In 1969 the first of three aluminium smelters was built in Iceland at Straumsvík, near Hafnafjörður, on the South West side of Reykjavík by Alusuisse (subsequently Rio Tinto-Alcan). In 1998 a second smelter was constructed by Century Aluminum (now a subsidiary of controversial mining giant Glencore), at Hvalfjörður near Reykjavík, and in 2007 the third, run by Alcoa, was completed at Reyðarfjörður in the remotely populated East of the country. The Icelandic Government had been advertising the country’s vast ‘untapped’ hydroelectric and geothermal energy at ‘the lowest prices in Europe’ hoping to attract jobs and industry to boost Iceland’s already very wealthy but somewhat fishing dependent economy. The industry, which would permanently change Iceland’s landscape with mega-dams, heavy industry scale geothermal plants and several kilometer long factories, was promoted by the Icelandic Government and the aluminium companies as ‘good employment for a modern age’. However, ten years after the flagship Alcoa Fjarðaál project was completed, unemployment is higher than it was in 2005, and Iceland’s economy has become dependent on an industry which is vulnerable to commodity cycle slumps and mass job losses. Worse, the price charged for Iceland’s energy is tied to the price of aluminium and analyses of the country’s 2008/9 economic crisis suggest it was exacerbated by the poor terms of Iceland’s late industrialisation. Yet demands for further industrialisation remain, and more than 1000 Icelanders are employed in the aluminium sector.

This article exposes the conditions inside Iceland’s aluminium smelters based on interviews with workers conducted in 2012. The stories from two smelters share correlating accounts of being forced to work in dangerous conditions under extreme pressure, and without adequate safety equipment, leading to serious accidents which are falsely reported by the companies. These shocking allegations require serious attention by the trade unions, Icelandic government and health and safety authorities. This especially in the current context of labour disputes with the aluminium companies, alongside revelations about the same companies’ tax avoidance schemes and profiteering in the country.

Century, Grundartangi:

A former worker from the Century plant at Grundartangi shared his story, though did not want his identity revealed. Steini (not his real name) had worked at the plant for ten years and only quit recently.

“When I went to work there I thought of it as just a job and it was good pay. My experience of it was that they were taking our labour for cheap and making work us like slaves. The only thing we get out of it is our pay.

There were so many accidents that were their fault, not ours. They put so many rules in place, but you have to break the rules to get the work done, which they are pressuring you to do, then if something goes wrong its all your fault.”

Steini described how bonuses are awarded to the shift according to the number of accidents. If you have an accident and are off work you lower your annual bonus. At first the bonuses included smart new bikes, then they were reduced to a restaurant meal, and finally just pizza and beer.

He described the pressure of the job; how workers are pushed to work harder, but as soon as they get quick at the tasks they add more work so they are even more pressured. Akin to Alcoa Fjardaál in the East of Iceland the turnover rate is around 20% with only a handful of people staying for ten years as he had. Similarly, both Alcoa and Century Aluminum have gradually replaced permanent jobs with contract labour. Increasingly the work force was made up of University students on summer jobs which made the work even more risky as this short term labour was less experienced and more prone to accidents.

Shifts were twelve hours long, for 183 hours/month and the working hours were very unsociable, many at night for three days in a row. Steini described how most of the days off in between shifts were used to sleep and recover energy in order to work again. As the plant was expanded and more pots were added the work got harder.

“Everybody who works in Norðurál [Century] hates it. Most of the people are eating anti-depressants and everything. They hate the company, they hate the work but they are afraid to change and be without work.” He said.

He described how many accidents there were at the factory and how the company avoid paying compensation or having to report the severity of the incident;

“I got a broken finger, I burned my feet and once I had a forklift drop on my arm. I never got any compensation from the company and when I went to insurance companies I could get nothing either. The company ask you to come back to work as soon as you can move and just sit at the computer, then they count that as being ‘well’ in their records so it looks like less ‘work days lost’. The insurance companies also see it this way so it it very hard to get compensation.

One guy was doing something very risky and fell into the [molten aluminium] pot up to his knees. He was on morphine for a few weeks. I remember the health and safety guy coming out of a meeting with him smiling. He had admitted that it was all his own fault.”

Industry standards on reporting discriminate between lost time injuries and restricted work injuries, with the former being taken more seriously. Like Alcoa, Glencore claim that the ‘total recordable injury frequency rate’ (TRIFR) is being reduced annually. Nonetheless ten people died at Glencore’s global operations last year according to their 2015 Annual report, and sixteen in 2014.

Scandals over worker’s rights had previously erupted in Iceland during the construction of several mega power projects for the aluminium industry after the conditions of cheap foreign labour were exposed. More than a dozen Chinese and other foreign workers died during the construction of the Kárahnjúkar dam and several Romanian workers suffocated in geothermal pipes on the site of a Reykjavík Energy work camp in Hellisheiði where they worked up to 72 hour weeks.

Steini described the heat of the pot rooms and how restrictive and hot the many types of safety clothing are. As a result most workers chose to use the minimum amount of safety clothing, enabling them to be comfortable and work faster to get bonuses;

“You used as little safety equipment as you could so you could get the job done. When I was in the pot room I just used a paper mask for comfort. I stopped noticing the smell of the gases, then after a period working in the pot lining rooms I went back to the pot room and I really smelt it. It chokes your throat and you know it’s bad.”

‘Pot rooms’ are huge sealed troughs of carbon anodes and aluminium flouride through which up to 320,000 amps of electricity are passed to separate the strongly bonded oxygen from the alumina. Molten aluminium is then ‘tapped’ from the pots and cast into ‘ingots’. The process generates gases including inorganic fluorides, sulphur dioxide, CO2 and perfluorocarbons. Perfluorocarbons (PFCs) are extremely potent greenhouse gases lasting up to 50,000 years in the atmosphere. Tetrafluoromethane, the most common PFC is 6,500 times more potent a greenhouse gas than CO2 and its main global source is from aluminium smelters. Sulphur dioxide and fluoride emissions are acidic and can kill or stunt plant growth. Fluoride emissions also build up in the bones and teeth of animals and humans causing Skeletal Fluorosis, which weakens bones and can lead to bone deformation much like arthritis. Farmers living around Centrury’s smelter in Hvalfjörður claim their sheep and horses have got sick and even died from flouride poisoning.

Saga (not her real name) started work in Century Aluminum’s Grundartangi smelter in 2006, before turning twenty. It was her first big job and her introduction to the working world. She was working twelve hour shifts from the outset, and her work began in the pot rooms. Like Steini she described the fallacy of the health and safety training;

“We were told to wear dust-masks because of all the dangerous and unhealthy gases that come out of the pots, also because of the alumina, fluoride and other pollution in the air. You could always smell it all through the mask though. It was emphasized very heavily not to smoke inside because smoking inside the pot-rooms could result in ‘stone-lungs’ in few years time, which is very common amongst smelter-workers. That is because of all the pollution in there. If you would smoke inside, you were inhaling three times more tar and other stuff straight down to your lungs than if you where smoking outside in more normal surroundings. We also learnt that pregnant women are never allowed to enter the pot-rooms because there is a great risk of foetal harm.”

Saga accused Century of extremely low health and safety standards and condemned the company for making workers “repeatedly risk their lives to keep the smelter operational into the next shift”. She described being given second hand protective clothing in poor condition, and claimed that much of the equipment was in need of repair but was still being used as parts were hard to come by. Like Steini she had witnessed and experienced serious injuries, which had been misreported or disguised by asking workers to come in for office days when injured in order to improve the figures on workdays lost due to injury;

“Working for show” you could call it. I have even heard about workers with broken legs being made to show up for hanging out in the office for a few hours just to keep the records clean. It was easy to pressure people with many passive methods, such as bringing down the accident record which means that their shift doesn’t get a reward like the others that went through the year “without” accidents that caused absents.”

She gave a scathing and detailed account of the pressured and dangerous work environment;

“I witnessed others, and found myself, doing dangerous and life threatening things in the smelter. This was not because we had some kind of death wish or thirst for adrenaline but because there was no other way to finish our daily jobs on time. There is no other choice than to climb on that pot, drive that windowless forklift, work on this broken down and not really functioning crane today, not take proper breaks. Be one doing two people’s jobs, drive too fast because you have to hurry and “fixing” things with all possible and impossible ways so they will last just a little bit longer. I have seen people run away, scared for their lives, and then being forced back because somebody has to take care of what went wrong. I have witnessed what happens after a pot explodes.

Far too many people cram themselves into vehicles, because distances are very long and your main transport is your own two legs on the hard concrete floors. These are all labeled as dangerous things to do in there and in theory they are not “really” allowed. For example climbing on pots –which are very often badly closed and have broken lids or holes. Working alone on a crane, which is strictly speaking never allowed, always to be performed by a team of at least two workers. That’s because of the danger of people passing out from the heat, exhaustion, lack of liquid, rest or food, and a crane-operator could very likely be in a critical place when that happens, like over an open pot. Driving vehicles with the lights not working, broken windows or too filthy windows to actually see out is not allowed. Neither is the operation of any vehicles or cranes without proper training, or vehicles and cranes that are broken or not functioning properly. Having your shoes not closed all the way, having an old helmet, old shoes, no dust-mask, standing under an crane in use, not preheating your tools well enough to touch liquid metal or acid. Working in too much loudness, too much darkness or too much pollution. Not getting the breaks that you are entitled to. Teaching yourself how to do things. Working with a person you don’t trust or yourself being in so bad physical state, like suffering illness, fatigue, hunger, pain, that you don’t even trust yourself.

All of these things, I have had to do to finish my duties, just like everybody else in there (at least back then). Of course I could have said no at any given time, but you don’t really want to do that when you know that it is just going to be somebody else, a co-worker who is in the same shoes as you, that will have to take care of it and finish what you left. Everything has to be finished every day no matter what it takes.”

Alcoa Fjarðaál.

The Alcoa plant in the East of Iceland was heralded by the Icelandic Government as the saviour of the waning Eastern economy and a fantastic employment opportunity which would bring young people from Reykjavík to the East. Officials promised up to 1000 permanent jobs, plus another 2.5 jobs created in other sectors for each job in the aluminium industry. Ten years later, however, few of the promised benefits have come to the region, and overall unemployment in Iceland, which was less than 3% in 2005, reached 7.5% in 2009 and remained at 5% 2015.

Alex Smári drove the Alcoa bus from Stöðvarfjörður to Reydarfjörður from 2006 to 2008. He says people in the East believed work in the smelter would be easy, with good pay and plenty of time off, but the reality had turned out to be very different. He described workers returning from their shifts as ‘like corpses’ in the bus, and claims many quit their jobs after a short time. In his opinion the East has not become more thriving as the politicians and company promised, to the contrary “Fjarðabyggd is like a labour camp”.

One worker in the Alcoa Fjarðaál smelter was willing to speak to me though he did not want to be named. Bergur (not his real name) noted the high turnover of workers with many leaving after just a year or two. He claimed around 100 of the 450 employees in the smelter were foreign, suggesting that many in the East simply don’t want to work there. There are only a handful of people who have remained in employment with the company since the smelter opened in 2007.

“Out of twenty people on my shift that started working there five years ago there are only two left. Everyone else quit because they didn’t like working there. The turnover was 20% last year. 20% with all the unemployment in Iceland! It really tells a story.”

Like the Century workers he described how the managers push the workers to work as fast and hard as possible during the shift. However, once they have learnt to work faster the job load simply goes up again.

“The Alcoa building system is devised to suck every bit of what you have. You start with 100 people doing 100 people’s jobs and then you push everyone until 90 people are doing 100 people’s jobs, and then there are 60 and then 50. At Alcoa, everyone gets into the situation where he is working the whole shift doing his absolute best and still walking away with a kick in the butt for not finishing something or other.”

Bergur claimed company people had told them in a meeting that Fjarðaál is the most dangerous of Alcoa’s smelters in Europe. Shifts are twelve hours long and often at night and employees are expected to work 176 hours a month compared with only 142 hours on eight hour shifts at Rio Tinto’s Straumsvík plant near Reykjavík.

There is also a bonus system that rewards the workers for the quantity and quality of aluminium they produce. This means workers effectively get fined when a machine breaks or poor quality alumina is delivered, even though this is out of their control.

“Everything is connected to the bonus. If a crane breaks down and it holds off production it lowers the bonus for everyone. Now we have low quality alumina coming in which means we get through more anodes and that also lowers the bonus. When this situation is going on the workload gets substantially higher, so not only are you working a lot more, but you know you are getting less pay.”

