Strengthening legal effects and establishing the National Emergency Supply Agency

For the defence economy the late 1980s and the two first years of the 1990s were the time for picking ripe fruit. Emergency stockpiling progressed quite satisfactorily in all sectors, both in respect of real stocks and in respect of legislation. Another essential reform was the adoption of the Provision for Emergency Act and the State of Defence Act. Parliament adopted both Acts without any problems and they entered into force of 22nd July 1991. The Provision for Emergency Act replaced the old State of Defence Act from 1970. The new State of Defence Act replaced the Rationing Powers Act from 1930. Both new Acts were of major importance for security of supply work.

Security of supply constituted an integral part of security policy

Another essential change took place in 1992 when the Board of National Defence renewed its definition of a crisis, in particular in respect of emergency planning.

The Council of State's decision of 1988 concerning the material objectives for security of supply was found to impose too stringent economic obligations. In June 1990 NBED suggested that the Ministry of Trade and Industry establish a working group to make a proposal concerning the ways of financing the measures required for achieving the objectives established in that decision. On 31st January 1991 the Ministry established the Working Group for Financing Security of Supply.

The Working Group emphasized provision for emergency measures other than stockpiling. In its view it was important that public funds, in particular revenue form the Emergency Stockpiling Levy, could be used for financing security of supply measures other than stockpiling. Such other measures were inter alia preparations of alternative production, acquisition of double sets of appliances and the creation of emergency reserve systems.

The Working Group for Financing Security of Supply found that in some cases the State budget was too rigid to be a useful tool. The Working Group suggested a system where NBED has a "security of supply budget" at its disposal. Within the framework of that budget NBED could develop security of supply in a comprehensive and coherent way. Some administrative body, a "centre" should be responsible for security of supply. That "centre" should consist of NBED, of the Central Government Security of Supply Fund, operating under the auspices of the Ministry of Trade and Industry, and possibly of the full time secretaries of other planning agencies.

The National Emergency Supply Agency was born in the aftermath of that report

At the meeting of the Working Group for Financing Security of Supply on 8th November 1991 the proposal was made to establish the National Emergency Supply Agency (NESA).. The Government presented a legislative bill to Parliament on 26th June 1992 and Parliament took a favourable attitude to the project. On 23rd December 1992 the President of the Republic approved the bill and also issued a decree concerning the National Emergency Supply Agency It started operations on 1st January 1993.

The Ministry of Trade and Industry guides NESA's operations by approving its performance objectives. The change had no implications for NBED. NESA constitutes its secretariat.

NESA was given new tasks

At the middle of the decade some measures were taken to further concentrate tasks and responsibilities in this sector to NESA. Membership of the European Union required a reorganization of the State Granary, which meant that the responsibility for emergency stockpiling of grain was transferred to NESA. Responsibility for provision for emergency in respect of electronic communications was transferred to NESA in 1996 and the council responsible for this sector under the auspices of the Ministry of Transport and Communications was repealed.

Internationalization changed the character of operations

Membership of the European Union and intensification of other international co-operation has resulted in many new issues in the area of security of supply.

IEA

In 1991 Finland acceded to the International Energy Programme and to the International Energy Agency that implements the Programme. The agreement provides that Member States shall maintain stocks of oil for emergency situations. Each Member State shall maintain stocks equal to not less than 90 day's consumption.

Membership of the European Union

Finland acceded to the European Union in 1995. Membership definitely removed the risk of a trade embargo. EU constitutes an economic and political force stabilizing the continent. A functioning internal market is an effective guarantee for security of supply. In particular, the Economic and Monetary Union in 1999 has an impact on the measures available for ensuring security of supply. For example, traditional financing by bank notes in a crisis is no longer among the available range of measures, but on the other hand exchange rate risks have practically disappeared.

Participation in NATO's Partnership for Peace Programme (PfP)

NATO's Partnership for Peace Programme was initiated in 1994 and the Programme also includes co-operation for provision for emergency in the civil sector. PfP operations offer one of the few forums for examining security of supply matters from an international perspective.

Bilateral co-operation with Sweden

The Agreement on Economic Co-operation in Emergency Situations between Finland and Sweden entered into force at the beginning of 1993. The objective of the Agreement is to ensure continued trade between the two countries in essential goods that are agreed separately between the two countries.

Nordic co-operation in many areas

In the 1990s active co-operation was initiated in the areas of electricity, medical supply and defence equipment, as well as between authorities in the transport sector.

Period of transition in respect of operative principles

When examining decisions made concerning the objectives of security of supply we can clearly see the profound changes of thought and philosophy that have occurred during the past fifteen years. War and foreign trade embargo are no longer the essential emergency pictures. Instead, we have a situation where various disturbances pose a threat to the functioning of essential social systems. There has been a transition away from access to materials; now the critical issue is the maintenance of activities and of the service level.

The Council of State's decision of 1988 concerning the objectives of security of supply

The Council of State established the general objective that basic functions must be safeguarded during an emergency situation of not less than one year's duration. In case of a foreign trade embargo the national economy and production shall be gradually adapted to basic supply level. In case of a shorter and less serious economic crisis economic activities shall continue on the basis of the economic sector's own capacity to adapt and of its own natural resources, with only a minimum of guidance from public authorities. The objective shall be to safeguard access to materials for a period of 4 - 6 months so that the population's subsistence remains on next to normal level.

The main emphasis was put on safeguarding the access to food, clothing, health services and lodging and on basic social functions, such as energy supply, circulation of money, communications and transport. The minimum needs of the transport and communication sectors must also be secured. Security of supply of materials shall also include the industry that serves the armed forces.

NBED has established objectives for itself in the following sectors:
• administrative provision for emergency
• provision for emergency in production
• provision for emergency concerning materials
• provision for emergency concerning support operations.

The decision of 1995 concerning security of supply

On 13th December 1995 the Council of State made a decision concerning the objectives of security of supply. The Decision entered into force from the beginning of 1996. The general objective is to guarantee independent security of supply with the help of national resources and measures. They are to be supplemented by emergency preparation on EU level and by some other international agreements.

The basic scenario for security of supply is a crisis of not less than 12 months duration. Such a crisis may imply state of defence referred to in the State of Defence Act. The most serious threat against security of supply would result from a crisis where Finland's opportunities to produce and acquire from abroad essential products and services is seriously jeopardized.

More specific objectives for security of supply were defined in the following areas: Food and energy supply, transportation, stockpiling and distribution, society's technical facilities, health care and industrial production and repair work that serves military defence.

The objectives of security of supply in 2002

In May 2002 the Council of State defined the objectives of security of supply. The general objective still is to maintain security of supply primarily by means of resources and measures on national level. A strategic strike is perceived to be the main future threat, and not a large scale attack. Crises would presumably be local.

In addition to the new scenario of perceived threats, increased international co-operation concerning security of supply, as well as social networking and society's technical development have an impact of the objectives and scope of security of supply. For these reasons provision for emergency has been increased in respect of threats that can be foreseen to endanger essential social structures.

When perceived threats changed, changes were also made to security stockpiling. The stockpiling objective for imported fuels was reduced from seven months to five months of normal consumption. Stockpiling of fodder grain was abandoned and it was replaced by security stockpiling of imported proteins.