Fishing Corruption Is Rampant in Iceland
In the fall of 2019, following the publication of the WikiLeaks files, Iceland was rocked by a corruption scandal involving the executives of one of the country’s largest fishing companies and Namibia’s political elite, who had received large bribes from Icelanders in exchange for granting fishing quotas in the African country’s exclusive economic zone.
Furthermore, the executives of the Icelandic company hid fishing income in tax havens, using Norway’s largest bank for money laundering. This demonstrates the systemic nature of corruption in the Nordic countries, considered corruption-free, spanning much of Scandinavia.
The lengthy investigation into this large-scale cross-border economic crime yielded no significant results, aside from several voluntary resignations and prison sentences for several Namibian officials.
The Icelandic justice system’s lenient response to tax evasion—the most heinous crime in the US and many other countries, according to a recent report in an influential Norwegian newspaper—may be explained by political corruption, as a fifth of Iceland’s parliamentary members hold shares in the country’s major fishing companies.
In the seemingly respectable and supposedly law-abiding Iceland, a highly scandalous situation has developed, the development of which will likely follow the Fishrot Files scenario, where the perpetrators were never punished.
Unlike the US, where taxable corruption is legalized in the form of lobbying and the entire edifice of the American state is built from it, including the foundation, walls, roof, and interior decoration, Iceland appears deceptively respectable.
However, as the publications cited below show, Iceland’s state structure has been thoroughly rotted by the corruption that benefits some politicians and representatives of the country’s largest industry, fishing, and that has resulted in democracy, freedom of speech, and citizens’ right to know what country they live in and who they vote for falling victim to it.
Iceland is not unique in this regard; structural corruption unites politicians and business representatives in a fascinating adultery that victimizes law and order in all countries of the world, some of which rely on it as an institutionalized tool for solving various public administration problems.
The nature of human greed has not changed over thousands of years, and those in power habitually forget the Pythagorean cup, which futilely calls modern politicians to moderation, decency, and law-abidingness.
As it turns out, it’s not just Third World politicians, plagued by pervasive corruption—that is, the illegal privatization of public funds—but also the bright-faced Icelandic politicians, former “white-robed” candidates, who enjoy breaking the law.
Corruption is dangerous not in itself, but because of the public’s lack of awareness of it, due to the restriction of freedom of speech, which is characteristic of Iceland, and the inadequate response of the law enforcement system, which is subject to pressure from corrupt politicians.
As a televised discussion held in Iceland on April 20 shows, some participants prefer to deny the obvious, unsightly reality.
It is unwise to act like the three monkeys in the Buddhist parable: “If I see no evil, hear no evil, and say nothing of it, then I am protected from it.” Protection from the evil of corruption can only be achieved by acknowledging its existence and actively countering it.
‘Fishrot Files’
Icelander Þorsteinn Már Baldvinsson, who until recently was CEO of the large Icelandic fishing company Samherji, resigned in November 2019 while the company’s role in a possible corruption case was investigated.
The case concerns possible bribery of officials in Namibia in exchange for fishing rights. Two Namibian ministers—Fisheries Minister Bernhard Esau and Justice Minister Sacky Shanghala—have also resigned as a result of the case.
Together, the three men have, according to the newspaper, “been the first rolling heads” in the corruption case that came to light this week.
Earlier this week, approximately three thousand documents were published by WikiLeaks, which showed how the company Samherji has allegedly paid over 1 billion Icelandic krónur (approximately 55 million Danish kroner) in bribes since 2012 to secure access to fishing quotas in Africa.
The so-called ‘Fishrot Files’ also revealed that Samherji has allegedly channeled approximately 471 million krónur to the tax haven between 2011 and 2018, while some of the money is also said to have passed through Norway’s largest bank, DNB.
DNB’s CEO, Thomas Midteide, tells DN.no that suspicious payments are regularly reported to the Norwegian anti-money laundering police, but he will not comment on whether this has been done in this case.
Samherji wrote on its website on Tuesday that the company is “disappointed to hear that Jóhannes Stefánsson has apparently participated in questionable working methods and may have involved Samherji in illegal activities.”
According to The Guardian, Iceland’s Prime Minister, Katrín Jakobsdóttir, says that if the allegations against Samherji are true, then there is “reason for great concern for Iceland’s industrial activity,” and that the revelations “could affect the nation as a whole.”
According to The Guardian, Africa’s coastal waters are increasingly in demand by international trawler fleets, and Namibia’s resource-rich fishing waters are particularly in high demand.
