The myth of Iceland’s innocence is dead

By James Kleinfeld

I first met Johannes Stefansson on a typically crisp and windswept day in May in the Icelandic capital Reykjavik. As rain fell intermittently outside the makeshift office where we were meeting, Johannes was preparing himself, and the five assembled journalists, for the battle of his life.

His animated enthusiasm belied the severity of the allegations he was about to bring forward: that, on the instructions of his superiors, he had paid millions of dollars in bribes to well-connected figures in Namibian politics in order to secure the country’s lucrative fishing grounds for his former employer, the Icelandic fishing conglomerate Samherji.

“We are in this all the way,” he would say often, underlining his determination to see his former colleagues and business partners face justice for what he claims was a large-scale criminal enterprise defrauding the Namibian people of the proceeds of their country’s natural wealth. Facing Johannes was a formidable array of vested interests, political power and financial behemoths, all in league, Johannes claims, with the murky underworld of the South African mafia.

I was introduced to Johannes by Kristinn Hrafnsson, editor-in-chief of WikiLeaks. Coming straight from Belmarsh Prison, where his erstwhile colleague Julian Assange continues to languish, he met me in London’s Fitzrovia.

He told me about Johannes’s journey in one of Iceland’s largest fishing companies, Samherji; from his long career as a fisherman on board Icelandic trawlers around the world, to managing Samherji’s subsidiaries in Morocco and Namibia, to eventually leaving the company in disgust at what he considered to be the corrupt corporate culture.

As he left Samherji in 2016, Johannes recognised the significance of the data on his laptop. Emails, memos, presentations, photos and videos would all come to constitute the Fishrot Files, an archive of more than 30,000 documents hosted on WikiLeaks, providing the documentary evidence to back up Johannes’s claims of the corruption he facilitated during his time at Samherji.

As Kristinn trawled through the thousands of documents, he began to seek potential media partners. The natural partners in Johannes’s and Kristinn’s native Iceland were Kveikur, the investigative series of RUV, the state broadcaster, and the weekly magazine Stundin. And it was to Al Jazeera’s Investigative Unit that WikiLeaks turned to raise the profile of this important leak, give it worldwide coverage and take the investigation in an entirely new direction.

The Namibian landscape is rich with natural resources: from the uranium buried in the ground and treasured by the world’s nuclear powers, to diamonds dredged from the seafloor.

Despite this, roughly one out of every five Namibians lives in poverty, and the country suffers from a 33 percent unemployment rate.

When it gained its independence, the young Namibian state looked askance at other African nations rich in natural resources and emerging from colonial domination; it saw that foreign companies had replaced overt colonial administrations with a more subtle form of neo-colonial domination, looting national assets and paying as little tax as possible.

Namibia sought to escape this resource curse by enacting legislation ensuring domestic ownership of the industries exploiting the nation’s natural resources. The “Namibianisation” policy in the country’s fishing industry encourages foreign companies to enter into joint ventures with Namibian companies. As long as 51 percent of the company is owned by Namibians, and ideally those Namibians from historically disadvantaged black African communities, they can benefit from advantageous access to fishing quotas.

The government had reason to promote such protections for its people. Recent studies by the African Union show that Africa loses at least bn annually as a result of illicit financial flows from foreign companies doing business on the continent.

Global Financial Integrity estimates that for every dollar that comes into the developing world in the form of foreign aid, US$10 leave, mostly as a result of tax avoidance by multinational companies. These figures are a stark reminder of how foreign companies have thoroughly ravaged African economies, leaving little behind for the people of the continent.

The ‘sharks’ among Namibia’s fish

I met the executive director of the Tax Justice Network Africa, Alvin Mosioma, who explained to me how African economies have been victims of what has come to be known as “state capture”, whereby “a very small clique of the elite are able to determine the decisions which a government makes”.

In the context of the Namibian fishing industry, the members of this clique are the so-called “sharks” implicated in the Fishrot files.

They are the [ex-] minister of fisheries Bernhard Esau, [ex-] minister of justice Sacky Shanghala, state-owned fishing company Fishcor’s chairman James Hatuikulipi, and their close associate, Tamson Hatuikulipi who is Esau’s son-in-law and James’ cousin.

Johannes speaks of how his former employers Samherji used their privileged connections with these power brokers to facilitate their entry into – and ultimately capturing a significant portion of – the Namibian fishing industry.

With James installed as chairman of Fishcor, the state-owned company began selling large quantities of quota at below-market prices. Almost at the same time, the power brokers, led by Sacky Shanghala, pushed through a bilateral agreement with neighbouring Angola, profiting from a little-used loophole in Namibia’s fishing regulations allowing Samherji to bypass the competitive tendering process and catch greater harvests of Namibian fish.

In return for these generous allocations of fishing quotas, the “sharks” and others in their entourage collectively earned more than US$10m in what Johannes claims were “bribes”. Media reports from 2014 show that Namibia’s Anti-Corruption Commission had been investigating Sacky Kadhila’s company for allegedly paying US$65,000 to a director at the Ministry of Fisheries.

Al Jazeera does not know what this alleged payment was for, or indeed what came of this investigation, but what is known is that Kadhila told Al Jazeera’s undercover reporter he could “find somebody in the ministry that we could place in our company … that person is only for the influence, to ensure that Omualu always gets a quota”.

The need to line the pockets of public officials in order to gain preferential access to fishing quotas led our fake investor to the CEO of Fishcor, Mike Nghipunya, and Minister of Fisheries Bernhard Esau.

For his efforts to secure quotas, Nghipunya is offered a 20-percent stake in the proposed joint venture, as well as a one-off payment of $500,000. Likewise, to enter into the good graces of Esau, our Chinese investor offered him a gift of a limited-edition iPhone and promised to make a US$200,000 donation to the ruling Swapo party in the run-up to the country’s general elections on November 27.

Outing himself as a proxy for the minister, Kadhila remarked that Esau “thought very highly” of our undercover investor, and assured us that he would do “whatever it is that we would require from him to assist us”.

Dancing the corruption tango

As Alvin Mosioma said: “All too often, we tend to focus much more on the beneficiary of corruption and not the supplier of corruption.” In other words, in the dance of corruption, “it takes two to tango”. On one side, you have powerful political elites who have captured democratic processes. On the other, you have powerful business elites who, for the right price, can bend the rules to work in their favour.

“Frontmen” were used so that Samherji’s Namibian subsidiaries could, on paper, be majority-owned by Namibians, meeting the standards of “Namibianisation”. And yet, despite the bounty of profits Namibia provided for Samherji, a leading company executive was found in a draft presentation to have described the Namibian people as “happy lazybones”.

While Samherji may not have invaded Namibia by force, set up a colonial administration or brought large numbers of Icelanders to settle there, in many ways, its corrupt business practices are neo-colonial: treating the local population and institutions with contempt and considering respect for local laws and regulations as optional.

– Al Jazeera