Published August 22, 2003


Both the product and the puppet of seismic activity, Iceland’s resulting terrain is as unique as it is spectacular. For centuries ecological and economic evolution progressed along parallel lines at a snails pace, a comfortable independent co-existence. Until WWII Icelandic society was rural, unindustrialised and quite poor. Though environmentalism as a coherent force that would confront ecological threats from big business and industry had yet to emerge, Iceland’s pristine ecology was in no immediate danger and required little in the way of protective measures.

In the last forty years profound changes have taken place. Environmentalism has grown from an elitist science into a mass popular movement and indeed a formidable political force with many European countries having strong and growing green parties. Simultaneously Iceland’s socio-economic situation has been transformed. At the end of the war Marshall aid and Iceland’s entry into NATO along with increased foreign investment prompted rapid, some might even say rapacious, development. Free market economics have, particularly of late, been wholeheartedly embraced by the dominant Independance Party, now into its fourth consecutive term. Rapidly increasing tourism and growing industrialisation has inevitably prompted fears about the sanctity of Iceland’s environment. In this context it was only a matter of time before the opposing forces of ecology and industry would collide in spectacular fashion.

Aluminium versus the environmentalists; this most modern of Icelandic sagas has been running now for several years and centres on a proposal to build an aluminium plant in Reyðarfjörður in the east of the country. Iceland is no stranger to this versatile metallic substance and there are other similar plants dotted around the countryside. Just a stones´ throw from the capital, international aluminium giant Alcan established a kilometre long factory using geothermal energy from the surrounding geothermal fields. This state of affairs begs the obvious question; what´s so special about the latest project? The simple answer is water.

This new development is, in effect, a three-stage process. First is the building of a huge dam to provide water for the hydro-electrical power station that will in turn power the aluminium plant. It is not so much the power plant or even the aluminium factory that has given way to controversy but the building of the initial dam. Achieving this requires the flooding of a vast valley floor, an area that is the largest unspoilt natural habitat in Western Europe, containing all manner of unique and fascinating flora and fauna. Environmental experts and their supporters claim that this unique part of Iceland’s natural heritage should not be sacrificed for yet another metal factory.

On the opposing side of the argument are many locals who hope that the added employment will help to stem the tide of depopulation and allow more young people to remain in the area. These citizens have also had the considerable weight of the Icelandic government behind them. Enthusiastic supporters of the project from the outset, the Department of Industry lined up a Norwegian corporation as a private partner to construct and run the aluminium factory. The government, anxious not to be seen to be imposing a solution, made all the usual noises about consultation and independent impact assessment. But, as any student of “real politick” knows, government usually initiates a “consultation process” only after it has already privately made up its mind on how to proceed. Add to this the track record of the current administration and the result has been less a balanced investigation of the facts than an expensive PR exercise on behalf of the state.

With such formidable forces ranged against it, environmental campaigners resorted to a multi-pronged approach to their opposition efforts. Along with such traditional methods as petitions, public demonstrations and political lobbying, Icelandic eco-warriors have tried to nullify popular arguments in favour of the plant. They pointed out that while local Icelanders will certainly pick up work at the site, the vast majority of employees would be drafted in from Reykjavik and abroad, thus producing little benefit for locals. Opponents of the scheme also argue that any increased employment will be short lived, falling off dramatically when the initial construction period comes to an end, thus creating a whole set of readjustment problems for the local workforce. Destroying this area is also needless, argue activists, as there are other viable locations from which to choose.

The third prong of activists’ strategy was to generate sufficient controversy to pressure the Norwegians into pulling out of the deal. A couple of years back, activists scored what at the time seemed a significant victory when this very objective was achieved. After months of indecision and to the intense chagrin of the Icelandic government, the Norwegians backed out of the project citing bad publicity and worries about the suitability of this sparsely populated region to this kind of industry. This left the Independence Party-Progressive Party government, aggressive backers of the project, in the embarrassing position of having to look desperately around for a new private partner to shore up the development. Environmentalists’ delight was to be short lived, however. Any doubts entertained by even the most cynical observers about the lengths to which the government would go to save face and the project were dispelled with the announcement of the governments new strategic partner; step forward those models of industrial and environmental probity, US multinational corporation Alcoa.

To the average first world citizen the name Alcoa means, if anything at all, that most versatile and pliable of twentieth century metals, aluminium. To our long-suffering third world brethren, however, the company acronym implies other things; wholesale environmental degradation, breathtaking violations of international environmental law, wage slavery, and denial of trade union rights to mention but a few. Happily for our democratically elected betters here in Iceland such an unsavoury reputation is reassuring proof of their efficiency and ability to get the job done in the face of such annoying distractions as adherence to basic standards of employment rights.

The signing of an official contract between the government and Alcoa in February lent a distinct air of inevitability to the whole project, reflected in the decreasing level of vocal protest against the development. This has been followed more recently by the beginning of the construction of an infrastructure to support the actual building of the dam later this year.

After years of controversy, protests and setbacks, and just when the government had hoped the issue had been finally laid to rest, a fresh furore is now blowing up over the wisdom of the government’s choice of company to complete the initial work. The Italian construction company Impreglio won the initial contract to build infrastructure and housing in readiness for the machinery and workforce needed to construct the dam. Serious allegations, ranging from incompetence to wholesale violation of agreed work contracts have surfaced in the media in recent weeks. The foreign contingent within the workforce claim to have been completely deceived about working conditions and pay, with some workers receiving about 3 euro an hour while others claim never to have even seen an official pay-slip. Impreglio´s strategy has been to avoid awarding work contracts of more than six months thus allowing the company to pay only the absolute minimum in salaries. According to staff representatives, temporary camps set up to house this first wave of workers are so cramped and unsanitary as to constitute a health hazard. In the long term many are also sceptical about the ability of these cheap and hastily constructed prefabrications to survive the rigours of a harsh Icelandic winter. Trade union organisations and the sanitation board are said to be monitoring the situation with interest but as yet no concrete action has taken place because of these allegations.

Given governments´ predilection for impoverishing the already poor to enrich the already wealthy, and indeed themselves, this sleazy Italian outfit must seem like the perfect choice. So to the intense surprise of nobody, both Impreglio, anxious to hold on to its lucrative contract and the Department of Trade and Industry anxious to hold on to its contractor are, as the saying goes, unavailable for comment.

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