The Falkland Islands' economy was mainly dependent on sheep
farming. Some 690,000 sheep were the principal form of income. In
the late 1980's vast schools of squid were discovered in the
Falkland Islands Internal Conservation Zone (FICZ) (4).
Squid has a high market value. The subsequent sale of quota
licences to fishing ships made the Falklands economically self
sufficient. The sale of licenses accounted for nearly half the
revenue of the Falkland Islands. Due to the sharp drop in stocks
of squid, revenue generated by the sale of licenses has decreased
sharply, making the Falkland Islands again dependent on support
from the United Kingdom.
In the seabed around the Falklands oil has been discovered. It
is not clear yet how big off-shore oil reserves are. Plans for
development of these oil reserves have been developed. Dependency
on aid from London can be averted by exploiting the oil
resources.
The Spanish claim initial discovery of the Malvinas in 1523
when Spanish sailors first sighted the islands. By contrast, the
British claim initial discovery of the Falkland Islands when they
were first sighted in 1592 by captain John Davis. However,
Dutchman Sebald van Weert is the only one credited with an
authenticated discovery of the Falkland Islands.(5)
Ever since the first landing on the Falkland Island,
sovereignty is disputed because of the strategic position of the
Falkland Islands. The Falkland Islands were first settled by the
French in 1764.(6) The French erected a
settlement on the East Falklands. One year later captain John
Byron took the islands in possession for the British crown and
was unaware of the French settlement. A settlement was erected on
the West Falklands. Spain claimed the whole of (South) America as
their territory because of a papal bull dating of 1493. By this
papal bull Spain was granted all territory except for the
territories occupied by Portugal. Spain assumed that this grant
also included the Falkland Islands because of their closeness to
the continent. After negotiations, the French part was ceded to
Spain. France then withdrew claims.
Spanish troops loyal to the Argentine governor ousted the
British in 1770. This action brought Spain and the United Kingdom
on the brink of war. A war was just prevented by drafting a
treaty concerning the handing back of the conquested territory.
The Spanish Crown said that the governor was acting on his own
initiative and they handed the Falklands back to the British in
1771. The carefully worded agreement did not prejudice the
British nor the Spanish claim.(7) Both
countries implicitly recognized that their claim was not
unchallengable. The British left Falklands three years later, but
reiterated their claim on the islands and they left a plaque
behind to mark English sovereignty over the Falkland Islands.
Therefore, the British claim there was no derelictio of right
because there was no intention to sacrifice those rights. The
Spaniards also left in 1811, but did not repeat their claim. The
islands were without sovereign.
In 1816 Argentina became an independent country. The first
Argentine landing took place in 1820. No settlement was
established but Argentine sovereignty over the Falkland Islands
was claimed. The Times published a notice on 3 August 1821.(8) In 1825 the United Kingdom recognized
Argentina and did not protest to Argentine actions on the
Falkland Islands. Vernet, a German national, then established a
settlement on the island on behalf of the Argentine government in
1828. Only in 1829 Great Britain protested that the Argentine
government could not claim that their sovereign rights derived
from the Spanish claim. The United Kingdom claimed that Spain had
left the Falkland Islands in 1811 without reiterating their claim
and thereby had sacrificed their claim to the Falkland Islands.(9) After Vernet was removed from the Falklands by
the United States in 1831, Argentina appointed a new governor in
1832. In 1833 the United Kingdom invaded the Falkland Islands.
They found some Argentine forces trying to quell a mutiny.
Argentine forces withdrew at gunpoint but no shots were fired.
This period of continuous British government lasted until the
Falkland war in 1982.
In 1965 the United Nations voted that a colonial situation
exists on the Falkland Islands.(10) Since then
a Special Committee on the Situation regarding the Implementation
of the Declaration on the Granting of Independence to Colonial
Countries and Peoples, is concerned with the Falkland Islands.
Despite the British 'unchallengable' sovereignty claim and
invasion threats by Argentina, the United Kingdom entered into
talks with the Argentine government. Attempts for a peaceful
conciliation had already started in 1966.(11)
However Argentina and the United Kingdom never reached an
agreement.
In 1976 a military junta had taken over civil government. In
1977 Argentina was preparing an invasion, but because of the
sending of British warships to the area, they never carried out
the invasion.
British Minister of Foreign Affairs Ridley proposed a
leaseback solution for the Falkland Island in 1980. The United
Kingdom would hand over sovereignty to Argentina, but would lease
back the islands for a certain period. They would exploit natural
resources jointly.(12)
However, members of Parliament voted this proposal down in the
House of Commons, which refused to transfer sovereignty. The
Argentine government interpreted that this policy meant that the
United Kingdom government would not defend the Falkland Islands
at all costs. Also they argued that the United Kingdom at least
recognized for a part the Argentine claim. The foregoing explains
why many in the United Kingdom still oppose co-operation over
natural resources in the disputed areas.
