“I’m glad that the women, who were used physically and emotionally by British undercover police, have decided to initiate a legal action against police. Thereby, the operations of these police officers lands once again on the German parliamentary agenda,”

Eight women have filed legal action against the Metropolitan Police. Five officers have been named that have infiltrated leftist movements since the 1980′s, and used deceit to create sexual relationships with these women. Among them is the former undercover officer Mark Kennedy, who worked for the German police in the states of Mecklenburg-Vorpommern und Baden-Wuerttemberg. The open statement of these women contradicts the claims of Kennedy, that he only had sexual relationships with two women.

Andrej Hunko further stated:

“The courageous step of these eight women must also have consequences in Germany.

According to media reports, Kennedy was operating in 22 countries. It follows then, that Kennedy likely also used such illegal tactics in these countries. In my opinion, the Kennedy operations went against the European Convention on Human Rights, Article 8, which protects the rights for private and family life, including the right to form relationships without unjustified interference by the state.

According to Mark Kennedy, it is unlikely that his commanding officers did not know about his sexual relationships. The women involved speak about an ‘institutionalised sexism within the police’.

Although the British Interior Minister announced a restructuring of the undercover operations earlier this year, it appears that only cosmetic changes have taken place. Further investigations have been delayed. The demands for an independent investigation commission has already been denied.

The German policing agencies responsible for the operations of Mark Kennedy must now release all information about his scandalous operation. The German National Criminal Police (BKA) must immediately open up the workings of this network: the police acted as a central point for these cross -border undercover exchanges, and took part in secret international working groups. A recently begun German-British initiative has attempted, at the EU level, to keep such undercover operations a large secret.

The British government must accept that in many countries, there is a need for strong investigations into this affair. Only then can there be the creation of a proper international, and especially independent investigation commission. Then the practices of these undercover officers could be exposed, whether they are in Iceland, Italy, France, Ireland, USA, Germany, or anywhere else”.

By Snorri Páll Jónsson Úlfhildarson.
Originally published in the Reykjavík Grapevine.

Criminal court cases, waged by The State against political dissidents for acts of protest and civil disobedience, can be understood in two ways. Firstly, the juridical system can be seen as a wholly legitimate platform for solving social conflicts. Such a process then results with a verdict delivered by Lady Justice’s independent agents—a ruling located somewhere on the scale between full punishment and absolute acquittal. According to this view, it is at this point only that a punishment possibly enters the picture. And only if deserved.

Secondly—and herein lies a fundamental difference—the original decision to press charges can be seen as a punishment in itself, regardless of the final verdict. With these two points of understanding in mind, two recent verdicts, which have not received much attention, are worth observing.

You Shall Not Run

Number one is the case against Haukur Hilmarsson and Jason Slade who in June 2008, while attempting to stop an airplane from departing, and thereby deporting Kenyan asylum seeker Paul Ramses to Italy, ran onto a closed-off area at the Leifur Eiríksson International Airport in Keflavík. To shorten a long and complicated story (covered in-length here) their political sprint snowballed into protests of all kinds, eventually bringing the asylum seeker back to Iceland, where he and his family were granted an asylum.

During the case’s most recent court proceedings—the third one, indeed, after already rolling through Reykjavík’s District Court and Iceland’s Supreme Court—the two accused attempted a moral defence, speaking solely about the act for which they were charged and which they justified with a reference to the asylum seeker’s desperate need and the large-scale impacts of their actions. But neither prosecutor nor judge were willing to speak of these things, focusing instead on fences and the possibility of destroying an airplane’s engine by being sucked into one such. Eventually the two were found guilty of violating air-safety regulations and air-traffic laws, and ruled to pay a fine, lower than what the State pays for executing the trial.

You Shall Not Stand

Number two is the case against Lárus Páll Birgisson who recently was sentenced for disobeying police orders and this is in fact his second sentencing in a year, due to exactly the same scenario: Lárus stands on a sidewalk in front of the U.S. embassy in Reykjavík, holding a sign bearing a message against war. Police arrives after a complaint from the embassy and order him to leave the sidewalk. Lárus rejects, citing his legally and constitutionally protected right to protest, and official data regarding the sidewalk’s public status. He is then arrested, charged and finally sentenced.

And what is it, so heavy and hazardous, that undermines his right to protest in public? “It is well-known,” says in the judge’s verdict, “that embassies worldwide have in recent years and decades been targets of perpetrators and hence it is not strange that their staff is on alert regarding traffic in the most nearest surroundings.” And not a single additional word. The justification starts and ends in one and the same sentence, referring to something “well-known”—a concept as blurry, insignificant and out-of-context as “public opinion” and “common sense”.

You Shall be Punished

On the surface, these sentences per se are of no heavy-weight importance for The State (actually minor enough, according to recent rules, not to be published officially, which might—possibly—explain the little-as-no attention). And while the sentenced ones would obviously have preferred different results, the relatively low fines are certainly not equivalent to physical imprisonment.

So, what is the use then? In fact, both cases perfectly embody the second above-mentioned way of understanding—that the punishment lies in the charges themselves but not the final verdict. Not only does it consume money, time and energy from those directly involved, but its social impacts are also dead serious.

To begin with, such verdicts give the police a further green light for giving illegal orders and arresting those who disobey in the name of their rights. Probably more importantly, they clearly determine the precedent that it is worth forcing political dissidents into long and costly court cases—in these two cases keeping people inside the court system for years and repeatedly charging the same man for the same completely harmless act—even when the final results amount to be mere small-talk. An ongoing and ever-hanging threat of sentences, fines and jail-time, is more than likely to keep people away from resisting oppression, meaning that the threat is a form of silencing, a form of oppression, itself.

For Mine is the State, the Power and the Justice

Regarding the first-mentioned way of understanding, it might be worth wondering if these court cases possibly manifest a resolution of social conflicts. In order to be so, the discussion in court would have had to be free from anything like “well-known” or “public-good” and instead deal with the tough tug between status-quo—such as airport rules and fences, or the police’s right to order and be obeyed—and people’s legal, ethical and natural rights to directly and spontaneously interfere with their up-front reality.

But as Haukur Hilmarsson said during his procedure, one of the most humiliating factors of being dragged through the courts is to have a dialogue based on The State’s premises. No matter how willing the defendant is to speak about his action and debate its over-all legitimacy, in such context Lady Justice just does not seem to weigh a challenging argument. The weighing-scale might be broken… or is this—punishing via prosecuting—maybe, after all, what solving social conflicts and doing justice is essentially about?

These news echo the many warnings made by the opponents of the cluster of five dams at Kárahnjúkar and nearby Eyjabakkar, who repeatedly stated that the project’s alleged profitability was nothing but an illusion, but were systematically silenced by Iceland’s authorities.

Now, as these facts finally become established in the media—this time straight from the horse’s mouth—similarly bad news has arrived regarding another big Icelandic energy company. Reykjavík Energy has failed to make a profit from their 2007 and 2008 investments, effectively making them lose money. At the same time, new research shows that the environmental impacts of the Kárahnjúkar dams are exactly as vast and serious as environmentalists and scientists feared.

And yet, more dams, geothermal power-plants and aluminium smelters are on the drawing table—presented as the only viable way out of the current economic crisis.

Dividend: Close to Zero

During the last half century, Landsvirkjun has paid its owner—the Icelandic nation—only 7,8 billion Icelandic Krónur (66 million USD at present value) as dividend, which according to Hörður Arnarson is way too low and in fact almost equivalent to zero. While it would be fair to expect around eleven percent dividend from the company’s own equity, it has been at an average of two percent since Landsvirkjun was founded. The income from the Kárahnjúkar plant has been about 6 percent of its book value, which again is too low, as according to normal standards the income should be 9 percent of the book value.

At present, Landvirkjun’s total earnings have been 73 million US dollars at most, whereas it should be closer to 180 million USD, considering the owner’s 1,6 billion USD equity. It was made clear by Arnarson that the price of energy purchased by large-scale energy consumers plays a major role herein—a price that obviously has been far below any rational logic and standards.

Same Old, Same Old

In 2003, British newspaper The Guardian published “Power Driven”, Susan De Muth’s exclusive report about the Kárahnjúkar power plant, which at that point was already under construction. Among many critiques made in the article, De Muth questioned Kárahnjúkar’s allegeded profitability. She wrote:

Thorsteinn Siglaugsson, a risk specialist, prepared a recent independent economic report on Karahnjukar for the Icelandic Nature Conservation Association. “Landsvirkjun’s figures do not comprise adequate cost and risk analysis,” he says, “nor realistic contingencies for overruns.” Had the state not guaranteed the loans for the project, Siglaugsson adds, it would never have attracted private finance. “Karahnjukar will never make a profit, and the Icelandic taxpayer may well end up subsidising Alcoa.”

Siglaugsson is just one of many who critically analysed the economics of the Kárahnjúkar project, concluding that its contribution to Iceland’s economy would be about none—or in fact negative. But just as many geologists who cautioned against the risks of locating the dams in a highly geologically seismic area were dismissed by Valgerður Sverrisdóttir, then Minister of Industry, as “politically motivated and not to be listened to”, so were the skeptical economists.

De Muth’s article caused a real stir in Iceland, manifest for instance in the fact that Landsvirkjun and Iceland’s Embassy in London contacted The Guardian in a complaint about “so much space […] used for promoting factual errors and misconceptions of the project and Icelandic society as a whole.” Friðrik Sophusson, Landsvirkjun’s director at that time—who in the article is quoted calling all of Kárahnjúkar’s opponents “romantics”—actually offered The Guardian to send another journalist over to Iceland in order to do “a proper report on issues in Iceland”, this time with his “assistance.” ALCOA also sent a barrage of objections to the Guardian. All the facts presented in the article were double checked by the Guardian’s legal team and confirmed to be accurate.

This volatile response from the authorities and corporates only strengthened the article’s points on the Icelandic tradition of suppressing criticism. This was confirmed in a letter to The Guardian by Icelandic environmentalist and commentator Lára Hanna Einarsdóttir, who suggested that “an Icelandic journalist would have lost [his or her] job if he or she had been so outspoken.”

The Coming Recession

And no wonder, as the article pinpointed serious flaws in the whole rhetoric surrounding the plans to heavily industrialize Iceland, plans that would be nothing without the construction of a series of mega hydro dams and geothermal power plants. Whereas these plans were presented as a path to an increased economical prosperity, De Muth quoted aforementioned economist Siglaugsson, who voiced his fear “that a boom during the construction period, with attendant high interest rates, will be followed by a recession.”

And as time told, this was indeed what happened. In an article published in the early days of Iceland’s current financial crisis, Jaap Krater, ecological economist and spokesperson of Saving Iceland, gave it a thorough explanation:

These mega-projects in a small economy have been compared to a ‘heroin addiction’. Short-term ‘shots’ lead to a long-term collapse. The choice is between a short-term infuse or long-term sustainable economic development. The ‘shot’ of Fjardaal [Alcoa's aluminium smelter in Iceland, powered by the Kárahnjúkar power plant] overheated the Icelandic economy.

Recognizing the dangers of overheating the economy—a point also made clear in Charles Ferguson’s recent documentary, Inside Job—leaves us with two options. As Krater pointed out:

There has been a lot of critique on the proposed plans to develop Iceland’s unique energy resources. Those in favour of it have generally argued that it is good for the economy. Anyone who gives it a moment of thought can conclude that that is a myth. Supposed economic benefits from new power plants and industrial plants need to be assessed and discussed critically and realistically. Iceland is coming down from a high. Will it have another shot, or go cold turkey?

Another Shot, Please

This spring, Landsvirkjun stated that if the company was to start its operations from scratch the aluminium industry would be its prime costumer. This particular paradox—as the aluminium industry is already its biggest energy purchaser—was just one of Landsvirkjun’s many. Another one is their suggestion that Icelanders should “settle upon” plans to build 14 new power plants in the next 15 years. And the third one is the company’s plans to sell more energy to aluminium companies—costumers who, in Landsvirkjun’s own words, do not pay a fair amount for what they get.

But Arnarson has said that the future looks better, referring for instance to the fact that the price for Kárahnjúkar’s energy is directly connected to world-wide aluminium prices, which Arnarson says are getting higher. Herein is the fourth paradox, as linking energy prices with aluminium prices has so far been disastrous for Iceland’s economy—most recently acknowledged in an official report regarding the profitability of selling energy to heavy industry. According to the report, commissioned by the Ministry of Finance and published last Friday, December 2nd, the total profitability has been an average 5% from 1990 until today, which is far below the profitability of other industries in Iceland, and much lower than the profitability of similar industries in Iceland’s neighbouring countries. The year 1990 is crucial here, as since then, Landsvirkjun’s energy prices to heavy industry have been directly linked to global aluminium prices.

It is worth quoting Jaap Krater again here, where he explains the dangers of interlinking these two prices, and describes how increased aluminium supply will lower the price of aluminium and decrease revenue for Iceland:

One might think that a few hundred thousand tons of aluminium more or less will not impact the global market. The reality is that it is not the sum of production that determines the price but rather the friction between supply and demand. A small amount of difference can have a significant effect in terms of pricing.

High Costs, Low Production

On top of this, recent calculations revealed in newspaper Fréttablaðið, show that Kárahnjúkar is Landsvirkjun’s proportionally most expensive construction. When the production of each of the company’s power plants is compared with the production of Landsvirkjun’s property as a whole, as a proportion of their construction costs, it becomes clear that Kárahnjúkar—with its 2.3 billion USD initial cost—is the most economically unviable plant.

Another Energy Company in Crisis

At the same time that Icelanders face Landsvirkjun’s confession to it’s virtually zero profitability, a damning report on another big energy company, Reykjavík Energy (OR), has been made public. It was originally published at the beginning of this year but wasn’t supposed to enter the public sphere, which it indeed didn’t until in late November. Reykjavík Energy’s biggest shareholder is the city of Reykjavík, meaning the inhabitants of Reykjavík.

As already documented thoroughly, the company—which operates several geothermal power plants, including Hellisheiðarvirkjun, largely built to fuel Century Aluminum’s production—is in pretty deep water. But the newly leaked report proves that it has sunk even deeper than generally considered. The report is a literal condemnation of the company, its board and its highest ranking managers, who get a grade F for their job. A good part of Reykjavík Energy’s investments from 2007 and 2008 are now considered as lost money.

The report also reveals that when energy contracts between OR and Norðurál (Century Aluminum) were made, for the latter’s planned fantasy-of-a-smelter in Helguvík, Reykjavík Energy’s directors completely ignored the very visible economic collapse confronting them.

Recently it has been reported that Reykjavík Energy owes 200 billion Icelandic ISK in foreign currency, which is two thirds of all foreign debts owed by Icelandic companies, whose income is not in foreign currency.

