late 2013, but as it stands is exceptionally beneficial for cloud hosting
providers.
Overview of Icelandic Information Regulation
18
Icelandic law conforms broadly to the European acquis regarding a number of different
information regulations.
Telecommunications are in general governed by law 81/2003 (telecommunications act),
which implements EU directive 999/5/EC, regulation 2887/2000/EC, the Telecoms Package
(directives 2002/19/EC, 2002/20/EC, 2002/21/EC and 2002/22/EC), and directives 2002/58/
EC and 2002/77/EC.
Electronic commerce and other electronic services are generally governed by law 30/
2002, which implements the e-Commerce directive (2000/31/EC), thereby establishing
intermediary liability limitations which are crucial to the functioning of Internet service
providers, hosting providers and data centers. The only practical failing of the Icelandic
implementation of the e-commerce directive is that allowance is made for injunctions
which, for historical reasons, can be issued by a regional sheriff (sýslumaður) without court
supervision. This has not caused problems in the context of intermediary liability limitations,
but has been used to stifle media on one occasion, and could potentially be abused further.
Media is regulated under the media law, 38/2011, which implements Audiovisual
Media Services Directive (2007/65/EC). Broadcast media is also regulated by the
telecommunications act (81/2003).
Personal and private data is protected under law 77/2000, which implements the Data
Protection Directive (95/46/EC). Electronic signatures are allowed as a valid form of
signature under law 28/2001, and to this end a national authentication card scheme has
been developed and is being distributed as a feature of banking cards.
Freedom of access to government information is defined in law 50/1996. This law has been
under review, and a broad-reaching proposal for a new freedom of information law was
submitted to the Parliament during its 139th term (ending in October 2011), but did not
pass. A small subset of the changes proposed in that law by the relevant parliamentary
committee were adopted into a new version of the bill which was submitted to parliament
at the beginning of the 140th term. This new version did not include provisions proposed
by the review committee regarding public registration of government documents and public
advertisement of confidentiality terms, reasons and durations for secret documents.
With regard to intellectual monopoly rights, patents are defined in law 17/1991, biopatents
in law 58/2000, descriptions of electronic components are protected under law 78/1993,
trademarks under law 45/1997, and in particular corporate logos are protected under law
155/2002. Finally, copyrights are defined in law 73/1972, which implements EU directives
89/552/EEC, 2003/4/EC, 2001/29/EC, 2001/84/EC, 91/250/EEC, 92/100/EEC, 93/83/
EEC, 93/98/EEC, 2004/48/EC (IPRED) and 2006/123/EC. Law 53/2006 defines specific
permissions regarding the collection of evidence pertaining to violations of intellectual
monopoly rights.
Compatibility with European Union Directives
As previously stated, Iceland’s laws regarding information technology and media are largely
in accordance with European acquis. However, in the European Commission’s Opinion on
19
Iceland's application for membership of the European Union (COM(2010) 62)8, a few minor
issues are laid out.
The most salient issue is that the EU Data Retention Directive (2006/24/EC) has not
been transposed. This is however a trivial issue——the telecommunications act contains
provisions for data retention which originate from early drafts of the data retention, and is in
all regards equivalent to the Data Retention Directive. Therefore, transposition is a formality.
Data retention will be discussed further in the later section on electronic surveillance.
Also according to the opinion, while “the legislative and administrative structure is similar to
most EU Member States” the appointment procedures for the national regulatory authority
(the post and telecoms administration, póst- og fjarskiptastofnun) have to be revisited to
ensure transparency, objectivity, and high standards regarding security of tenure.
It goes on to say that “in the field of information society services, the main directives have
been transposed into the Icelandic legal order, i.e. the Directives on electronic signatures, e-
commerce and conditional access.”
Intermediary Liability Limitations
Law 30/2002 on e-commerce and electronic services implements the e-commerce directive
(2000/31/EC), which provides indemnity for "mere conduits", such as telecommunications
networks and Internet hosting providers.