Last year, it was revealed that a fifth of the country’s members of parliament owned shares in fishing companies. This caused the country’s media to “fury,” with several of the media outlets accusing the politicians of corruption.
Samherji was founded in 1972 and has 850 employees.
‘The Most Promiscuous Nun in the Convent’
When the author of the article told his British friend that Iceland was the most corrupt country in the Nordics, he laughed. He didn’t think it was helping the people and said: “Being the most corrupt country in the Nordics is like being the most promiscuous nun in the convent.”
A new article in the Danish newspaper Berlingske about the Icelandic fishing industry paints a picture of Iceland as the Sicily of the North.
The article claims that in Iceland, the “oligarchs” of the fishing industry are running rampant on the basis of fear, greed, and political influence. The article discusses the close ties between the fishing industry and the Independence Party, alleged bribery by Samherji in Namibia and the company’s special “guerrilla unit” that was responsible for organized attacks on journalists.
If anyone was thinking of giving the shipping company the benefit of the doubt, that plan backfired: earlier this week, it was reported that “guerrillas” had threatened the Danish journalist and advised him not to discuss the matter.
But does it matter that Iceland is the most promiscuous nun in the monastery?
Tried to Change the System
The problem is the industry that the regulation protects as fiercely as the Icelandic fishing industry. The quota system is a defensive wall that no newcomer can penetrate.
In a discussion in Berlingske, Daði Már Kristófersson, Minister of Finance, said that he had tried to change the system and called for part of the quota to be set aside and sold at auction every year.
When asked why this has not happened, Daði replies: “Let me put it this way: There is a very powerful political pressure group.”
Who and How?
Some may consider it an innocent fate to be the most promiscuous nun in the convent.
But if anyone should be wary of industry attempts to capture the regulation, it is the Icelandic people.
We Icelanders have one of the most famous textbook examples of regulatory capture: the Icelandic banking collapse.
Wouldn’t it be right, in light of history, for the Minister of Finance to disclose who is behind such manipulation and what tricks they use?
Reports have been written for less reason.
Divided Opinions in the Television Discussion
Eyrún Magnúsdóttir, editor of news outlet Gímaldið, Halldór Halldórsson, chief executive of marine algae company Kalkþörungafélagið, Gréta María Grétarsdóttir, former managing director of discount supermarket Prís, and Svandís Svavarsdóttir, former chair of Vinstri græn (the Left-Greens), were guests on RÚV’s Silfrið on April 20, where they discussed the state of Iceland’s fishing industry.
The Berlingske article paints a dark picture of the fishing industry, describing it as built on fish, fear, greed, and political influence.
The article states that the fishing industry has contributed to Iceland’s state treasury, but that it is also “eating away at the country’s democracy from within,” as it is phrased in the piece. The industry is described as being built on fear, control, and political influence.
The quota system is said to have got out of hand and to have led to an elite within the fishing industry having excessive influence on political decisions. The Samherji case is also discussed in the article.
Berlingske journalist Emil Eire Frerk Olsen spoke to 19 sources, including politicians, experts from various fields, and people working in the fishing industry. Daði Már Kristófersson, Minister of Finance, is among those who spoke to Olsen.
Daði Már is quoted as saying that he has long tried to “solve the problem” but that “powerful pressure groups” stand in the way. Along with other Berlingske sources, he mentions links between Sjálfstæðisflokkurinn (Independence Party) and fishing companies.
Perceives Strong Links between Politics and Financial Power
Silfrið’s guests took differing views on the issue.
“I have always felt it must be a matter for reflection for such a large industry as fisheries that there is so much dispute about its position. That discussions so often arise about a lack of transparency, a lack of trust and that the debate is not open enough, and so on,” says Svandís.
The industry often goes on the defensive when criticized.
“An industry of this scale should, in fact, be able to withstand criticism and should use it to strengthen and build itself.”
Instead, there is a “defensive discourse” that does not reflect careful consideration.
“I have felt, and I have also heard it from people within the fishing industry, that it is important to step into trying to cultivate trust, not just to develop the industry itself, because the industry really needs the public to stand with it and support it,” says Svandís.
Asked whether she experienced significant pressure as a politician from parties connected to the fishing industry, she says there are strong links between the industry and politics.
“Of course, one experiences that there are very strong links between politics and financial power in this country, and fisheries are absolutely central to that. That is precisely why we need greater openness, we need to make ownership and vested interests much clearer and more transparent in Iceland than we have been doing.”
