Decision on Whaling Broke Law

Svandís Svavarsdóttir

The decision made last summer by Minister of Food, Agriculture and Fisheries Svandís Svavarsdóttir to stop whaling was not in accordance with the law, the Alþingi Ombudsman has concluded. The conclusion is likely to threaten Svandís’ position as minister and possibly the coalition government as a whole.

Svandís announced in June that she would temporarily stop whaling due to an “unequivocal” opinion on animal welfare produced by the Icelandic Food and Veterinary Authority (MAST). She argued that in light of the opinion, she would have no choice but to postpone the start of whaling season. The hunting of whales remains a controversial practice in Iceland and has been protested by several local and international animal rights groups.

Whaler sues for damages

Kristján Loftsson, the CEO of Iceland’s only active whaling operation, Hvalur hf., told Morgunblaðið that he would sue for damages. “She lets her own political views guide her with no regard for other interests if they don’t align with hers,” Kristján said of Svandís after the Ombudsman published their conclusion. “Of course Hvalur will ask for compensation because of the enormous harm that’s come to the company and its staff.”

Svandís’ decision last summer was met with fierce opposition by her coalition partners in the Independence Party. Svandís is a member of the Left-Green Movement, who along with the Progressive Party, make up the coalition government spanning from centre-left to centre-right. Mbl.is reports that MPs from the Independence Party are already speculating on the possibility that she will be forced to resign or offered a similar route to Independence Party leader Bjarni Benediktsson. Last fall, the Ombudsman issued a conclusion criticising Bjarni’s handling of the March 2022 sale of Íslandsbanki as Minister of Finance, in which a group of “qualified investors” were given priority to purchase bank shares. Among these qualified investors was Benedikt Sveinsson, Bjarni’s father. Bjarni then swapped ministries with fellow party member Þórdís Kolbrún Reykfjörð Gylfadóttir and became Minister of Foreign Affairs. Some expect Svandís to swap ministries in this way or else risk the future of the coalition.

Svandís told Mbl.is that she has not considered resigning and that the Ombudsman’s conclusion will help guide future policy-making on whaling.

Minister of Finance, Bjarni Benediktsson, Resigns from Office

bjarni benediktsson

Now-former Minister of Finance, Bjarni Benediktsson, has resigned from office following critique of his role in the March 2022 sale of Íslandsbanki shares.

Report on Íslandsbanki Sale Highlights Lack of Transparency

The Ministry of Finance issued a notice this morning of a press briefing at 10:30. Earlier this morning, the opinion of the parliamentary ombudsman had been published on the government website where it is stated that the Minister of Finance’s preparation for the privatization process of Íslandsbanki did not conform to government guidelines.

Following the 2008 banking collapse, several major banks were taken into state ownership, to later be sold off in a privatization process. The sale of shares in Íslandsbanki was criticized for a lack of transparency at the time, with special attention given to Hafsilfur ehf., a company owned by Benedikt Sveinsson, the father of the Minister of Finance. Hafsilfur was among those who purchased shares in Íslandsbanki when a 22.5 per cent stake in the bank was sold in an auction. Bjarni, now-former Minister of Finance, has stated in the past that he first learned about the company’s purchases when the ministry received a list of buyers from the State Financial Supervisory Authority after the auction had concluded.

FME Believes Íslandsbanki Broke the Law During March Sale

Skúli Magnússon, the parliamentary ombudsman has indicated that there was a lack of clarity in the preparatory documents regarding conflicts of interest. In his official opinion, the parliamentary ombudsman concluded that the Minister of Finance was not qualified to approve the sale. According to the ombudsman, it must be assumed that he had “significant and real interests in the sale.” The ombudsman also stressed that nothing has come to light that would cast doubt on the Minister’s claim of ignorance regarding Hafsilfur’s participation in the auction.

In his response to the ombudsman’s findings, Bjarni expressed his disagreement with some of the conclusions but emphasized the importance of respecting the opinion. He mentioned that the next steps would be determined in consultation with fellow Independence Party members.

Bjarni also reiterated that he had not been aware of his father’s involvement in the auction and defended his actions throughout the auction process. The sale of Íslandsbanki’s stake has had several important consequences, including one of the largest-ever fines levied on an Icelandic financial institution,  and the resignation of Íslandsbanki CEO, Birna Einarsdóttir.

Agreement Reached Between Central Bank and Íslandsbanki

During his press briefing, Bjarni stated that, given the recent opinion given by the ombudsman, he found it impossible to continue working in the Ministry of Finance. He stated that he wanted to bring peace to the ministry and that he would step down as the Minister of Finance and Economic Affairs. Bjarni stated further that he wanted to demonstrate that “responsibility came with positions of power.”

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