There are few and mostly well defined exceptions to this indemnity:
●
an injunction from a sheriff or court order
●
an notice-and-takedown procedure regarding copyright infringement
●
knowledge of child pornography
The exception for general court orders without further definition is worrying, due to the
remnants of an magistrate system mostly abolished in 1991. Prior to this, the district “sheriff”
(sýslumaður) also served as magistrate and had the ability to, amongst other things, enact
injunctions. When their magisterial rights were revoked with the 1991 law, they retained
their ability to enact injunctions. Although this has not caused problems in terms of Internet
hosting, a sheriff’s injunction was used in 2009 to prevent the state broadcaster, RÚV,
from airing a story pertaining to a leaked large loan book from the bank Kaupþing. As the
injunction was revoked when the injunction had failed, it was never taken to court, so its
veracity under the constitution was not tested.
The exceptions should probably be improved by clarifying which exact circumstances can
trigger such exceptions, as well as restricting the injunction measures to actual courts.
Surveillance
The Telecommunications Act (Law 81/2003) was amended in 2005 to include provisions
for data retention. It applies to telecommunication providers and its current implementation
mandates the retention of records of all connection data for 6 months. It states that
communications companies may only deliver information on telecommunications in criminal
8 http://ec.europa.eu/enlargement/pdf/key_documents/2010/is_opinion_analytical-report.pdf
20
cases or on matters of public safety. It also states that such information may not be given to
others than police and public prosecution.
According to COM(2010) 62, an analytical report accompanying the communication from
the Commission to the European Parliament and the Council containing the Commission
Opinion on Iceland’s application for membership to the European Union, Iceland has
not currently implemented the Data Retention Directive. This directive is currently being
discussed (December 2011) in the Icelandic Parliament, however there are complications
owing to the fact that the Data Retention Directive, 2006/24/EC, came into effect one year
after the Icelandic Data Retention provisions, which have not since been overturned or
amended. However, the 2005 law which established data retention in Iceland was made
at the request of the Icelandic police chief (Ríkislögreglustjóri), making use of the current
discussions that were then ongoing in the European Commission about the issue. Therefore,
the implementation of data retention is structurally equivalent to the data retention directive,
although formally the EU directive has not been implemented.
During discussions in the Icelandic parliament about the (formal) implementation of
the data retention directive, some parliamentarians were surprised to find that such a
broad surveillance law already existed in the telecommunications act. There have been
discussions, both public and within the parliament, about the potential abolition of data
retention. However, this would impede the EU membership process and is therefore unlikely
to gain traction without any political support from within the EU.
There is an ongoing discussion about granting police enhanced surveillance rights, in
the form of proactive investigative measures aimed at counteracting organized crime and
terrorism. Although these measures have not yet been implemented, there is currently a
resolution proposal being processed in the parliament. The interior minister, Ögmundur
Jónasson, has independently stated that he is preparing proposals for such a law. The
scope of such a law is unknown, but it is clear that proactive investigation measures would
necessarily have to include expanded rights for telecommunications surveillance.
Wiretapping and other electronic surveillance is regulated under the Telecommunications
Act (81/2003) and further defined in Rules no. 837/2006 on Electronic Surveillance9.
Both data retention and surveillance support add to operating costs and jurisdictional
uncertainty for cloud hosting providers, especially given the complexity of unsettled
international cross-jurisdictional issues.
A new bill has been proposed in the Parliament, by the Interior Minister, for the
establishment of a CERT team. The proposal as it stands contains provisions for allowing
the CERT team to perform limited surveillance of a computer network, having been granted
permission to do so by the network operator. It also gives the CERT team the right to report
illegal activities on the network to the police. This combination could potentially be abused
as a gateway to blanket surveillance, as has been noted in a memo issued by the Icelandic
9 http://www.personuvernd.is/information-in-english/greinar//nr/610
21
Digital Freedoms Society10, but with greater restrictions (such as a ban on deep packet
inspection and identification of individual users or network analysis that could compromise a
user’s identity), it could serve to improve network security.