As a result of this pressure Bergur claims the few days off between shifts are usually spent simply sleeping and recovering before work starts again. Contrary to Alcoa’s claims that the workplace is ‘family friendly’ he claims Alcoa Fjarðaál has become known locally as ‘the divorce factory’ since so many couples have separated due to the unsociable hours which affect their relationship.

Bergur also spoke about Alcoa’s use of contract labour, and its effect on worker’s rights and the strength of the unions:

“There are two groups of people working at Alcoa: There are Alcoa employees and there are contractors who are not part of Alcoa. We are doing the same work but they are not members of the unions. By having these two groups they can control the employees more easily and the unity within the factory will be less.”

“We have to live!”

Former Prime Minister of Iceland Halldór Ásgrímsson famously promoted the Alcoa Fjardaál project by proclaiming “we have to live!”. But what kind of livelihood have Icelanders been forced to accept? All of the workers expressed feeling misled by the government and the aluminium companies.

Saga claimed that prospective workers were denied information about the health and safety risks;

“Our government has been been eagerly promoting smelters as very agreeable and good working places for years. Smelters are being promoted in places where people don’t know them, don’t know the dangers, the threats and the health risks, and don’t feel they have a choice. How can a place where you are constantly breathing heavy pollution – alumina, fluoride and dangerous gases – that make you feel like your lungs took a severe beating every time you open up a pot, be a healthy and agreeable working place?”

Bergur analysed the Icelandic government’s claim that the smelter would reverse the East to West migration trend:

“The people who have quit there, who have returned to Reykjavik or whatever…I call those the sensible people. They have moved to the East to work for Alcoa, maybe both man and woman. They come with high hopes and determination to make this work. After working for a year, or a year and a half, the pressure which goes on at the shift becomes too much, and when they realise this is the system and will not change, that they are never going to be in a situation where you are working a relatively easy shift and going home not so tired….this is not going to happen. When they realise that, they quit and get out.”

Steini also questioned the government’s promotion of aluminium smelting as a good employment for Icelanders;

“People in Iceland just wanted jobs, but not necessarily this kind of factory. The question is who put this idea in our minds that the only way to get a job is by having an aluminium smelter?”

Of course, Icelandic smelter workers are not alone in their experience of pollution and dangerous working conditions, and there is much potential to link up with global struggles for workers rights. At Hindalco’s Hirakud aluminium smelter in Odisha, India, workers are taking the company to court asking why they were not told what they were breathing in. They were being moved from the pot-room every four years, told that this was due to the potential health effects of working in such high heats, but the effects of breathing in highly toxic fumes were never mentioned. They believe the company was deliberately concealing the dangers while trying to minimise them.

On top of poor working conditions, employment in the aluminium industry is innately insecure, as it is vulnerable to the peaks and troughs of the commodities supercycle. The recent commodities downturn led to the demise of the UK steel industry, including the likely closure of Port Talbot steel, cutting 11,000 jobs. The workers have already lost part of their pensions, a common phenomenon in the metals industry, as the owners – Tata Steel – claim they cannot afford to pay the full amounts. The rusting skeleton of Century Aluminum’s Helguvík smelter, abandoned midway through construction in 2009, stands as a stark reminder of the false promises and volatility of this industry.

Iceland’s aluminium workers cannot expect their employers, experts in anti-unionising and misleading PR, to protect their rights. Instead, they must properly inform themselves of the risks to their health and security, and contribute to the debate on what constitutes ‘a nice place to work’ in a modern Iceland.

Sources:

Cooke, K. and Gould, M.H. 1991. The health effects of aluminium, a review. The Journal of the Royal Society for the Promotion of Health. 111, 163-8.
Aslam M, Khalil K, Rasmussen RA, et al. (October 2003). “Atmospheric perfluorocarbons”. Environ. Sci. Technol. 37 (19): 4358–61.
Dr R. Liteplo and Ms R. Gomes, 2002, ‘Environmental Health Criteria for Fluorides’. International Programme on Chemical Safety, UNEP. http://www.inchem.org/documents/ehc/ehc/…

Indriði H. Þorláksson, economist and former tax director

Frumvinnsla áls – Lýsing á hinni mengandi og orkufreku framleiðslu álbarra

Haukur Már Helgason

Last week’s Thursday, the majority of Alþingi’s Industrial Affairs Committee (AIAC) announced its intention to to re-categorize eight sites as “utilizable” options for the construction of hydroelectric power plants. These have until now been categorized, either as for preservation, or as on “standby”. These are categories defined by the Master Plan for nature conservation and utilization of energy resources, as bound by law. The re-categorization would serve as the first legal step towards potential construction.

The proposal had neither been announced on the committee’s schedule, before its introduction, nor introduced in writing beforehand. The committee’s majority gave interested parties a week’s notice to submit comments on the proposal, which is admittedly faster than we managed to report on it.

Reasoning

When asked, by Vísir, why the proposal was made with such haste, without any prior process in the committee or an open, public debate, Jón Gunnarsson, chair of the committee on behalf of the Independence party, replied that “it is simply about time to express the majority’s intention to increase the number of options for utilization.”

The proposal is in accordance with statements made by the Minister of Industry, Ragnheiður Elín Árnadóttir, at Landsvirkjun’s autumn meeting earlier that week, as reported by Kjarninn. In her speech at the occasion the Minister said: “I will speak frankly. I think it is urgent that we move on to new options for energy development, in addition to our current electricity production, whether that is in hydropower, geothermal or wind power. I think there are valid resons to re-categorize more power plant options as utilizable.”

Opposition

As the proposal was introduced to Alþingi, members of the opposition rose against the plans.

Róbert Marshall, Alþingi member in opposition on behalf of Bright Future, has called the lack of process “deadly serious” and “a war declaration against the preservation of nature in the country”. Steingrímur J. Sigfússon, the Left-Greens’ former Financial Minister, concurred, calling the proposal the end of peace over the topic, as did the former Environmental Minister on behalf of the Left-Greens, Svandís Svavarsdóttir, who called the proposal “a determined declaration of war”. Katrín Júlíusdóttir, former Minister of Industry, on behalf of the Social-Democrats’ Coalition commented that the proposal was obviously not a “private jest” of the committee’s chair, but clearly orchestrated by the government as such.

Lilja Rafney Magnúsdóttir, the Left-Greens’ representative in AIAC, and the committee’s vice chair, condemned the proposal. According to her, Minister of the Environment, Sigurður Ingi Jóhannsson, specifically requested fast proposals on these eight options. She says that she considered the data available on all options to be insufficient, except for the potential plant at Hvammur.

That same Thursday, the Icelandic Environment Association (Landvernd), released a statement, opposing the proposal. According to Landvernd’s statement, five of the eight options have were not processed in accordance with law. Landvernd says that the proposal “constitutes a serious breach of attempts to reach a consensus over the utilization of the country’s energy resources.” It furthermore claims that the AIAC’s majority thereby goes against the Master Plan’s intention and main goals.

Landsvernd’s board says that if Alþingi agrees on the proposal, any and all decisions deriving thereof will “constitute a legal offense and should be considered null and void”. Guðmundur Ingi Guðbrandsson, Landvernd’s manager, has since stated that if the plans will proceed, the high lands of Iceland will become a completely different sort of place.

The Iceland Nature Conservation Association (INCA) also opposes the plans. The association released a statement, pointing out that if current ministers or members of Alþingi oppose the Master Plan legislation, they must propose an amendment to the law, but, until then, adhere to law as it is.

The options

Mid-October, Environmental Minister Sigurður Ingi Jóhannsson already proposed re-categorizing one of the eight areas, “the plant option in Hvammur”, as utilizable. This was in accordance with proposals made by AIAC last March. Leaders of the parties in opposition then objected to the decision-making process, saying that such proposals should be processed by Alþingi’s Environmental Committee before being put to vote. The Hvammar plant would produce 20 MW of power.

The other seven options to be re-catogorized are: the lagoon Hágöngulón (two options, totalling 135 MW); Skrokkalda, also related to Hágöngulón (45 MW); the river Hólmsá by Atley (65 MW); lake Hagavatn (20 MW), the waterfall Urriðafoss (140 MW); and Holt (57 MW).

The last two, as well as the plant at Hvammur, would all harvest the river Þjórsá, the country’s longest river. The eight options total at 555 MW.

Backstory: Kárahnjúkar

The latest power plant construction in Iceland took place at Kárahnjúkar. The 690 MW hydropower plant at Kárahnjúkar is the largest of its type in Europe. It fuels Alcoa’s aluminum smelter in Reyðarfjörður. The largest power plant in the country before Kárahnjúkar, was the Búrfell hydropower plant, on-line since 1969, at 270 MW. The Icelandic government and the national power company Landsvirkjun committed to the dam’s construction in 2002, which was concluded in 2008. The total cost of the construction was around USD 1.3 billion. The largest contractor was the Italian firm Impregilo. The construction was heavily contested, for its environmental and economic effects, for the treatment of the workers involved and for a lack of transparency and accountability during the prior decision- and policy-making process.

At least four workers were killed in accidents on site, and scores were injured. “I have worked on dam projects all over the world and no-one has even been killed on any of the schemes. To have this number of incidents on a site is not usual,” commented International Commission on Large Dams (ICOLD) vice president Dr Andy Hughes at the time.

During the construction, the country saw new kinds of protest actions, involving civil disobedience and direct action, led by the organization Saving Iceland. Andri Snær Magnason’s 2006 book Draumalandið – The Dream Land – contesting Iceland’s energy policies, and calling for a reinvigorated environmentalism, became a bestseller at the time. Ómar Ragnarsson, a beloved entertainer and TV journalist for decades, resigned from his work at State broadcaster RÚV to focus on documenting the environmental effects of the Kárahnjúkar plant and campaigning against further construction on that scale.

In the eyes of many, however, the greatest impact was the environmental damage done to a significant part of the country’s wilderness and fragile eco-system, as one thousand square kilometers of land were submerged by the dam. Along with Saving Iceland, INCA was at the forefront of the struggle against the plant’s construction.

Few would contest that the dam construction at Kárahnjúkar was the most dividing topic of debate in the country during the first decade of this century, until the 2008 economic crash. Alþingi’s Independent Investigative Committee, established to investigate the advent of the crash, was not alone in relating the expansive effect of construction on this unprecedented scale to the succeeding crisis.

[Correction: Apart from a 2 MW plant in Kaldakvísl, n]o new power plants have arisen since the construction at Kárahnjúkar. Which plays the bigger role, environmentalist campaigns, or the economic crash which ensued, may be debated. What remains at stake is not any single construction project, as such, but the pro-heavy industry policy, continuous through multiple governments through the last fifty years.

Earlier this November, before the latest turn of events, INCA pointed out that at least three of the options that Landsvirkjun already categorized as “utilizable” were considered for preservation according to the still current Master Plan. Due to this, the association protested the Landsvirkjun’s vice president Ragna Árnadóttir’s recent claims, that the company intended to reach a wide consensus on the use of energy resources.

Landvernd and Landsvirkjun

Landvernd, the Icelandic Environment Association, was founded in 1969. It is among the the country’s leading environmental NGOs, runs several educational programs, lobby groups and reviews parliamentary bills and motions. In the last two decades, its emphasis has moved from the conservation of soil and vegetation towards protecting Iceland’s wilderness and landscapes, not least in the country’s uninhabited central highlands. It has initiated civil disobedience actions, its website citing the Mayday Green Walk in 2013 as an example.

Landsvirkjun is the country’s largest electricity provider, operating seventeen power plants, on a scale from Hafið’s 2MW to Kárahnjúkar’s 690MW. The largest hydroelectric power plant serving the public, rather than industry alone, is the plant at Búrfell, at 270MW.

Original source: Grapevine

The Financial Times notes the importance of his ‘fixer’ role, noting that:

The quietly spoken and affable geologist is seen as someone willing to throw himself into engaging with governments and communities in some of the “difficult” countries where miners increasingly operate. That is something that Vedanta is seen as desperately needing – not least in India itself. Mr Albanese may lack experience in the country but one analyst says that can give him the opportunity to present himself as a clean pair of hands who will run mines to global standards…“There’s a big hill to climb there” Mr Albanese said.(1)

In fact Albanese has already been hard at work for Vedanta since he discreetly joined the company as Chairman of the little known holding company Vedanta Resources Holdings Ltd on Sept 16^th 2013, billed as an ‘advisory’ role to Anil Agarwal (Vedanta’s 68% owner and infamously hot headed Chairman).

Vedanta Resources Holdings Ltd (VRH Ltd) (previously Angelrapid Ltd) are a private quoted holding company with $2 billion assets at present, and none at all until 2009. VRH Ltd own significant shares in another company called Konkola Resources Plc – a subsidiary of Konkola Copper Mines (KCM) – Vedanta’s Zambian copper producing unit. This is an example of the complex financial structure of Vedanta – with holding companies like this one serving to move funds, avoid taxation and facilitate pricing scams like ‘transfer mispricing’.

