Bribery Investigators Head to Namibia

Þorsteinn Már Samherji

Officials from Iceland travelled to Namibia last week to participate in the questioning of witnesses in the Samherji bribery case. District public prosecutor Ólafur Þór Hauksson and investigators also met with the Namibian Anti Corruption Commission, RÚV reports.

Nine Icelanders investigated

In the fall of 2019, the story broke that one of Iceland’s largest seafood companies, Samherji, had allegedly bribed Namibian government officials to gain access to lucrative fishing grounds, while also taking advantage of international loopholes to avoid taxes. The story was reported collaboratively by Kveikur, Stundin (now Heimildin), and Al Jazeera Investigates, after months of investigations sparked by the confessions of whistleblower Jóhannes Stefánsson, a former project manager for Samherji in Namibia.

The district public prosecutor’s office began its investigation in November of 2019. Nine Icelandic individuals are being investigated, including Þorsteinn Már Baldvinsson, CEO of Samherji. He briefly stepped aside when the news broke, but returned as CEO shortly after. In Namibia, ten people have been charged with receiving bribes from Samherji in exchange for fishing quotas. Among them are two former ministers from the Namibian cabinet, the chairman of Fishcor, the National Fishing Corporation of Namibia, and its CEO.

Prolonged investigation

Ólafur Þór said that the trip was mutually beneficial for both Icelandic and Namibian authorities and that the next step would be to work through the information collected during the trip. “The case is becoming clearer, the longer we get into the investigation,” he said, but did not comment on when his office will close the investigation, which is now entering its fifth year. The duration has been criticised by both the Icelandic public and the defendants themselves.

Paulus Noa, manager of the Anti Corruption Commission, said that the Icelandic delegation would help Namibian authorities with the investigation of their side of the scandal, which has been dubbed the Fishrot case. He added that the goal is to secure the prosecution of the individuals involved, regardless of their nationality.

Iceland News Review: Counting Birds, Hunting Whales, Corruption And More!

INR

In this episode of Iceland News Review, we report on some good news for disaster preparedness. Last month’s eruptions near Grindavík has motivated Parliament to set up a special fund to deal with sudden catastrophes, but it may take some time yet before it can be established.

In other news, we report on how fin whale hunters and the government are at odds, corruption in Iceland, the annual bird count, plus weather, road conditions and much more!

Iceland News Review brings you all of Iceland’s top stories, every week, with the context and background you need. Be sure to like, follow and subscribe so you don’t miss a single episode!

Iceland Drops in Corruption Rankings

Boat with Samherji Logo

Iceland is down two spots in Transparency International’s corruption rankings and now sits in 19th place. The Nordic countries, apart from Iceland, rank at the top as some of the least corrupt countries in the world, Heimildin reports.

Transparency International, a global movement to end the injustice of corruption, published its list this morning. Each country is rated on the basis of factors linked to corruption in the public sector, with 0 being the most corrupt and 100 the least corrupt. As it stands, Iceland has a rating of 72, the lowest rating it’s ever received. The country dropped two points and two spots from last year. In 2005 and 2006, Iceland ranked as the least corrupt country in the world before revelations related to the financial crash of 2008 saw it move down the list.

Samherji case highlighted

In a notice from the Icelandic office of Transparency International, a number of bribery cases, the privatisation of the publicly-owned Íslandsbanki, the Samherji bribery scandal, political uncertainty, and a corrupt fisheries system are named as examples of factors that have decreased public faith in good governance.

The Icelandic office specifically mentions the 2019 revelations that Samherji, one of Iceland’s largest seafood companies, had allegedly bribed Namibian government officials to gain access to lucrative fishing grounds, while also taking advantage of international loopholes to avoid taxes. A number of Namibian officials are already on trial for their part in the scandal, but in Iceland, no one has been charged in the four years since the story broke.

“Namibia has 49 points, unchanged from last year,” the notice reads. “The Icelandic office would like to highlight that Namibia is down three points since the Samherji case began. During the same time period, Iceland dropped six points.”

Nordics top the list

Transparency International was founded in 1992 and now operates in over 100 countries. They’re independent, non-governmental, and not-for-profit and have a vision for “a world in which government, politics, business, civil society and the daily lives of people are free of corruption”, according to their website.

Denmark is the least corrupt country according to the index, with 90 out of 100 points. Finland, New Zealand, Norway, Singapore and Sweden follow. The most corrupt country in the world is Somalia, according to the index, with South Sudan, Syria, Venezuela, Yemen and North Korea ranking just above it.

Depositions Next in Samherji Case

Director of Samherji Þorsteinn Már Baldvinsson

The office of the district public prosecutor has received all documents requested from Namibia related to its investigation into the Samherji scandal, District Prosecutor Ólafur Þór Hauksson has confirmed with Heimildin. The final step will be depositions of Namibia-based individuals, many of whom are held in custody by Namibian authorities on bribery charges.