Censorship
No state censorship is currently practiced in Iceland.
Corporate censorship has been employed by telecoms providers in a few cases, at request
of police and child protection authorities. Most notable was the anonymous forum site
Ringulreið, which was accused of being a center for cyber-bullying. After the major telecoms
providers, Síminn and Vodafone, voluntarily censored access to the site from its users, the
site was shut down by its operators.
Some ISPs, most notably Síminn, the largest ISP in Iceland (formerly the state telecoms
company) offer parental filtering services to their customers on an opt-in basis. Such
blocking software is largely controlled by end-users, although it is somewhat unclear by
which criteria websites are added to these filter lists. However, no anti-competitive, political
or religious censorship has been noticed in these systems.
Over the last year, it can be argued that abuse of libel law has been on the rise. Journalists
and commentators have been increasingly found guilty of libel for comments made on online
media. In particular, one journalist has been found guilty for directly quoting an interviewee,
whose statement was considered to be libelous by the court. In another case, an elderly
woman was found guilty of libel for a Facebook comment wherein she made a value
judgement on the characters of the claimants. Of course, in each of these cases there are
competing interests and some uncertainty left to the courts, but many have commented on
the potential chilling effects associated with such lawsuits and have called for reform.
Data Protection
Data protection is regulated under law 77/2000, which implements EU Directive 95/46/EC
(Data Protection Directive) and parts of EU Directive 97/7/EC (Equal Treatment in Social
Security Directive). The day-to-day management of compliance is managed by the Data
Protection Authority.
Various rules and regulations apply with regards to data protection that might have
relevance to data centers and information hosting, specifically:
●
Rules no. 837/2006 on Electronic Surveillance.
●
Rules no. 698/2004 on The Obligation to Notify and Processing which requires a
Permit.
●
Rules no. 299/2001 on security of personal data
●
Regulation no. 322/2001 on Management of Personal Information by the Police
10 Full disclosure: one of the authors of this report, Smári McCarthy, co-signed the memo
in question and is a board member of the Icelandic Digital Freedoms Society at the time of
writing.
22
Human Resources
Iceland is a highly educated country. Out of a workforce of 181,000 people, 33.3% have
primary education, 38.2% have vocational education, and 28.1% have university education.
After the financial crisis started in 2008, unemployment rose from 1.01% in 2007 to 8.13%
in 2010. Recent reports suggest that the unemployment rate is going down, but that has not
been confirmed by publicly available statistics.
A 2006 OECD report showed that the number of scientific and engineering publications
in internationally recognised journals had increased at an average annual growth rate of
5.7% since 1998 and that between 1991 and 2001, the number of publications per million
population increased by 50%, from 403 to 610, compared to averages of 416 and 556 in
those same years in the EU15. At that time, Iceland ranked eighth in the number of
citations per paper (worldwide). The financial crisis caused some reductions in innovation
and research & development funding, but this primarily had the effect of shifting researchers
further into private sector research operations and startup companies. On the other hand,
the Icelandic Innovation Center has started a number of seed labs where startup companies
and small proprietors can rent inexpensive office space.
Bala Kamallakharan has noted11 that 2011 was a record year for insolvencies in Iceland,
while the number of new company registrations has dropped significantly. This could
perhaps be attributed to unavailability of capital available to startups, or perhaps deflation
of the last decade’s bubble. Without suitable employment for its highly skilled labor force to
absorb, Icelanders will either resort to leaving for better opportunities abroad or remain idle
domestically letting their considerable talent go to waste.
11 http://www.startupiceland.com/2012/01/2011-has-been-record-year-in-iceland.html
23
Either way, the combination of experienced researchers, high unemployment rate, low rate
of startup and high insolvency rate suggests that unless Iceland continues to experience an
increase in “brain drain”, where well educated people seek employment outside the country,
a significant underemployed or unemployed workforce will exist in Iceland.