Shortly after becoming CEO of Vedanta Resources Holdings Albanese helped Agarwal by buying 30,500 shares in Vedanta Resources in November 2013 as their share price plummeted and Agarwal himself bought a total of 3.5 million shares to keep the company afloat. In December Albanese bought another 25,163 shares.

By February 2014 he was being sent out to Zambia to manage a crisis over Vedanta’s attempt to fire 2000 workers, which Agarwal himself had failed to fix during an earlier trip in November, and further damage caused by revelations about the company’s tax evasion, externalising of profits and environmental devastation in Foil Vedanta’s report Copper Colonialism: Vedanta KCM and the copper loot of Zambia. 

In a taste of things to come newspapers referred to Tom Albanese as the Chairman of Vedanta Resources, and Labour minister Fackson Shamenda alluded to a ‘change of management’ giving them new confidence in Vedanta. Albanese appeared to have done some fine sweet talking, promising that workers would not be fired as part of a ‘new business plan’ and claiming that all of KCMs reports are transparent – an outright lie as their annual reports, profits and accounts are as good as top secret in Zambia and the UK.

However, scandals and unrest continued to blight Vedanta in Zambia and the Financial Times reported that Albanese had flown out a total of four times in February alone.

Albanese’s role as a ‘fixer’ and sweet-talker is nothing new. His appointment as CEO of Rio Tinto in 2006 was on very similar terms, as an article in The Independent newspaper noted his role to ‘green tint’ Rio, and ‘scrub its image clean’. The article mentions that, in an exclusive interview with the paper Albanese declared unprompted that the company is a “good corporate citizen”, and describes him showing no emotion and choosing his words carefully, focusing on safety and environmental and social responsibility.

But Albanese could not play dumb about the reasons a new image was needed for Rio. Since he joined the company in 1993 Rio had been accused and found guilty of a number of major human right violations. 

In the early nineties they forcibly displaced thousands of villagers in Indonesia for their Kelian gold mine. They, and partner Freeport McMoran caused ‘massive environmental devastation’ at the Grasberg mine in West Papua, and when people rioted over conditions in 1996, began funding the Indonesian military to protect the mine. $55 million was donated by Freeport McMoran to the Indonesian military and police between 1998 and 2004, resulting in many murders and accusations of torture. In 2010 they locked 570 miners out of their borates mine in California without paycheques leaving them in poverty. In 2008 Rio threatened to shut their Tiwai point aluminium smelter, firing 3,500 if the government imposed carbon taxes. In Wisconsin, Michigan and California the are accused of toxic waste dumping and poisoning of rivers, and in Madagascar and Cameroon they have displaced tens of thousands of people without compensation or customary rights at their QMM mine, and the giant Lom Pangar Dam – built to power an aluminium smelter.

In 2011 a US federal court action accused Rio Tinto of involvement in genocide in Bouganville, Papua New Guinea, where the government allegedly acted under instruction from Rio Tinto in the late eighties and nineties when it killed thousands of local people trying to stop their Panguna copper and gold mine. 10,000 people were eventually killed in the class uprising that resulted from the conflict over the mine. Rio Tinto were accused of providing vehicles and helicopters to transport troops, using chemicals to defoliate the rainforests and dumping toxic waste as well as keeping workers in ‘slave like conditions‘.

Yet, Albanese is being seen as a respectable CEO with a more diplomatic and clean approach than his new Vedanta counterpart Anil Agarwal. There is great irony in Albanese’s promises to improve workers conditions in Zambia when Rio Tinto are famed for their ‘company wide de-unionisation policy’, with 200 people marching against the ill treatment of mineworkers outside the international Mining Indaba in Cape Town in February, calling them ‘one of the most aggressive anti union companies in the sector’.

Perhaps Albanese will feel at home in another company with a dubious human rights and environmental record. Both Rio and Vedanta have been removed from the Norwegian Government Pension Fund’s Global Investments for ‘severe environmental damages’ and unethical behaviour following investigations. The Norwegian government divested its shares in Rio Tinto in 2008, while it divested from Vedanta Resources in 2007, and also excluded Vedanta’s new major subsidiary Sesa Sterlite from its portfolio just a few weeks ago in January 2014.

Albanese was previously famed for being one of the highest paid CEOs on the FTSE 100, earning £11.6 million in 2011. However he refused his 2012 bonus in a last ditch attempt to save his career at Rio before he was fired in January 2013 amid a total of $14 billion in write-downs caused by his poor decision to acquire Alcan’s aluminium business just before prices crashed, and a $3 billion loss on the Riversdale coal assets he bought in Mozambique, making him in effect a ‘junk’ CEO today.

Other commentators have noted that this is not the first time Vedanta have recruited a junked mining heavyweight to save their bacon, but point out that the appointments have previously been short-lived, possibly due to frustrations about the dominance of majority owner Agarwal and his family. The infamous mining financier Brian Gilbertson, who merged BHP and Billiton, was another scrap heap executive who helped Vedanta launch on the London Stock Exchange in 2003 in the largest initial share flotation that year. However, he quit after only seven months after falling out with Agarwal.

Albanese is diplomatic when faced with questions about potential conflicts between himself and 68% owner and Chairman Anil Agarwal claiming Agarwal “will be in[the] executive chairman role when it comes to M&A and strategy”. However, commentators point out that, ‘the British Financial Services and Markets Act of 2000 stipulated that the posts of CEO and Chairman of companies should be separated – a principle which was backed in October 2013 by the UK’s Financial Conduct Authority’, potentially posing another corporate governance issue for Vedanta, who are already accused of violating governance norms in London by people as unlikely as the former head of the Confederation of British Industry – Richard Lambert.

But Albanese is positive about his re-emergence as a major mining executive. In fact the man with so much blood on his hands may be alluding to his experience in making great profit from others’ misery, when he says to the Financial Times, on the occasion of his appointment as Vedanta CEO, that:

“Sometimes the best opportunities are when the times are darkest”.

1) Financial Times, March 10 2014, ‘Albanese back at the helm to face Vedanta challenge’.

* quotes are only in paper version in section on ‘marriage of convenience between American miner and Indian billionaire.

The ruling against the mine is being hailed as a precedent victory for grassroots democracy, after Supreme Court judges initiated a referendum on the mine last summer in which every inhabitant of twelve villages on the mountain voted against the project, giving passionate speeches against the company and the Odisha government.

The failure of the Niyamgiri bauxite mining project is estimated by some to have cost Vedanta $10 billion in lost investments. Vedanta boss Anil Agarwal had built the Lanjigarh refinery at the foot of Niyamgiri mountain, and even expanded it sixfold, so sure was he that he would gain permission to mine despite the local inhabitants’ dissent. In November 2004 he even used a Financial Times article to mislead investors and create confidence, by claiming that he already had permission to mine the mountain.

The misleading FT article is typical of the many ways in which the British government has propped up this contentious company, which is increasingly criticised by even such high profile figures as the former head of the Confederation of British Industries (CBI) Richard Lambert – who accused it of violating human rights and corporate governance norms and using its London listing to improve its reputation. Foil Vedanta is now calling for Vedanta to be de-listed from the UK Stock Exchange in recognition of their catalogue of human rights and environmental abuses at every one of their operations across India and Africa, as well as corruption, tax evasion and violations of corporate governance.

Foil Vedanta have recently published a comprehensive report on the company’s Zambian copper mining subsidiary KCM  http://www.foilvedanta.org/articles/copp…) which has cost the Zambian exchequer billions of dollars in lost tax, as well as polluting and mistreating workers relentlessly.

Meanwhile the company are facing hard times as low share prices officially demoted them from the FTSE 100 to the FTSE 250 this December, removing their ‘blue chip’ status. In a panic Anil Agarwal (majority owner and Chairman) began to buy back as many shares as possible to increase the share price and save the company. He bought 1.7 million shares on Dec 19th, and another 3.5 million on Dec 24th, through his holding company Volcan Investments Ltd, which is based in the Bahamas, a UK controlled tax haven. A little later his new Executive, Tom Albanese (formerly Rio Tinto CEO who was pushing the aluminium industry on Iceland), also bought a large chunk of shares. But it was too late and the company slumped to the FTSE 250 nonetheless.

This makes Anil Agarwal now the 67.99% owner of Vedanta Resources, a violation of corporate governance norms for a listed public company.

Agarwal is now trying to keep his investors happy by claiming he will get bauxite to keep his refinery alive from another source in Odisha, but there are no immediate options available and activists are demanding the decommissioning of the Lanjigarh refinery, which has repeatedly spilled toxic red mud in local streams and polluted the surrounding villages.

First published in Grapevine. Based on a 2010 article entitled “Í landi hinna klikkuðu karlmanna.” (“In the Land of the Mad Men”). Translated in part by Haukur S. Magnússon.

After the election, we see the old parties of economic mass destruction are coming back to power. Giving enormous promises of easy money to be wrestled from evil vulture funds, debt relief and tax reduction, The Progressive Party doubled in size after a few years of hardship. There is a jolly good feeling between the two young new leaders of a brave new Iceland, and when a radio host called them up and offered to play them a request, they asked for Duran Duran’s ‘Wild Boys.’ I Googled the lyrics, not quite remembering the lines, and got a nice chill down my back:

Wild boys fallen far from glory
Reckless and so hungered
On the razors edge you trail
Because there’s murder by the roadside
In a sore afraid new world

They tried to break us,
Looks like they’ll try again

Sounds quite grim. This, coupled with the new government’s announcement that it would be effectively dismantling the Ministry for the Environment and Natural Resources and that there will be no Minister for the Environment, gave me a strange flashback feeling. I decided to revisit the state of mind that we used to call normal in 2006. When the economic policy, the energy policy, the expansion of our towns, the mortgages on our homes—almost all aspects of our daily life had become totally mad. This is not my own diagnosis; if you search the homepage of the IMF for the phrase “Collective Madness,” you’ll find this:

“’Iceland, in the decade and a half leading up to the crisis, was an example of collective madness,’ said Willem Buiter, chief economist at Citigroup, a remark that elicited spontaneous applause from the more than 300 participants, many of them Icelandic policymakers, academics, and members of the public.”

In our daily lives, we usually sense what is normal and what is over the top. Sometimes the discourse will blind us; PR and propaganda can create a kind of newspeak. It can be a good exercise to try to talk about things in a foreign language, to view them in a new light. As an Icelander, you could for instance try to tell someone from another country that Iceland’s government sold one state bank and received payment in the form of a loan from another state bank—and vice versa. That the state banks were thereby handed to men that were closely connected to the then-reigning political parties. The manager of one of the parties became head of one of the banks’ board of directors, while the other party’s former Minister of Trade belonged to the group that was given the other bank. That man had access to every bit of inside information about the bank’s standing.

In the meantime, this former Minister of Trade became Central Bank Manager. He went to the US and made Alcoa an offer that the company could not refuse. He had thus set in motion the largest-scale construction project in Icelandic history, greatly increasing economic activity in Iceland—a grand boon for the bank he just finished selling to himself.

If you tell this story in a foreign language, people shake their heads. They gape in disbelief. They use words like “corruption” and “mafia.” They exclaim, full of disbelief and even disappointment, “no, not in Scandinavia!”

THE ACCEPTED INSANITY

It is insane to expand a banking system by tenfold in eight years. We know that now. It isn’t technically possible to grow all the knowledge and experience needed to build up and manage such a contraption in such a short time. Not even by shoving an entire generation through business school. It is impossible.

But the megalomania was not just confined to the banking sector. Energy production in Iceland was doubled from 2002–2007, when the huge Kárahnjúkar dam was built in the eastern part of the highlands—to serve one single Alcoa smelting plant. The energy it produces, about 650MW annually, is enough to power a city of one million people. Doubling the energy production in a developed country over a five-year period is not only unheard of, but it would also be considered ridiculous in all of our neighbouring nations. Most industrialised states increase their energy production by around 2–3% annually. Doubling it would be unthinkable. It has been proven again and again that gargantuan investments generally destroy more than they create.

In Iceland, however, the goal was to double the nation’s energy production AGAIN by building aluminium smelters in Helguvík, Húsavík and enlarging the Straumsvík smelter by more than threefold. The period of insanity was to be succeeded by a total and complete madness. This was to be funded by 4–5 billion dollar 100% loans to Icelandic energy companies from foreign banks. Nearly 20,000 dollars for every single Icelander—every loan directly connected to aluminium prices and secret energy prices. The media reported this as your everyday act of government job-creation. It was regarded extremist to ask critical questions. Many regarded it unthinkable for the survival of the nation NOT to do this.