In December 1981, the military junta consisted of the Chiefs
of Staff, General Galtieri, Admiral Anaya and Air Force General
Lami Dozo. The junta came under internal pressure as the economy
went down and popularity of the junta reached an all time low.
Together with Minister of Foreign Affairs Costa Mendez, the junta
evaluated that the United Kingdom would and could not defend the
Falkland Islands. Reasons were the atmosphere around the ongoing
talks and the British austerity policy that damaged offensive
capabilities of the Royal Navy.
Argentina made new invasion plans, while UNCLOS III was
drawing to a close. The incorporation of the 200-mile Exclusive
Economic Zone meant that whoever had sovereignty over the
disputed islands, was in effective control over the South West
Atlantic Ocean and the rich fishing grounds of the Patagonian
shelf. This would mean jurisdiction over all natural resources
such as the rich fishing ground and the oil reserves on the
Patagonian shelf. This also might have meant an important
incentive for Argentina to occupy the islands.(13)
The invasion was triggered quite randomly. Events in South
Georgia and protests in Buenos Aires seemed to have played an
important role. On 19 March a group of Argentine workers landed
on South Georgia to remove scrap metal from a disused whaling
station.(14) The Argentine workers raised a
blue-white flag. After immediate British protest, Costa Mendez
promised to pick up the workers. When the British warship
Endurance made its appearance in the area, it had to be withdrawn
because three Argentine warships were also found in the area.
On the 30th March big protests against the junta were staged
in Buenos Aires. In response to the signals of the British
government, internal unrest and the actions on South Georgia, the
Argentine fleet steamed to the Falkland Island on 30th of March
1982 in a bid to occupy the Malvinas and to quell the civil
unrest. On 2 April, Port Stanley fell to the Argentine army and
South Georgia followed on 3 April. The same day, the Security
Council called for an immediate truce and withdrawal of Argentine
forces.
The United Kingdom responded by dispatching a task force to
Falkland Islands. While nationalist feelings and government
support were running high in Argentina, the same could be said
for the United Kingdom under Thatcher's government.
Diplomatic negotiation and mediation by Mr. Haig could not
lead to a settlement of the dispute. The ensuing hostilities
ended with a victory for the United Kingdom. On 25-26 April, the
British task force recaptured South Georgia. By 5 June, Port
Stanley had also been recaptured. An independent poll in 1986
confirmed that 94,5% of the Falkland Islanders wished to remain a
British dependency.(15)
Some 1250 lives and five billion US dollars were spilt on this
war. Although the United Kingdom was again in effective
possession, the sovereignty dispute remains to be settled.
Sovereignty here is a preliminary question to the main
question who can legally establish binding rules to exploit and
conserve the natural resources of the seas. To claim a
territorial sea or EEZ of 200 miles a state must have sovereignty
over the lands that border these waters. In other words, only a
coastal state can exert jurisdiction over the territorial sea,
contiguous zone or EEZ.
The claims made by the United Kingdom and Spain and its
successor Argentina can be summarized as follows:
United Kingdom
initial recorded discovery
withdrawal of all others that had expressed a claim to
the Falkland Islands
uninterrupted possession for more than 160 years
direct and continuous protests when others infringed the
sovereign rights of Great Britain
continuous protest against United Kingdom's claims
a colonial situation on the Falkland Islands
From various precedents at the International Court of Justice
it becomes clear that there are two requirements to recognize
sovereignty of a state over disputed territory:
title
effective occupation
Both countries claim a title because of initial discovery.
From the Palmas Island Arbitration(17)
it stems that discovery only constitutes an incomplete title and
later acts that constitute an effective occupation complete the
title of sovereignty. This effective occupation occurs when a
state is capable of offering a minimum protection to the rights
of other States and their nationals. As such, it is more
important to find state acts, displaying sovereignty. The Clipperton
Island Arbitration(18)stipulates that
effective occupation takes place when: "the state
establishes in the territory itself an organization capable of
making its laws respected."
By establishing the first settlement on the Falkland Islands,
France could exercise effective occupation and hence completed
the title for sovereignty, although being a rather weak effective
occupation. The Clipperton Arbitration adds that if a
state makes its appearance in uninhabited land and the occupation
is undisputed, effective occupation has been established as well.
Although France could not claim an incomplete title from initial
discovery, it follows from the Island of Palmas arbitration
that the a title derived from effective occupation prevails over
initial discovery.(19) This is also in line
with the British 'Hinterland-doctrine' which stipulates that if a
nation has made a settlement it has a title of sovereignty to all
vacant adjacent land.(20) Therefore, the
French had completed their sovereignty over the Falkland Islands
before the English. From this point of view, the English
occupation of 1765 was illegal. France also showed sovereignty in
several acts, the most remarkable being the cession of the
territory to Spain. It follows that Spain acquired sovereignty
due to cession of the French title.
Even if the United Kingdom would have possessed a title to the
Falkland Islands it would be extinguished because when the United
Kingdom left the Falkland Islands, it only left a plaque behind.
