A wake-up call in Reykjavík

Fifteen years ago, most Icelanders believed that corruption was virtually non-existent in the country. Back then, Iceland’s Corruption Perception Index score was amongst the highest, comparable with the other Nordic countries. However, a lot has changed since, and the Icelandic nation is gradually realizing that it has a corruption problem.

The 2008 financial crisis and its aftermath, with prison sentences for managers and owners of Icelandic banks, opened the eyes of many. The Panama Papers of 2016 were another big wake-up call, since many prominent Icelanders were implicated in that scandal, including leaders of powerful political parties: the then-Prime Minister was forced to resign after it was revealed that his family hid large sums of money in tax havens, and the Minister of Finance also turned up in the Panama Papers as the owner of a shell company based in Seychelles.

2019 marked another turning point as several alleged corruption cases were widely covered in the Icelandic media and abroad. The Minister of Justice had to resign after the Supreme Court of Iceland and the European Court of Human Rights ruled that she had violated Article 6 of the European Convention on Human Rights, meant to ensure individuals’ right to a fair trial, when appointing judges to a new intermediate court in a way that “disregarded a fundamental procedural rule” that was “an important safeguard to prevent the Minister from acting out of political or other undue motives that would undermine the independence and legitimacy of the Court of Appeal” (ECHR, Guðmundur Andri Ástráðsson v. Iceland).

Even more notably, at the end of 2019, detailed coverage appeared in the media claiming that the largest fisheries company in Iceland, Samherji, had bribed ministers and officials in Namibia and Angola and people connected with them, in order to gain access to valuable fishing quotas, and laundered the proceeds of the questionable fishing activities through shell companies in tax havens. The story only came to light thanks to information from an Icelandic whistleblower who worked for the company in Namibia.

The company in question has a large portion of the fishing quotas in Iceland, which have been very profitable. It has denied any wrongdoing and claimed that the whistleblower made decisions to bribe people all on his own, without knowledge or instruction from company management. The company's efforts to undermine the credibility of the whistleblower, the media, and investigative journalists who are covering the case have been met with condemnation from journalists.

It certainly thickens the plot that the current Minister of Fisheries was once Chairman of the Board of the company and is an old friend of its CEO. His reaction to the case - or lack thereof - has been widely criticized and many have demanded his resignation, but his party and the government coalition have supported him.

The District Prosecutor in Iceland is currently investigating the case and several of the company's executives have the status of defendants in that investigation. In Namibia, several people have been in custody for months awaiting trial and sentencing. The case is also being investigated in Norway due to alleged laundering of the profits through Norwegian banks.

In light of the above, it is therefore not difficult to guess why Iceland's score has dropped to 75, ranking it seventeenth on the CPI, 6 places lower than last year and considerably behind the other Nordic countries. Fortunately, international pressure on the Icelandic government to take corruption and its prevention seriously, and to do what needs to be done to protect the Icelandic public from its great social ills is increasing. In mid-December of last year, the OECD's report on the Working Group on Bribery for Iceland's fourth audit was published. In that report, the Icelandic government is harshly criticized for its poor performance in this area and for its apparent lack of interest in these issues.

The Icelandic chapter of Transparency International, with the help of its supporters and the Icelandic people, is also determined to ensure greater transparency and accountability for all Icelandic authorities in politics, government and business, and will work to support and protect whistleblowers and investigative journalists. Regretfully, there is no shortage of work to be done.