Now we know that we did not only sacrifice our nature for the economy, we sacrificed nature and the economy. Again, we do not have to seek out the websites of activists or environmental groups for this information. We just go to the IMF reports:

“Executive Directors observed that the Icelandic economy is at a difficult turning point. The long economic expansion, initiated by aluminium sector investments, sustained by a boom in private consumption, and fuelled by ready access to external financing, contributed to a build-up of macroeconomic imbalances and financial vulnerabilities.”

COCAINE IN THE HOT WATER?

The madness made itself clear in the business of geothermal energy, making itself known in the form of financial troubles and enormous debt of the energy companies. The geothermal field had enjoyed an even and stable development since it got started in the early twentieth century. During the great depression, the City of Reykjavík created the world’s largest geothermal heating system by pumping hot ground water into the homes in the city. Later they started producing a small amount of electricity by harnessing steam through turbines. But one day it seemed as if someone drilled into a cocaine vein. Out of the twenty high temperature geothermal areas in Iceland, plans suddenly emerged to harness sixteen right away, all for the sake of the aluminium industry. The energy companies applied for permits to do research drilling in most of the remaining ones. In an instant, the field went from a very slow, conservative development to becoming a geothermal wild west.

In the south, a major development of all the geothermal areas from the Reykjanes Peninsula to Þingvellir was planned—a chain of power plants in pristine and delicate areas—to serve a Century Aluminium smelter in Helguvík. But the geothermal plants would not have sufficed—the remaining power would be squeezed from hydro electricity in the Þjórsá river—potentially threatening the greatest stock of North Atlantic Salmon in Iceland—and up in the highlands—threatening the Pink-footed Geese of Þjórsárver.

So what was referred to as “moderate development” when the parties of The Wild Boys were last in charge of our energy sector? Their plans went like this: A new Alcoa smelter in the east, a new Alcoa smelter in Húsavík, a new Rio Tinto Straumsvík smelter beside the old one, an expansion of the Century smelter in Hvalfjörður and a new Century smelter in Helguvík. Amounting to a total of 1.4 million tons of aluminium. Each one of them needing energy that could serve one million people in their daily lives. Each one of them demanding sacrifice of great natural wonders, wild rivers and pristine geothermal areas.

How did they fare? The Alcoa Smelter in the East has been built, with the destruction of two glacial rivers, Lagarfljót and 50 km2 of highland beauty. The expansion of the Rio Tinto smelter was stopped and the Húsavík smelter did not go through, however, a skeleton of the Helguvík smelter is currently rising—with no power in sight.

The Alcoa smelter in the north would have required all the harnessable power in the northern part of Iceland, only excluding Jökulsá á Fjöllum. Close to Mývatn, we have the Krafla geothermal area. After a long and often struggling forty-year development period, the available power from the area reached about 60 MW. Now, the goal was suddenly to quadruple the area’s energy production—expanding it by 150 MW in just a few years, and harnessing the beautiful Þeistareykir area to its utmost capacity—up to 200 MW. They also had their eyes set on Bjarnarflag and Gjástykki, delicate areas that should be regarded as national heritage sites. All this was to serve a new Alcoa factory they wanted to build close to Húsavík, the famous whale watching and fishing village in North Iceland. Having done all that, however, the energy production would still not reach the 600 MW that Alcoa really needed—the harnessing of two more glacial rivers would have been necessary: Skjálfandafljót with the waterfall Aldeyjarfoss and the glacial rivers running from Hofsjökull.

The interesting thing is not how crazy this seems in hindsight, how extreme, how mad this reality was — but that outsiders did not see this plan as collective madness. The scheme was praised in international media as being a progressive plan for “clean” energy, and we still have members of parliament that regret that this did not happen. And the fact that our labour unions and politicians have referred to this when they say that “nothing is happening” in terms of business and job creation in Iceland. Or that they refer to this when they say “we have still only harnessed X% of our energy.” They are talking about this as a normal feasible future state of Iceland.

Why are people so crazy? Is it or was it a good idea to indebt the nation by a total of 5 billion dollars to place two Alcoa smelting plants in the same constituency? To surround the Faxaflói bay, where 70% of Iceland’s population resides, with three smelters? The answer is simple: The mad men still think so. One of the new Independence Party MPs, Brynjar Níelsson, has no regrets for the death of the river Lagarfljót in service of Alcoa. He said it was apparent that protectionists loved a few fish more than they did people.

But you can still ask like a fool: Did Iceland really have enough accumulated knowledge and manpower to multiply all our energy companies in the space of ten years? Was there never a doubt in the geologist’s mind when he found himself in a magical place such as the Torfajökull area above Landmannalaugar, Kerlingarfjöll or the steam areas around Reykjavík? Did they really want to do drill, pipe and harness EVERYTHING, right away? And do it all for the sake of a single industry—the aluminium industry. Did it have to be the role of a marginalised group of a few activists to use their spare time to criticise this?

OF “REYKJAVÍK” KNOWLEDGE

I was once at a meeting in Húsavík, where I screened my film, ‘Dreamland.’ At that meeting, the local geothermal plant manager claimed he could easily harness 1,000 MW out of geothermal areas north of Mývatn. I asked if it wasn’t correct that scientists are concerned about overexploitation of the country’s geothermal areas. The scientists’ criticisms were quickly blown off the table as “Reykjavík knowledge,” and in that instant every alarm bell went off.

Now we understand that power is not as plenty as the hype promised, and now most Icelanders understand that energy production on the banks of Lake Mývatn in Bjarnarflag might just jeopardise the ecosystem in that wonderful lake. But you wonder if the people developing our most delicate areas possess good enough judgement to work close to natural wonders. It seems like they are ready to take the risk, to see what happens.

I found an interview with the aforementioned plant manager from 2002. At that time, he had drilled a big hole for 170 million ISK because a Russian company potentially wanted to build an aluminium oxide factory and a giant aluminium plant in Húsavík.

If one sets aside minor ethical facts, such as the Russian aluminium industry being run by the mafia at that time, one is still left to ponder the fact that almost no industry in the world produces as much and as toxic waste as aluminium oxide production (or alumina, as it is called). Those that followed the horrible events when a red slush toxic lake in Hungary broke should know what comes with an alumina refinery. But this local hard-working man had spent more than one and a half million dollars looking into the feasibility of such a plant in Húsavík. Things have been so good here that people think they are untouchable.

Even though the companies engage in malevolent practices in other countries, they would never do that here. Sure.

THE HOLY LOCAL

It seems that for some reason the most unbelievable hogwash gets promulgated without any critical thought. We enter a boom after boom and never learn from mistakes. We can look further back in history to see how madness is mixed up with ambition, how extreme and unrealistic views of the future are presented and taken seriously.

In an edition of Morgunblaðið from March 1987, one can read a prediction of the impending evolution of local fur farming until 1996. At that time, thirty fur farms were operated in Iceland. Morgunblaðið cites a report that predicts Iceland will foster 600 mink farms by 1996. They assume a twenty-fold growth in ten years, as if nothing were more natural. A month later, this optimistic story ran: “The mink stock will double this year.” Only three years later, in April of 1990, we find this dramatic headline in a copy of Morgunblaðið: “Fur farming: The industry is on its last legs. Many farmers on the edge of despair.”

In this country everything is considered normal if a “local” wants it. Nothing in Iceland is as crazy as the holy local is when he wants a smelter or an oil refinery, no matter how large or out of proportion. He has the sacred right to that, especially if he uses “job creation” as an argument. Numbers that would be considered sizeable in large nation’s economic statistics, energy resources and infrastructure that are earmarked by the world’s superpowers as being “strategically important” are subject to “the will of the locals.” The nation’s energy resources and nature are in the hands of a smattering of district councils that have no staff and no expertise while the majority of Icelanders that reside in the capital area seem by default “local” to nowhere.

So, the locals of the east destroyed their highlands, the locals of the south want to dam the wonders of the Skaftá area, the lower part of the Þjórsá river and the locals of the southwest are ready to harness almost every single geothermal area. And this seems to be a global problem—rural communities losing their youth and talents to the cities of the world are willing to sell off their forests, their mountains, their rivers and valleys for some hope of development and a future.

It is strange to see that one of the major driving forces behind this development resides within our labour leaders, who have been demanding extreme leverage and risk on behalf of public energy companies. If there should be a hesitation in the risk taking, the responsible parties are “dragging their feet.” The labour unions’ “stability agreement” with the former government entails that “every obstacle be removed” that somehow hinders the proposed Helguvík aluminium plant. It is exactly this kind of thinking that lead to almost 200 foreign workers being left disabled and unemployable as a result of working on building the Kárahnjúkar dam. Conditions of workers were severely compromised to make the dam construction process cheap enough. Every obstacle was removed to provide Alcoa with energy prices that save them 200 million USD annually. That amounts to the combined yearly wages of more than 10,000 teachers.

The noble cause of creating jobs becomes quite grim if it involves harming the work capacity of so many. The PR people talk about a ‘multiplication effect’ of every job in a smelter—but wouldn’t it be polite to subtract the disabled workers? People will go so far to satisfy their prince charming that they behave like the ugly stepsister in the fairy tale, cutting their toes off to fit the glass shoe.

HOUSE OF CARDS

The Helguvík aluminium smelter close to Keflavík Airport is a symbol of how poorly run Iceland can be; the Helguvík aluminium smelter is already being built, even though nobody knows where we can scramble together its required 600 MW of energy. The Helguvík smelter is a symbol of how weak the nation’s administration can be, of how shattered professionalism and long-term thinking can become, and how the media all but encourages unlawful activities in their headlines, if job creation is at stake. They started to build the smelter without access to power sources, and without the necessary power lines planned or agreed upon by landowners.

Why start building, then? Because in 2006, the Wild Boys were in power, showing their ambition and “competence” by signing long term sales agreements for cheap energy before the energy sites had been researched, planned or developed. Now Reykjavík Energy and HS Orka are bound by agreements that neither company wants to fulfil due to foreseeable losses from selling the energy below its production costs.

The sharks were very aware that they were taking advantage of a country with mad politicians in a rare period in our history. When they were willing to sell almost everything, anything, anywhere to anyone. In a remarkable investor report called: “Harnessing unlimited power and profit from the world’s most progressive energy program,” an analyst made this great comment:

“It works out great for Iceland, too. It is very cheap for Iceland to deliver power to Century. The Icelandic power companies will make extraordinary profits on that power if aluminium prices stay strong. And if aluminium prices weaken, Iceland is not biting the hand that feeds it.”

This is how politicians build an elaborate house of cards that combine risk, debt and commitment that collapses if only one of the cards falls. Thus, the hands of future city governments have been tied and an insane construction binge in important areas has been commenced, all to benefit one company that’s lacking most of the needed permits.

Could anyone recount the details of the Century Aluminium Helguvík Smelter project at an international conference without being booed off the stage as a fraud? At an aluminium conference, however, such a man would actually bring more lust than an exotic dancer.

Despite being in the hands of extreme capitalists, the labour movement has not called for professionalism or long-term thinking in energy affairs. It simply demands that “every obstacle be removed.” Get the trucks rolling immediately.

In 2006 we were in the middle of a revolution, but the Wild Boys did not call themselves “The Aluminium Revolutionary Front”—they defined themselves as the norm, even though their scale was insane. If they were criticised, they started thinking of themselves as persecuted. Warlords are always persecuted moderates when they’re merely conquering neighbouring nations in the name of peace.

THE CORE OF THE PROBLEM

Throughout the years, polls have shown that a large part of Icelandic males aged 40–70 have been in favour of the collective insanity seen in the energy policy of 2006. The biggest problem seems to be with male voters of The Independence Party, where a vast majority has even considered the most extreme energy policy as the sole basis for the continued survival of Icelanders. That explains the great emotional attachment they have to dams and smelters. To secure their survival, the majority of them wants to cut back on our environmental regulations, and they have no standards whatsoever on the ethical background of the corporations coming to Iceland.

Therein lies Iceland’s most serious political ill. If everything were normal, our males would be conservative, moderate, aversive to risk, frugal, orderly and even a bit boring. This is an important group of people in every society. It contains a lot of average household fathers; it contains pillars of society, company directors, influentials, MPs and even journalists and editors. These are men that have the power to define what is normal and what is abnormal and/or excessive.