What we see here are two of Iceland’s largest energy companies, both of them public property, both having spent hugely excessive amounts of money—or more precisely, collected gigantic debts—struggling to continue to build power plants in order to feed the highly energy intensive aluminium industry with dirt cheap and allegedly “green” energy. As a result, they have ended up without profit and in a deep pool of debt.

And who is to pay for their gambling risks? As Thorsteinn Siglaugsson stated in 2003: the Icelandic taxpayer.

“No Impacts” Become Huge Impacts

To make bad news even worse, the irreversibly destructive ecological impacts of the Kárahnjúkar dams have, in the last months, become more and more visible. To quote “Power Driven” once again (as simply one of a good number of warnings on the dams’ environmental impacts):

The hydro-project will also divert Jokulsa a Dal at the main dam, hurtling the river through tunnels into the slow-moving Jokulsa i Fljotsdal, which feeds Iceland’s longest lake, Lagarfljot. The calm, silver surface of this tourist attraction will become muddy, turbulent and unnavigable.

This was written in 2003. Today, this is what is happening: because of the river’s glacial turbidity Lagarfljót has changed colour, which according to Guðni Guðbergsson, ichthyologist at the Institute of Freshwater Fisheries (IFF), means that light doesn’t reach as deep into the water as before (see photos aside and below). Photosynthesis, which is the fundamental basis for organic production, decreases due to limited light, its domino effects being the constant reduction of food for the fish. IFF’s researches show that near Egilsstaðir, where visibility in Lagarfljót was 60 cm before the dams were built, it is now only 17 cm. They also show that there are not only less fish in the river, but that the fish are much smaller than before.

In addition to this, residents by Lagarfljót have faced serious land erosion due to the river’s increased water content and strength.

This effect was warned of in an Environmental Impact Assessment (EIA) for the project by the Iceland National Planning Agency (INPA), purposely ignored and overruled by Siv Friðleifsdóttir, then Minister of Environment. Landsvirkjun had complained to the Ministry of the Environment, and the EIA ended up on Friðleifsdóttir’s table, who nevertheless issued a permit for the construction, stating that the dams would have no significant impact on Lagarfljót.

In response of the news on Lagarfljót’s current condition, Svandís Svavarsdóttir, Minister of the Environment, said during parliamentary discussion last September, that her Ministry’s over-all administration regarding the Kárahnjúkar decision-process will be examined in detail. She should demand a similar investigation into the decision making of the Ministry of Industry, whose Minister, Valgerður Sverissdóttir has, along with Landsvirkjun’s Friðrik Sophusson, openly admitted while joking on film with the US ambassador in Iceland, how they enjoyed “bending all the rules, just for Alcoa.”

All the Old Dogs

Despite all of this, Iceland’s energy companies, hand in hand with the aluminium industry, some of the biggest labour unions and industry-related associations—not to mention a majority of parliamentarians, including those of government-member social-democratic Samfylkingin—are still in heavy industry mode, campaigning for the construction of more dams, geothermal power plants and aluminium smelters. Ironically, but still deadly serious, smelter projects such as Century Alumium’s Helguvík, which is at a standstill, unable to guarantee both necessary energy and financing, continue to be presented as profitable solutions to the current crisis.

Met with little resistance in parliament, most of these plans are still considered to be on the drawing table, though most of them seem to be on hold when looked at closely. The latter is mostly thanks to grassroots activists, bloggers and commentators who have systematically reminded the public of the reality, while the bulk of journalists seem to be unable to stick to facts—being extraordinarily co-dependent with those in favour of further heavy-industrialization.

Under the banner of “solving the crisis”, “creating jobs”, and most recently “getting the wheels of work to spin again”, the heavy industry-favoured parties seem to simply refuse to listen to hard facts, even their very own. This attitude is probably best summed up in the recent words of Valgerður Sverrisdóttir, responsible as Minister of Industry, for the building of the dams at Kárahnjúkar, who in response to the news about the power plant’s close-to-zero profitability, said that she wouldn’t want to imagine how the current financial situation would be, if the dams hadn’t been built.

It is said that an old dog will not learn new tricks. And to be honest, ‘old dogs’ pretty accurately describes those making decisions on Iceland’s energy and industry affairs. In order to learn from mistakes and prevent even bigger catastrophes, it wouldn’t be unfair to ask for a new generation—would it?
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More photos of Lagarfljót’s turbid condition

These photos are from 2008, which suggests that the current condition is even worse.

International Rivers and Friends of the Earth International have teamed up to create a state-of-the-art Google Earth 3-D tour and video narrated by Nigerian activist Nnimmo Bassey, winner of the prestigious Right Livelihood Award. The production was launched on the first day of the COP 17 climate meeting in Durban. The video and tour allow viewers to explore why dams are not the right answer to climate change, by learning about topics such as reservoir emissions, dam safety, and adaptation while visiting real case studies in Africa, the Himalayas and the Amazon.

During a recent meeting of chairmen from all the member unions of the Icelandic Confederation of Labour (ASÍ), Hörður Arnarson, the director of the national energy company, Landsvirkjun, said that due to the current situation on international markets it would be enormously difficult for Norðurál to finance the 250 billion ISK smelter project. According to Vilhjálmur Birgisson, who attended the meeting, chairman of the Labor Union of Akranes (near to Grundartangi, where Century’s currently operating smelter is located),  Hörður spoke of the Helguvík project’s likelihood as very negligible. Another representative at the meeting, Kristján Gunnarsson, chairman of the Labour and Fishermen Union of Keflavík, stated that when asked about the possibility of Landsvirkjun selling energy to Norðurál, Hörður answered saying that no energy is really available for the project.

While it certainly is true that Landsvirkjun has, especially in the nearest past, had problems with financing, due to the international financial crisis as well as the Icelandic economy’s instability, the latter point – that no energy is actually available for Helguvík – is of more importance here. Environmentalists have, from the beginning of the Helguvík project, stated that the plans to harness energy for the smelter in geothermal areas on the Reykjanes peninsula, are not sufficient, for two reasons. Firstly, as the alleged size of the energy extraction is not sustainable and is more than likely to drain these unique natural areas for good. Secondly, because even if fully exploited, the geothermal areas would not produce enough energy for the smelter. Another energy source will be essential in order for the smelter to operate and even though Reykjavík Energy (OR) has promised Century some energy from a planned enlargement of their power plant in Hellisheiði, the aluminium producer still faces a serious lack of electricity for Helguvík.

It is here that Lower Þjórsá enters the picture. In November 2007 Landsvirkjun announced that the company would not supply any further energy to aluminium smelting in the South-West of Iceland, meaning Rio Tinto Alcan’s smelter Straumsvík, Century’s smelter in Grundartangi and the one planned in Helguvík. But many have doubted the truth behind this statement. In early June of 2008, when Saving Iceland activists gate-crashed Century Aluminum’s lack-of-permission-party in Helguvík, Saving Iceland highlighted the obvious lack of energy and asked if the planned damming of the river was meant for the smelter. Though Landsvirkjun has always denied those suggestions, several different signs have suggested the opposite.

Geologist Sigmundur Einarsson has  for the last couple of years repeatedly called attention to the inaccuracy concerning geothermal energy’s alleged sustainability and efficiency. In a new article about Reykjanes’ energy resources, Sigmundur once again points out the real energy figures and reveals that even if H.S. Orka is able to go ahead with its energy plans for Reykjanes – as mentioned above currently on hold due to an arbitration conflict between H.S. Orka and Century regarding energy prices – the Helguvík smelter will still lack between 310 and 390 MW. Sigmundur theorises that Century has from the beginning been aware of its slack energy situation, but used the cheap trick to simply start construction and thereby create expectations among the inhabitants of the Reykjanes peninsula. “Shallow-minded Icelandic politicians,” says Sigmundur, “were then supposed to bite the bait and sort out the energy by ordering Landsvirkjun to dam Lower Þjórsá (c.a. 200 MW) and sell it to Norðurál [Century] for a price accepted by the aluminium company.”

Not only does this theory full confirm Saving Iceland’s and other environmentalists’ repeated warnings not to let Century start construction of the Helguvík smelter, but now it also seems that at least a few high ranking officials have come to the same conclusion. Following Alcoa’s recent announcement about the company’s withdrawal from its years long planned Húsavík smelter, both Katrín Júlíusdóttir, minister of industry, and Hörður Arnarson, Landsvirkjun’s director, stated that Alcoa and other interested parties had created unrealistic expectations way ahead the establishing of the project’s key foundations. Thus it should not take them long to put two and two together, realizing that the same story applies to Helguvík – something that neither of them has been willing to seriously address until now.

To officially state the dead end of Century’s Helguvík dreams, Landsvirkjun would have to confirm that the planned Þjórsá dams are not meant for the smelter but for quite a while the company has been unwilling to openly discuss the Þjórsá project. The Þjórsá conflict actually splits the sitting government: While favored by the social-democrats of Samfylking, of which the minister of industry is a member, it is opposed by the Left Greens (VG). When asked about Þjórsá, Landsvirkjun now cites the Master Plan for the exploitation and protection of Iceland’s natural resources, currently in making, of which conclusions the company will wait for before any further comments. In a draft for a parliamentary solution regarding the Master Plan, the three planned Þjórsá dams are given a green light for construction. But this might change due to strong local opposition to the dams as well as the comments of a considerable number of people who protested against the project during a three months long open reviewing process, which was a part of the Master Plan’s making.

Albeit not necessary being the project’s one and only fundamental foundation, the protection of Lower Þjórsá would almost certainly mark the end of Century’s fantasies of a smelter in Helguvík. Until then the myth might live a bit longer.
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For more information about Century Aluminum, its operations in Iceland and the Helguvík crisis, see:

Century Aluminum Energy Questions

From Siberia to Iceland: Century Aluminum, Glencore and the Incestuous World of Mining

Believes Aluminium Plant Is Poisoning Sheep

National Energy Authority Fears Overexploitation of Geothermal Areas in Reykjanes

Words by Paul Fontaine. Photo by Alísa Kalyanova. Originally published in The Reykjavík Grapevine.

One of Iceland’s proudest assets is its energy grid. Geothermal energy, by 2010 figures, accounts for just over 26% of the country’s electricity, as well as 86% of its heating and hot water. Iceland’s geothermal energy technology has been shared with countries around the world, and has attracted the interests of foreign investors.

However, as comparatively cleaner for the environment geothermal power is not without its problems. One of these is the main elephant in the room: geothermal energy is not a renewable energy source. Boreholes that tap into the massive steam vents below the surface do not last forever. When Ross Beaty, CEO of Magma Energy (now a part of Alterra Power Corp.) made the specious claim that geothermal energy lasts for centuries, scientists such as Stefán Arnórsson and Sigmundur Einarsson were quick to point out that geothermal power in the Reykjanes area?where Magma sought to drill?only had enough power to last about 60 years at best. Although this point was seldom, if ever, brought up in any previous discussion about geothermal power in Iceland, more recent events have shown that geothermal energy is not just non-renewable; it can even pollute.

DON’T DRINK THE WATER

First of all, the steam that geothermal energy taps does release a number of harmful emissions. The International Geothermal Association released a report in 2002 showing that these emissions can include carbon dioxide, hydrogen sulfide, methane and ammonia. These emissions are linked to global warming, and can do extensive environmental damage. Even the water itself can be poisonous?the scientific journal Environmental Contamination Toxicology published a study in 1997 which showed that waste water can contain chemicals such as mercury, arsenic and boron.

In order to reduce the amount of pollutants that geothermal power produces, it is necessary to take a number of precautions, such as recycling the steam through a series of compressors and pumps. The waste water needs to be channelled deep back into the ground, to prevent it from poisoning drinking water tables. Both of these precautions were outlined in the 2007 scholarly article ‘Strategic GHG reduction through the use of ground source heat pump technology’. This last point has been the centrepiece of the controversy surrounding one such plant in Iceland, Hellisheiðarvirkjun.

The largest power plant in Iceland?and slated to be the largest in the world once it reaches its full capacity?it is located in the geologically active Hengill area of southwest Iceland, comprised primarily of a chain of three volcanoes. The up-side of this is that a tremendous amount of power can be generated here: the plant estimates 400 megawatts will be reached once the two additional turbines added earlier this month as in full swing. The down-side is: geological activity means earthquakes.

The sheer amount of geological activity in the area cannot be underemphasised. Hundreds of tremors were reported in the Hengill area on a single day last September, and concerns were immediately raised that these tremors?some of them measuring 3 or higher on the Richter scale?could do damage to the pipeline that pumps waste water back into the ground, below drinking water tables. Steinunn Jakobsdóttir of the National Weather Service told Stöð 2 news at the time that larger quakes could not be ruled out.

The plant itself had already been targeted by environmentalists as damaging to the environment, from a developmental standpoint, with Saving Iceland trying to bring attention to the plant’s overall effects on the landscape. The notion that poisonous waste water could be broken free from pipes, and spilled into drinking water, turned the dial up on the anxiety.

NOTHING CAN POSSIBLY GO WRONG!

These concerns were immediately addressed by Bjarni Bjarnason, director of Orkuveita Reykjavíkur (Reykjavík Energy), the power company that oversees the plant. He told RÚV earlier this month that he did not believe waste water pipes were in any danger of being damaged by earthquakes, and added: “We see no danger [of waste water poisoning ground water] so long as we pump it at least 800 metres into the earth.”

But research done on the drilling does not necessarily support Bjarni’s claim. An environmental assessment conducted on the plant in 2006 by the South Iceland Health Supervisory Authority arrived at the conclusion that they “put a great deal of emphasis on closing the construction of the waste water disposal system and the area used to dispose of the water,” meaning that the area itself for pumping waste water back into the ground was far from ideal. Research conducted by the nearby municipality of Ölfus in March of this year concluded that there were not enough controls in place to even be able to handle the regular amount of waste water being produced under normal circumstances.

Despite these warnings, construction steamed ahead, and any criticism of waste water polluting drinking water was dismissed as alarmist. That is, until it was discovered that that’s exactly what happened.

STRANGE BREW

Only weeks ago, it was discovered that Hellisheiðarvirkjun had been pumping waste water containing hydrogen sulphide into drinking water tables, on and off, for two years. The reason? Before a new waste water borehole was completed last September, another one at the Gráuhnjúkar area had been used instead. This borehole did not have the capacity to deal with the amount of waste water it had to contend with, and so it released it, through a valve intended only for emergencies, into the drinking water tables.

Residents of nearby Hveragerði were less than pleased with this news, and called a town meeting demanding an explanation. They have been assured by Orkuveita Reykjavíkur that with the new waste water borehole in place, this practice will not continue. They also emphasised that their scientists do not believe the pumping of waste water into the ground will increase the risk of earthquakes. No mentions were made, however, on how well these pipes could hold up in the event of a strong enough quake?and strong earthquakes are not exactly uncommon to the area.