Even after denying that such an act could not have legal effect,
because the United Kingdom did not posses a title, it is hard to
argue that the United Kingdom preserved their title. For more
than 50 years the United Kingdom did not display any sign of
sovereignty nor made such claims. As such the British right was
not sacrificed by derelictio but extinguished by (negative)
prescription.
When Spain left the Falkland Islands it did not reiterate its
claim on the Falkland Islands. However this does not necessarily
lead to abandonment. The British assumed that this meant
derelictio of the Spanish claim. However, such intention to
sacrifice a claim was not shown. More important are intentions
displayed by the leaving state or its successor. The Clipperton
arbitration, Minqiuers and Ecrehos case(21)
and Eastern Greenland(22) show that
subsequent behavior is important. Does the state still grant
licenses, collect taxes, uphold the laws? Therefore, does the
claimant state treat the territory as heirs and how have other
states reacted to this animus occupandi? Argentina thought it was
the rightful successor of Spain. It settled the island and tried
to uphold its laws.(23) At first this was not
protested upon by the British. Only in 1829 the first protest
came. This was four years after the formal recognition of
Argentina by the United Kingdom. Hence the British claim was
either extinguished or estopped in 1832.
Having concluded that the British conquest of the Falkland
Islands was illegal, does this mean that the Falklands should be
handed back? Such an act would be contrary to the wishes of the
native people. Most people are from British ascendancy and
support the present political situation.
In my view the old title of Argentina does not override the
will of the people of the Falkland Islands. Self determination is
a well recognized right in international law. Sovereignty is
derived from the free determination of the people living in the
area to subject their selves to a government. Argentina
recognizes that the population is strongly pro-British.(25)
The General Assembly Resolution 2065 (XX) stated that a
colonial situation exists on the Falkland Islands. Such
indication is misplaced. No indigenous people have been living or
are living on the Falkland Islands. Ethnically the people of the
Falkland Islands are more closely related to the United Kingdom
than to Argentina. In addition the United Kingdom has provided
safety and a certain degree of self-determination. For this
reason it seems unwise to undo the illegal acts performed by the
United Kingdom in 1832. Transferring the territory would only
replace one colonial master with another colonial master. Such an
act runs counter to will of the people of the Falkland Islands
and non binding statements by the United Nations Charter and the
General Assembly.
The sovereignty dispute thus remained unsettled for the time
being. Diplomatic negotiations nor adjudication nor war could
solve the dispute over the concerned islands. With the outbreak
of the Falkland War on 2 April 1982, diplomatic ties were broken.
After the war and after the call for free democratic elections by
the military junta, both parties sought a modus vivendi. However,
it still lasted years before a temporary solution was found. Both
countries had a shared interest though; namely economic interest
that coincides with valuable fish stocks on the Patagonian shelf.
On 19 October 1989 Argentina and the United Kingdom agreed
upon a formula to reestablish diplomatic ties.(26)
Under the so-called Umbrella formula both countries
admitted that a conflict exists over the sovereignty regarding
the Falkland Islands, South Georgian and South Sandwich Islands.
This agreement brought a modus vivendi for both parties.
Diplomatic ties could be reestablished and informal talks led to
more agreements. Confidence building measures helped to ease
tensions between both countries. The reestablished ties led to
several joint declarations which for example established a South
West Atlantic Fisheries Committee, joint offshore activities and
joint scientific research in fish stocks.
The Falkland Islands Business
Directory (1990). Edited by Nicola Summers.
Stanley: Falkland Islands Government.
The Europe World Year Book 1995
(1995). London: Europe, 36th ed. 2 vols.
Whitaker's Almanac 1995
(1994). London: J. Whitaker, 127th ed. 1280 p.
More information on the internet can be found here.
Falkland Islands Socio-Economic Data from the Inter-American Development Bank. This is the source for all the hard economic data you need. The particular country page is slow loading, but well worth the wait for you economic gurus.
The Falkland Islands Tourist Board, a department of FIDC, has successfully consolidated its relationship with a number of specialist UK and European tour operators, and holidays in the Islands are now featured in several tour programmes. The 1994/95 season (November-March) saw a significant increase in visitor numbers over the previous year. Visitor numbers since the 1991/92 season have increased considerably, mainly due to the expanding cruise ship sector.
Although the UK is currently the Islands' principal market, recent efforts have also focused on the development of existing and new contacts with wildlife and adventure tour operators in the USA and mainland Europe.
The Islands' main tourist lodges at Port Howard, San Carlos, Sea Lion Island and Pebble Island are now well established. The two hotels in Stanley have recently been up-graded.
The establishment of angling holidays has created the opportunity to extend the tourist season as the most favourable sea trout conditions occur during the Autumn and Spring.
Some 2,000
people live on the Falkland Islands, the greatest settlement
being Port Stanley with 1,200 people. No indigenous population
was present, before the present inhabitants arrived on the
islands. 