OF RESPONSIBLE PUNKS AND SURREALISTS

It is harmful for communities when a critical mass of their important males starts adhering to revolutionary and completely reckless ideas, adopting a blind belief in them. This group is not fit for governing anything while the situation lasts, and it is therefore no coincidence that the city of Reykjavík is now governed by the punkers and surrealists of the Best Party. A moderate mixture of surrealism and punk rock is a down to Earth, conservative and responsible policy when compared to the delusions and anarchy of the crazed men. They have proved very moderate and responsible, and have now moved the policy of Reykjavík Energy, Reykjavík’s energy company, into a more sustainable and modest direction. And the Left Green Social Democrat government did the same with Landsvirkjun, the national energy company.

Those that are worst off in this group of mad men share a mutual admiration for Einar Benediktsson (1863-1945). The Icelandic National Myth is perhaps best embodied in the figure Einar Ben, our poet of progress. His most recent biography gives a good picture of the kind of man he was and the impulses that motivated his actions:

What drives Einar Benediktsson on to undertake this long journey […] is his unshakeable belief in his own abilities to be of use to his impoverished fatherland in countries abroad. His dream is to furnish the money that will transform Iceland into a modern country, with towns, factories, railways, roads, harbours and large-scale farms. He carries nothing with him except his belief in himself…

Einar Benediktsson had great dreams for the future of Iceland, replete with hydroelectric dams, factories and railways. While his generation on both sides of the Atlantic saw their dreams become a reality, and sometimes a nightmare, Einar was to be disappointed in all his great hopes and ambitions. Henry Ford was born a year before Einar Benediktsson, and Sam Eyde, the founder of Norway’s Norsk Hydro was born three years after him. But Iceland failed to industrialize in the way Einar envisaged. Whether Iceland was fortunate or unfortunate to have missed out on the Industrial Revolution is something we can argue over. But the failure of Einar’s dreams left an unfilled space in the Icelandic soul. Iceland’s wealth came from fishing, but Einar’s ideas still hovered in the air, leaving a sense of a task left unfulfilled—the unfinished Icelandic dream. The Americans could move on from Ford to Gates. The Icelanders were still lacking a Ford.

One of the first bubbles in Iceland happened when businesspeople travelled the country buying rights to harness waterfalls in the beginning of the 20th century. Einar Ben had the Norwegian engineer Sætersemoen draw up a row of power plants spanning the entirety of Þjórsá. The drawings of the proposed power plants look magnificent and enticing and would without doubt be considered among Iceland’s most beautiful buildings had they been constructed. But how realistic were the plans? They had planned for harnessing Þjórsá to produce 600–800 MW—in 1918, nota bene. This does not include the rest of the water rights these men had secured for themselves, including Dettifoss and Gullfoss. In comparison one could note that today, one hundred years later, the City of Reykjavík uses 200 MW—on Christmas Eve, with every electric appliance running at full steam.

What did Einar plan on doing with all this energy in 1918? Aluminium production was barely on the horizon as a feasible industry, and televisions and freezers were but distant dreams. What were they planning to do with all the power? Produce fertiliser? The Gufunes fertiliser plant used around 20 MW when it was running at its peak. Who was to use all the energy and pay for the series of power plants? The answer is likely simple: No one. No one in the world could have found use for this energy.

Of course Einar could easily have harnessed a small stream to light up a small village, maybe even a cowshed or two. But there is no glory in that. The act would not appease the deranged men’s need for conquest and magnitude. There’s much more spunk, gusto and vigour in lining all of Þjórsá with power plants, even if the energy produced is way beyond what the nation can use one hundred years later. To this day, a lot of people think that Iceland’s government at that time was backwards, afraid of foreigners and somehow prevented the founding of a great and profitable company and “foreign investment.” But it’s enough to look at the numbers to see that the whole thing was a sham.

It’s so weird to think that, ever since, a certain group of Icelandic males have harboured a strange sort of national grief. It’s as if Einar’s unrealistic ideas have been haunting later generations of Icelanders. Not as fantasy, but as real, attainable goals or lost opportunities: “The dreams of our turn of the century poets have finally come true.” Remarked former PM Geir Haarde as he signed a deal with Alcoa in 2002. Yes, finally, the nation was dragged into a century old illusion.

THE MAD MEN VS. THE WISE GIRLS

The mob seems tolerate nothing worse than young, educated women who that use words like “professional” or “process.” Even if aluminium production in Iceland has been tripled over the last ten years, a lot of the crazy guys think that Iceland’s economic problems stem first and foremost from a lack of aluminium smelters.

Supporters of a new Century Aluminium smelter in Helguvík spent millions in advertisements campaigning against departing Minister for the Environment Svandís Svavarsdóttir, who delayed the building process with demands of a sober overview of the energy demand and environmental impact. The blogosphere went wild when Left-Green MP Kolbrún Halldórsdóttir spoke up against deep-sea oil drilling in Icelandic waters. One sensed a lynch mob in the making as former-Minister for the Environment Þórunn Sveinbjarnardóttir met with locals in Húsavík advocating for a full environmental impact assessment for a new Alcoa smelter—the audience was only lacking the pitchforks. The decline of The Independence Party is very evident in the fact that Katrín Fjeldsted lost her seat in parliament. She is a well-educated, intelligent and logical doctor and the only party MP who questioned the insanity. Every obstacle shall be pushed out of the way.

Icelanders harvest 1% of the world’s fish. We receive more tourists per capita than most nations. Iceland has harnessed five times the amount of energy that the nation needs to function, and we currently operate three aluminium smelters. But we have ALREADY harnessed five times more energy than our neighbouring countries. We are already an energy superpower—if everything were normal, such an investment should yield a fair bit of profit to the nation, if we don’t blow the proceeds and resources in another round of debt. But the discourse is so crazy. People act as if “NOTHING IS PERMITTED” when the energy production is already five times more than the nation can consume. Of the energy we produce, 90% already goes to smelters.

We already have everything a modern society needs. We just need to tend to what we have already built, to reap some profit from the power plants we have already constructed and take better care of what we’re currently fishing. People get insecure when interest groups moan: “Who will support us in the future?!?” as if Iceland is a country without foundations. The fear that is purposely spread is resulting in Iceland acting like a man that demands radiotherapy, chemotherapy and surgery to fix his headache. The truth is that the treatment will never cure him—but it might kill him. He will in the best-case scenario grow addicted to the drugs.

THEY TRIED TO BREAK US…

We are a small community and we need peace and room to work. That Björk should need to take time off work to fight the insanity is just a small example of the disturbance that thousands of Icelanders suffer every day because of this crazy nonsense. Living here will become unbearable if something like the reckless policy from 2006 goes full speed again. It is maddening that we cannot seem to leave our most beautiful areas alone. We are a small community where co-dependency is the norm and people are polite.

The new leaders are young and nice guys; Sigmundur Davíð loves old buildings and has good ideas for city planning. But behind them is a crowd of mad men, “fallen far from glory, reckless and so hungered.” Were four years from power enough to sober up the mentality in terms of the energy policy? What will come out of the “rethinking” of the Energy Master Plan? Will we be strapped up into another rollercoaster, just to take another ride of boom and bust? “They tried to break us. Will they try again?”

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%.

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 chance 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.”

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?

Landsvirkjun, Iceland’s national energy company, intended to channel river Skaftá to river Tungnaá river through Langisjór, which would effectively become a reservoir. The Skaftá dam (Skaftárveita) would have added another 7 km2 to the lake-reservoir with the purpose of increasing the energy capacity of planned dams in rivers Þjórsá and Tungnaá. The three planned dams in Þjórsá have been met with fierce local and national opposition whereas the construction of Búðarháls dam in Tungná is already taking place, its energy meant for increased aluminium production in Rio Tinto’s Alcan smelter in Straumsvík. Effectively, the damming of Langisjór would lead to a sediment build-up and increased turbidity which would destroy the lake ecosystem.

The enlargement of Vatnajökull national park involves two areas, which in total match 420 km2. On the one hand is the area of lake Langisjór, one of the biggest pristine lakes on Iceland’s highlands, and mountains Tungnárfjöll, which wilderness and unique formations are linked to volcanic activity on large-scale eruptive fissures. Amongst those are tuff ridges Grænifjallagarður and Fögrufjöll, which maturated during a Pleistocene volcanic eruption, as well as the north-east part of volcanic canyon Eldgjá, which in 934 spouted an enormous lava eruption. On the other hand is the uppermost part of the Skaftáreldar lava, south-east of volcanic fissure Lakagígar, which formatted during the well known 8 month long Laki and Grímsvötn eruption in 1783-4. Including the Skaftárledar lava in the national park is meant to protect the extremely uncommon biotope of the area.

According to geophysicist Helgi Björnsson, Langisjór and its surroundings make an unique area on a global scale as nowhere else is such enormous volcanic activity to be found under a Pleistocene glacier. The natural monument consisting of Lakagígar, Eldhraun and the tuff ridges lying from Grænfjallagarður and north-east on Langisjór’s both sides, has an unique educational and scientific value, and is considered likely to get on the UNESCO World Heritage List. The Eldgjá lava from 934 and the Skaftáreldar lava from 1783-4 are the biggest of their kinds during the last several millennia. Would Landsvirkjun’s ideas of changing Langisjór into a reservoir been realized it is considered that Langisjór would have filled with mud, all the way south to Útfall, in 80 years, and in about 150-250 years the whole lake would probably have been half-filled with mud. Roads would have been counstructed in the area, which along with dams, reservoirs, dikes and other structures, would have completely changed the area’s countenance for futurity.

As a part of the plan to heavy-industrialize Iceland, the right-wing government of Sjálfstæðiflokkur and Framsóknarflokkur (in power from 1995 to 2007, Framsóknarflokkur then replaced by social democrats Samfylkingin) excluded Langisjór and its surrounding area from the Vatnajökull national park in order to able the way for Landsvirkjun’s plans. Early in 2002 the management of the much debated Energy Master Plan of Iceland, published a temporary report on the valuation and comparison of possible hydro power projects, especially done for the government to compare different options with the infamous Kárahnjúkar dam, which then was in its beginning stages. The report – in which it stated that the environmental impacts of Kárahnjúkar dam would be the highest of all, which still did not cease its construction – displayed Skaftárveita not only as the most economically valuable project but also as one of the least environmentally destructive.

Such statements have systematically been objected by environmentalists, who now, by the officially declared protection of Langisjór, have seen one of their biggest victories realized.

A slide-show of photos from the area surrounding Langisjór can be viewed here.

Like explained on the project’s official website the process was “split into two phases. The first phase, 1999–2003, evaluated and ranked 20 large-scale hydro-power options, mostly located in the highlands, and the same number of geothermal options in 8 high-temperature areas.” The second phase was supposed to “rank all the options to produce the final result,” including “an evaluation of whether some areas should be conserved completely, without any energy-harnessing activities.” Proposed power projects were said to be “evaluated and categorised on the basis of efficiency, economic profitability, and how they will benefit the economy as a whole,” while the “the impact on the environment, nature, and wildlife” was also supposed to be evaluated, “as well as the impact on the landscape, cultural heritage and ancient monuments, grazing and other traditional land use, outdoor activities fishing, and hunting.”

TORFAJÖKULL AND KERLINGAFJÖLL PROTECTED – HELLISHEIÐI, REYKJANES AND KRAFLA AMONG “EXPLOIT-FRIENDLY” AREAS

The second phase’s report, as said before, was published in the beginning of July 2011, two years later than expected when the process started. On top of the protection list are two geothermal areas, around Torfajökull glacier and Kerlingafjöll mountains, which both have been viewed as preferable exploitation areas by the energy industry and its representatives in committees concerning the Master Plan. Other areas scoring high on the protection list are geothermal area Vonarskarð and rivers Skaftá and Hólmsá, south-west of Vatnajökull glacier, the latest-mentioned being a part of Landsvirkjun’s recently announced plan to build 14 new power-plants in the next 15 years. These areas are, according to the report’s authors, the highest ranking natural treasures that were taken into account in the making of the report.

On the other hand the geothermal areas on Hellisheiði by mountain Hengill, the Reykjanes peninsula and volcano Krafla, as well as river Tungnaá, are listed on the top of exploitation areas. Geothermal energy production has been going on Hellisheiði since 2006 (where Saving Iceland’s 2008 action camp was located ), resulting in highly increased sulphur pollution in the Reykavík capital area. There is a vast local opposition against the plant and the planned enlargement of it, its most recent manifestation being when residents of Hveragerði, living close by one of Reykjavík Energy’s boreholes, called the police to complain about constant noise coming from the borehole. Further construction is currently taking place in Hellisheiði as well as in Tungaá river where Landsvirkjun is building its Búðarháls dam that will produce energy for increased aluminium production in Rio Tinto Alcan’s smelter in Straumsvík, Hafnarfjörður. Already existing plans to increase geothermal energy production on the Reykjanes peninsula, for a planned Norðurál/Century Aluminum smelter in Helguvík, have resulted in worries of overexploitation – not only by environmentalists but also, and most recently, by Iceland’s National Energy Authority.