WHERE DOES THIS LEAVE US?

If geothermal power?Iceland’s crown jewel of green energy?is neither sustainable nor non-polluting, does this mean we need to turn exclusively to hydropower, which comprises the remainder of the country’s power source? What about oil, which is believed to lie beneath the seabed in Drekasvæði, the northern corner of Icelandic fishing waters?

There might not actually be a dichotomy at all?other green resources may exist. While Iceland is far from ideal when it comes to solar energy, and wave power is still proving to be both expensive to build and maintain, anyone who has ever visited the country can attest that if there is one thing Iceland has plenty of, it’s wind.

A research group assembled by Landsvirkjun in 2010, working in conjunction with Icewind?a pan-Scandinavian team looking to develop wind power in the Nordic countries?has concluded that wind power is a very realistic option for Iceland. They believe that building wind turbines in the southwest would be the best option.

Úlfar Linnet, an energy expert at Landsvirkjun, told Fréttablaðið that the matter should be explored seriously. “The goal is to have Iceland in step with the other Nordic countries,” he said in part. “We’re starting at zero, as a windmill has never been raised in Iceland. But we’re making progress.”

In fact, just last July Icelander Haraldur Magnússon successfully raised a 30 KW windmill on top of Hafnarfjall mountain, which immediately went into operation. MP Mörður Árnason?who is also the chairperson of the National Energy Authority Research Fund?believes that while figures do not seem to indicate that wind power is a competitive option at the moment, that it would be hasty to dismiss the option altogether. Indeed, there are many vast, uninhabited and perpetually windy areas in Iceland, particularly in the Highlands, which would make ideal grounds for a wind farm.

Whether the Icelandic government devotes more time and energy into exploring wind power remains to be seen. In the meantime, Hellisheiðarvirkjun is inadvertently repeating the point that geothermal power is not as green as it seems, and that it may be time for Iceland to put its pride and joy to rest.
_________________________________________________________

For further information and analysis see:

Saving Iceland’s Increased Sulphur Pollution in Reykjavík Due to Geothermal Expansion in Hellisheiði.

Miriam Rose’s and Jaap Krater’s Development of Iceland’s Geothermal Energy for Aluminium Production – Download as PDF.

Anna Andersen’s Reykjavík Energy in Deep Water: The Untold Story of Geothermal Energy in Iceland.

A special report for Saving Iceland by Dónal O’Driscoll

Preface

Glencore are the majority shareholder of Century, the owner of one operational and one half-built smelter in Iceland, it’s key operations for aluminium smelting. But who are Glencore and what are the implications for Iceland? This comprehensive article profiles the world’s biggest commodity broker, who’s only comparable predecessor was Enron. The profile covers the reach and grip of Glencore’s domination of metal, grain, coal and bio-oils markets, allowing it to set prices which profit very few and are detrimental to many. It shows the tight web of connections between the major mining companies and Glencore through shared board history and shared ownership of assets, cataloguing key shareholders (and board members) who’s stakes make them larger shareholders than institutional investors in ownership of Glencore. These connections include Rusal’s co chair Nathaniel Rothschild, a financier with a $40m investment in Glencore, and a personal friend of Peter Mandelson (former EU trade commissioner and British politician) and George Osborne (UK Chancellor).

The article details the human rights and environmental abuses of Glencore at it’s many operations, including the 2009 killing of Mayan indigenous leader Adolfo Ich Chamán who spoke out about Century’s activities in Guatemala under CEO-ship of Peter Jones (still a Century board member). It claims that Glencore is higher than most in the running for most abusive and environmentally detrimental mining company, going where lesser devils fear to tread – trading with Congo, Central Asia and embargoed countries such as Saddam Hussein’s Iraq and apartheid South Africa. Glencore founder Marc Rich was involved in trading embargoed Iranian oil, and fled the United States in 1983 accused of insider dealing and tax dodging over Iranian deals, becoming one of the 10 fugitives most wanted by the FBI, until he was pardoned by Bill Clinton. Glencore is still run by two of his main men.

Introduction

From Kazakhstan to Australia, taking in the views of Zambia, war-stricken Congo and Angola, cutting across from Siberia to Iceland is a network of mining and metals companies with a catalogue of environmental and community abuse in their wake. In Iceland its  face is Century Aluminum, but behind them, at the heart of this web lies the secretive commodity broker Glencore International of Switzerland. Glencore is about to launch one of the biggest placement of shares, raising $10 Billion, making a lot of people very rich and valuing itself as a company worth $60Bn. In this article we start to throw a spotlight on just how Glencore makes its money and how Iceland is just one of many victims of a company built on ruthless exploitation.

On the surface, Glencore’s wealth comes from the buying and selling of the world’s commodities (see below for more detail), specialising in grain and metal markets. However, what is unusual for a commodity broker is that it invests heavily in the very companies whose produce it is trading. Its interests are global, from the breadbaskets of Russia, to zinc mines in Kazakhstan, copper and cobalt interests in Congo and Angola, and aluminium in Iceland.

It is the latter that ties Glencore into the Icelandic economy through its 44% ownership of Century, as well as membership of the board of directors. Century is the owner of the Grundartangi smelter and is behind the building of another plant at Helguvik, for which a number of controversial new geothermal and hydro power plants would need to be built. There is also a doubt if enough energy to run a smelter in Helguvík actually exists. Glencore controls 38% of the global trading market in aluminium. Of this, 50% of this comes from Century and UC Rusal, the Russian Aluminium giant (of which Glencore owns 8.8%).

The result is a private network of personal ties and business relationships so tight that what matters to Century also matters to Glencore. The Icelandic government may be doing deals with Century, but Glencore is always present in the background, bringing unsavoury alliances to this particular bed. There are a lot of unanswered questions over how and with whom Glencore chooses to invest. One only has to look at its principle partners and deals to see it does not shy away from exploitation of war torn countries or making alliances with men whose fortunes carry with them heavy taints of corruption. Despite all the exuberance in financial circles at the profits to be made by the Glencore share offering, a few more level-headed traders and journalist are wondering if there should be more caution, especially given how little is known about the inner workings of the company and just how manages to pull off so many exceptionally profitable deals.

It is also worth noting that the last time the world saw such a commodity broker dominate a market to this extent ended up going very sour – that commodity broker being Enron.

Who are Century Aluminum?

Century is a company that specialises in smelting aluminium. It was founded in 1995 when various interests controlled by Glencore were brought together. In 1996 it was spun off as a public company^.1 As well as its Icelandic sites, which it owns outright, it owns or has a share in aluminium plants at Ravenswood, West Virginia, at Hawesville (100%), Kentucky (80% owned with the rest owned by Glencore), and at Mt. Holly, South Carolina (50%, the other half owned by Alcoa Inc). In the past it has had interests in the Congo. As a global player it is the 10th largest producer.

Its ownership remains dominated by Glencore at 44%, with the majority of the other shareholders being held in relatively small amounts by US institutional investors (hedge funds etc.).² It is clear from Century’s website that Iceland is a major part of their business and strategy and three executives of its Icelandic operations are listed as key management.

Key People

Gunnar Gudlaugsson, Plant Manager of Nordural Grundartangi

Joined Nordural in 2008, from Straumsvik, the Rio Tinto Alcan smelter, where he had served for over ten years.

Ragnar Gudmundsson, Managing Director of Nordural

Nordural is the holding company for the Icelandic interests of Century. Previously Chief Financial Officer of Basafell, prior to which he was a senior manager at Samskip, both leading companies in Iceland.

Wayne R. Hale, Chief Operating Officer

Joined Century in 2007, having previously been with Sual in Russia (it was Sual, Rusal and Glencore’s Russian aluminium interests which merged to form UC Rusal). Has also worked for Kaiser and Rio Tinto.

Peter Jones, Director

2001-2006 was President & Chief Operating Officer of Inco Ltd. Former President & CEO of Hudson Bay Mining & Smelting Co (retired at the end of 2009).

David J. Kjos, Vice President of Operations in Iceland

Former manager of Cygnus Inc, an aerospace manufacturing company; prior to that was with the United Development Co & Kaiser Aluminium & Chemical Co.

Logan W. Kruger, CEO, President

Joined November 2005. Before Century, from 2003 he had been a leading executive at Inco, the large nickel mining company where he over saw operations in the Asia / Pacific region, including the Goro Nickel operation in New Caledonia and other projects in Indonesia, remaining as a director of the Indonesian subsidiary P.T. Inco (Inco has since been acquired by the Brazilian nickel miner Vale). He has also served as head of Anglo American’s operations in Chile (2002-03) and as CEO of the Hudson Bay Mining & Smelting Co in Canada (1998-2002).³ He is also a director of Amcoal which over sees the South African coal interests of the mining giant Anglo-American.

Andrew Michelmore, Director

From 2009 CEO of Minerals and Metals Group; former CEO & Managing Director of OZ Minerals. Both firms are leading Australian mining companies. Minerals & Metals Group is a subsidiary of Minmetals Resources Ltd, a Hong Kong based company with significant aluminium interests in China.

John P. O’Brien, Chairman of the Board

Chairman since January 2008. His background is in business management and restructuring.

Willy R. Strothotte, Director

Chairman of Glencore and of Xstrata (see below under Glencore).

Jack E. Thompson, Director

Also serves a director for a number of other mining companies including Anglo-American and Centerra Gold (largest Western-based gold producer in Central Asia), among others.

Though there are 4 other directors who appear to represent general institutional investors, it is clear from the above that the board is dominated by mining executives who share considerable common history. There is much more that is not obvious just from this board of directors. For example, Century and Noranda purchased from Kaiser Aluminium the bauxite mine at St. Anns, Jamaica and factory at Gramercy, Louisiana, though Noranda has since bought out Century. Noranda is a spin off from Xstrata who originally purchased it in 2006 when it took over the Falconbridge mining company.

Other links of note are:

Xstrata and Anglo-American Chile are joint owners of the Collahuasi copper mine, the world’s third biggest such mine and which in 2010 saw violent action against striking miners.⁴

Hudson Bay (of which Logan Kruger, now Century CEO, was CEO until 2002) is now the subject of a lawsuit over the murder of Mayan indigenous leader Adolfo Ich Chamán who spoke out over the company’s activities in Guatamala – he was hacked to death by security personnel in 2009.⁵ This took place while Century board member Peter Jones was CEO of the company.

Centerra Gold has acquired the Kumtor mine in Kyrgyzstan from the government there. Given that the deal saw little benefit to the people of that country, it has, as a result, played an important political role there.⁶ Jack Thompson, board member of Century and of Anglo-American sits on Centerra’s board also.

In 2006, indigenous tribes people stormed the Inco mine at Goro, New Caledonia due to environmental concerns.⁷ Inco’s CEO of the time was Peter Jones, while Logan Kruger oversaw operations at this mine from 2003-2005, and remains a director of its parent company P.T. Inco of Indonesia.

UC Rusal, the world’s single largest aluminium producer is controlled by Russian oligarch Oleg Deripaska through his En+ Group which he chairs. En+ is the controlling interest in a large number of other extractive and power generation businesses, mostly based in Siberia.⁸

His co-chairman is the financier Nathaniel Rothschild who runs the mining investment company Vallar, has a $40m investment in Glencore and is on record as being keen to support a Glencore takeover of Xstrata.^9,10 Rothschild is also a personal friend of both Peter Mandelson, the former EU Trade Commissioner, and of George Osborne, current UK Chancellor.

Xstrata has large interests in Australia where it has been criticised for sharp business practices¹¹, run roughshod over indigenous people at the McArthur River site¹² and is subject of a campaign due to its environmental destruction at it Mangoola opencast mine.¹³

It is hard to single out any firm within the incestuous world of mining conglomerates as being better than the other. All have issues with relationships with indigenous people, suppression of union activity and environmental damage, however the ease at which these accounts can be found in the collective past and present of Century’s key people and directors is telling.

Glencore International AG

Marc Rich & Co

The origins of Glencore are in the trading firm controlled by commodities baron Marc Rich, a controversial figure over the last few decades. Rich built up a commodities trading empire by making deals with the likes of Ayatollah Khomeini to trade Iranian oil while a US embargo was in place. At the same time he was linking himself to Mossad, the Israeli secret service.

In 1983, he and his partner Pincus Green were accused of insider dealing, dodging tax and illegal dealings with Iran when that country was under US sanctions. As a result they both fled the United States and Rich was named among the top ten most wanted fugatives by the FBI until he was controversially pardoned by Bill Clinton on the latter’s last day in the White House. Interestingly, his representative in Washington for 15 years (1985-2000) was Lewis ‘Scooter’ Libby, the subsequently disgraced Chief of Staff to Dick Cheney.

Rich settled in Switzerland where he founded Marc Rich & Co, continuing his commodities dealing, specialising in oil, gas and metals. In 1993/4 he failed in an attempt to corner the world zinc market, which lead to the loss of control of his company, though he remains a comfortably well off billionaire.

At the same time part of the company was spun off to become the equally controversial Trafigura. This is another commodity broker who entered the news when it brought out a ‘super-injunction’ to stop reporting of its role in illegal dumping of toxic waste in Côte d’Ivoire, though it has other scandals to its name as well.

Glencore

Marc Rich & Co was taken over by Rich’s inner circle and renamed Glencore. Many of its partners, of whom there are 485, will become very wealthy men following the listing of the shares. Day-to-day control remains principally with two of Rich’s former lieutenants, the highly seclusive and media-shy Ivan Glasenberg (current CEO) & Willy Strothotte (founding CEO and Chairman). Under these two, Glencore has continued to grow and dominate many of the markets it is involved in. It developed the tactic of investing in producers of raw materials, then striking deals that gave it exclusive access to their products which it would then trade on the market. The result is a global empire with its fingers in many pies, particularly metals, oil and grain. The ruthless and aggressive dealings methods developed under Marc Rich continued to shape the culture of the company, though it remains mired in considerable secrecy.

A large part of Glencore’s success is its willingness to do deals in places and with people were the more respectable sides of capitalism are wary to tread, doing deals in Congo and central Asia. It has also never been afraid to make deals that breached embargoes, including Saddam Hussein or South Africa during the apartheid era. Large-scale deals are being done in Central Asia with the numerous mining barons which emerged there after the collapse of the USSR, and who have strong links to corruption in those states. To this day many of its subsidiaries continue to be accused of human rights and environmental abuses.

The networks of control associated with Glencore are vast. In terms of its position in the world, it controls huge amounts of the addressable global market in copper (50%), zinc (60%), aluminium (38%), lead (45%), cobalt (23%), ferrochrome (16%), thermal coal (28%), wheat (10%), and one quarter of the worlds barley, sunflower and rape seed.^14,15 What this means is that it can effectively set prices for these commodities.