She says, however, that she did not have difficulty saying what she thought, either about fisheries or other matters.
“However, I did feel very strongly, when I was preparing a bill for a comprehensive review of fisheries legislation, that it was very poorly received by those with the greatest vested interests, especially steps relating to transparency,” says Svandís.
”Always Focusing on One, Two, Three Companies”
Halldór Halldórsson was previously mayor of Ísafjörður. He believes the Berlingske coverage goes too far.
“It of course depends on who is spoken to. I do not know which 20 [sic] people were interviewed. But I think there is quite a strong bias when people start talking about oligarchs and corruption,” says Halldór.
He points out that Icelandic fisheries remain a cornerstone industry, even though other sectors have developed.
“Although I have no connection to fisheries today, I worked for a fisheries company in Grindavík when I was younger. I got to know the industry very well there, and I have also come to know it well in the Westfjords. I simply do not recognize Icelandic fisheries as anything other than an industry of people who follow the law, do their best and create enormous value for Iceland.”
Halldór notes that there was strong pressure on politicians not to introduce the quota system.
“At the time, it was argued that the fishing industry should respond to the nation, as it was put. And the industry was entirely willing, at that time for example, to introduce resource fees. Resource fees are not common. It might be said that they exist to some extent in Norway, but they are essentially paid back almost immediately,” says Halldór.
Resource fees are paid by fishing companies to the state, for access to fish stocks.
He says he suspects many of Berlingske’s interviewees simply dislike the fishing industry.
“And we should also bear in mind that when people talk about Icelandic fisheries and there is this kind of hostility towards this cornerstone industry, the focus is always on one, two or three companies. But companies differ within Icelandic fisheries, and most of them are small and medium-sized and form the basis of communities,” says Halldór.
He says it is therefore natural that people in both fisheries companies and fishing communities resist changes they fear could put their companies out of business.
”We Can Certainly Influence the Future”
Gréta María grew up in Flateyri and knows first-hand the value and value creation involved in fisheries.
“I think this often comes down to the idea that wealth has accumulated in the hands of a few, but we must not forget that we should be proud of how much we have done well,” says Gréta María.
Icelanders have been at the forefront of fisheries management.
“Then there is another point: many of these companies are listed on the market, and I also think that market forces should simply apply—if a company is doing something wrong, it will find its place within the system. There are laws and regulations, and the market should also punish them if something is not right. So I think we must perhaps allow market forces to operate.”
She says it was painful to watch a vessel leave her town at the time, leaving behind a struggling fishing community.
“But that is done and we cannot change it today. But we can certainly influence the future. We must trust those elected to parliament at any given time, who set laws and regulations, to do so in a way that the nation can accept. And I think we are moving in that direction,” says Gréta María.
Concern about the State of the Media in Iceland
Eyrún Magnúsdóttir, editor of news outlet Gímaldið, says she must speak up for her own profession, journalism.
“I find it striking what emerges there, which is how aggressively this journalist is being attacked. Two individuals are mentioned who are extremely aggressive towards him, almost issuing threats and sending letters,” says Eyrún.
Emil Eire Frerk Olsen, the journalist at Berlingske, said over the weekend that Páll Vilhjálmsson and Páll Steingrímsson sent him numerous messages after he sent an enquiry to Samherji. The two namesakes warned him against reporting on the matter.
She says the way people consider it acceptable to speak to journalists says a great deal about the state of the media and journalism in Iceland.
“But what also struck me, and I will not pretend to be any fisheries expert, is what Daði Már Kristófersson, Minister of Finance, says about the media in this Berlingske analysis. He says he has serious concerns that the weakening of the media in Iceland is a real problem. And I very much share those concerns,” says Eyrún.
In the coverage, Olsen points out that Iceland has dropped to 17th place in global media freedom rankings, far below the other Nordic countries.
Brim Boss: Berlingske Coverage “Inaccurate”
Separately, yesterday, Guðmundur Kristjánsson, CEO of Brim, said he believes that an inaccurate picture is presented in the Berlingske coverage. Everything is out in the open in Icelandic fisheries, which operate in accordance with the country’s laws.
Guðmundur says he considers the journalist’s and the outlet’s working methods not to be professional. “I think he belittles our system of governance. He says there is corruption here and that we do not follow Icelandic law.”
The fishing industry has followed the laws on the quota system for the past 40 years. “Members of Alþingi have passed these laws and we have always complied with them. Iceland is now considered one of the least corrupt countries in the world, whatever anyone says.”
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