In the fall of 2019, the story broke that one of Iceland’s largest seafood companies, Samherji, had allegedly bribed Namibian government officials to gain access to lucrative fishing grounds, while also taking advantage of international loopholes to avoid taxes. The story was reported collaboratively by Kveikur, Stundin (now Heimildin), and Al Jazeera Investigates, after months of investigations sparked by the confessions of whistleblower Jóhannes Stefánsson, a former project manager for Samherji in Namibia.

Nine stand accused in Iceland

The district public prosecutor’s office began its investigation in November of 2019. Nine Icelandic individuals are being investigated, including Þorsteinn Már Baldvinsson, CEO of Samherji. He briefly stepped aside when the news broke, but returned as CEO shortly after. In Namibia, ten people have been charged with receiving bribes from Samherji in exchange for fishing quotas. Among them are two former ministers from the Namibian cabinet, the chairman of Fishcor, the National Fishing Corporation of Namibia, and its CEO.

Delays criticised

The prolonged investigation, now entering its fifth year, has been criticised, both by the Icelandic public and by the defendants. One of them, former Samherji General Counsel Arna McClure, filed a motion earlier this year, arguing that the case had been excessively delayed. The court did not grant the motion and she remains under investigation. In Namibia, court proceedings formally began last week, when a number of defendants were asked to enter their pleas regarding one aspect of the case. One after the other they refused to enter pleas, while their attorneys either didn’t show up or recused themselves.

Samherji Sells to Síldarvinnslan

Börkur ship fishing

Seafood company Síldarvinnslan has bought a 50% share in the seafood sales company Ice Fresh Seafood for ISK 4.7 billion from Samherji. Samherji’s CEO Þorsteinn Már Baldvinsson had to step down from the board of Síldarvinnslan when the purchase was decided. RÚV reported first.

Samherji has run the company Ice Fresh Seafood, which sells fish abroad through a sales network covering over 60 countries. As soon as Síldarvinnslan acquires half of the company, a certain reshuffling of the other foreign sales companies of Samherji Group and Síldarvinnslan will be carried out, transferring them partially or completely to Ice Fresh Seafood.

Purchase price considerably above book equity

Síldarvinnslan’s announcement of the purchase states that the purchase price in the transaction is considerably higher than the Ice Fresh Seafood’s equity. Síldarvinnslan is paying ISK 4.7 billion for half of Ice Fresh Seafood and the value of the company in the transaction is 76% higher than the company’s book value of equity at the end of last year. It states, however, that there are decades of knowledge and business relationships behind IFS in the main markets for Icelandic seafood. According to the CEO of Síldarvinnslan, investing in the sales company strengthens sales and marketing, allowing Síldarvinnslan to get further in the value chain.

Samherji owns over 30% of Síldarvinnslan and when its board decided to buy, Þorsteinn Már Baldvinsson, CEO of Samherji, had to step down from the board. It is stated in the announcement that he was not involved in decision-making regarding the purchase.

A pillar of Iceland’s economy

The Icelandic seafood industry is one of the country’s key industries, employing around 7,500 people or approximately 3.9% of the workforce. The seafood industry contributes around 8% directly to Iceland’s GDP, but its indirect contributions are much greater. Marine products account for 43% of the value of Iceland’s exported goods. Another large purchase in the Icelandic seafood industry was announced yesterday when Brim purchased 10.83% of Iceland Seafood International.

Just four companies hold around 60% of Iceland’s fishing quota: Samherji, Brim, KS, and Ísfélagið.

Samherji Tax Audit Concludes with Settlement

Þorsteinn Már Samherji

Samherji has reached an ISK 230 million ($1.6 million / €1.5 million) settlement with the Directorate of Tax Investigations in Iceland, RÚV reports. The audit into the company’s books is, therefore, considered complete, although another investigation into alleged bribery and money laundering in Namibia is still undergoing.

Two cases concluded via settlement

In a press release published last week, Samherji announced that an investigation launched by the Directorate of Tax Investigations (DTI) in Iceland into two companies within the Samherji Group has concluded with a settlement. The investigation was opened following revelations made by the investigative news programme Kveikur in 2019, RÚV notes.

According to the settlement, Samherji and another related company, Sæból, have been made to pay approximately ISK 214 million ($1.5 million / €1.4 million) plus interest and penal interest as a result of the DTI’s reassessment. Samherji will also pay a non-criminal fine of ISK 15 million ($105,000 / €97,000).

Settlement means confidentiality

Experts interviewed by RÚV stated that a settlement means that the case will remain a private matter between Samherji and the Directorate of Tax Investigations and will not go to court, where additional facts concerning the audit could become public.