Addressable: the amount of a commodity accessible to a market. For example, many mines are owned by larger concerns who have acquired them entirely for their own use rather than for trading the ore/products on the open market. Thus the percentages quoted are for the volume of the global market rather than the total amount if all production is taken into account.

Leading Business Interests¹⁶

Glencore has a vast number of interests around the globe. The following is a brief on some of its leading assets and their problems, and it is certainly not exclusive. Many of the other mines it has a controlling interest in are open cast, with all the attendant problems, such as habitat destruction and pollution of the environment.

Argentina

The AR Zinc Group, acquired in 2005 operates the Aguilar mine, the Palpala smelter and a sulphuric acid producer, Sulfacid S.A. in the heavily mined north-western state of Jujuy, Argentina. These operations are part of a group of mines and related industries that have caused significant environmental damage and health problems to the various indigenous peoples of the region – demonstrations and protests against the presence of the mining companies have been held, including AR Zinc.^{17, 18, 19}

Australia

Glencore have a 40% stake in Minara Resources (formerly Anaconda), which runs the Murrin Murrin mine. Willy Strothotte, Ivan Glasenberg and others connected with Glencore sit on Minara’s board.²⁰ Both Murrin Murrin and Mt Isa Mines, which is controlled by Xstrata, were cited in 2009 as among the worst polluters in Australia.²¹

Bolivia

Glencore owns the Sinchi Wayra mining company that operates five mines. There has been an ongoing dispute with workers over attempts to increase working hours and on pay. The workers have called on the government to nationalise the company.²² In the past it has been criticized for mass lay-offs as a cost cutting tactic.²³

Columbia

The El Cerrejon Norte mine, jointly owned with Anglo American & BHP Billiton has been described as “a continuing horror story of forced relocations of indigenous people, human rights violations, environmental destruction and other assorted injustices”, in particular against the Wayuu people. Union organisers have received death threats from paramilitaries.²⁴ Similar allegations are made in relation to its coal mine at La Jagua, which Glencore’s subsidiary Prodeco purchased from Xstrata.^25,26,27 Prodeco also operates an open cast coal mine at Calenturitas, La Loma.

Congo

Glencore acquired control in 2008 of the financially troubled Katanga Mining²⁸, one of Africa’s biggest copper and cobalt producers. It is situated in a highly troubled region where militias have funded their struggles by selling off resource rich land. There are reports of water contamination and poor working conditions at its mines.²⁹ Swiss NGOs have been highly critical of Katanga Mines, with Bread For All and The Swiss Catholic Lenten Fund publishing a report accusing Glencore of involvement with of human rights abuses, child labour, pollution and tax evasion in the region³⁰, which has lead to a campaign against the company. ³¹ Glencore also owns the new mine at Mutanda, also in Katanga province. Glencore’s minority partner in Katanga is the Israeli magnate Dan Getler who specialises in investments in the Congo and who has links to blood diamonds and to right-wing Israeli politicians, in particular Avigdor Lieberman.³²

Kazakhstan

Glencore has partnered with Kazakhstan private investment company Verny Capital to take control of the Kazzinc, which has extensive mining and smelting interests throughout that country. Currently 51% owned by Glencore, that stake is expected to rise to 93% following Glencore’s floatation. Verny is controlled by the controversial Utemuratov family, which is close to President Nazarbayev, who is also believed to have a stake.³³ Under Nazarbayev there has been large-scale transfer of the nation’s mineral wealth into private hands and Glencore has been integral to that process.

Peru

Glencore owns the Iscaycruz & Yauliyacu mines (Los Quenualos), which have been accused of unsafe working conditions and subsequent anti-union activities.³⁴

Philippines

Xstrata’s proposed Sagittarius mine at Tampakan, Mindanao threatens indigenous peoples and important rainforests. On 9th March, 2009 a leading opponent of the project, Eliezer “Boy” Billanes, was assassinated.³⁵ Mines in Philippines, such as this one, have also been linked with threats to food security, partly due to the particular nature of the ecology they work in.³⁶

Russia

UC Rusal³⁷, the Russian aluminium giant; controls the world’s largest deposits of bauxite (the ore from which aluminium is obtained) and is the second biggest producer of global alumina (aluminium refined from bauxite) with a 14% of global production. Controlled by oligarch Oleg Deripaska, the firm was created by a merger of Rusal with the smaller SUAL and Glencore aluminium interests. There remain strong links between Glencore and UC Rusal with Glencore owning 8.7% of UC Rusal, and a friendship between Deripaska and Glasenberg.³⁸

As well as UC Rusal, Glencore has numerous other business interests in mineral wealthy Russia. Some of these date back to when Glencore was swift to do deals to take control of Russian state assets following the collapse of the USSR. Though it has been edged out of some of these companies who prefer to sell direct to consumers in China, etc, it does have deals with Russian producers of coal, oil and grain, in part through EN+, Deripaska’s company. There are rumours that it is trying to exploit links into the zinc, nickel and lead producers. Other deals and their relations to Glencore remain murky³⁹, but another major partner is the independent oil refiner Russneft.⁴⁰

Zambia

Glencore has control of Mopani Mines, which has come under environmental scrutiny, being believed to be the source of acid rain due to sulphur dioxide emissions.⁴¹ In 2005, 20 miners died in different accidents at the mine, blamed in part on cut backs in training.⁴² A Daily Mail investigation has claimed that Glencore is engaged in exploitation tax evasion through sharp pricing techniques, so depriving the country of much needed revenue.⁴³

Zimbabwe

In 2011 Glencore signed an agreement with Mwana Africa to acquire nickel from the Trojan mine at Bindura in Zimbabwe – notable for its links with Morgan Tsvangirai. Mwana’s is a South African based miner with copper operations at Katanga in the Congo and gold mines in Ghana.

Other global interests

Glencore owns the PASAR copper smelter in the Philippines, the Sherwin Alumina smelter in Texas (cited for hazardous chemical releases^44,45) and the Portovesme lead and zinc smelter on Sardinia. It also owns 70% of the South African coal miner Shanduka. As owner of the Moreno sunflower oil company, one of the biggest in the world’s largest suppliers of sunflower oil, Glencore is heavily involved in the producing and selling of genetically modified products.⁴⁶ It controls 270,000 hectares of agricultural land and has various grain processing sites around the world which aid its interests in these markets.

The smallest aluminium smelter in Iceland uses 50% more electricity than all of Iceland’s households and businesses combined, while contributing very little to the country’s GDP. Heavy industry has often been touted by Icelandic conservatives as a cash cow: foreign companies can provide the country with jobs, while utilising Iceland’s green energy to produce aluminium in a cleaner fashion.

While the myth of the “green smelter” has been definitively put to rest, aluminium is still billed by some as being good for the economy. However, Vilhjálmur Þorsteinsson – the chair of a study group assembled by the Ministry of Industry that studies Iceland’s energy use – has come to some damning conclusions about smelters in Iceland.

Iceland’s three aluminium smelters – Alcoa in Reyðarfjörður, Norðurál in Grundartangi, and Rio Tinto Alcan in Straumsvík – consume approximately 13 terawatt hours of electricity. The entire capacity of Iceland’s electrical output is 17 terawatt hours. Furthermore, Straumsvík – the smallest smelter in the country – uses 3.6 terawatt hours. The combined total energy consumption of every home and business in Iceland (apart from the smelters) equals only 2.3 terawatt hours.

At the same time, even the best estimates of what smelters contribute to the economy only put them in the neighbourhood of contributing to 5% of the GDP. Tourism accounts for about the same percentage of the GDP while using far less of the power grid. Meanwhile, Iceland’s service sector accounts for 69.9% of its GDP, and fishing accounts for 12%.

By Snorri Páll Jónsson Úlfhildarson, originally published in The Reykjavík Grapevine.

Those who are yet to give up on Icelandic media cannot have avoided noticing one Kristján Már Unnarsson, a news director and journalist at TV station Stöð 2. Kristján, who in 2007 received the Icelandic Press Awards for his coverage of “everyday countryside life”, is a peculiar fan of manful and mighty constructions and loves to tell good news to and about all the “good heavy industry guys” that Iceland has to offer.

To be more precise, Kristján has, for at least a decade (and I say “at least” just because my memory and research doesn’t take me further back), gone on a rampage each and every time he gets the change to tell his audience about the newest of news in Iceland’s heavy industry and energy affairs. He talks about gold-mills when referring to dams built to power aluminium production; and when preparing an evening news item on, say, plans regarding energy and aluminium production, he usually doesn’t see a reason for talking to more than one person – a person who, almost without exception, is in favour of whatever project is being discussed.

After witnessing Kristján’s latest contribution to the ongoing development of heavy industry and large-scale energy production, i.e. his coverage of Alcoa’s recently announced decision not to continue with its plan of building a new aluminium smelter in Húsavík, wherein he managed to blame just anything but Alcoa itself for the company’s decisions, I couldn’t resist asking (and, really, not for the first time): What can really explain this way too obvious one-sidedness, manifest not only in this one journalist’s work but seemingly the majority of news coverage concerning heavy industry?

“Lack of professionalism,” someone might say. Professionalism would thus imply allowing more than one single voice to be heard, letting one argument meet another, allowing conflicts to take place and thereby giving the audience a chance to critically make up its mind. This lack of professionalism actually applies to such a huge quantity of all news material produced. Indeed, the constant recycling of content – of interviews, press-releases, photos etc. – and the manufacture of single-perspective news content often seems to be the mainstream media’s predominant modus operandi.

“Co-dependency,” could be another suggestion. And a good one, as it often seems that the bulk of journalists are seriously co-dependant with the ruling political and economical order. Take, for instance, the mantra of the never-questioned importance of non-stop economic growth, or the commonly heard phrase that during a protest “the police needed to use teargas” – as the decision to spray isn’t fuelled by a precise political will, but rather of a simple need.

These two are good answers, but definitely not good enough when standing on their own. To get the full picture, lets look into the relationship between mainstream journalism on the one hand, and public relations on the other. How, for instance, are the tops of the aluminium and energy companies’ PR departments staffed?

At Reykjavík Energy we have Eiríkur Hjálmarsson, former journalist and program maker at state TV station RÚV, whereas at Landsvirkjun we find one Ragna Sara Jónsdóttir, former journalist at RÚV and newspaper Morgunblaðið. Alcoa prides itself of Erna Indriðadóttir, long-time journalist at RÚV, while Rio Tinto Alcan sports Ólafur Teitur Guðnason, former journalist at RÚV, DV and business paper Viðskiptablaðið (it is worth noting that Ólafur is also known for his aonce-annual books analysing and criticising the mdia, not from the usual Chomsky-alike left-wing but rather a right-wing perspective). At last but not least, the only employee of Samál (or The Icelandic Association of Aluminium Producers), is Þorsteinn Víglundsson who, along with a few jobs in the financial sector, used to write news for Morgunblaðið.

Quite an impressive list, isn’t? And where does it bring us? Possibly to the assumption that the first-mentioned Kristján Már Unnarsson must be doing his entrance examination, or even an on-the-job-training. But that would be a bit too simplistic because practically, Kristján Már might well be preparing for a better paid PR job, whereas theoretically it really doesn’t mater if that is the case or not.

What matters is the ever impenetrable handshake between those two industries: Public Relations and The Media. What, in fact, is one medium’s coverage of a company but a conversation between the two parties? A pre-designed and post-edited conversation, for sure, but a conversation nevertheless. And the conversation element is crucial as a journalist’s co-dependency and lack of professionalism (deliberate or not) are of no use if the Holy Trinity’s most important link is missing. And vice versa: Without beneficial journalists, a PR stunt is likely to end up dead in the water.

The stunt’s key moment, as Spice Girls realised and told us, is “when two become one.”

As from 2005 Alcoa, along with national energy company Landsvirkjun, Húsavík’s authorities and – to begin with – the Icelandic authorities, has been working on the project, which would have required at least 400 MW of energy, produced by harnessing geothermal areas and glacial rivers in the North. In 2008 a Memorandum of Understanding (MOU) between Landsvirkjun and Alcoa expired, and a year later the same happened concerning a MOU between the aluminium producer and the Icelandic government, the latter not willing to renew it.

Since then Landsvirkjun has signed a few other MOUs, regarding geothermal energy commerce, with possible buyers such as data centres and silicon factories, in some ways meeting with a popular demand for less destructive and more “green” use of the geothermal energy. Regardless of what one finds about the alleged “greenness” of such enterprises this development has inevitably raised the question if Landsvirkjun would be able to feed both Alcoa’s planned smelter and at the same time these smaller, less energy intensive factories.

Environmentalists have warned of the over-exploitation of geothermal energy. In fact, as early as in 2008, when Landsvirkjun’s official plan still seemed to include only Alcoa’s smelter, Saving Iceland insisted that the damming of one or more of the glacial rivers in the North was crucial if Landsvirkjun was to provide energy for a the smelter. At that time Alcoa had already stated that a 250 thousand ton smelter would be “unsustainable” and that the company would want to build at least a 346 thousand ton smelter in Bakki. For a smelter of that size 400 MW would have been needed in addition to the already planned 400.

In 2008 Þórunn Sveinbjarnardóttir, then Minister of Environment, ruled that the project needed to undergo a joint Environmental Impact Assessment (EIA), taking into account not only the impacts of the smelter per se but the whole infrastructure around it, including the power plants and energy transportation. The company’s response, as well of others in favor of the smelter, was that the minister’s ruling was a political attack against the project, only meant to delay the process.

The first draft of the joint EIA report was ready in the spring 2010 and a few months later Iceland’s National Planning Agency published its comments on it. The Planning Agency’s comments were damming, stating that the projects impacts would be high and could not be mitigated; its greenhouse gas emissions would constitute 14% of Iceland’s total and 17,000 ha of pristine wilderness would be affected. Most importantly, as pointed out by Jaap Krater, ecologial economist and spokesperson of Saving Iceland, the Agency highlighted the “uncertainty on the full impact of the planned power plants and particularly on how much geothermal energy can be sustainably produced. Finally, the assessed energy projects will not be able to fully power the smelter, with 140 MW of capacity missing.”

This energy crisis – similar to the one Century Aluminum is facing, regarding geothermal energy for their planned smelter in Helguví, South of Iceland – is no doubt the main factor leading to Alcoa’s withdrawal, though the company and other interested parties blame the joint EIA and the current government’s energy policy. As mentioned before this has been clear for a long time – in January this year business newspaper Viðskiptablaðið reported that Alcoa was about to withdraw from the Bakki project due to energy uncertainties. The final straw, according to the paper’s sources, was Landsvirkjun’s discussions with a company called Carbon Recycling, which plans to build a methanol plant run on geothermal energy from the North. This was, however, rejected by the company only a week later. Alcoa said that the smelter was still on their drawing table and that a permit for at least 500 MW of geothermal energy existed.