Icelandic Modern Media Initiative
On July 16th 2010, the Icelandic Parliament, Alþingi, unanimously adopted a parliamentary
resolution to develop in Iceland advanced legislation for the protection of the rights to
information and free speech. Since then, the Icelandic Modern Media Initiative, or IMMI, as it
was called, has been in development, both inside the government ministries and institutions,
and within Icelandic civil society. The originators of the IMMI initiative founded, in 2011, the
International Modern Media Institute, a synacronymous civil society organization working
towards ensuring that the goals and spirit of IMMI are met in Iceland, and sharing the ideas
and developments with the world at large.
Subject area
Status
Notes
Source Protection
Complete
Media law + constitution
Freedom of Information Act
Pending
New law replacing older law +
ratification
constitution
Communications Protection
Pending
Changes to law + constitution
ratification
Intermediary Liability
In development
Changes to law + constitution
Limitations
Publishing Liability Limitations
In development
Changes to law
Whistleblower Protection
In development
Changes to law + constitution
Prior Restraint Limitations
Pending
Constitution + regulatory changes
ratification +
In Development
Judicial Process Protections
On hiatus
Network Neutrality
Pending
Constitution
ratification
Virtual Limited Liability
On hiatus
Companies
Freedom of Expression Prize
On hiatus
24
Source Protection
The protection of sources refers to measures which forbid journalists from exposing the
identity of their sources without the source’s permission. The purpose of such measures is
to increase the willingness and security of sources who consider themselves to be at risk,
when providing information of criminal wrongdoing, corruption, negligence or other socially
unacceptable behavior to journalists.
Journalistic source protection was implemented in Icelandic law 38/2011 (the media act).
The source protection clause is defined in article 25., which states:
Employees of media organizations which have been licensed or registered with the media committee
are forbidden to expose the identity of source for articles, books, retellings, announcements or other
material, regardless of whether it has been published, if the source or the author requested anonymity.
Employees of the media organization are also forbidden to release data which contain information
regarding the source or author in such circumstances.
The rule in the 1st paragraph also applies to those who, due to connections to the media organization
or the production of the material has gained knowledge of the identity of the source or author, or has
attained data to that effect.
Source protection under paragraphs 1 and 2 can only be relieved with the permission of the source or
the author, or on the basis of article 119 of the law on the prosecution of criminal cases, no. 88/2008.12
In addition to the stipulation in the new media law, the proposed constitution for Iceland
contains, in article 16, the statement:
The protection of journalists, their sources of information and whistle-blowers shall be ensured by law.
It is not permitted to breach confidentiality without the consent of the person providing the information
except in the process of criminal proceedings and pursuant to a court order.
This provides equivalent protection under the constitution, if ratified, ensuring that the source
protection clause would not be removed from law without referendum.
Status: Complete.
Freedom of Information Act
Access to government documents and records is mandated in Iceland by law 50/1996, (the
information act). The current Icelandic FOI law does not conform to CoE convention, and it
does not match the standards set in the Aarhus convention for environmental information.13
An updated information act was proposed at Alþingi in 2011, however, due to end of term
in late September 2011, the bill did not complete the third reading in parliament and was
therefore dropped. It has since been reintroduced with many of the changes merged in and
multiple improvements made, however, the newly proposed version does not meet the high
standard the bill had previously achieved.
IMMI submitted an 8 page report and a 84 page change comparison of the two bills to
the constitutional and regulatory committee of Alþingi in February 2012#, criticizing the
government’s backpedaling against the changes that had previously been proposed in
12 The exception in article 119 of law 88/2008 applies to the case where criminal proceedings for serious offences cannot be
resolved without the identity of the source or author being exposed. In such cases, it has been recommended although it is not
stipulated in statutes, that the identity first be exposed to the judge in camera, so that the judge can appropriately measure the
potential risk to the source against the benefit of the source’s exposure. This is generally considered an acceptable limitation to
the otherwise absolute source protection clause.