ÞJÓRSÁ RIVER NOT CONSIDERED NATURALLY VALUABLE

What mostly grabs one’s attention is the fact that Þjórsá river is llisted quite high on the report’s exploitation list, meaning that according to the authors, Landsvirkjun’s three planned dams in the river would not have any serious impacts on the environment surrounding the river. Thus the planned dams by Holt and Hvammur are number 15 and 16 on the list, while the damming of Urriðafoss waterfall – the most critical of all three – is located number 28, which is still above the list’s middle. This conclution completely contradicts environmentalists nation-wide and many local residents around the river, opposing all three dams. In an article e.g. published on Saving Iceland’s website, natural scientist and author Guðmundur Páll Ólafsson, criticised the rhetoric of those in favour of the dams:

When a glacial river is harnessed to generate electricity, this important function, and the binding of the greenhouse gas CO2, is diminished. What they generate is not green energy as the advocates of hydro-power plants and heavy industry maintain, but black energy. Dams and reservoirs hinder the function of glacial sediment in the oceans, and hence hydro-electric power plants that harness glacial rivers are far more harmful than has hitherto been believed.

The planned Þjórsá dams have also been highly criticised from a social perspective, most recently by a group of young locals who challenged Iceland’s government “to state officially that no dams will be built in the lower Þjórsá river, against the peoples wishes.” This happened shortly after a Supreme Court ruling stating that the decision of Environmental Minister Svandís Svavarsdóttir, to reject the construction of a dam in Urriðafoss waterfall in Þjórsá river, was illegal. The ruling was only a one small factor in the long and complicated farce concerning the Þjórsá issue – a farce including Landsvirkjun’s attempts to bribe local residents and the company’s threats of using expropriation in order to gain access to lands owned by people opposed to the dams. Following the publication of the Master Plan’s second phase report, Guðmundur Hörður Guðmundsson, chairman of environmentalist organization Landvernd, expressed the organization’s disagreement with Þjórsá’s position on the exploitation list, stating that a much better and more detailed research has to be done on the planned dams’ social impacts.

Interviewed by newspaper Fréttablaðið, natural scientist Guðmundur Páll Ólafsson voiced a very negative view towards the report, saying that the whole process of it marks the energy company’s coming retrieval. “My criticism is mostly based on the premises that the exploitation options are always at the forefront, but not to protect the Icelandic nature and Icelandic natural treasures from the outburst of the present,” Guðmundur said and added that the latter is much more important than to exploit certain areas. He also criticised the Minstry of Industry and the National Energy Authority for allowing Landsvirkjun to walk all over the second phase’s protective section.

THE COMING RETRIEVAL

Only a few days prior to the report’s publication Landsvirkjun announced the company’s future policy formulation, parallel to the publication of another report that was made for Landsvirkjun by a consulting service named GAMMA. The reports states that according to the results of the Energy Master Plan’s first phase, Landsvirkjun can duplicate its energy production in the next 15 years, promising between 9.000 and 11.000 thousand related jobs. If things go like planned, at least 3.000 people would be employed by energy-intensive heavy industry companies in 2025, while the so-called – and often doubted – derivative jobs would be a little more than 4.000, meaning that c.a. 4% of the Icelandic nation would work directly or implicitly for heavy industry. To make a good story better the director of Landsvirkjun, Hörður Arnarson, compared Landsvirkjun with the Norwegian oil industry, saying that if the company is allowed to follow its published strategy, only its dividend payment and tax payment could become 14% of the state treasury. Hence Landsvirkjun would be able to live up to the cost of Iceland’s police, courts, culture, sports, colleges and universities.

Aforementioned Guðmundur Hörður Guðmundsson, chairman of Landvernd, called Landsvirkjun’s strategy “the mapping of the next economical bubble,” pointing out that the financial amounts mentioned in the report are much higher than the amounts of the Kárahnjúkar dam project, which contributed fiercely to Iceland’s economic collapse in 2008. “How will the situation be here when all this construction will be finished?” he asked when interviewed by a left-leaning news-website Smugan, adding that Landsvirkjun is not the only energy company planning large-scale constructions. The editor of that same website, Þóra Kristín Ásgeirsdóttir, called the report “Landsvirkjun’s political manifesto” and asked when a time would come where expensive professionals would be hired to write a report about the immeasurable value of unspoiled nature instead of yet another report on the greatness of large-scale exploitation. In an open letter to Katrín Júlíusdóttir, Minister of Industry, Guðmundur Páll Ólafsson said that “in fact nothing has changed in the Minstry of Industry since the collapse […] except that the scurrility is more than before.”

ENVIRONMENTAL MINISTER PROMISES EMPTY-LOOKING CHANGES

As reported by Saving Iceland before, environmentalists are highly critical of the making of the Master Plan, especially in relation to a committee, nominated to sort the areas in question into three different categories: protection, hold and utilization. The committee did not include a single representative from environmentalist organizations whereas representatives from the energy and tourism industries, as well as the Ministries of Environment and Industry, had seats IN it. Minister of Environment and a Left Green MP, Svandís Svavarsdóttir, has now backed up the criticism, stating that there is, and has always been, an enormous advantage difference between environmentalists on the one hand and those in favour of extreme exploitation on the other. Interviewed by State TV station RÚV, Svandís said that within both the Ministries of Environment and Industry there is a will to strengthen environmentalists’ position, though no plans have been made how to actually execute that will.

Once again promises given about changes concerning the protection of Iceland’s nature seem to lack all real meaning.

It’s 14 years since the war ended over what was once the world’s largest copper mine, at Bougainville in Papua New Guinea, but Dateline has uncovered claims that the PNG government was acting under instruction from mining giant Rio Tinto, when it killed thousands of people who wanted the mine shut down. The allegations come from PNG’s former Opposition Leader, and now Prime Minister, Sir Michael Somare, in 2001 court documents obtained by SBS Senior Correspondent Brian Thomson for Dateline. In them, Somare says the company, and its subsidiary Bougainville Copper Limited, effectively used its wealth to control the government – a claim denied by BCL. With negotiations now underway to reopen the abandoned mine, could Bougainville be heading for a repeat of the bloody battle over its resources?

Since October 2006 Orkuveita Reykjavíkur (Reykjavík Energy) has produced geothermal energy on Hellisheiði, predominantly for the Norðurál/Century aluminium smelter in Grundartangi, Hvalfjörður. Since then increased sulphur pollution in the power plant’s surrounding area, as well as in the area around Reykjavík, has regularly become a topic of discussion and Sigurðardóttir says that the pollution’s impacts are systematically underestimated. Instead of using recent researches into the issue, Mannvit bases the EIA on prediction-models, but new studies by the University of Reykjavík indicate that the increased use of medicine for asthma and heart disease angina pectoris is directly linked to increased sulphur pollution.

Sigurðardóttir pointed out that according to an assessment made by the Public Health Authority (PHA) the construction at Gráuhnjúkar could increase the amount of sulphur in air by 40 percent. Since the energy production at Hellisheiði started in 2006, increase by 140 percent has already been measured at Hvaleyrarholt, close to Hafnarfjörður. The PHA’s concerns are the exact same as those from the PHA of Hafnarfjörður and Kópavogur. In the preliminary EIA there is no mention of climate and the fact that due to easterly winds the pollution from the power plant travels regularly to Reykjavík.

The impacts of hydrogen sulphide are well known but there is lack of knowledge about the long term impacts of low sulphur valency on people’s health. Sigurðardóttir said that nothing is known about the results of Reykjavík Energy’s experiments with refinery equipment. “Suitable equipment already exists but it is expensive and there is a question how much will there is to put it up” she said.

Mannvit, the engineering firm that made the preliminary EIA, is directly connected with the construction of Hellisheiði power plant and the planned expansion at Gráuhnjúkar. The company, which according to its website states to be “dedicated to the development of green energy”, is the result of the merger of Iceland’s three major engineering firms: Hönnun hf., VGK hf. and Rafhönnun hf. Due to the 2008 merger, Mannvit is linked to all major energy and heavy industry projects in Iceland, as the three merged companies “have played significant roles in Iceland’s development into a modern, industrialized nation,” like it says on their website. The list of Mannvit’s projects includes the three aluminium smelters in Reyðafjörður, Grundartangi and Straumsvík, as well as the Kárahnjúkar dam.

See also this analysis from Saving Iceland on the harmful effects of geothermal energy on an industrial scale: Development of Iceland’s Geothermal Energy Potential for Aluminium Production – A Critical Analysis PDF

In the video above, Indian author Arundhati Roy talks about her recently published book, Broken Republic: Three Essays, and how the Indian government is, along with international mining corporations, violating the indigenous of India, destroying their lands and displacing them, leading to a constantly increasing gap between the rich and the poor. One of the book’s essays, titled “Mr Chidambaram’s War”, focuses on the Dongria Kondh tribe in Odisha, who have fought against Vedanta’s and ALCAN’s bauxite mining for aluminium production over the last decades.

The following text explains Broken Republic’s content briefly:

War has spread from the borders of India to the forests in the very heart of the country. Combining brilliant analysis and reportage by one of India’s iconic writers, Broken Republic examines the nature of progress and development in the emerging global superpower, and asks fundamental questions about modern civilization itself.

Most Icelanders would like to see their country’s economy turn towards innovative industries rather than aluminium smelters, a new survey shows.

Vísir reports on the results of an online poll conducted by the business analysis company Miðlun. Respondents were asked what the most important field of employment was.

Of those who responded, 30.8% said domestic industry should be a top priority. This was followed by companies focusing on innovation (18.1%) and jobs related to the fishing industry (14.7%).

Only 13% said they believed heavy industry was the most important area of unemployment that Iceland needs to focus on. This was followed by the tourist industry, and housing servers for the internet.

There was a significant difference between the genders when it came to heavy industry, with 16.5% of men but only 9% of women giving the field top importance. By contrast, support for innovative technologies was relatively equal between genders.

Conservatives and centrists in Iceland have put a lot of faith in heavy industry – in particular, aluminium smelters – despite evidence that such projects do little to help growth. By contrast, the tourism sector is growing, and the vast majority of Iceland’s export-driven economy relies on fishing.

In February this year Iceland’s parliament voted in favor of a bill that would repay Britain and the Netherlands for money lost when the Landsbanki bank collapsed along with its high interest IceSave accounts in the two countries. The bill is the third one agreed upon by parliament since the collapse of Iceland’s three major banks in the fall of 2008, and the second one to be rejected by Iceland’s president but in March 2010 the majority of voters voted against the bill as it was at that time. The discourse on the IceSave topic seems to be never-ending and has split people into two fighting arrays: Firstly those who claim Icelanders are in no way responsible to pay the debts of a then privatized bank; secondly those who fear Iceland’s political status if the debts will not be paid at all.

In a press release from Landsvirkjun, the company’s director Hörður Árnason says that the loan is an important step in the plans for Búðaráls dam and that it reflects a high trust towards the company. But in fact, the loan – that accommodates one third of the needed amount – is dependent on other loans needed for the construction of the dam, which in other means that for the dam to be built Iceland has to pay the IceSave bill. The European Investment Bank has e.g. repeatedly delayed deciding upon a loan to Landsvirkjun while the IceSave contention is still not solved.

During a discussion in parliament today, prime minister Jóhanna Sigurðardóttir embraced the NIB loan but reaffirmed what she said to be the need to pay the IceSave debts. She also said that parliament members should not interfere with Landsvirkjun about where the company decides to harness energy. The government is, along with the labor market, working on increasing investment opportunities and building up the economy, Sigurðardóttir said.

The damming of Tungnaá river is supposed to produce c.a. 80 MW, which are meant for Rio Tinto-Alcan’s increased production in its aluminium smelter in Straumsvík, Hafnarfjörður.

Landsvirkjun’s original intentions were to channel Skaftá river to Tungnaá river, through lake Langisjór – a extraordinarily beautiful lake at the western edge of Vatnajökull – which would effectively become a reservoir. The Skaftá dam (Skaftáveita) would add another 7 km2 to the lake-reservoir with the purpose to increase the energy capacity of the planned dams in the Þjórsá and Tungnaá rivers. Effectively, the damming would lead to a sediment build-up and increased turbidity which would destroy the lake ecosystem. In February this year environmental minister Svandís Svavarsdóttir announced the preservation of Langisjór, meaning the end of these energy fantasies.

Together with speakers from Sól á Suðurlandi commedians Saga Garðarsdóttir and Ugla Egilsdotttir will perform and finally there will be live music from Mukkalo.