Though Alcoa’s representatives, as well as Húsavík’s authorities and other parties favouring heavy industry, have since yesterday acted as Alcoa’s withdrawal is somewhat of a shocking news, Katrín Júlíusdóttir, Minister of Industry, says that it is of no surprise to her. Alcoa has, according to Katrín, had a head start on all other possible energy purchaser, which it has not used in its own favour.

In a two pages interview with newspaper Morgunblaðið today – free from even a single comment from an environmentalist or other critical perspective – Tómas Már Sigurðsson, Alcoa’s director in Iceland, does not admit that the actual energy uncertainty, addressed by environmentalists and the National Planning Agency, has been the company’s main hindrance. Tómas, however, hints at it when stating that Alcoa has from the start been clear about its thirst for more then 400 MW, given that more than that can be harnessed in the North.

Tómas also says that the price that Landsvirkjun wants for the energy is not “competitive” – or in other words: too high. For the last year Landsvirkjun has been heavily criticized for prizing its energy seriously low, mapping Iceland out as a cheap energy haven for the aluminium industry, which makes it especially interesting that now Alcoa – an international corporation and of the world’s biggest aluminium producers – claims it cannot pay for Icelandic energy.

Now, as Alcoa’s dream of a smelter in Bakki is over – after six years process, including an investment of two billion ISK (17,3 million USD) – Tómas says that the company will continue its plans of further projects in Quebec, the New York state, Norway and Saudi Arabia. Also, as repeatedly reported by Saving Iceland, Alcoa recognizes Greenland as its next Iceland, from a social and economic perspective – i.e. easy exploitable society and cheap energy – and plans to build at least a 400 thousand ton smelter there in the nearest future.

Albeit the clear fact that Alcoa’s withdrawal from Bakki does not manifest the company’s worldwide decrease in operations, it surely marks a milestone in the struggle against the aluminium industry – not only in Iceland, but also worldwide. More on that later.
_____________________________________

See also:

Alcoa in Greenland: Empty Promises? by Miriam Rose
Alcoa: Where Will the New Dams be Built? by Jaap Krater
Greenland’s Decision: Nature or Culture? by Miriam Rose

Through survivors’ testimonies, Kandhamal 2008 examines how Hindu supremacist groups turned two communities – Adivasi (indigenous) Konds and Pano Dalit Christians – against each other, with the tacit support of the State Government and local administration. More than 50,000 people became refugees, 5,000 houses were burnt and destroyed, at least 400 churches, prayer halls and institutions were desecrated, demolished or burnt down. This region is extremely poor, but rich in mineral resources which have attracted multinational mining companies including British firm Vedanta. The Odisha Government has ruthlessly pursued neo-liberal land acquisition policies formulated by the UK’s (Department for International Development (DfID) and the World Bank. The Konds have consistently fought this corporate land grab and the film highlights how Hindu supremacist groups and the State Government have sought to undermine that struggle.

Kandhamal 2008 will be premiered on Tuesday, 1 November, in Rm CLM.6.02 Clement House, London School of Economics at 7.15 pm. Director and researcher Samarendra Das, who was born in Odisha and has lived most of his life in Kandhamal, will discuss the background to and making of the film. Samarendra’s book, Out of this Earth: East India Adivasis and the Aluminium Cartel (Orient Black Swan, 2010), which was co-written by anthropologist Felix Padel, is a thorough study of the aluminium industry and its global impacts. For more information about the documentary screening contact:  sasg at southasiasolidarity.org.

Árni Daníel Júlíusson

It is funny how things can turn around. For decades, Iceland languished in neoliberal hell, with signs of opposition few and far between. Meanwhile the opposition to the neoliberal order of things grew all over the world—with massive protests in Seattle, Genoa and elsewhere—and the beginnings of a world-wide anti-globalisation movement represented by the World Social Forum, first held in Porto Alegre, Brazil, in 2001. Almost nobody in Iceland did or said anything to support these powerful movements against the neoliberal order, with the exception of the brave Saving Iceland organisation. Even the considerable activism surrounding the anti-imperialist campaigns against American military presence in Iceland seemed to die completely down in around 1990. Neoliberalism reigned, Iceland supported the Iraq invasion in 2003 and nobody said or did anything.

Everything changes

In 2008, everything suddenly changed. The Icelandic banks collapsed, and out of nothing there grew an immensely powerful protest movement, leading to the collapse of the ideological hegemony of neoliberal order in Iceland. It was symbolised by the January events of 2009, when saucepans and pots were taken into use by protesters, who drummed the right wing neoliberal government out of office in the last week of January.

Suddenly everyone and her brother was involved in organising some sort of protest, with many thousands turning up at rallies in the centre of town on a regular basis, and hundreds or thousands of people involved in organising alternatives to the prevailing neoliberal order.

Even the president of the country, who had been one of the cheerleaders of neoliberalism, suddenly turned into an invaluable ally of the protest movement against the financial system, enabling two national referendums on the Icesave issue. Under the leadership of Eva Joly a criminal investigation into the whole neoliberal financial scam of the nineties and noughties was organised, and a very thorough investigation on the causes of the collapse was initiated by the Icelandic parliament. There was even a Constitutional Assembly, which was meant to write a new constitution for the country.

Right wing, left wing: both neoliberals

To be sure, instead of the rightwing neoliberal government a leftwing neoliberal government ascended to power after parliamentary elections in April 2009. That was surely not the intention of the saucepan revolutionary movement, and the situation in Iceland has been tense since. An important part of the original protest movement has been paralysed, as it has seen it as its duty to defend the “left” government against what it sees as attacks organised by the right. So the most radical part of the original saucepan protesters, those who are of the opinion that the “left” government is just another neoliberal government, has found tactical allies among the right wing parties, and this alliance has had some victories, like the rejection of the Icesave treaties.

But the Icelandic protest movement against neoliberalism has been powerful enough to inspire people outside Iceland. Yes, indeed, people abroad have really been inspired by Iceland! This was first evident around the Icesave referendum on March 6, 2010. The international anti-globalisation movement followed it closely, for example the Jubilee movement, the international Attac movement and the Tax Justice Network.

Congratulations rained on Icelandic activists after the Icesave treaty was rejected, the so-called Icesave II treaty, wherein Icelandic taxpayers were supposed to pay large sums of money to the citizens of the Netherlands and the UK because of the collapse of the Icelandic bank Landsbankinn. Icelandic taxpayers refused to take responsibility for the wheelings and dealings of the international financial oligarchs, and this was widely admired by anti-neoliberal activists everywhere.

Rumours

But there was more to come. In 2010, rumours started to circulate on the Internet among activists, especially in those former provinces of the Roman Empire comprising the present day lands of Spain, Portugal and France, that there had been some sort of a quiet revolution in Iceland. This revolution was supposed to have been almost systematically shut out of the world media, in order not to present a possible model for revolution in other countries. These rumours appeared on French and Spanish websites, and at last they acquired some sort of critical mass. In December 2010 and January 2011, Attac Iceland started to receive a lot of questions about the quiet revolution in Iceland from members of Attac France and Attac Spain. Activists even started to visit Iceland to find out about the quiet revolution.

When Attac Iceland was slow to respond—and when it did it would not be ready to agree that there had been any sort of revolution in Iceland—it was pointed out by the international activists that the Icelandic banks had been nationalised, that the government had been forced from power, that the governors of the Central Bank of Iceland had been replaced, that Iceland had shown true grit by the rejection of the Icesave treaty. All of which was true, but Attac Iceland has not interpreted this as a revolution, even if it certainly can be viewed as a very powerful and successful protest movement, one of the most powerful popular responses to the collapse of the neoliberal order, and up until 2011 certainly the most powerful. And quiet it was not, as those activists who have come from Spain, Portugal and France to Iceland to investigate have found out.

Iceland as a model of revolt

Then in December 2010, Tunisia erupted in revolt. Egypt followed, and the world watched in amazement as country after country in the Arab world arose in revolution against the established order of American imperialist rule and the rule of US supported despots. There were certainly some references to the Icelandic revolt in these movements. And in May 2011 Spain erupted, with the M-15 movement and the Indignados movement forming as a powerful protest wave against the neoliberal order. Here the references to the Icelandic movement were numerous and quite visible, with public squares in Palma, Mallorca, renamed after Iceland in honour of the quiet revolution, the Icelandic flag being waved on numerous occasions and Facebook groups organised in honour of the Icelandic movement.

This was certainly a rather dramatic turnaround in the position of Iceland in relation to the neoliberal world order. Suddenly Iceland had turned from a model of the quiet, obedient neoliberal outpost, to become a model of protest movements around the world against this same neoliberalism.

The revolution that nobody wants to talk about

Then in the summer of 2011 the indignados started coming to Iceland themselves, organising TV-crews in order to document the Icelandic revolution. And, indeed, they did not find a quiet revolution: In the words of Portuguese document film maker Miguel Marques, who was here in August and extensively documented the activities of the Icelandic movement, the Icelandic revolution was anything but quiet. Another crew came from Spain and interviewed the Icelandic activists, and in October there will be a Venezuelan crew documenting Icelandic activism for the big South American TV network teleSUR.

So, for the Icelandic activists and anti-neoliberalist, the situation is a bit awkward. When finally Iceland produces something worthy of admiration of the international activist community, the activist groups in Iceland have been reluctant to admit to it being what the foreigners perceive it to be. Why is this? Why is the powerful protest movement in Iceland not lauded or presented in a positive light by the Icelandic activists? This is mostly because of the political situation in Iceland.

On one hand, the media, mostly right wing, the academics, mostly right wing or centre left neoliberals, and others of the talking and writing classes have very limited interest in promoting the Icelandic saucepan revolution. On the other hand many in the protest movement now support a neoliberal “left” government in the vain hope that it will eventually, in the distant future, maybe deliver on something of value, and this supports hinders any positive evaluation of the protest movement after the ascend of the “left” government. The radical parts of the protest movement do not have a positive evaluation of the results of the movement, exactly because the results of the parliamentary elections in April 2009 were that the neoliberal dominance in politics continued. So nobody seems interested in taking credit for the very real and positive results of the Icelandic protest movement 2008–2011.

The Energy Master Plan is a framework programme, meant to result in a long term agreement upon the exploitation and protection of Iceland’s glacial rivers and geothermal areas. Its making, which since 1999 has been in the hands of special steering committiees, established by the two above-mentioned ministries, reached a critical status in July this year when its second phase was finished and presented to the ministers who in mid August presented their proposition for a parliamentary resolution. Before it will be discussed in parliament the proposition will be open to comments and criticism from the public, as well as interested parties, energy and aluminium companies on the one hand, environmentalists on the other.

Twenty-Seven Energy Options Put on Hold

The proposition lists natural areas into three categories; protection, exploitation and hold. The last-mentioned includes areas that, according to the steering groups and ministers, have not undergone enough research for a decision to be made upon weather to protect or exploit them. Included in this category are, among other, the glacial rivers in fjord Skagafjörður as well as other rivers such as Skjálfandafljót, Hvítá, Hólmsá and Farið by lake Hagavatn in the south-west highlands. Also geothermal areas such as Trölladyngja and Austurengjar in Krýsuvík and certain areas around mount Hengill where the heavily indebted Reykjavík Energy (OR) already operates Hellisheiðarvirkjun, a sulphur polluting geothermal power plant. The 27 areas of the waiting category will be revised in five years, given that satisfactory studies have been made at that time.

Þjórsárver Wetlands to be Saved

Delightfully, the protection category features the uppermost part of river Þjórsá where Landsvirkjun wants to construct Norðlingaölduveita, a dam that would destroy the Ramsar listed Þjórsárver wetlands. River Jökulsá á Fjöllum, which has been seen as an energy potential for a new Alcoa aluminium smelter in Bakki, is also listed protected. The same applies for certain parts of river Tungná, in which Landsvirkjun is already building the Búðarháls dam that will provide energy for increased production in Rio Tinto Alcan’s aluminium smelter in Straumsvík.

The protection category also features geothermal areas such as the ones around Brennisteinsfjöll mountains on the Reykjanes peninsula, as well as Gjástykki, close to volcano Krafla and lake Mývatn. The same goes for the Grændalur valley and Bitra, which are located close to the small town of Hveragerði and have been particularily desirable in the eyes of energy companies. Bitra was saved by a local campaign in 2008 whereas Grændalur was recently threatened when Iceland’s National Energy Authority allowed a company called RARIK to operate test drilling in the valley, in complete contravention of previous rulings by the Ministries of Industry and of Environment.

Krýsuvík, Þeistareykir and Þjórsá to be Destroyed

The exploitation list features geothermal areas Þeystareykir, Bjarnarflag and Krafla in the north of Iceland, as well as Hágöngur in the mid-highlands west to glacier Vatnajökull. Also certain parts of the area around mount Hengill and finally geothermal spots in Reykjanes, Krýsuvík and Svartsengi, all three on the Reykjanes peninsula. Rivers Hvalá, Blanda and Köldukvísl are then all categorised as exploitable. And most critically the Energy Master Plan proposition allows for Landsvirkjun’s construction of three dams in the lower part of river Þjórsá.

Environmentalists Threefold Response

The most common response from environmentalist so far has been threefold. Firstly there generally satisfied by the protection of areas such as the Gjástykki, Jökulsá á Fjöllum and Grændalur, let alone the Þjórsárver wetlands. Shortly after the publication’s release, Iceland Nature Conservation Association (INCA) stated that, if approved by parliament, the Master Plan will mark the end of environmentalists’ forty years long struggle to save Þjórsárver from destruction. Though listed by the international Ramsar Convention on Wetlands due to its unique ecosystem, the wetlands have been on Landsvirkjun’s drawing table as a potential for construct a large reservoir, meant to produce energy for a planned expansion of Rio Tinto Alcan’s aluminium smelter in Hafnarfjörður, which was later thrown off in a local referendum. The plan has always been met with fierce opposition, no matter of Landsvirkjun’s repeated attempts to get it through by proposing a smaller dam and reservoir.

Secondly environmentalists are critical of the fact how many invaluable areas, such river Skjálfandafljót, are kept on hold instead of simply been categorised protected. Thirdly there is a clear opposition to the planned exploitation of certain wonders of nature, one example being the geothermal areas on the Reykjanes peninsula. Ellert Grétarsson, a photographer who has documented these areas extensively (his photos are here aside), fears that the drilling in Krýsuvík – covering between five and eight thousand square meters of land – will simply kill the area. And as a matter, says Ellert, the whole Reykjanes peninsula will be riddled with energy construction. Hjörleifur Guttormsson, former Left Green MP and a genuine environmentalists, shares Ellert’s worries and has asked for an integral study of Reykjanes before any decisions are made.

