Fishrot: The Icelandic and Namibian corruption scandal

Head of hake

Fishrot is a name that alone evokes the foul stench of corruption.

The financial scandal, which was inspired by a 2019 Wikileaks release known as the "Fishrot Files," spans from Namibia to Iceland, involves government ministers and at least $20 million (£16.76 million).

The largest corruption trial in the nation's brief history is currently being prepared for in southern Africa.

It all has to do with fish quotas, which may not seem like an obvious source of corruption but are actually very profitable in Namibia.

Fishing, which contributes about 20% of the nation's export revenue and spans nearly 1,600km (1,000 miles) of South Atlantic coastline, is one of the main industries.

In the Fishrot scandal, several well-known politicians and businessmen are charged with running plots to seize power over lucrative fishing quotas, such as those held by the state fishing firm Fishcor. Then, allegedly in exchange for kickbacks, they diverted them to the Icelandic fishing firm Samherji.

Ten suspects, including former Justice Minister Sakeus Shangala and former Fisheries Minister Bernard Esau, are suspected of having benefited.

All those accused have proclaimed their innocence, despite the fact that some have already spent more than three years in detention. One of the most significant businesses in Iceland, Samherji, has vehemently refuted claims of bribery.

Two men in court
Two people accused of being involved in the Fishrot scandal are former fisheries minister Bernard Esau (R) and businessman Tamson Hatuikulipi (L), both of whom deny the accusations.

The scandal has also hurt Namibia's larger fishing sector. Jobs have been lost, and the government has lost money that could have been used to help the most vulnerable members of one of the world's most unequal societies. .

First off, a portion of Fishcor's earnings were intended to fund social programs like drought and unemployment relief. Second, because the fishing quotas were changed, Namibian fishing as a whole suffered.

The scandal first surfaced in November 2019 when WikiLeaks published more than 30,000 documents, including business emails, contracts, presentations, and photos, that had been leaked by Johannes Stefansson, a former Samherji manager in Namibia. He claimed that in order to obtain access to the fishing quotas at a discount from market value, the company conspired with a number of powerful individuals.

This case has proven to be complicated, and although it will likely take some time to reach court, it is already having an effect in the real world.

This is evident in locations like Walvis Bay, the country's main harbor.

Jason Ipinge in front of his two-bedroom flat
On a factory ship that belonged to the Icelandic business Samherji, Jason Ipinge lost his job.

One of the main townships in Walvis Bay, Narraville, is where Jason Ipinge resides. Here, one-story homes are built right up to the edge of the desert.

He was laid off from one of Samherji's large factory trawlers back in 2018.

Three Namibian quota holders and a ton of fish were brought aboard the ship, the Heinaste, by ArcticNam, a local joint venture company that was leased by one of Samherji's subsidiaries.

It seems that the partners' relationships deteriorated after a few successful years. It has been reported that there was a dispute between the Namibian and Icelandic sides of the business over whether the promised jobs had actually been filled.

The entire crew was told to leave the ship without warning or explanation, according to Mr. Ipinge, who claims that the fishermen working on the boat were completely unaware of the situation.

He admitted to me, "I've lost a lot in life, and my dignity has also suffered.". I used to be able to send things back to my village to help my parents, but I'm not able to do that anymore. " .

The tale of Mr. Ipinge is by no means unique. Two researchers from Namibia's National University, Ellison Tjirera and Rui Tyitende, spoke with numerous individuals who shared a similar circumstance.

We've heard tales of people who had to pull their children out of school and send them to live with their grandparents, Mr. Tjirera says. "We heard tales of people who lost their partners because they couldn't support their families any more.".

Some people turned to crime. So I think you can see how this massive corruption scandal affected regular people's lives. ".

Unsurprisingly, a lot of businesses in Namibia's competitive fishing industry suffered. Due to Fishcor's practices being questioned, even those who may not have been involved in the scheme have been impacted.

They are still having difficulties at Princess Brand Processing (PBP), one of the largest fish factories in sub-Saharan Africa.

Horse mackerel, a species with a sizable African market, is caught by PBP and brought ashore for processing. General Manager Adolf Burger claims that it has adopted a labor-intensive strategy that has led to the creation of 650 jobs.

PBP processing hall, standing still
PBP has a large labor pool available at its Walvis Bay processing facility.

According to Mr. Burger, "This is done with 10 or 15 people in Europe.". "A fully automated factory could have been built here, but since the goal is to create jobs, we kept it as manual as we could. ".

The company lost a sizable quota allocation that had been agreed upon with Fishcor when the Fishrot scandal broke.

When Namibia gained independence 33 years ago, the country's goal was to provide jobs and economic prosperity for its people while also claiming the wealth of marine resources that had been long exploited by other countries.

In order to "Namibianize" the country, the new administration, led by the former liberation movement and now-political party Swapo (South West Africa People's Organisation), granted fishing rights to its citizens and required foreigners to enter into joint ventures in order to access its resources.

According to Graham Hopwood, executive director of the Institute for Public Policy Research (IPPR) in Namibia, a policy that was good in theory has run into issues.

"Companies that are Namibian, or majority-Namibian owned, are given the rights to various different types of fish in our sea on extended periods of 10, 15, and so on," he claims.

Theoretically, that is good, but the majority of these are paper-only, briefcase businesses owned by people with little to no experience in fishing and no infrastructure who see this as a way to make money. Many of these people are also politically connected. ".

The IPPR is not alone in believing that the industry is vulnerable to abuse because of the opaque manner in which it is managed and regulated. .

Ex-Justice minister Sakeus Shangala, and former director of state fishing company Fishcor, James Hatuikulipi
At one of the court hearings that have taken place prior to the trial, ex-Justice Minister Sakeus Shangala (on the left) is seen here with ex-Fishcor Director James Hatuikulipi.

The Fishrot case will be the largest trial in the history of the nation when it is finally heard in court later this year.

The suspects are accused of racketeering, bribery, money laundering, and tax evasion, according to a 144-page indictment.

The defendants are also accused of using a bilateral cooperation agreement with Angola as leverage to divert more quotas to Samherji at deeply discounted rates.

The scandal also had a political price.

Just days after the Fishrot story broke, Swapo experienced its worst election results.

As analyst Rui Tyitende puts it, "Politically they are in the intensive care unit.".

Iceland's reputation as a whole, which has declined in the international corruption index over the past few years, is also being scrutinized, not just that of one of the most significant companies.

Samherji has consistently refuted claims of corruption. It hired a Norwegian law firm to look into the scandal when it first emerged. In a statement following the publication of its report, the company acknowledged the problem but insisted there had been no bribery.

More consideration needed to be given to the manner in which payments were made, to whom and on what basis, as well as to who had the power to direct them and where they should be received, according to Samherji. Furthermore, it is obvious that the underlying contracts for the payments ought to have been explicit and formal. " .

The business added that it had made extensive efforts to prevent similar errors from occurring in the future.

It assigns responsibility for any potential criminal activity to the whistleblower, Johannes Stefansson.

But Mr. Stefansson claims that other people authorized the payments, and he will likely be the key witness for the prosecution at the trial later this year.

Play the Fishrot: Clear Waters, Murky Dealings documentary on the BBC World Service.

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