1990s

Stronger legislation and the establishment of the National Emergency Supply Agency

The late 1980s and the first few years of the 1990s were a period of plans coming into fruition in the field of economic defence. Emergency stockpiling developed quite satisfactorily overall, in terms of both the actual stockpiles and relevant legislation.

Another positive development was the adoption of the Emergency Powers Act and the State of Defence Act. Both were approved by Parliament without incident and entered into effect on 22 July 1991, with the Emergency Powers Act replacing the so-called Rationing Powers Act from 1970 and the State of Defence Act replacing the State of War Act from the 1930s. Both of these Acts have had a significant impact on Finland’s security of supply operations.

Security of supply is an integral part of defence policy

Another pertinent change occurred in 1992, when the National Defence Council updated its definition of crisis, in particular in view of provisions for emergency planning.

The 1988 Government Resolution on the Material Objectives of Security of Supply had proven too rigid from an economic standpoint. Because of this, in June 1990 the National Board of Economic Defence issued a proposal to the Ministry of Trade and Industry on the establishment of a working group to prepare a proposal on the funding instruments required to achieve the objectives defined in the Government resolution. This led to the Ministry of Trade and Industry establishing the Working Group for Financing Security of Supply on 31 January 1991.

In its proposal, the Working Group emphasised the importance of other preparedness methods besides stockpiling. The Working Group considered it important for public funding and especially the income from emergency stockpiling fees to be made available to fund other activities contributing to security of supply besides emergency stockpiling, such as preparations for replacement production or the doubling of production machinery and the building of backup systems.

The Working Group came to the conclusion that budget funding from the Government was too inflexible in certain cases. According to the Working Group, what was needed was a system whereby the National Board of Economic Defence would be provided with a ‘security of supply budget’, within the framework of which it could develop security of supply in a comprehensive manner. This development would have to be overseen by some kind of dedicated government agency. To this end, the Working Group proposed the merger of the Economic Defence Planning Agency and the Ministry of Trade and Industry’s emergency stockpiling fund to form the core of a new organisation, which would also include the full-time secretaries of certain other committees.

The National Emergency Supply Agency is established

The establishment of the National Emergency Supply Agency was formally proposed at the Working Group for Financing Security of Supply’s meeting on 8 November 1991. The Finnish Government issued a legislative proposal on the matter to Parliament on 26 February 1992, which Parliament subsequently approved. On 18 December 1992 the President of the Republic approved the Act on Safeguarding Security of Supply and issued the Decree on the National Emergency Supply Agency. The National Emergency Supply Agency started operations on 1 January 1993.

The new agency’s operations were overseen by the Ministry of Trade and Industry, which approved its performance targets. The change did not substantially impact the operations of the National Board of Economic Defence – the National Emergency Supply Agency served as the NBED’s secretariat.

The NESA’s duties are expanded

The mid-90s saw the implementation of various measures with which security of supply duties were further centralised to the National Emergency Supply Agency. Finland’s membership of the European Union required the reorganisation of the State Granary, as a result of which the emergency stockpiling of grain was reassigned to the NESA. In 1996, the NESA also assumed responsibility for electronic communications preparedness when the Committee on Securing Electronic Communications under the auspices of the Ministry of Transport and Communications was disbanded.

Nature of operations changed by internationalisation

Finland’s membership of the European Union and increasing participation in other international cooperation have had a significant impact on security of supply work.

IEA

In 1991, Finland acceded the International Energy Program and became a member of the International Energy Agency that coordinates it. According to the Agreement on an International Energy Program, participating countries must maintain oil stockpiles for emergencies. Each participating country must maintain emergency stockpiles equivalent to at least 90 days of net imports.

Membership of the European Union

Finland joined the European Union in 1995. This served to decisively eliminate the threat of Finland being subjected to trade blockades. The EU is considered a stabilising economic and political force in Europe, the internal market of which contributes heavily to ensuring security of supply. The Economic and Monetary Union (EMU) (1999), in particular, has had a notable impact on the methodology of security of supply by, for example, removing the need to use quantitative easing as one of the potential methods for securing funding in a crisis and almost completely eliminating currency risks.

Participation in the NATO Partnership for Peace

Established in 1994, the NATO Partnership for Peace also covers cooperation in civilian preparedness matters. PfP is one of the few forums for discussing international security of supply issues.

Bilateral cooperation with Sweden

In 1993, Finland and Sweden entered into a treaty on economic cooperation in the event of an international crisis. The purpose of the treaty is to secure the trade of specific critical goods between the two countries.

Nordic cooperation in many areas

Since the 1990s, Finland has engaged in active cooperation with the other Nordic countries in the areas of power supply, medical care, defence materiel and transport.