Þjórsá, the Bone of Contention

As as mentioned before the biggest concern regards Þjórsá, which has for a long time been the bone of contention between the two clashing arrays fighting for or against nature conservation. The struggle over Þjórsá has been especially tough, actually to such an extent that the government can be reputed to stand or fall with that conflict in particular. Guðfríður Lilja Grétarsdóttir, MP for the Left Greens, demonstrated, during parliamentary debate last April, her full opposition to the construction of dams in Þjórsá. At that point, three Left Green MPs, who up until then had been increasingly critical of the government and its lack of left-leaning policies, had just recently departed from the party, leaving the government with only one person’s majority in parliament. And as most members of the social-democratic People’s Alliance (Samfylkingin), which makes up the government along with the Left Greens, have not shown a sign of objection to the damming of Þjórsá, it wouldn’t be surprising if the river will be up for a heavy debate in parliament.

In fact it is more than sure that Þjórsá will be among the main matters of argument in parliament. The right wing Independence Party, which was in in power from and is largely responsible for the neo-liberalisation and heavy-industrialisation of Iceland, has always been one of the driving motors behind Landsvirkjun’s plans to dam Þjórsá. When the Master Plan’s proposition was presented in August, Ragnheiður Elín Árnadóttir, a MP of the party, called for the immediate starting of construction in Þjórsá. She also said she grieved the long period of which the project has been stuck within bureaucracy, referring to the attempts of Svandís Svavarsdóttir, current Minister of Environment, to halt the construction of one of the three proposed dams by refusing to include the dam, Urriðafossvirkjun, in a land-use plans for the parishes of Flóahreppur and Skeiða- and Gnúpverjahreppur (rural districts along Þjórsá) made by them at the request of Landsvirkjun.

Three Dams: Threat to Society and Ecology

The conflict in parliament mirrors the actual conflict in the Þjórsá region where locals have for a long time fought over the river’s fate. There Landsvirkjun hasn’t only used bribes in its attempt to get its plans through local administration, but also threatened farmers whose lands are at stake will the dams be built, by stating that if the farmers do not negotiate with the Landsvirkjun, the company will attempt for a land expropriation. This conduct has created a complete split within the local community, clearly demonstrated in last March when young locals from the region published a statement, in which they demanded a permanent halt to all plans of damming Þjórsá – thereby an end to the social conflict associated.

As a matter of fact two members of the Master Plan’s steering committee recently stated, when interviewed on state radio station RÚV, that due to the serious lack of studies regarding the social impacts of the planned Þjórsá dams, those plans should without any doubt have been put on hold. This is exactly what Guðmundur Hörður Guðmundsson, chairman of environmentalist organization Landvernd, said in last July following the publication of the Energy Master Plan’s second phase report.

Þjórsá’s position in the Master Plan proposition, yet shouldn’t be of any surprise. In the second phase report the three planned dams are not considered to be a great threat to the ecology of Þjórsá and its surroundings – contrary to the opinion of environmentalists who have voiced their worries concerning the dams’ impacts, for instance on the river’s salmon stock. Orri Vigfússon, chairman of the North Atlantic Salmon Fund (NASF), recently stated that “never before in the history of Iceland has there occurred such an attack on a sensitive area of wild salmon.” As is considered that the salmon’s spawning and breeding grounds are mosty located above waterfall Urriðafoss, where one of the three dams is planned to be built, Orri believes that the stock of salmon and salmon trout are likely to vanish.

Energy Companies Unsatisfied as Expected

As one could have imagined, Icelandic energy companies and other adherents of large-scale power production for heavy industry, are everything else than happy about the Master Plan’s proposition. Following its release Eiríkur Hjálmarsson, Public Relation manager of Reykjavík Energy, opposed the protection of Bitra on the ground that the company has already harmed the area with three examination boreholes, roads and electricity lines – but most importantly, spent 785 million ISK on the project. As reported earlier this year by Anna Andersen, journalist at the Reykjavík Grapevine, the foolhardy business operations of Reykavík Energy during the last decade or so – including large-scale geothermal projects associated with heavy industry – have brought the publicly owned company a debt of 233 billion ISK (2 billion USD or 1.4 billion Euros). Despite this financial collapse the company still advocates for the continuation of the agenda that brought it down.

Other energy companies have responded similarly, mostly complaining about the amount of areas listed as protected or on hold. Landsvikjun’s director Hörður Árnason has said that compared to the second phase report, the parliament proposition suggest that way too many energy options are put on hold. Another company, Suðurorka, owned by Alterra Power (former Magma Energy) and Íslensk Orkuvirkjun, had planned to construct a dam, called Búlandsvirkjun, in river Skaftá – a plan that the proposition puts on hold. The company argues that few energy options have been studied as thoroughly and while the studies might have been done – and might be thorough – not everybody agrees with the company on the impacts. Farmers in the area have opposed the project as some of their most important grasslands will be drowned under the dam’s reservoir.

Energy company RARIK will, due to the Master Plan, loose its grip on geothermal areas in Grændalur valley, as well as rivers in Skagafjörður and Hólmsá river – projects that the company claims to have invested in with 300 million ISK. Using the same monetary argument, HS Orka, also owned by Alterra Power, has been vocal about its 700 million ISK investment into their proposed, but now delayed if not entirely halted, geothermal plants in Trölladyngja. Finally representatives from Reykjahlíð, a small town that holds the good part of Gjástykki’s property rights, have stated that if the area will be protected, billions of ISK will be demanded as compensation.

The Predominant Strategy

Those arguments do in fact manifest the predominant strategy of those involved in the heavy industrialization of Iceland. Instead of waiting for all necessary contracts to been signed, all needed permissions to be granted, and all required energy to be ensured, the energy and aluminium companies have simply started major construction immediately when only one or a few permissions have been granted. And when criticised, not to mention when forced to stop, they have stated that because these projects have been announced and vast amounts of money put into them, they should be allowed to continue. If needed, they have also pointed out that because the natural areas at stake have already been harmed (by themselves), there is “no point” in preserving them.

One example would be Helguvík, where a framework for a proposed Century Aluminum smelter has already been built but hardly any construction has taken place there for two year. With every day that passes it becomes clear that not only has the company failed to ensure the energy needed to operate the smelter, but also that the energy simply doesn’t exist.

Geologist Sigmundur Einarsson has, for the last years, pointed this out and stated that the amount of energy needed for the Helguvík smelter cannot be found and harnessed on Reykjanes, like stated by the parties involved. For instance he believes that no more than 120 MWe can be harnessed in Krýsuvík, contrary to the official numbers of 480 MWe, and has repeatedly demanded answers from the authorities about where from the rest of the energy is supposed to come. Just as Saving Iceland’s questions about the whereabouts of energy for Alcoa’s planned smelter in Bakki, Sigmundur’s questions have never been answered, but he claims the Energy Master Plan proofs his theory.

Yet Another Three Kárahnjúkar Dams!

Environmentalists have reacted to the energy companies’ complaints and asked how on earth the companies can still pretended to be unsatisfied. As pointed out by Landvernd, these company’s are about be granted permission to harness energy equivalent of three Kárahnjúkar dams. From 2004 to 2009, Iceland’s energy production duplicated, largely with the construction of Kárahnjúkar dam, and is currently 16,900 gigawatt-hours. If the Energy Master Plan will be accepted as proposed, the energy companies will be able to duplicate the production again in few years, says Guðmundur Hörður, chairman of Landvernd, and continues:

The increase of public electricity usage is about 50 gigawatt-hours per year. The expansion entailed in the proposition would thus sustain that particular public increase for the next 265 years! If this will be the conclusion, the energy companies can be very satisfied. Still they send their agents onto the media, in order to cry and complain. That doesn’t give a good hint for a settlement.

Other environmentalists, Ómar Ragnarsson for instance, have mentioned that the whole discourse surrounding the Energy Master Plan portrays a false image. While the plan regards Iceland’s each and every hydro and geothermal area, potential for exploitation, the areas that have already been harnessed are kept outside of the discourse. Ómar says that it is simply false to state that “only twenty-two areas” have been categorised exploitable, as twenty-eight large power plants have already been built in Iceland. That means that out of the ninety-seven considered in the Master Plan, fifty have already been or will be utilised. In addition to the twenty-seven areas put on hold, another thirty-two have yet not been categorised by the steering committees, which makes the current proportion of protected areas even lower.

Ómar has also pointed out mismatches within the proposition. One example regards geothermal area Gjástykki that is listed as protected, as it is “a part of Krafla’s volcanic system, which has a protection value on a worldwide scale,” like stated in the proposition. But according to Ómar this will depend entirely on definitions. As an energy option, Vítismór, which is a part of Krafla’s volcanic system and is an inseparable part of the Gjástykki-Leirhnjúkur area, is currently listed as an addition to the Krafla power plant and would thus, regardless of its position within the Master Plan, be available for exploitation.

Limnology (or freshwater science) professor Gísli Már Gíslason upholds Ómar’s argument and has stated that half of Iceland’s “profitable hydro power” has already been utilised. One of those rivers is Jökulsá á Dal, harmed by the infamous Kárahnjúkar dam, which in order to be built required disallowing the protection of Kringilsárrani, an extremely important grassland for reindeer. This is not a unique incident as, for instance, the three dams in river Láxá are also manifestations of hydro power plants built in protected areas.

The Coming Struggle

Notably by the above-listed contradictions, which though demonstrate only a small part of the debate about the Energy Master Plan so far, the coming struggle about the fate of Iceland’s nature is going to be harsh and heavy. Armed with the rhetoric of economic crisis, unemployment etc., those in favour of heavy industry – in other words a big part of parliament, the energy companies, the Associations of Industry and Employers, the country’s biggest trade unions, and most recently Samál, a joint association of aluminium producers in Iceland – use literally every opportunity to push for the further development of industry, especially aluminium. In order for that development to occur, the country’s glacial rivers and geothermal areas have to be exploited on a mass scale.

Environmentalists, on the other hand, need to sharpen their knives and both ask and answer a great amount of questions. What, if any, are the actual benefits of heavy industry and its parallel large-scale energy production? And what are its impacts on Iceland’s society and ecosystems? No less importantly, what are its global impacts such as on the atmosphere or bauxite communities in India, Guinea, Hungary and Jamaica? How has it affected the economy and what are its contributions to the current economic situation? What are the impacts of the building of big dams and geothermal power-plants, fuelled by extremely high loans, bringing a temporary pump into the economy that inevitably leads to the demand for another shot? And what is the value of nature per se?

Only by answering all of these and many more questions, one can honestly try to answer the one fundamental question regarding the Energy Master Plan: What actual need is there for yet another three Kárahnjúkar dams, or in fact just a single more power plant?

By Snorri Páll Jónsson Úlfhildarson

On Friday September 2, two men appeared in court in downtown Reykjavík. It wasn’t their first time—and it probably won’t be their last. If found guilty, the defendants, Haukur Hilmarsson and Jason Thomas Slade, face up to six years in prison, due to a peculiar action on their behalves that marks a turning point in Icelandic asylum-seeker affairs.

On the morning of July 3, 2008, Haukur and Jason darted onto the runway of Leifur Eiríksson International Airport in Keflavík, hoping to prevent a flight from departing, and deporting. Inside the plane, which was headed to Italy, sat one Paul Ramses, a Kenyan refugee. The two activists ran alongside the plane, and placed themselves in front of it—halting its takeoff.

It would be wrong to assume that anything has changed since 2008. Iceland may have seen an infamous economic collapse followed by a popular uprising and a new government, but for the two activists it must feel like time is standing still. Since their arrest at the airport, they have been stuck in a seemingly endless legal limbo, first charged for housebreaking and reckless endangerment and later thrown between all levels of the juridical system. Last Friday, the case’s principal proceedings took place for the second time in Reykjavík’s District Court, after the courts original sentences were ruled null and void by Iceland’s Supreme Court.

THE ICELANDIC STATE VS. PAUL RAMSES

Paul Ramses originally arrived in Iceland in January of 2008. The year prior, he had unsuccessfully participated in Kenya’s general elections on behalf of the Orange Democratic Movement (ODM). Many Kenyan and trans-African associations claimed the electoral victory of ODM’s main opponents, the Party of National Unity, to have been rigged behind the scenes. The ensuing wave of fatal protests and riots had brought down 800 people by late January, and as ODM members faced mass persecution, Paul and his wife Rosemary fled Kenya and escaped to Iceland via Italy.

Paul Ramses and his wife Rosemary fled Kenya in 2008, afraid of their lives due to mass persecution against members of a political party that Paul was involved with. Shortly after their arrival, Rosemary gave birth to a son they named Fidel, thereby establishing her right to stay along with the newborn. Paul, on the other hand, needed to apply for asylum. The Directorate of Immigration (UTL for short) refused to take up his case and ruled for him to be deported to Italy. Although their ruling was made in April, Paul however wasn’t notified until three months later, the night before he was to be deported, when he was arrested by Icelandic police and separated from his family—an act that violated both his rights to appeal UTL’s decision and his son’s internationally protected right to stay with his parents.

WHAT IS THE DUBLIN REGULATION?

UTL’s decision to refuse Paul asylum was argued for by citing the Dublin Regulation, an agreement on asylum affairs implemented by the member-states of the Schengen Area. The Dublin Regulation permits authorities to deport asylum seekers to the first Schengen state they entered, but it does not oblige the state to deport the asylum seeker in any way—and, as a matter of fact, specially bids authorities to apply it in harmony with human rights conventions. However, UTL’s official policy has been to start every asylum application process by checking if it can be outsourced to another Schengen state.

That sort of policy is certainly not to lighten the burden of states—such as Italy, Spain and Greece—that are located at Schengen’s south and east borders (in 2008, 31.200 asylum application were filed in Italy, compared to 72 in Iceland). The South-European asylum seekers’ dilemma has been the subject of a multitude of damning studies and these three countries’ refugee policies have been heavily criticised by the likes of UN Refugee Agency, Amnesty International and European Parliament.

According to Jórunn Edda Helgadóttir, MA student of international and comparative law, The Dublin Regulation brings forward grossly defective rules that have allowed the Icelandic state to deport asylum seekers en masse by stating that “because everybody does it, we can too.” This was indeed how Björn Bjarnason, then Minister of Justice, replied upon being heavily criticised for the deportation of Paul Ramses: “Of course there is nothing unlawful or wrong with employing this treaty, any more than other international treaties.”