In the aforementioned press release, Samherji noted that the district attorney’s office has dropped criminal charges against the companies and their employees and confirmed that neither the managers nor the employees of the group have been guilty of criminal offences in relation to the audit.

District Prosecutor Ólafur Þór Hauksson confirmed to RÚV that the tax side of the office’s investigation into Samherji had been transferred to the tax authorities, which is why the district prosecutor’s investigation into Samherji’s books has been completed. He noted, however, that the office’s investigation into alleged bribery and money laundering by Samherji in Namibia is still under investigation and that that investigation is well advanced.

RÚV was unable to reach Þorstein Már Baldvinsson, CEO of Samherji, following the company’s press release, and when the media outlet requested numerical data concerning the case, a representative for the company referred to the press release. Bryndís Kristjánsdóttir, Director of Tax Investigations, has yet to respond to RÚV’s requests for an interview.

An unusually heated discussion

Samherji’s press release quotes CEO Þorsteinn Már Baldvinsson, who maintains that the DTI took the initiative to conclude the investigation with a settlement:

“In these cases, a thorough investigation was carried out on all operations within the Samherji group. The company collaborated with integrity with the tax authorities and provided all requested documents. It should be noted that the Director of Tax Investigations took the initiative to end the cases amicably. There has been an unusually heated discussion about our company and our people, both in the media and in Parliament. It is, therefore, a great relief to be able to clear away serious accusations with the confirmation of official institutions. The key point here is that the cases are now over without any lawsuits being filed against the company or any individual.”

Namibian Officials Visit Iceland And Discuss Fishrot Files

Netumbo Nandi-Ndaitwah and Þórdís Kolbrún Reykfjörð Gylfadóttir

Namibian officials, including the country’s Deputy Prime Minister, visited Iceland this week and discussed the case of Icelandic seafood company Samherji’s allegedly questionable business practices in Namibia, Stundin reports. The District Public Prosecutor confirmed to Vísir that he has met twice with those in charge of investigation and prosecution and states that the investigation is progressing nicely.

Read more: The Fishrot Files

Two and a half years have passed since Kveikur, Stundin, and Al Jazeera Investigates cooperated with Wikileaks to shed light on what’s known as the Fishrot Files. In that media coverage, whistleblower Jóhannes Stefánsson alleged that Samherji committed bribery and tax fraud in relation to their fishing operations in Namibia.

“We’ve acquired a considerable amount of data, and we’re working our way through that data and conducting interviews, although COVID-19 has hindered us in getting meetings, mostly abroad. We’ve been working on fixing that over the past few days,” District Public Prosecutor Ólafur Þór Hauksson told Vísir, confirming Stundin’s report that Icelandic investigators had met with their Namibian counterparts in the Hague last week to coordinate their efforts. Meetings have continued in Iceland over the past few days.

“Most recently, there have been meetings with the parties investigating and prosecuting these cases n Namibia, and we needed to go over the situation of the case there. I can’t disclose the content of the meetings but will confirm that the meetings have taken place and been very productive.”

Icelandic citizens cannot be extradited to Namibia

Deputy Prime Minister of Namibia Netumbo Nandi-Ndaitwah is in Iceland along with Namibia’s Anti-Corruption Commission (ACC) Deputy Director-General Erna van der Merwe and Prosecutor General Martha Imalwa. The reason for their visit is to meet with the Icelandic investigators on the case as well as Icelandic ministers. After their meeting with the Minister of Justice’s assistant Brynjar Níelsson, he confirmed to Stundin that Namibian authorities had extended no official extradition request. Namibian investigators have asked that Namibian judicial authorities issue such a request, as extradition is a prerequisite for prosecution. No extradition treaties are in place between Namibia and Iceland, and according to legislation, Icelandic citizens can not be extradited.

When asked if it was normal for an investigation to take such a long time, Ólafur stated that it’s possible when the case is extensive. “In that case, this can take a long time in Iceland and abroad. I will point out, in this context, that Namibian investigators started looking into the issue long before 2019. I believe it was in 2015 that they started looking into it.”

Ólafur would not issue a timeframe for prosecution but repeated that the investigation was progressing satisfactorily.

Fishing Industry Profits Spark Wealth Distribution Debate

fishing in Iceland

Iceland’s largest seafood companies made huge profits last year, if the first published financial statements are any indication, Fréttablaðið reports. Opposition MPs are arguing that the industry should be taxed more so its earnings are more evenly distributed throughout Icelandic society. According to Minister of Fisheries Svandís Svavarsdóttir, the nation sees the industry as unjust, largely because consolidation of fishing quota has funnelled large profits into the hands of very few individuals.

Billions in profits

At the end of 2020, the seafood industry’s equity was evaluated at ISK 325 billion [$2.6 billion; €2.4 billion]. In the same year, the industry paid just under ISK 4.8 billion [$37.7 million; €35.2 million] in quota fees, while the state treasury faced record financial challenges due to the coronavirus pandemic.

