Icelandic Fishing Company Engaged In Bribery, Tax Evasion, Plundering African Resources

Some 30,000 documents published by Wikileaks as The Fishrot Files, and subsequently reported on by Stundin, RÚV’s investigative news programme Kveikur, Al-Jazeera and The Namibian, show that Samherji, Iceland’s largest fishing company, has for years been engaging in bribery of public officials to secure fishing quotas in Namibia. The proceeds from their operations, totalling some $70 million USD, were then transferred to a shell company in the Marshall Islands, a tax haven.

Jóhannes Stefánsson, the former managing director and CEO of Samherji in Namibia who left the company in 2016, was the whistleblower of this story, telling reporters that he became very disturbed at how Samherji has been “robbing the Namibian people”. Samherji does not dispute the evidence against them, but have shunted the entirety of the blame onto him—despite the fact that the Fishrot Files show that the bribes continued after he left.

Samherji’s practices off the coast of Africa have been well known and heavily criticised for many years now.

Securing Namibian quotas through bribes

Samherji has been very actively fishing off the coast of Africa, including such countries such as Namibia, Morocco, Mauritania and Western Sahara, since at least 2012. In order to secure their massive horse mackerel fishing quotas in Namibia, the Fishrot documents show, Samherji paid some $10 million USD in bribes to several Namibian officials, including Minister of Fishing Bernard Esau, Justice Minister and former attorney general Sacky Shangala, and James Hatukulipi, an investor and the chair of Fishcor, Namibia’s state-owned company which distributes fishing quotas. Jóhannes says that Samherji CEO Þorsteinn Már Baldvinsson authorised these bribes, which were then handled by Jóhannes.

These bribes were of course not listed as “bribes” in Samherji’s accounts, but rather “consultation fees” and “facilitation fees”. Their payments were often very complex. For example, Samherji paid $3.5 million USD to a company known as Tundavala Investments Limited in Dubai—which happens to be owned by James Hatukulipi. These payments were not made directly, but rather through Esja Seafood Limited, a Samherji holding company in Cyprus.

Samherji “deceives and makes empty promises”

In speaking with reporters, Jóhannes pulled no punches in talking about Samherji’s practices.

“Samherji does whatever it takes to get its hands on the natural resources of other nations,” he said. “The company deceives and makes empty promises all in order to exploit these resources. They do not hesitate to use bribes and break the law so that they can take as much money as they can out of the country and leave nothing behind but burnt soil and money in the pockets of a corrupt political elite.”

Washing the money

Hiding the proceeds from these illegally obtained fishing quotas was a high priority for Samherji, and required the use of tax havens and obscure bank accounts. Many of these proceeds were funnelled to the Marshall Islands, a tax haven, and put in a bank account there of a shell company called Cape Cod FS. DNB NOR, a Norwegian financial services group now known as DNB, closed Cape Cod FS’s bank accounts in the Marshall Islands in May 2018.

Shortly before, Bank of New York Mellon declined to process a transaction from Cape Cod FS through its system, and a subsequent investigation by DNB NOR came to the conclusion that it could find no information on the actual beneficial owner of Cape Cod FS, which violates KYC (“know your client”) rules that were specifically established to prevent money laundering. In fact, Samherji had been using Cape Cod FS for about seven and a half years before DNB NOR closed the account.

Despite the closing of the account, Samherji remained a major client of DNB NOR.

Denials and scapegoating

When contacted by reporters for a response to the Fishrot Files, both Þorsteinn Már and Kristján Vilhelmsson—Samherji’s second largest shareholder and the de facto general manager in Iceland—both refused to respond directly. Þorsteinn glibly commented on the weather rather than answer questions when contacted by Kveikur, while Kristján was decidedly more defensive when Stundin reached out to him last October.

“I will not answer any questions from you, not about this matter or any other,” he reportedly said. “I do not owe you answers about anything.”

As such, it is fairly safe to assume that Samherji was well aware that they were being investigated by journalists weeks before this story broke. Despite this, they have waited until yesterday to respond to the charges, in a statement published on their website—which quotes Þorsteinn Már.

“It is very disappointing to us to learn that Jóhannes seems to have taken part in questionable business practices and have possibly embroiled Samherji in trades that can be considered illegal,” the company quotes him as saying. “We’re taking this very badly. Not solely because Jóhannes confirmed that he took part in these practices, but also for extending his accusations towards his former coworkers at Samherji. This is a work practice that is alien to us.”

“Robbing Namibia inside and out”

For his part, Jóhannes does not deny his participation in the bribery and money laundering scheme, but is emphatic in his assertion that this was common practice at Samherji.

“Little by little you begin to realise that [Samherji] is robbing Namibia inside and out; they’re treating the nation and its people very badly,” he told reporters. “I paid no bribes without the green light from Þorsteinn. I just got the information and contacted Þorsteinn and said: they have requested to get this [payment] as a bribe, do you give me the green light for this? And he’d just give it. But it was never through any emails, but rather through Skype or a video conference at his office or the office in Namibia, because this was a secure form of communication.”

“They have to go”

Interestingly, Namibian authorities have responded much faster to the news than Icelandic authorities have. The Namibian Sun reported that President Hage Geingob vowed to fire both Bernard and Sacky in the wake of these revelations. Shortly thereafter, the Sun tweeted that they have both resigned.

Meanwhile, in Iceland, Kjarninn reports that Minister of Health Svandís Svavarsdóttir told the Icelandic radio programme Bítið that the Fishrot Files paint “a picture of greed that got out of hand”. When asked directly if the Icelandic government will respond to Samherji’s activities, she said it was “not unlikely”. The government is due to next meet this Friday.

In a radio interview with RÚV, Iceland’s Prime Minister, Katrín Jakobsdóttir, likened the matter to colonialism and said that there would be a full investigation.

About the photo: The banner image shows Bernard Esau (left) and Þorsteinn Már Baldvinsson. This photo and more are a part of the Fishrot Files documents.