Such a statement is wrong, according to Jórunn as Iceland has validated the European Convention of Human Rights, in which it says that “no one shall be subjected to torture or to inhuman or degrading treatment or punishment,” and that “everyone has the right to respect for his private and family life”—two of many law paragraphs that were not considered in the case of Paul Ramses. “The focal issue at stake is will”, she says, as the “problem would never grow to be so huge if most governments weren’t so willing to pass their duties and commitments on to other states.”

“WE INTENDED TO SAVE HIS LIFE…”

Back at the airport, Haukur and Jason were arrested and air traffic continued after a short delay. Interviewed by online news outlet Vísir shortly after his release, Haukur cut the crap when asked about his and Jason’s motives. “We intended to save Paul Ramses life,” he said, expressing worries that they had failed. Surprisingly, the next day, hundreds of people assembled by the Ministry of Justice and demanded Paul’s return to his family in Iceland.

The pressure increased with daily demonstrations, petitions and parliamentary debates, as well national and international media attention—all of it to be diagnosed as “sentimentality” by Minister of Justice Björn Bjarnason. But eventually Björn himself succumbed to “sentimentality” and overturned UTL’s decision. Parallel to the aforementioned pressure, Paul’s lawyer Katrín Theodórsdóttir issued a complaint to the Ministry, demanding material handling of Paul’s asylum application from a humanitarian standpoint. Following the Ministry’s ruling, UTL finally granted Paul asylum.

“…AND WE DID”

Today Haukur believes that although the impact of a single act of direct action is hard to measure, he and Jason actually saved Paul’s life. And their action, he says, paved the way for what followed, as standing in front of a ministry or signing a petition requires much less effort than running in front of an aeroplane. In the aftermath, they claim, people were less afraid to protest. Using the same logic, he insists that the good number of direct action such the ones of environmental movement Saving Iceland, which both him and Jason have also been involved in, paved the way for the so-called ‘pots and pans revolt’ of 2008-9.

At the same time he believes that The State’s response to such actions, for instance by instigating serious court cases, is likely to keep newcomers from getting involved. “It is sad that people have to make such enormous sacrifices for such tiny changes,” says Haukur and mentions Þorgeir Þorgeirsson, an author who in 1994, after a ten years long fight, won a historical victory at the European Council of Human Rights. Þorgeir had been sentenced in Iceland for his articles decrying and depicting police brutality in Reykjavík. Even if proven right, public innuendos regarding state or city officials was illegal at the time—something that wasn’t altered until the European Council ruled in Þorgeir’s favour.

THE ICELANDIC STATE VS. HAUKUR AND JASON

Haukur and Jason were originally charged with housebreaking and reckless endangerment. But once in court, the prosecutor brought forward two additional penalty clauses not included in the original charges, which he encouraged the judge to take into consideration. Such a move is not only illegal, but also in breach of the European Convention on Human Rights, which states that everyone charged with a criminal offence should be given adequate time and facilities in preparing their defence.

Despite protest from their defence lawyer, Ragnar Aðalsteinsson, who had to defend his clients unprepared for these new clauses, the District Court found the two guilty. Haukur was sentenced to two months in prison while Jason was given a 45 days probationary prison term, a ruling that the two appealed to Iceland’s Supreme Court. And while the Supreme Court judges did agree with Ragnar regarding the illegitimacy of the District Court’s ruling, they didn’t rule for the case’s discontinuation. Instead of acquitting the two, the Supreme Court’s judges made the unusual decision to send the case back to District Court, to start from scratch again.

According to Hrefna Dögg Gunnarsdóttir, law student and employee at law firm Réttur, the Supreme Court’s ruling surely manifests that Iceland’s uppermost court of law recognised the prosecution’s illegal move. Yet the decision to grant the prosecution another chance crystallises the fundamentally different position of the prosecutor and the defence. “This could be compared to a basketball game, in which one of the two competing teams always gets the ball after a failed throw,” says Hrefna.

Does this mean that they should have been acquitted? Not necessarily, if looked at by the book of law. But when viewed in context with the fact that by granting Paul asylum, UTL—and thus the Icelandic state—recognised the threat he faced if deported to Kenya, one has to wonder why the courts still questions Haukur and Jason’s actions.

WHAT IS THE PURPOSE?

“The purpose of the charge is obviously to suppress resistance,” says Haukur. “I stopped hoping for an acquittal. Instead I use this case to learn how to analyse State Power, and to educate myself about this system and how it operates.”

During the procedure last Friday, one could witness the findings of Haukur’s studies as he delivered his 8.000 word’s long disputation—his own theory on the constant clashes between The Individual and The State’s innumerable tentacles. One of the more interesting points he made regards the humiliation entailed in having to discuss important issues on The State’s terms. While having ideologically argued for his actions, he claims he has constantly been met with idiotic and irrelevant questions; while wanting to discuss an important topic as refugee policies surely is, he has been met with a debate about fences and police regulations.

The prosecutor indeed questioned Haukur and Jason extensively about their entrance onto the airport driveway, about alleged signage that was supposed to forbid their entrance and why they didn’t obey orders from airport staff. The prosecutor, however, showed little or no interest in discussing the motives behind their actions, which usually is considered an important factor in criminal cases. Instead of entering an ideological dialogue with the defendants—a discourse that could eventually force him to face the overall legitimacy of their action—his obvious aim was to get them jailed for a mindless and dangerous criminal act.

Haukur has given up hope for an acquittal, but will admit that a victory in court would serve as an exemplary beacon for future cases against political dissidents, not to mention the legal and bureaucratic amendments it could lead to. But these are not these fundamental changes he hopes for. “The impact of these kind of cases on the behaviour of State Power can certainly lead to minor reforms, but the knowledge we can gleam from it can give rise to revolutionaries.”
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A shorter version of this article was published in the Reykjavík Grapevine magazine (p. 26).

Ge9n trailer (EN) from SeND film tank on Vimeo.

If not familiar with The Reykjavík Nine – nine people who were charged and later acquitted of attacking Iceland’s parliament after wanting to enter the building’s public gallery on December 8th 2008, a few months after Iceland’s economic collapse – then you can read through the whole case on the nine’s official support website. Check out a short, sharp and informative video from the 2011 London Anarchist Bookfair or download a brochure that was published and distributed shortly before the case’s main procedure, which took place in January 2011.

Also take a look at Ge9n’s official website where you can find a very nice poster, a press kit and the film’s title song: Stóriðjuverkefnið mig, composed and performed by Linus Orri and Þórir Bogason. Finally, read a review of the film’s première (the one mentioning the “ticking timebomb”) and an exclusive interview with the film’s director, Haukur Már Helgason (p. 30-32).

In a recent article, originally published on news-website Pressan, Sigurbjörn says that before the municipal elections in spring 2009, the community in Hvalfjörður settled upon an agreement about environmental and industrial affairs. But under the administration of Hjálmar Sveinsson (on photo), who is a vice-councilman of Reykjavík for Samfylkingin, a joint venture of several port authorities in the Faxaflói area, titled the Associated Icelandic Ports, is enabling the way for the construction of yet another two factories at the Grundatangi industrial site in Hvalfjörður, where the two aforementioned factories are located. Sigurbjörn describes the whole process as a very dubious one:

Faxaflóahafnir [the Associated Icelandic Ports] requested that the industrial site at Grundartangi would be enlarged by 70,000 square-meters in order to place polluting industries there. The municipality, lead by the chairman of the parish council who is also a board member of Faxaflóahafnir, managed to put the change, which is now waiting a verdict from the Ministry of Interior, through by shady manners. Around 50 persons and parties made remarks on Faxaflóahafnir’s requested changes, but none of them were taken into consideration. But that wasn’t all: A detailed land-use plan was advertised beside the change of the general plan even before the deadline to make remarks on that particular change passed.

As the authorities have kept silent it is still not certain what companies are involved in those plans. In July this year newspaper Fréttatíminn reported that a Finnish company called Kemira – involved e.g. in paper and fertiliser production as well as biotechnology – which plans to operate a sodium chlorate plant in Iceland for bleach production, is looking at two potential locations: Bakki by Húsavík on the one hand, also a planned location for an Alcoa aluminium smelter; Grundartangi on the other. Such a construction does not require an Environmental Impact Assessment (EIA) by default but needs to be notified to Iceland’s National Planning Agency, which then decides if an EIA is needed or not. The energy needed to run the plant, which is said to be 40 MW, would, according to Fréttatíminn, come from geothermal area Þeistareykir, given that the plant would eventually be built in Bakki. No particular energy source has been mentioned in the case of Grundartangi.

Sigurbjörn and other residents of Hvalfjörður, who have filed repeated complaints against the plans to enlarge Grundartangi’s industrial site, have mostly been met with silence. While this should not necessary be surprising in a state that has still not ratified the Aarhus Convention, the Hvalfjörður residents were astonished to find out that the above-mentioned Hjálmar Sveinsson – who, in his article, Sigurbjörn says “can be remembered as a creative radio personality who one could contentedly listen to, especially due to his own stance on environmental and planning issues” – is one of the project’s key figure. Sigurbjörn states that after weeks, months and years of Hjálmar’s radio talks on environmentalism and democracy, one would have considered it as likely that Sea Shepherd’s Paul Watson would become a whale-hunter in Hvalfjörður as that Hjálmar Sveinsson would advocate for polluting industries and abuse of power. Paul Watson visited Iceland in 1986, along with Rod Coronado, where the two of them famously sank two of the country’s whaling ships and sabotaged a whale-processing factory in Hvalfjörður.

Neither Hjálmar nor any other authority figure responsible for these plans have openly responded to this criticism.
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See also:

Believes Aluminium Plant Is Poisoning Sheep

More Flouride in Animals Around Aluminium Factories than Elsewhere – Environmental Agency Refuses to Investigate

Elkem’s Icelandic Alloys Year Round “Human Errors”

Originally published by Reykjavík Grapevine

A plan to build three dams in the river Þjórsá could wipe out salmon in the river. National power company Landsvirkjun insist they have measures on the table to keep the salmon alive. Vísir reports that an environmental assessment has already confirmed that should the three proposed dams be built, the salmon that use the river will disappear.

Plans to dam Þjórsá have not been without their controversy, as the project has been heatedly debated for years now. In fact, the notion that damming up the river would wipe out salmon from the river was known as far back as 2002. While Landsvirkjun says they would construct what effectively amounts to a sperm bank for salmon to fertilise eggs, the Ministry for the Environment has looked at the plan and concluded that nothing in the plan indicates that it would even work.

The three dams have been green-lit, though, so the options now on the table are to either find some other way to save the river’s salmon while construction goes underway, or to pull the plug on construction, either temporarily or permanently. Neither option will be inexpensive for the parties involved.

Report by Dr. Ranghildur Sigurðardóttir on the effects of a dam at Urriðafoss in Þjórsá. (in Icelandic)

The following chapter is from ‘Bankastræti Núll’, the latest book by poet and author Einar Már Guðmundsson, translated and originally published in The Reykjavík Grapevine, parallel to an introduction to Einar by Alda Kravec. The introduction says that the book “opens with the narrator’s lament: the current political situation has stifled his ability to write poems to his lover. Although he foresees a future where “reality wakes up” and poets can once again sing the praises of love and nature, the resounding sound of social injustice presently overwhelms him and beckons him to first engage in the struggle against the free reign of the stock exchange, privatisation and greed.”

It is written somewhere that all cats are grey in the dark, but here in Iceland, official reports are all black, no matter how bright it is outside. Alþingi’s Investigative Commission’s Report is black. The Central Bank’s Report on the status of household debt is black. And the government and International Monetary Fund’s Memorandum of Economic and Financial Policies is also black, dark as a coal mine, and sure enough, it was drafted in April, the cruellest month. It is a reminder of the misery that the IMF has presided over in countries all over the world, and directly refutes the notion that the IMF plans to apply different methods than those it has adhered to until now.

In Greece, the public has risen up against the Fund’s plans, but here the labour movement and employers get into bed with it and are almost more devout than the Pope in getting investors to come here with their baggage of offshore profits and dummy corporations. In one district, where neo-liberals have sold everything and there is nothing left to mortgage except the harbour, efforts are being made to set a precedent by selling natural resources through a shelf company just so politicians can save face after having handed over the entire district to their associates and relatives on a silver platter.

What should the poets write about? Will the IMF supply the country with a literary writing programme? No, I do not think it has any interest in literature. Thank goodness for that. They just have graphs and bar charts, economists, advisers, and—if the confessions of former employees of the Fund are taken seriously—so called ‘economic hit men,’ who see to keeping politicians quiet, paying them off, or even ousting them. I do not trust myself to make more of this matter,except to say that automatons from Washington have been sent here, men who know all about the state deficit and nothing about our history and culture. They go on about “economic growth” but do not want to know anything about the public’s welfare; they are indifferent to whether nations are literate or illiterate. They are only interested in whether it is possible to squeeze money and proceeds out of the state in the interest of investors and big industry. Here is one big lemon. We will squeeze a whole tub of lemon juice out of it. Here are natural resources. Money can be squeezed out of them to pay hedge funds that have bought the debts of banks and financial corporations at bargain rates. The economist Michael Hudson has described the IMF as a sort of henchman for international creditors, collecting property and industry revenues on their behalf. But what is more incredible, he remarks, is that nations around the world are sacrificing their economic and monetary independence without resistance.

The first mission chief the IMF sent here was Mark Flanagan. He was succeeded by a woman, Julie Kozak. They were both assisted by a man named Franek Rozwadowski; and all of them were assisted by a woman who headed Landsbanki’s research group and almost everything they once reported turned out to be false. In any case, the Icelandic public had to listen to the bubble economy wisdom of the research group when Landsbanki was supposedly in its prime.Those from other research groups were no better but I call her out in particular because she is an employee of the IMF, which is in command of this country. It may be leaving now, but it will only truly be felt after it departs, having tightly bound everything according to its plans. It is really quite remarkable that most of the Social Democrat cabinet ministers collect their assistants and advisers among the ruins of the banking system.The IMF mission chief gives more orders than the President and the government, regardless of the mission chief’s gender. The mission chief can tell the Minister of Finance to stand on his hands, and the Minister of Finance will stand on his hands. But whoever gives orders to the mission chief is another story.

I once met Mark Flanagan. It was at a meeting in The Central Bank requested by a group of people who opposed the IMF’s economic plans for different reasons and on various grounds. I had a copy of Naomi Klein’s book ‘The Shock Doctrine’ with me, a beautifully bound book with a yellow cover. I asked Mark Flanagan whether he had read this book and whether he wanted to discuss its contents. He looked down at me from above his table and replied that the author of this book was not an economist. Then he turned to his bar charts on trade deficit, which he supposed should level off in the very short-term. It was obvious from Mark Flanagan’s arguments that he was a disciple of Milton Friedman, the man at the centre of ‘The Shock Doctrine,’ the man who laid the groundwork for the period of neo-liberalism as an ideologist and prophet, and has left his fingerprints on historical events, from the military coup in Chile to the privatisation of Icelandic banks.