13 The Aarhus convention was ratified by law 131/2011.
25
parliamentary committee. At the moment, the committee work is proceeding.
Cautious optimism suggests that the committee will once again restore the bill to its former
state and that it will be accepted. If this is the case, the norm for access to information
in Iceland will be altered from being a ‘publish on request’ regime to ‘publish by default’
regime.14 Then, any documents which are not published can be at least listed along with
information about why it has been held back and FOI requests can be made for those
documents specifically. This change is the most important alteration of many.
In the meantime, the new proposed constitution of Iceland has guaranteed a substantial
improvement of information rights.15
Status: Pending ratification
Network Neutrality
Network neutrality is a very broad concept, but generally refers to the idea that each node
operating on the network should be considered equal to all others in terms of access.
Numerous governments and corporations have instantiated various forms of censorship and
containerization#. Due to technical limitations of the IPv4 space, almost every end-user of
the Internet can be considered in an aberration of the end-to-end principle often from NAT
(Network Address Translation), this makes their nodes second class citizens of the Internet.
There is a lot to be done in terms of network neutrality.
This is going to be a topic for many years, but for now IMMI has decided to take the first
steps. Article 14 of the proposed constitution creates an obligation for the government to
protect the Internet, with the same constraints as those on free speech in general. Although
those limitations should definitely be questioned, this must be considered a substantial
victory, as no country currently even mentions the Internet in its constitution, let alone
defends it:
The government shall guarantee conditions that are conducive to open and informed public discussion.
Access to the Internet and information technology shall not be curtailed except by a decision of a court
of law and on the same substantive conditions that apply to restrictions on the freedom of expression.
Status: Pending Ratification
Communications Protection and Communications Data Retention
In the interests of protecting privacy and source confidentiality, protection of communications
is a vital ingredient to any coherent information regulation strategy.
The protection of communications is a wide project that can be roughly split into two tasks.
On the one hand, removing existing threats to communications protection from law, and on
the other hand establishing new protections for communications.
In January 2012, as Alþingi was debating the adoption of the European Union’s Data
Retention Directive, IMMI produced a report outlining the dangers of blanket data retention.
In committee, IMMI’s views got the support of the Privacy Directorate, and this led to the
parliamentary committee requesting that the directive be postponed indefinitely and that
the foreign minister inform the European Union that Iceland would not be implementing the
14 meaning that instead of FOI requests having to be made for each document individually in order to obtain a private copy for
dissemination, which is a slow and complicated process, the rule will become that government publishes all documents publicly
by default, for instance in an online database.
15 http://www.stjornlagarad.is/english/ Articile 15 (English PDF available from the website)
26
directive.
This however was not enough, as Iceland has in law a data retention clause (paragraph
3, article 42, of the telecommunications act, 81/2003, amended in 2005), which predates
the EU’s Data Retention Directive by a year. IMMI has argued against this clause, both in
newspapers and in opinions to parliament, and has drafted a bill for the removal of the act.
More recently, IMMI was asked to submit proposals for improvement of certain articles of
the telecommunications act being added to introduce a Computer Emergency Response
Team (CERT) in Icelandic law, so as to better balance against privacy concerns. In these
proposals, IMMI included the following proposal:
Paragraph 3 of article 42, requiring the retention of telecommunication data, is dropped.
Appended to article 42 is a new paragraph:
Parties other than the sender and the receiver of electronic packet-switched communications are
forbidden to inspect or electronically process the payload of the packets. Headers and metadata of
packet-switched communications shall only be stored for the period needed to resolve the routing of the
communications and security measures as per article 47. a.
This would effectively remove the data retention provisions from law, if adopted, and
simultaneously improve the communications protection by making it a criminal offense to
intercept and inspect communications, by methods such as Deep Packet Inspection. It is our
hope that this provision be adopted in law.