The fishing industry has continued to grow despite the pandemic recession. Between 2020 and 2021, the total value of catch in Iceland increased around 9%, from ISK 148.3 billion [$1.2 billion; €1.1 billion] to ISK 162.2 billion [$1.3 billion; €1.2 billion], according to figures from Statistics Iceland. Prospects continue to be good, especially since the price of fish has risen dramatically in the wake of the Russian invasion of Ukraine.

Four companies hold 60% of quota

Just four companies hold around 60% of Iceland’s fishing quota: Samherji, Brim, KS, and Ísfélagið. Brim reported profits of ISK 11.3 billion [$88.8 million; €82.9 million] last year, and Síldarvinnslan’s profits are similar. In the first three months of this year, Síldarvinnslan has made profits of nearly ISK 4 billion [$31.4 million; €29.3 million]. Samherji, Kaupfélag Skagfirðinga (KS), and other fishing industry giants have not yet submitted financial statements from last year, but similarly high profits are expected.

In a column published in Morgunblaðið yesterday, Minister of Fisheries Svandís Svavarsdóttir stated that the nation viewed the consolidation of fishing quota in so few hands as deeply unjust, and that it felt that this collective resource was not distributed fairly.

Fishing money in other sectors

Opposition MP and Social-Democratic Alliance Chairman Logi Einarsson echoed these words. “We have watched a huge accumulation of wealth in very few hands, which has also led to a small number of individuals not only holding the majority of fishing quota, but due to this same wealth, accumulated assets in many parts of society, in unrelated sectors.” Logi named these sectors as the media, real estate, transport, grocery stores, energy, and even insurance and banking.

“This creates a very unhealthy situation,” Logi continued. “And now that the entire public expects worsening livelihoods and various healthcare and welfare services are underfunded, quota holders should certainly pay more toward public expenditure, they are well capable of it, to say the least.”

Journalists’ Case Dismissed from Court of Appeal

The Court of Appeal has dismissed journalist Aðalsteinn Kjartansson’s case against North Iceland Police, RÚV reports. The court’s ruling says there is nothing in the case that suggests that police did not follow correct procedure in the investigation against Aðalsteinn. The Northeast Iceland District Court had ruled in Aðalsteinn’s favour, but the journalist had requested to appeal the case.

The Court of Appeal ruling states that the media play an important role in a democratic society for free and informed debate. It stresses that care must be taken to avoid imposing restrictions on their work that would impair their ability to discuss issues. However, this does not guarantee journalists protection against a police investigation into alleged violations of criminal law.

Aðalsteinn was one of four journalists who received the legal status of defendant in connection with a police investigation into a violation of privacy. He decided to challenge the legality of the police’s actions and appealed to the Northeast Iceland District Court. While it was originally believed the case concerned the journalists’ coverage of a scandal connected to seafood company Samherji, the Chief of Police later announced that it concerned other, sensitive data found on a Samherji employee’s phone.

The journalists’ source has not been confirmed, nor whether they accessed the employee’s phone. Neither was there any mention of the sensitive data in question in any of the journalists’ reporting on the scandal.

The ruling means that the police may call the four journalists in for questioning in relation to their investigation.

Samherji Journalist Wins Appeal Against Northeast Iceland Police

The Northeast Iceland District Court has ruled on Stundin journalist Aðalsteinn Kjartansson’s appeal to determine the legality of a police investigation into his and other journalists’ alleged distribution of sexual material from the stolen phone of a Samherji ship captain. The judge concluded that Northeast Iceland Police chief Páley Borgþórsdóttir was wrong to give official defendant status to Aðalsteinn on those grounds, Vísir reports.

As previously reported, four journalists are under investigation by Northeast Iceland Police. While it initially appeared the investigation was into the journalists’ reporting on leaked communications between several Samherji employees calling themselves the company’s “guerrilla division.” However, they were instead accused of violating Articles 228 and 229 of the Penal Code — legislation implemented to protect victims of digital sexual violence. They were given the legal status of defendants in the case.

A law isn’t broken by a journalist receiving data

As per news site Stundin, the Northeast Iceland District Court determined the journalists were not considered to have breached the law simply for receiving and viewing sensitive personal data since it is part of a journalist’s job to receive data and tips and determine if it is in the public interest to pursue them.

The ruling notes that, in general, the mere act of receiving and opening data sent without the recipient’s consent is not a criminal offence.

A case built on sand?

The district court’s verdict also states that it cannot be concluded from police documents that ship captain Páll Steingrímsson contacted the police because of the personal videos on his phone, which the police claimed to be the reason for Aðalsteinn being named as a defendant.

Gunnar Ingi Jóhannsson, Aðalsteinn’s lawyer, told Stundin the ruling confirms his argument that “the police’s case against the journalists is built on sand.”