The event will take place on the upper floor of café Glætan,  19 Laugavegi, 17.00 hrs., Wednesday March 2.

In early 2010 Svavarsdóttir rejected land-use plans, made by the parishes of Flóahreppur and Skeiða- and Gnúpverjahreppur (rural districts along Þjórsá) at the request of Landsvirkjun, which had also paid for the preparations to the changes in the plans. A contract about Landsvirkjun’s financial involvement in the land-use plan was signed in July 2007, and included e.g. that the company would pay for the making of the plan. In addition, Landsvirkjun was to pay for road and water supply construction in the area, as well as improved mobile phone connections – all constructions that the state is already legally bound to take care of.

Landowners by Þjórsá relegated the contract to the Ministry of Transport, which ruled it illegal since only the municipality could pay for the making of the plan. In September 2009, the National Broadcaster, RÚV, reported that the municipality would most likely repay the 6.5 million Icelandic krónur that Landsvirkjun had already paid the council.

Legal uncertainty about Landsvirkjun’s financial involvement
The Minister’s decision to reject a part of the plan was made on the grounds that according to Icelandic law, such plan changes are to be paid for by the communities themselves, and any third-party involvement in the costs is illegal. The rejection was sued by the council of Flóahreppur and ruled illegal by the District Court. The Minister appealed to the Supreme Court, which on last Thursday, February 10th, confirmed the District Court’s decision, stating that Landvirkjun’s involvement was not illegal.

At the time the contract was made, nothing in the Icelandic law said that an outside party could not become financially involved in such a project. Nevertheless the law said that land-use plans should be paid by municipalities or particular planning funds. In the beginning of 2011 a law amendment went through parliament, making it clear who is allowed to pay for plan making and who not.

Financial Minister Steingrímur J. Sigfússon, who is also the chairman of the Left Green party, said in parliament yesterday (February 14th) that the Court’s ruling is not a condemnation of the administration of the Ministry of Environment. Those who read the judgement see that an uncertainty had arisen about the legality of an outside party paying for a part of the plan making; two ministries came to the conclusion that it is not legal but the court came to another decision, said Sigfússon.

Rejection of the dam only
According to a recent announcement from the Ministry of Environment, the rejection had only to do with a particular part of the land-use plan, i.e. the Urriðafoss dam. The Ministry also claims that it was ready to validate all other parts of the plan when ready without the dam. But instead the council decided to start a whole new process and make a new land-use plan from the scratch – work that is still not finished.

Director of the local council lied about construction delay
Shortly after Supreme Court’s decision, Margrét Sigurðardóttir, the director of Flóahreppur council, lied when interviewed by the state-owned radio RUV, stating that Svavarsdóttir’s decisions had stopped all detailed land-use plan from taking place. People living in the region have proven this wrong and pointed out that all kinds of construction has taken place during the last year, some of it on behalf of the local council, e.g. school buildings, residential houses and stables.

Leftist news website Smugan spoke to local people who said Svavarsdóttir’s decision did even not delay the construction of the dams themselves, since landowners by Þjórsá have still not signed any contracts about the use of their lands. Therefore no dams can be built, regardless of the minister’s decisions. In 2008, Friðrik Sophusson, director of Landsvirkjun at that time, said that if meetings with local farmers would not go as expected – meetings that the farmers just announced would never take place – expropriations might be used.

According to Smugan, members from both of today’s government parties have promised farmers by Þjórsá that no expropriations will take place, which fits well to Þórunn Sveinbjardóttir’s (then Minister of Environment) reaction to Sophusson’s statement in 2008. Today, Landsvirkjun though still claims that the company will continue its preparations for three dams in lower Þjórsá but wait for the results of a framework programme – currently in the making, about the use and protection of natural resources – before final decisions are made. Prime Minister Jóhanna Sigurðardóttir recently said that the current government opposes the planned damming of Þjórsá.

Sól á Suðurlandi, a local organization fighting against the Þjórsá Dams, has now officially demanded detailed answers from the district council, about what exact plans, others than Urriðafoss dam, have been delayed because of the Minister’s rejection. The organization also says that the delay of the planned dams can be explained by many other different factors, e.g. the fact that Landsvirkjun  generally lacks access to money, manifested in the fact that the company still has not found enough money to fund Búðarháls Dam in Tungná river (north-east of Þjórsá). Nevertheless the company has received all necessary permissions for that projects, which is obviously completely different then the situation with Þjórsá.

Accusations back and fourth
Since the Supreme Court ruling, accusations have been thrown back and fro between the two opposing parties; environmentalists on the one hand and heavy industry proponents on the other. MP’s from the opposition have demanded that Svavarsdóttir resigns from her position and the Confederation of Icelandic Employers (SA) – one of the most dedicated pro-heavy industry lobbyist organizations in Iceland – said the Minister’s aim was only to “please narrow political interest in the Left Green party.”

Members of the Left Greens have responded to this critique in defence of Svavarsdóttir, saying that a Minister of Environment should always allow nature the benefit of doubt and people should be happy to finally have an Environment Minister of that actually does so. Svavarsdóttir herself has said that she has no reason to resign from her position, a statement supported by Prime Minister Sigurðardóttir.

In a weekly discussion show on state TV station RÚV, Mörður Árnason, MP from Samfylkingin (the social-democratic People’s Alliance) accused Landsvirkjun of bribery and referred to the above-mentioned promises Landsvirkjun gave the municipality before the contracts were made in 2007. Árnason’s statement has been highly criticized by the heavy industry lobby and particularly by Landvirkjun, which in a press release refused the accusations and said that the company had only worked closely with the municipality like it always does. However, the press release does not mention the different parts of Landsvirkjun’s financial involvement, apart from the payment for the plan making itself.

What is all this energy for?
During the whole media frenzy following the Supreme Court’s decision, neither Landvirkjun nor Flóahreppur council nor the parliament opposition have been asked the simple question: Why are three dams to be built in lower Þjórsá; Urriðafoss (130 MW), Hvammur (82 MW) and Holt (53 MW)?

In November 2007, Landsvirkjun announced that the company would not sell any more energy to companies planning to build aluminium smelters in the south-west part of Iceland, but rather to data centres, silicon factories and other such production, which is low-impact compared to aluminium production. But due to older contractual obligations the power company is bound to provide energy to Rio Tinto-Alcan’s planned expansion of its aluminium smelter in Straumsvík, Hafnarfjörður. Also there is an existing contract about energy for Verne Holding’s planned data centre in Reykjanes. Landsvirkjun obviously needs more power plants.

However, the data centre needs only 25 MW, which is about 10% of the planned energy production in Þjórsá, and Rio Tinto-Alcan needs about 75 MW, which leaves Landvirkjun with 165 MW from the Þjórsá Dams, not to mention the energy that is supposed to be produced with Búðarháls Dam in Tungnaá River (80 MW), making the total sum 245 MW. So what is all this energy for?

Like repeatedly mentioned by Saving Iceland and other environmentalists, both Norðurál (Century Aluminum) and Alcoa are faced with a lack of energy: Norðurál for its smelter in Helguvík, currently in the making, and Alcoa for its planned smelter in Bakki. Environmentalists have pointed out that at least eight power-plants are needed for the Helguvík smelter and while the majority of them will be geothermal plants, environmentalists have made a guess that Urriðafoss Dam will be the last of the eight needed. Similarly, Alcoa states that the Bakki smelter will be run only on geothermal energy, whereas environmentalists – especially Saving Iceland – have made it clear that hydro dams will have to be built if the smelter is supposed to run at all.

This leads inevitably to a simple question: Are the Þjórsá Dams planned for more aluminium smelters?

Miriam Rose

After 13 years of continuous battle, the people’s movements to save the Niyamgiri hills from bauxite mining have won their land and livelihood back from the jaws of extinction. Niyamgiri is one of a series of threatened bauxite capped mountains in Orissa. On August 21st 2010 a review of the Vedanta mining project carried out by the Ministry of the Environment exposed the company’s “total contempt for the law”, having violated a number of environmental regulations, and revealed “an appalling degree of collusion” by local government officials with Vedanta. A few days later Environment Minister Jairam Ramesh called a halt to the project.

Two months later the Environment Ministry also rejected Vedanta’s plans for a six fold increase in capacity at the Lanjigarh alumina refinery, the plant at the foot of the Niyamgiri hills which would have been served by the 8 million tons of bauxite mined above. The company were also warned to follow pollution guidelines closely and were reprimanded for starting expansion work without prior permission (1). One month after that (November 2010) Vedanta Chairman and founder Anil Agarwal’s extravagant plans for a $3.2 billion ‘Vedanta University’ in Orissa were also knocked back when the High Court ordered that 6892 acres of beautiful coastal land, including part of the sacred Jagannath temple, had been illegally acquired and should be returned to the ousted inhabitants (2). An incredible victory! The events sparked celebrations across Orissa, and held the state government’s assembly in limbo for several weeks as ministers furiously argued over what had become an iconic battle of tribal people and people’s movements versus a mega corporation.

The Niyamgiri story has also been hitting headlines in the West in the past two years, focussing on the involvement of celebrities such as Bianca Jagger and Michael Palin, and the glitsy media campaigns of Action Aid and Survival International. Reading the papers you might think these large NGO’s led the fight against Vedanta. You would not hear that Action Aid accepted donations from Vedanta subsidiary Sterlite in 2003, and has signed MoU’s with Vedanta’s investors, ICICI bank (3), or that NGO professionals in their big jeeps have succeeded in splitting people’s movements in the area, paying particular tribal activists to be the face of their campaigns, and encouraging de-politicisation of the struggle. You would also not hear that the big NGO’s only joined the fight in 2007 and 2008, long after the people’s organisation Niyamgiri Surakshya Parishad (later Samiti) was formed in early Jan of 1998 in a gathering of more than 200 people in Asupada, a village at the foot of the lush green mountains. Nor that the Adivasi’s (tribals) are far from the helpless figures the NGO campaigns portrayed, but have fought tooth and nail for decades to successfully preserve their mountains and way of life from various threats, including logging during the British colonial rule. Sadly, the culture of protest orchestrated by the big NGOs was never intended to stimulate long lasting grassroots activism or to make the existing struggles visible. They were selling their product in India and the West, and by doing this they were actually suppressing the politics and the voice of the real people’s movements.

For the grassroots movements in Orissa the fight has been long and hard, with moments of great empowerment and also deep sadness and brutal police repression. After years of chasing away company men who surveyed their land with tools and clipboards, the threat of displacement finally became real for the Khonds when the Orissa government ordered the compulsory acquisition of farmlands around the proposed Lanjigarh refinery in 2003. During the land acquisition process government officials promised that the company would provide jobs to every family who sold their land. In reality very few got jobs or compensation. Instead local people suffer skin lesions, dust pollution, deaths from lorry accidents on the new road, TB and contaminated crops. One family who’s farm is just outside the refinery wall have begged the company to buy them out so they can leave their contaminated land and move somewhere safer, but Vedanta have refused.

Later that year the chimney of a BALCO refinery being built in the neighbouring state of Chhattisgarh collapsed killing 57 workers, a stark reminder of the unsafe conditions for aluminium workers in India. 2003 also saw the illegal arrest and detainment of Lingaraj Azad, state president of the political party Samajvadi Jan Parishad (Socialist People’s Council) and also convenor of Niyamgiri Surakshya Samiti (Council for the Preservation of Niyamgiri) who was jailed for 100 days on two occasions. In 2004 a rally of a thousand tribals protesting forceful evictions was violently broken up by police who ‘lathi-charged’ the crowd, striking them with long thin sticks that break the skin, and injuring women and men alike. Thirteen activists were arrested on invalid charges. On 23rd March 2005 the first state-sponsored murder took place when local activist Sukru Majhi was killed. This would be followed in 2010 by the murder of Arsi Majhi. 2000 had also seen police open fire on a meeting of tribals regarding another Orissa alumina refinery owned by Utkal in Maikanch village, killing three and wounding seven (4). In 2007 the Norwegian Government’s pension fund pulled its $13 million of shares in Vedanta as it believed its involvement could result in “an unacceptable risk of contributing to grossly unethical activities”, and in 2010 the Bank of England similarly dis-invested from the company on human and environmental grounds after UK authorities in India upheld allegations of illegal and unethical activity against tribal people.

Blockades of the Lanjigarh refinery by women and children in particular were a regular occurrence during the long struggle. One of the most symbolic protests took place in January 2009 when 10,000 mostly tribal people encircled the Niyamgiri hills in a 17km long human chain, vowing to protect its sacred ecology and its ancient inhabitants. A week earlier 7000 protesters had marched to the gates of the aluminium refinery saying ‘Vedanta Hatao!’ (Remove Vedanta!), demanding that the company leave the area (5).

