Samherji: Namibian quota fees were in line with market prices
Companies in Namibia that were affiliated with Samherji were never allocated any catch quotas and paid the market price for the quotas that they leased, the Icelandic fisheries company has confirmed.
As previously reported by SeafoodSource, in July this year, Norwegian law firm Wikborg Rein presented Samherji’s board of directors with an investigation report that had explored the strong accusations of bribery and other illegal practices made against the company's operations in Namibia. The board has been making some of Wikborg Rein report’s findings public to refute or correct certain allegations, with information already released about the losses suffered in the country and the taxes paid to local authorities.
With claims made that the price paid for the lease of fishing rights was far below market prices, it also commissioned a comparison of price agreements made by its affiliated companies, including Namgomar and Fishcor, with six unrelated Namibian companies.
In a statement, Samherji said that a total of 39 comparisons were made, and that in all but one case, the price it paid for catch quotas through agreements with Fishcor and Namgomar was not less than the price paid under the other companies’ agreements.
“Samherji firmly denies that quotas were leased from these parties at a price that was lower than the market price. Allegations to that effect are unfounded. In fact, the price paid under the agreements with Fishcor and Namgomar was always equal to or higher than the price paid by Samherji-affiliated companies to other quota holders in Namibia,” the company said. “The allegations that have been made about the price for quotas form part of a larger narrative according to which companies affiliated with Samherji are accused of having paid bribes to secure catching agreements grossly below market prices. It has also been claimed that companies in the Samherji Group did everything in their power to pay as low tax in Namibia as possible and that these contributing factors, together with the rich profits from operations in Namibia, mean that Samherji was in fact robbing a developing country.”
To ensure that the prices paid by Samherji's affiliates under the agreements with Fishcor and Namgomar were not unreasonably low, a price comparison was also made in similar agreements made by other domestic and foreign fishing companies with quota holders in Namibia.
Again, in the vast majority of the contracts examined in this second wave of comparisons, the Fishcor and Namgomar fees were equal to or higher than these other fishing companies' contracts.
“Despite the fact that individual employees did not follow procedures and working methods that Samherji strives for in all its operations, it is clear that the company is responsible for discipline and supervision and must intervene decisively when the required vigilance is not maintained. It seems clear that the leasing of catch quotas in Namibia has in some cases lacked such control and intervention. However, this does not change the main conclusion of this analysis, which is that companies affiliated with Samherji paid market prices for the quota they leased,” Samherji's statement said.
The company added that it will continue to correct misrepresentations and also report on deficient procedures and working methods.
Allegations were first directed at Samherji and its operations in Namibia in November 2019. At that time, WikiLeaks published thousands of documents claiming to expose corrupt schemes by the company to gain access to rich fishing grounds in the country.
Wikborg Rein was mandated to assist Samherji in its investigation into the relevant facts. The subsequent eight-month investigation saw it analyze more than 1 million documents and interview several personnel. At the same time, forensic accountant firm Forensic Risk Alliance (FRA) was engaged to analyze payments and other transactions related to the Namibian business.
Last month, Samherji’s board substantiated that its Namibian affiliates paid the equivalent of ISK 6.5 billion (USD 46.7 million, EUR 40.1 million) to the Namibian treasury while they were in operation. This total included tax payments and special levies for the utilization of catch quotas. In addition, companies affiliated with Samherji paid a total of ISK 12 billion (USD 86.3 million, EUR 74 million) for quotas, a lot of which went to state-owned companies and institutions.
It was also confirmed that its Namibian subsidiaries generated revenues of ISK 41.1 billion (USD 295.4 million, EUR 253.4 million) for 2012-2018, while its operating expenses totaled ISK 38.9 billion (USD 279.6 million, EUR 239.8 million). As such, the net loss for the period, adding depreciation, finance costs, income tax etc. amounted to ISK 950 million (USD 6.8 million, EUR 5.9 million).
Samherji ceased all of its Namibian operations in 2019. In January this year, it announced plans to introduce a new company-wide compliance program.
Photo courtesy of Samherji