Namibia’s Fishrot scandal: fishing crew sue over non-payment for court-ordered dismissal compensation

27 October 2023 · Carmel Rickard

Until recently, the public story of Namibia’s massive corruption scandal, nicknamed ‘Fishrot’, has focused on legal action brought against the big-name role-players. The scam involves a major Icelandic company as well as top Namibians, in a sleazy operation featuring kickbacks paid for procuring fishing quotas in Namibian waters. With prominent politicians including two former Namibian cabinet members, along with wealthy business people among the accused, the vulnerable victims of one aspect of the scandal were often overlooked. But now they are fighting back. One group of men who worked on a fishing vessel that was part of the scandal were suddenly dismissed from their jobs at the end of 2018. When they challenged their dismissal before the labour commissioner, they won an award declaring that they were unlawfully sacked and ordering that they be paid compensation. Despite many efforts, however, they have never been paid. Now they are headed to court with a personal claim against an Icelandic official allegedly involved in the scandal, and against one of the companies similarly impugned.

There’s an enormous, sad irony to the whole Fishrot story: the money that should have been earned through deals by Fishcor, Namibia’s state owned fishing company, was intended for programmes that would have helped ordinary people in Namibia who are suffering from the impact of drought and unemployment. Instead, the commercial and moral decay caused by the Fishrot scandal has left a trail of devastation across the lives of those who should have been helped.

Now, 23 former employees of ArticNam, a joint venture between Iceland and Namibian companies, and a key entity in the dispute, are fighting back. All of the fishermen were suddenly dismissed on 31 December 2018, with no proper reason or warning given. They have since won an arbitral award from the labour commissioner, and it was subsequently made a court order against the company.

But though they should long since have been paid the N$1.8m plus interest ordered as compensation, nothing has been forthcoming. Now the men have issued summons against three defendants for payment: Esja Investments (EI), Egill Helgi Arnason and ArcticNam.

Interpol

EI, a subsidiary of fishing company Samherji, the Icelandic company that lies at the heart of the allegedly corrupt deal, is based in Namibia’s Walvis Bay. The second defendant, Arnason, is a director on the board of EI and is also the managing director of ArcticNam, the third defendant. ArcticNam is owned by EI, which in turn is owned by Samherji.

Along with other key Samherji executives, Arnason left Namibia as the Fishrot story unfolded and it became clear that they were to be charged with corruption, money laundering and tax evasion. He and two other colleagues are now being sought for extradition from Iceland to Namibia. There is, however, no extradition agreement between the two countries, and Iceland has so far refused to surrender them. Against that background, Namibia’s state prosecutor has asked Interpol to help ensure their extradition.

According to the summons, EI and Arnason have been conducting the business of ArcticNam ‘recklessly and/or with intent to defraud creditors’. This they have done by way of a scheme ‘designed to defraud’ Namibia and ArcticNam’s creditors, in terms of which they illegally transferred large sums of ArcticNam money out of Namibia, leaving the company without the funds needed to pay the 23 their salaries or to pay other ArcticNam creditors.

Bribes

To avoid paying the salaries of the 23, EI and Arnason unlawfully ensured that their employment would end on 31 December 2018. This in turn led to an arbitration over unfair dismissal, resulting in an award against ArcticNam to compensate the fishermen.

The summons claims that EI and Arnason used so much of ArcticNam’s money to bribe Namibian officials that there wasn’t enough left to pay the 23 and the rest of ArcticNam’s creditors.

Further, EI and Arnason didn’t ensure that the arbitral award against ArcticNam was paid, meaning that interest is now accruing at 20% from June 2021. Meanwhile, EI and Arnason have been carrying on the business of ArcticNam, incurring other debts and financial obligations, when they both had to have known that ‘there were and are no reasonable prospects that the creditors of ArcticNam will be paid’.

Personally liable

This amounts to carrying on the business of ArcticNam recklessly and/or with intent to defraud creditors, says the summons. And this in turn means that EI and Arnason should be declared personally liable for paying the arbitral award originally made against ArcticNam.

The labour commissioner’s award, attached to the summons, shows that the 23 crewmen were to be paid different amounts, depending on their work, ranging between N$ 73 080 x 12 and N$157 500 x 12. This corresponds to their loss of earnings as a result of being dismissed, without reason or warning, at the end of 2018. To these amounts must now be added interest at 20% and the total stands at well over N$1m.

When the awards for unfair dismissal were first made, ArcticNam officials in Namibia said the company’s officials in Iceland were responsible for any discrepancies and that they had been trying to get their counterparts to take responsibility, without success.

Restraining order

As to where the funds to pay the 23 should be found, given the absence of Arnason and the complex relationship between the companies, the attorney acting for the 23, Norman Tjombe, said since ArticNam had no assets, it was necessary to act against the managing company, EI, and EI’s MD, Arnason. He said it was believed that EI had a lot of money in Namibia, which it hadn’t been able to get out of the country and which it was trying to hide. Some of it, however, had been frozen by Namibia’s prosecutor general, Martha Imalwa.

Tjombe gave as an example the MV Heinaste, a factory tug originally linked to Samherji, that was first seized in the wake of the Fishrot expose, and then sold on.

He said he had asked Imalwa to release funds from the sale of the vessel to pay the 23 who had worked as crew members on the Heinaste. He is also probing the implications of a restraining order against Fishrot-related assets and officials obtained by Imalwa, to establish whether they could be subject to a claim to satisfy the labour commissioner’s award.

Destitute

Meanwhile, the story of the 23 destitute fishermen, their plight and their claim, has made it into Icelandic media. Since the compensation claim was lodged by Tjombe, interviews have appeared, talking with them about their despair as a result of the poverty into which they have been forced because of their dismissal.

One report, in a publication called Heimildin, quotes fisherman Josua Hafeni as saying, ‘I no longer live with my children, I simply cannot afford it.’ Hafeni was part of the Heinaste’s crew. He said he found it hard to look his children in the eyes because he felt ashamed of what he ‘had become’ since being unlawfully sacked. He has not found permanent work since then, and he and his colleagues are still waiting for the compensation ordered by the labour commissioner.

The publication also quotes Tjombe as saying that Icelanders should realise that the damage caused to Namibia and its people by Icelandic-based businesses was ‘enormous’.

Strain on judicial system

He told this writer, however, that while the corruption had subjected the crewmen to sudden abject poverty, there was another difficulty: the trial of the alleged kingpins was ‘placing Namibia’s small, but very credible judicial system under enormous strain.’

‘It’s not easy to prosecute so many wealthy men – they have enlisted only the best criminal lawyers from inside the country and beyond. In an effort to stop the prosecution, they have been taking the most creative legal points, and will continue to do so’, he said.

‘The only good thing to have come out of this whole Fishrot scandal is that it has clearly exposed corruption in the allocation of Namibia’s fish resources, something that many people here had long suspected of being endemic.’

Carmel Rickard

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