Here in the UK, where the company is registered (despite violating a number of British company laws), the campaign came to a head at the 2010 Vedanta AGM, which was dominated by the Niyamgiri issue for the fifth year running. A Guardian article entitled ‘Vedanta’s very embarrassing silence’ reported how during the meeting our friend Orissa activist and film-maker Samarendra Das challenged the Lanjigargh refinery’s manager Mukesh Kumar’s claims that the mountain was not sacred to the affected Dongria Khond tribe. Testing his knowledge he demanded that Mr Kumar give the Dongria’s name for their holy Niyamgiri mountain, which he could not (6). The presence of paid protesters from Survival and Action Aid was minimal at the 2010 AGM, whereas they had dominated the previous years meeting, showing the volatility of NGO support and commitment. They may have believed the fight was over as the company appeared on the brink of bringing in the bulldozers and showed no signs of stopping.

The battle for Niyamgiri was fought on many fronts; through international solidarity, court room action, media campaigns, shareholder activism and in depth research and understanding of the aluminium industry itself (embodying what Gandhi termed ‘satyagraha’- the truth force). But at the root of all of these actions was the energy and determination of the Dongria Kondh, who’s understanding of the fallacies of ‘development’ are often as sharp as any university professor. In an improvised songKucheipadar village Deka musician and elder Salu Majhi is recorded asking how mining can be called ‘development’, and describing the ideological rift between the way they value their environment and societal well being, and the quantified measures of the company and state:

Use all this up in 25 years, very clever my friend
We are kui people
Storing water wont be enough
Our life is in our flowing streams (7)

Evidence agrees with Salu. Out of half a million Indians displaced by mining in the last 10 years in just four states, 92% are much worse off, even if they receive the paltry compensation offered by companies.

So where is Vedanta now? According to the Sunday Times Rich list the company founder and chairman Anil Agarwal is still tenth richest man in UK with wealth growth of a record 583% after the financial crisis. He remains very well connected in London, yet somehow manages to be invisible in the media, despite being an almost despotic character with a rags to riches story and a childish temper when he doesn’t get his way. Using his connections he has managed to rapidly diversify the business of the company, teaming up with the Scottish oil company Cairn Energy to exploit the controversial oil fields around Greenland. Two of Vedanta’s board members also serve on the board of Cairn India and one (Naresh Chandra) is also on the advisory board of BAE, not unusual for aluminium companies due to the direct link between aluminium production and arms manufacture (8).

But we must celebrate our victories before turning to face the next fight. In the three years since Saving Iceland’s 2007 International Conference against Heavy Industry we have seen a series of projects halted by people’s movements, a success we never would have dared to dream of! Trinidad’s La Brea smelter was canceled in 2010 after years of protest by our friends from No Smelter TnT and others. The site is now being reclaimed by local people who have permission to build a bio-digester or a mango plantation there! (9)

In Iceland all smelter construction ground to a halt following the economic crisis, and Alcoa’s plans for a mega smelter in Husavik, North Iceland, may have fallen through all together thanks to the determination of Saving Iceland and others to reveal the true costs of the dams and geothermal plants needed to power the project. In Greenland public opinion in favour of Alcoa’s enormous planned smelter plummeted after activists from Avataq sought international help to educate local people and politicians on the history of the aluminium industry and the clear lessons for communities dependent on an aluminium economy. The Greenland smelter now looks a lot less certain than it has long appeared. On top of the massive turn around of aluminium industrialisation in Orissa these victories are enormous.

Most importantly they all demonstrate the power of people’s movements to stop corporations in their tracks. Though we may sometimes doubt it, our grassroots actions to understand, expose and resist projects which we know will not benefit people or planet, are powerful, and they work. Davids continue to bring down Goliath’s… in fact they are the only thing that ever will.

*

The cancelling of Vedanta’s Niyamgiri project also occurred just after the publishing of Samarendra Das’ and Felix Padel’s seminal book on the fight and the global aluminium industry ‘Out of This Earth: East India Adivasis and the Aluminium Cartel‘, which was in the Indian best seller list and was read by the Home Secretary of India. For an in depth analysis of the aluminium industry and the struggle in India the book is highly recommended.

Notes:

(1) Govt says no to Vedanta’s $8.5 bn expansion plan, NDTV Correpsondent, October 21, 2010 (New Dehli).

(2) Deborah Mohanty, Indian Express, 16th Nov 2010. ‘Land acquisition procedure for Vedanta University illegal‘

(3) Das, Samarendra and Padel, Felix 2010 ‘Out of This Earth: East India Adivasis and the Aluminium Cartel‘. Orient Blackswan, Delhi.

(4) Das, S. and Padel, F. 2010,’Out of This Earth: East India Adivasis and the Aluminium Cartel‘, Orient Blackswan

(5) Saving Iceland, Jan 30th 2009. ‘Ten Thousand People Encircle the Niyamgriji Mountains in Orissa, India‘

(6) Peter Popham. ‘Vedanta’s very embarrassing silence’. The Guardian. Friday, 30 July 2010

(7) An excerpt from Samarendra and Amarendra Das’ 2005 documentary film Wdira Pdika (‘Earth Worm Company Man’

(8) Press Association, 25th April 2010. The Guardian ‘Rich list reveals record rise in wealth: Collective wealth of Britain’s 1,000 richest people rose 30%, the biggest annual increase in list’s 22-year history‘

(9) Richardson Dhalai, September 27th. ‘Rowley slams Govt’s decision to scrap smelter‘, Newsday.

A week after the signing of the deal with Alcan, Landsvirkjun invited tenders on the construction of Búðarháls-powerplant and related constructions. The tenders close at the end of August, and construction is expected to be finished by the fall of 2013. Preperational work for the powerplant construction started earlier this year after this project had been pointed out by the government’s Letter of Intent with the Industry Unions as the most prominent project to create jobs in the country and revive the economy. Preperation is supposed to be finished by the 1^st of December, and construction of the powerplant could begin at anytime after that.

In the middle of July Alcan made another deal, this time with Landsnet (National Power-Grid). A subsidiary of Landsvirkjun, concerning the transport of the newly purchased 75MW to the smelter in Straumsvík. That deal tied the final knot in securing the energy needed to power the expanded smelter, enabling Alcan to start the construction of the expansion and committing Landsnet to build the Búðarháls-powergrid and connecting the Straumsvík smelter to it before the end of 2013.

Búðarháls-powerplant will produce 585GW og power each year and will require a 7km2 large reservoir, Spoðöldulón, to be created with the construction of a 2km long dam over the river Kaldahvísl, just above where it meets the river Tungnaá. The picture on the right displays the planned Búðarháls-grid, the high voltage powergrid that will connect Búðarháls-powerplant to the powerstation at Sultartangi, that will have to be expanded to receive and distribute the new energy. The Environmental Impact Asessment (EIA) for the powerplant and grid was done several years ago by the Skipulagsstofnun (Icelandic National Planning Agency) overseed by Verkfræðistofan Hönnun (Mannvit), but these are the same offices that have done the EIA’s on areas that have been invaded and sacrificed on the altar of greed in recent years, and the results of these EIA’s is always supportive of further industrial build-up, usually without many restraints. Some of their newest ideas have included suggestions of lessening the negative impact of constructions by beautifying them in ways that can further the beauty of the environment instead of destroying it.

This next picture displays all of Landsnet’s current projects, building and connecting powergrids mostly. The second one, taken from tenders released earlier in the year, shows all of the companies projects that were under preperation at the start of 2010, some of which are now under construction like Búðarháls. An interesting point in these plans, is the fact that the powergrid for lower-Þjórsá river and the connecting grid for an aluminum smelter in Bakki are on them, but these projects are still undecided and highly controversial.

The Struggle So Far
The campaign to defend Europe’s greatest remaining wilderness continues. For the past five years summer direct action camps in Iceland have targeted aluminium smelters, mega-dams and geothermal power plants.

After the terrible destruction as a result of building Europe’s largest dam at Kárahnjúkar and massive geothermal plants at Hengill, there is still time to crush the ‘master plan’ that would have each major glacial river dammed, every substantial geothermal field exploited and the construction of aluminium smelters, an oil refinery, data farms and silicon factories. This would not only destroy unique landscapes and ecosystems but also lead to a massive increase in Iceland’s greenhouse gas emissions.

Political Landscape
Saving Iceland has reintroduced civil disobedience and anarchist ideas into Icelandic grassroots and demonstrated numerous methods of direct action, many of which were utilized in a highly successful manner in the ‘Kitchen Utensils Uprising´ of last year, where experienced Saving Iceland activists constantly stood in the forefront pushing boundaries. Saving Iceland and our work throughout the years was a major catalyst in toppling the corrupt pro-heavy industry ‘Alcoa government’.

However, last year´s general elections were a major blow for the environmental movement in Iceland, with the ‘Left Greens’ booting their own minister of the environment out for being genuinely concerned about environmental values. The leader of the party denounced their own environmental policies for being too ‘puritanical’ to be applicable in such times of financial crisis. With this and the continuing of the People’s Alliance in government we are still looking at a heavily fortified pro-heavy industry government, doing away with any pretence of being green or even remotely progressive. On top of this, corrupt labour unions are firmly in the grip of the aluminium lobby calling for job growth regardless of the environmental costs.

The Situation Now
The deep financial and ethical crisis that hit Iceland in the autumn of 2008 caused the energy companies temporary difficulties in obtaining foreign loans for their projects, but the aluminium lobbyists are more bloody minded than ever. Now their argument is that with the economic collapse, Iceland can simply not afford to take note of environmental concerns. This actually exposes the underlying truth that the aluminium lobby have always been aware of the validity of the environmentalists point of view. The aluminium lobby want to further their horrors, on grounds of a crisis which they are largely responsible for having created.

The banking side of the crash tends to be overemphasized while other major drivers of the crash are often ignored. The report of the Special Investigation Commission (SIC), which looked into the events leading up to and causing the financial crash, has however focused on the effects of heavy industry in a key chapter of their report. The expansion of Iceland’s financial system beyond the country’s sustainable limits, is unequivocally traced back to the enormous projects of the heavy industry build-up. This chapter has been ignored by the media, and so has another chapter that stated the media’s own culpability as unquestioning servants of the bank and industrial establishments.

A fundamental problem with the SIC report and the general atmosphere of denial that greeted it is that the report comes from within the very heart of the rotten State of Iceland. As such its real function is to keep all the options for dealing with the huge amount of corruption and democracy deficit safely within the sphere of the courts and parliamentary politics: Firmly under the control of the very establishment that created all this power abuse in the first place.

In case of the financial frauds this will mean years of long, drawn-out court cases which will gradually loose all meaning to the public, which have been left to pay the massive debts generated by the frauds.

In case of the deep rooted culture of corruption and the climate of fear which the aluminium corporations and power companies so thrive in, the promises of transparency and democracy are nothing but a smokescreen for an even greater corporate plunder of the countries’ energy resources. This plunder, supported by restructuring obligations in loan agreements with the IMF, is a continuation of a deeply corrupt policy of privatisation and ruthless industrialisation, the very same policies that created the crisis.

Current action targets
The Century aluminium smelter in Helguvík, targeted by Saving Iceland last two summers, is still slowly being built. Where the electricity for the plant is to come from is still uncertain, but it will require up to eight new power plants, at least seven of which will be geothermal on the Reykjanes Peninsula (HS/MAGMA) and Hellisheiði (OR – Reykjavik Energy). One of the geothermal plants powering Century’s smelter could be in Bitra, close to Hengill, and the eighth power plant will probably be a large dam on the beautiful Þjórsá River that Landsvirkjun (National Power Company) is eager to build as soon as they can. Norðurþing is in negotiations with Alcoa about an aluminium smelter in Bakki/Húsavík with energy coming from fragile wilderness areas in the north. Platina Resources want to do gold and other mining research in the Eastfjords.

Take action!
This year, instead of organizing a summer protest camp, we call for resistance throughout the seasons. We especially call for Icelanders to take action all year round but also environmentalists worldwide to come to Iceland, where we will warmly welcome any kind of individual actions against the aluminium corporations and the energy companies active in destroying the environment.

Symbolic actions have turned out not to be enough to stop the forces of destruction. The aim of actions should be to prevent any further rape of the land. Saving Iceland gives its wholehearted solidarity to any actions that hit the aluminium industry and the power companies where its most effective.

Even if you can not come to Iceland to do direct actions your help to our struggle with solidarity actions, donations, translations and by spreading the word will be invaluable.

For information on targets read:

The Nature Killers

The Saving Iceland European Target Brochure

S.I. European Target Brochure Update