In addition to this development, the proposed constitution of Iceland contains a clause in
article 11 expressly forbidding the search of communications, except with a valid court
order.16
Status: Pending ratification & in further development
Intermediary Liability Limitations
The original idea for limited liability for telecommunications intermediaries comes from the
development of the Communications Decency Act in the United States around 1996. Since
then, the European Union has adopted the e-Commerce Directive, which implements similar
limitations. The directive is implemented in Iceland as the electronic commerce and other
electronic services act (30/2002), and has equivalent measures.
Immediately on exploring the intermediary liability limitations (ILLs) in the Icelandic law, a
striking flaw presents itself in the form of “general court orders”. This phrasing is very vague
and more importantly lends itself to being understood that district sheriffs, who in Iceland
have injunctive powers, can issue takedown orders. IMMI has an interest in tightening this
language, and intends to make proposals to do so in the coming months.
More importantly though, ILLs have been under attack globally in recent years. A great many
changes in strategies relating to intellectual monopoly enforcement, protection of official
secrets and political attempts at opening doors for corruption have revolved around eroding
ILLs. In order to counteract this trend, IMMI has partnered with several organizations to
explore what can be done to define a legal and technical defense of both Internet endpoints
and intermediaries that can better withstand political attempts at erosion. This work is in
early stages, but some results are scheduled for July 2012.
Status: In development
16 http://www.stjornlagarad.is/english/ Articile 11
27
Libel Tourism Protection
Libel tourism is the act of a company or individual choosing to pursue lawsuits against
individuals or companies in a country with a low threshold for libel lawsuits. Legal extortion
schemes have been perpetuated with companies being tried in countries such as England
and Wales even if the defendant resides elsewhere in the world. This is a form of forum
shopping. Implementing laws that prevent or diminish the effects of libel tourism in Iceland
will protect Icelandic citizens and residents from this kind of forum shopping. It’s fairly
important that people can predict with some certainty where, if anywhere, they will be
taken to court. This also applies to companies, who base a lot of their operational security
on knowing the legal environment. In this way, ending libel tourism will encourage foreign
investment and provide financial security for companies operating here already.
For now, Iceland has a mechanism. As a signatory of the Lugano treaty, Icelandic courts
can decide not to uphold foreign court verdicts which go against the rule of law in Iceland.
This means that a libel verdict from a foreign country can be challenged in an Icelandic court
on the basis of article 34 of the Lugano treaty if it comes from a country with a substantially
different burden of proof for libel than Iceland does. This has not been tested, but is currently
our best bet.
In the meantime, British libel reform efforts are going well, and coupled with a well written
libel law in Iceland, may be sufficient to put an end to libel tourism - at least in Iceland. When
that is finished, the bigger issue of International Forum Shopping remains.
Status: Complete / Untested solution
Libel Reform and Publishing Liability Limitations
The media law from 2011 introduced new rules regarding media liability. However, since its
adoption, a number of court cases have been heard in Reykjavík which cast a shadow on
the reform and point at a deeper structural fault in the current libel regime.
Although media liability is defined in the print law and superseded by the media law, the
terms of libel itself are defined in chapter XXV of the criminal act, which treats violations
of privacy and libel as equal criminal offenses. Under the criminal act, it is illegal to make
truthful accusations, to offend somebody publicly or privately, or to make unfavorable
comments about deceased persons. As these are criminal offenses, they have assigned
imprisonment penalties from 1 to 4 years, as well as fines, although imprisonment is rarely
used in practice.
The global trend in libel law is to move it away from criminal sanctions and into tort law,
making it a civil offense, punishable only by fines. Alongside this, the scope of libel is to be
narrowed, making the truth a valid defense and ensuring that people cannot be brought to
charge for making value judgements against another’s character. It should be legal to call a
person a jerk, although it is questionable whether you can call somebody a murderous jerk
without backing it up with evidence.