The most prominent disciple of Milton Friedman in Iceland was Hannes Hólmsteinn Gissurarson [...]. Milton and Hannes were friends and were members of the same club, which shaped the most recent era of history. In the middle of the seventies, Hannes Hólmsteinn sat in the Student Council of the University of Iceland and I also sat there for a time, as a stand-in if I recall correctly. He was the only one among those on the right who took part in debates with those of us who were furthest to the left. Others on the right had little interest in global issues and generally knew little about politics and history. In light of history, Hannes Hólmsteinn Gissurarson is probably the most influential politician to have sat on the Student Council. But we did not take him seriously, and rather regarded him as an ultra right-wing individual who probably did not mean half of what he said. We thought he was joking. But we were wrong there. We were satisfied with dreaming, discussing and being in the right. But Hannes Hólmsteinn was the messenger of an ideology that was pushed into practice. I fancy that he gets the shivers when he thinks about the consequences of these theories. He talked about bringing dead capital back into circulation, that is to say, placing natural resources and public goods in the hands of private individuals. As such Hannes Hólmsteinn Gissurarson had no power but a lot of influence.

There were other famous right-wing personalities present, in addition to Ingibjörg Sólrún Gísladóttir and Össur Skarphéðinsson. Ingibjörg Sólrún was president of the Student Council and Össur Skarphéðinsson, the current Minister of Foreign Affairs, was vice-president. He had been president before her, exactly as it transpired later in The Social Democratic Alliance (Samfylkingin). It could be said that this Student Council was like a miniature picture of the nation’s failure. It was a little picture of the future, of the people who were to take charge and govern. Several Student Councils have since come and gone but it is always the same story. For many, the Student Council works as a springboard to the seat of power. When I sat there, it did not occur to me that I was surrounded by future heads of state, Members of Parliament, municipal mayors and some three cabinet ministers.

The left was in the majority and I supported the majority, but I was in a minority within the majority. Those of us who were to the extreme left and identified with revolutionary change and socialism did not adopt all the views of the majority and did not expect the majority to assume responsibility for our views. We had our own particular discourse on, for instance, overthrowing the social order, stopping wars and freeing political prisoners; views we thought should be heard but which did not explicitly fall within the jurisdiction of the Student Council. The Student Council was like any other special interest group, and it had student struggle on its agenda, just as recovering alcoholics join together to stay sober and stamp collectors to collect stamps. Or unions consolidate to protect the rights of their members. The struggle of the Student Council dealt with pressing interests such as student loans, student services and so forth. This is not to say that we did not regard the world revolution as a pressing interest but the majority on the left was not of the same opinion.

And so the winter went by. During this time, creative writing was taking hold of me and I was not always tuned into the political scene. Yet I wanted to participate in the discussion even though the discussion was not always objective. I was not particularly objective either. Sometimes I grew bored at these meetings, twisted things around and tried to be funny, causing trouble in a flippant sort of way. Sometimes I would let slip are mark that the opposition would put in the books and which would often amuse the Council. One time, for example, the right took up the issue of facilities for student associations, undoubtedly a necessary discussion. Among other things, it had to do with providing facilities for the respective associations affiliated with the left and right. While this discussion took place, I turned to the person sitting next to me and said to him:“Do those right-wingers need anything more than a wardrobe for their old Nazi uniforms?” We laughed at this sardonic joke. Meanwhile heated discussions were taking place over the issue itself, so that nobody heard what I said except one girl from the right-wing faction. This was of course merely crude humour, perhaps not particularly funny considering how sensitive Nazism is as a topic, especially for people on the right. But the girl insisted upon my words being recorded. I requested that she repeat my comment, and when she did, the room exploded with laughter as if she had been hearing voices. I still fail to understand what end was served in recording such a comment.

This girl was surely a fine individual but most of the others said little at these meetings and let the men present the arguments. Then they raised their hands and voted as they were supposed to.They contributed little to the discussions and did not keep up with world affairs. Nobody on the right kept up with world affairs except perhaps Hannes Hólmsteinn Gissurarson, the disciple of Milton Friedman. Today everyone agrees that this compliance and conformity, this subordinate way of thinking, is one ofthe causes of the collapse. I was myself turning away from political orthodoxy, which always toed the same line, and within a few years, I had completely turned my attention to story-telling and poetry. I found myself giving way to the facts and my view of society was expanding and becoming more variegated. Even so, the radical left continued to provide essential provisions for my journey in this world. It is also fair to point out that I would later meet many of those who sat with me on the Student Council as upright citizens who attended to their jobs with knowledge and solicitude, and it did not make a difference whether they had been on the right or left side of the spectrum.

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The photo of Einar Már is by Christopher Lund.

Protesters claim this is a British issue as both Cairn and Vedanta are British companies, and have been aided by David Cameron and the British Ambassador to India in pushing the deal through. The leaflets highlight Vedanta CEO Anil Agarwal’s position as the 17th richest man in Britain and claim the British government has allowed him to evade millions of pounds worth of tax using Jersey and Bahamas based tax havens. One of the placards showed Cairn CEO Bill Gammell and Vedanta CEO Anil Agarwal in bed with David Cameron and read ‘Bill Gammell, Anil Agarwal, David Cameron in bed for oil’ while another slogan accused all three of having ‘blood on their hands’. A stack of leaflets was handed in to the building to distribute to Cairn Energy staff and a security guard warned those gathered that the police would be called if they remained at the building. This warning was taken seriously in the light of Cairn Energy’s zero tolerance policy on protests at the same offices by Greenpeace a month earlier, at which the company took out injunctions against Greenpeace preventing them from publishing any pictures of the event. The protesters left after an hour.

Below is a press release that followed the protest. Download the leaflet that was distributed at the protest here: Cairn India AGM leaflet.

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PRESS RELEASE

18th August 2011

PROTESTERS TARGET CAIRN INDIA IN EDINBURGH

Exactly one month after Greenpeace occupied Cairn Energy’s Edinburgh offices to protest their Arctic oil drilling(1), the offices have been targeted again by campaigners objecting to Britain’s role in the take-over of key subsidiary Cairn India by British-Indian mining company Vedanta Resources plc. On the day of Cairn India’s AGM in Mumbai, protesters banged pots and pans to disturb the Edinburgh offices and shouted ‘Vedanta – blood on your hands’ and ‘Cameron get out of India’. They are angry that Vedanta – already accused of multiple violations of environmental law in India(2) – are being allowed to buy an oil company which is drilling in sensitive frontier oil fields around Sri Lanka’s coral reefs, and even angrier that David Cameron has personally helped to pave the way for the deal.

Vedanta has waited a year to complete its 58% buyout of Cairn India (leaving 22% with parent company Cairn Energy). When the Indian government delayed the deal citing uncertainty over Vedanta’s safety record and ability to handle ‘strategic oilfields’, David Cameron sent a personal letter to Indian Prime Minister Manmohan Singh urging him to prevent ‘unnecessary delays’(3). Britain’s Indian High Commissioner Richard Stagg also wrote to the Indian PM over a royalties dispute between Cairn India and Rajasthani state oil company ONGC which was hampering progress on the deal, telling him that any change in financial conditions could ‘render the proposed transaction unviable’(4). Vedanta currently own 28.5% and await a Cairn India shareholder resolution to complete the deal.

Miriam Rose from the group Foil Vedanta said the protest was in solidarity with people affected by Vedanta’s activities in India:

Vedanta has been found guilty of flooding a village with toxic mine waste, killing 40 workers when a poorly built chimney collapsed, illegally grabbing tribal land and polluting major rivers. How can a company with such a poor track record be trusted to deep drill for oil in the most bio-diverse area of Sri Lanka’s coast? Vedanta are a British company and should be accountable to British law for their crimes. Instead Anil Agarwal’s cosy relationship with the UK government has helped him become one of the richest men in Britain. His politician friends even help his business and allow him to evade millions of pounds of tax by keeping his earnings in tax havens.(5)(6)

Cairn India have already begun drilling in Block SL-2007-01-001 of Sri Lanka’s Mannar basin, using a fifth generation Japanese drill ship the ‘Chikyu’ which was damaged in the Sendai tsunami and awaits repair on one of its thrusters. The block extends right to the edge of the Bar Reef Marine Sanctuary, a pristine coral reef which is thought to be the most biodiverse area off India’s coasts(7).

Cairn employees have expressed fear over the Vedanta takeover, worried about pay and working conditions and that the mining giant has no experience in the risky business of oil(8).
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Notes and References:

For a profile of Cairn India see here and for Vedanta here.

(1) See: Police make arrests in Greenpeace ‘polar bear’ protest

(2) Vedanta’s Environmental and Human Rights Crimes Identified by the Indian Authorities
Vedanta’s bauxite mining has killed thousands, mainly Adivasi (indigenous) people, in India in accidents, police firings, forced displacement, injury and illness. It has displaced thousands of families and destroyed the environment, contaminating drinking water and devastating vast tracts of fertile land in an area of Odisha which has experienced famine regularly since 2007.

In Niyamgiri, Odisha: In August 2010 India’s then Environment Minister Jairam Ramesh stopped Vedanta from mining the Niyamgiri mountain which is the sacred mountain of the Dongria Kondh adivasis in Odisha. But Vedanta has now appealed to the Supreme Court against this decision.

In Lanjigarh, Odisha: In August 2010, the Environment Ministry ruled that Vedanta and its subsidiary Sterlite had contravened the Forest Conservation Act of 1980 by illegally clearing forest to establish its alumina refinery in Lanjigarh in 2006 and by again by expanding the plant in 2009. Environment Minister Jairam Ramesh criticised the Supreme Court for allowing the Lanjigarh project. The National Human Rights Commission identified 3.66 acres within the refinery that legally belong to Adivasis. Following this, the administration has now registered a case of land-grab against the company. This is the first time that Vedanta’s illegal land-grabbing has been ‘officially proved’.

However Vedanta’s environmental crimes continued On 5 April and again on 16th May this year a wall of the red mud impoundment (storing toxic waste) collapsed, polluting the Vansadhara river. The wall had not been properly constructed despite warnings from the Odisha State Pollution Control Board in December 2008 when it had previously collapsed.

In Puri, Odisha: In November 2010 the Odisha High Court ruled that Vedanta’s acquisition of thousands of acres of land in Puri for the so-called Vedanta University was illegal and void. The court ordered Vedanta to return the land it had stolen to the original owners.

In Jharsuguda, Odisha: In September 2010 the Odisha State Pollution Control Board found that Vedanta’s 500,000 tonne smelter and another nine captive power plants in the Jharsuguda district of north Odisha were operating without clearances from it and were violating water and air pollution Acts.

In Advalpal,Goa: In November 2009 the Bombay High Court ruled that Vedanta’s Sesa Goa iron ore subsidiary, the largest exporter of iron ore in India, was illegally dumping mining waste near Advalpal village in north Goa. On 6 June 2010, the dumps collapsed due to heavy rains. Tonnes of mining waste overflowed into a stream leading to floods. The Indian Bureau of Mines found that the mining plan had been violated.

In Thoothukudi, Tamil Nadu: In September 2010, the Madras High Court ordered Vedanta to stop production at its Thoothukudi copper smelter for environmental reasons — a decision that has been overturned by a stay order of the Supreme Court for the time being. Villagers from Thoothukudi complain of severe respiratory ailments

In Korba,Chhattisgarh: Vedanta and its subsidiary BALCO (which is 100% managed by Vedanta) have been found culpable for the collapse of a power plant chimney causing the deaths of 40 people. Vedanta built the chimney on state-owned forest land and had ignored ‘stop notices’ and threats of legal action and dismantling of construction work by the Korba Municipal Corporation. The chimney collapsed, according to a report commissioned by the Korba police, because of “careless, poor construction practice and poor workmanship in the construction of piles” and “improper cement content in the concrete mix” and because new layers of the chimney were being built before lower levels had been given time to cure properly”.

In Zambia: In December 2010,Vedanta’s Zambian subsidiary Konkola Copper Mines (KCM) was fined in court for polluting the very river it had poisoned four years earlier in the north of the country. In November 2006, effluents cascaded from a burst slurry pipeline into the Kafue river, raising chemical concentrations to 1,000% of acceptable levels for copper, 77,000% of those for manganese and 10,000% for cobalt. Following the most recent event, the UK company was also found guilty of willfully failing to report it to the authorities.

(3) James Lamont and Amy Kazmin in New Delhi, and Alex Barker in London, Financial Times, Feb 18^th 2011 ‘Cameron intervenes in Cairn sale’

(4) EI Finance. April 27, 2011. ‘Vedanta Buys Smaller Cairn India Stake as Delays Continues’

(5) Vedanta’s CEO, Anil Agarwal is the seventeenth richest person in Britain, whose personal wealth has grown even in the recession by 583% according to 2010 figs5.

(6) Vedanta plc is a London listed FTSE 100 Mining Corporation owned by Anil Agarwal and his family through a number of shell companies in tax havens – Bahamas-based company Volcan Investments Limited, Twinstar Holdings Ltd, THL KCM Ltd in Mauritius and Vedanta Resources Cyprus Ltd and others6

(7) Arijit Barman, Business Standard, Mumbai, August 17, 2011. ‘A year on, Cairn drills into Sri Lankan waters’.

(8) Himangshu Watts, 12/8/11, ‘Cairn India staff keep fingers crossed on future in Vedanta’, Economic Times of India.

A sheep farmer, noticing bone deformities in the skulls of some sheep, believes they may be connected to an environmental accident at an aluminium smelter in 2006, and is calling for an investigation.

Sigurbjörn Hjaltason, a sheep farmer from Kiðafell, told DV that he had noticed quite a number of sheep in his area having difficulty eating, with some dying of starvation as a result. On examining the skulls of the animals, he discovered unusually large swelling of the jaw bones.

This, he believes, is the result of pollution from an aluminium smelter at nearby Grundartangi. In 2006, an accident at the plant caused fluorine to be released into the environment.

Fluorine, which is also present in volcanic ash, when ingested by animals can cause freakish growths in the bones. Sheep that would eat grass that had been covered in volcanic ash would often times grow unnaturally large teeth that prevented them from being able to eat any food at all, resulting in starvation.

The conclusion of the Environmental Office at the time of the accident was the fluorine levels in the surrounding area had doubled.

Sigurbjörn has called for a full investigation, and wants an independent team of scientists to examine the teeth and bones of the sheep that have died.

See also: More Flouride in Animals Around Aluminium Factories than Elsewhere – Environmental Agency Refuses to Investigate