IMMI has completed the basic research needed to implement these changes and drafted
a bill which aim to alleviate at least most of the existing concerns. Due to parliamentary
scheduling rules, it cannot be introduced until the autumn of 2012.
Status: Pending
28
Whistleblower Protection
A whistleblower is a person that tries to disclose or report information on situations affecting
the public that may evidence of criminal activity. Protection for individuals reporting
institutionalized corruption is paramount. They may be providing relevant information
to the public record, such as data or testimony about relevant matters like public health,
passed incidents, crime, government biases, democracy undermining practices, violations of
constitutional rights, corruption and bribery.
Threats to whistleblowers come from corporate interests, governmental interests, criminal
activities, biases inherent in legal and judicial officials and systems. Whistleblower
protections must include a right to anonymity, physical, financial and social security.
As the threat models, institutional settings and personal complexities of whistleblowing vary
widely, this is perhaps the most complicated of IMMI’s tasks. While a lot of development
work has been put into this issue already, we feel that the adequate protection of
whistleblowers cannot be completed without deep investigation.
As one core issue, the idea of corporate personhood must be challenged. Disregarding
other arguments for doing so, it is very important that it not be decided that companies and
other corporate vehicles have a right to privacy, as this would pit whistleblower activities up
against privacy and data protection law, the sanctity of which is of equal importance. It’s a
fight nobody should have to fight. That said, there has been no such ruling in Iceland and it
is not foreseeable that that will change; it’s merely one issue of many that must be monitored
and pro-actively taken action on.17
Status: In development
Prior Restraint Limitations
Prior restraint is banned under article 73 of the Icelandic constitution. A slightly stronger
implementation of prior restraint limitations are introduced in the new constitution, which is
pending ratification.
Outside of constitutional guarantees, IMMI also has an interest in protecting against abuse
of injunctions by sheriffs, who still have injunctive authorities as a holdover from their now
abolished tribunal role. This fits in with the discussion of Intermediary Liability Limitations
stated above, and IMMI expects to be able to address these two concerns jointly.
Status: Pending ratification
Virtual Limited Liability Companies
Icelandic corporate law is currently somewhat hostile to foreign ownership from outside the
European Economic Area (EEA). The idea of Virtual Limited Liability Companies is to allow
for virtually defined corporate entities, whereby the ownership is somewhat ephemeral, as
long as the owners adhere to certain Icelandic transparency requirements. In that way, a
virtually operated commpany would have tax obligations and operational safe harbor rights
in Iceland like any other company, but gets to operate virtually in exchange for some strict
guarantees of transparency and such.
17 For more detail see:: http://immi.is/Press_Release:_IMMI_Status_Update,_April_2012
29
This issue has more to do with creating a pleasant investment environment than explicitly
improving the information regime in Iceland. For that reason, it has been relegated to the set
of the last things we aim to accomplish in this set, and is therefore on hiatus for now.
Status: On hiatus.
Selected Bibliography
●
Orkustefna fyrir Ísland; Stýrihópur um mótun heildstæðrar orkustefnu; http://
www.nea.is/media/gagnasofn/Orkustefna-fyrir-Island.pdf
●
Iceland. What a Great Place to Put a Data Center; Verne Global / Martin Hannigan;
http://www.uknof.org.uk/uknof12/Hanningan-Undersea.pdf
●
Orkuspá fyrir Ísland 2010-2050; Orkustofnun; http://www.os.is/gogn/Skyrslur/OS-
2010/OS-2010-07.pdf
●
Benchmarking Study on Iceland as a Location for Data Centre Activity; Invest in
Iceland Agency; http://www.invest.is/resources/files/invest.is/BDC%20Report.pdf
●
Mikil arðsemi af raforkusölu til stóriðju; Vísir; http://www.visir.is/mikil-ardsemi-af-
raforkusolu-til-storidju/article/2011712209851
●
Policy Mix for Innovation in Iceland; OECD; http://www.oecd.org/dataoecd/15/62/
36648108.pdf
30