Saving Iceland

A special report for Saving Iceland by Miriam Rose

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. Read More

On 6^th March Tom Albanese, the former Rio Tinto CEO, was appointed CEO of Vedanta Resources, replacing M S Mehta. The newspapers are billing his appointment as an attempt to ‘polish the rough edges off [Anil] Agarwal’s Vedanta’ and to save the company from its current crisis of share price slumps, regulatory delays and widespread community resistance to their operations. This article looks at Albanese’s checkered history and the blood remaining on his hands as CEO of Rio Tinto – one of the most infamously abusive mining companies.

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) Read More

News from our friends at Foil Vedanta:

More than 100 protesters from Foil Vedanta and other organisations crowded the entrance to British mining company Vedanta Resources’ London AGM and poured red paint on the steps on Tuesday in an attempt to disrupt the meeting. In Goa and Odisha in India where Vedanta operates, parallel demonstrations involving thousands of people affected by the company’s activities took place on Monday and Tuesday. Inside the AGM the meeting was once again dominated by dissident shareholders who pointed out Vedanta’s racism, major environmental and social violations and poor governance.

See the Foil Vedanta website for further information and photos.

Recent studies show links between asthma and sulphur pollution from geothermal power plants. Reykjavík Energy denies their connection with newly discovered effluent water lagoons in Hellsheiði. The Parliament’s Industries Committee orders a report that condemns preservation of nature, presented in a parliamentary resolution for Iceland’s Energy Master Plans. Alterra Power announces lower revenues in Iceland and their plans to enlarge the Reykjanesvirkjun geothermal power plant despite fears of over-exploitation. Greenland faces Alcoa’s plans of an import of cheap Chinese labour en masse, while Cairn Energy dumps toxic materials into the ocean off the country’s shores.

This is the content of Saving Iceland’s first round of brief monthly news from the struggle over Iceland’s wilderness and connected struggles around the world.

Hellisheiði: Asthma, Sulphur Pollution and Effluent Water Lagoon

Those who promote large-scale geothermal energy production as green and environmentally friendly, are once again forced to face another backlash as a recent research suggests a direct link between sulphur pollution from the Hellisheiði geothermal plant and asthma among the inhabitants of Reykjavík. The results of this particular research, which was done by Hanne Krage Carlsen, doctorate student of Public Health at the University of Iceland, were published in the Environmental Research journal earlier this year, showing that the purchasing of asthma medicine increases between 5 and 10 percent in accordance with higher sulphur pollution numbers in the capital area of Reykjavík.

Adding to the continuous unmasking of the geothermal green myth, environmentalist Ómar Ragnarsson recently discovered and documented new lagoons, created by run-off water from Reykjavík Energy’s geothermal power plant in Hellisheiði. At first Reykjavík Energy denied that the lagoons’ water comes from the company’s power plant, but were forced to withdraw those words only a few days later. Ómar had then brought a journalist from RÚV, the National Broadcasting Service, to the lagoons and traced the water to the plant. Despite the company’s withdrawal, they nevertheless rejected worries voiced by environmentalists, regarding the very possible pollution of ground water in the area, and insisted that this is allowed for in the plant’s license.

According to the plant’s license the run-off water should actually be pumped back, down into earth, in order to prevent polluting impacts and the creation of lagoons containing a huge amount of polluting materials. Ómar’s discovery shows that this is certainly not the case all the time, and additionally, the pumping that has taken place so far has proved to be problematic, creating a series of man-made earthquakes in the area, causing serious disturbances in the neighbouring town of Hveragerði.

In an article following his discovery Ómar points out that for the last years, the general public has not had much knowledge about geothermal power plants’ run-off water, and much less considered it as a potential problem. Ómar blames this partly on the Icelandic media, which have been far from enthusiastic about reporting the inconvenient truth regarding geothermal power production. One of these facts is that the effluent water, which people tend to view positively due to the tourist attraction that has been made of it at the Blue Lagoon, is a token of a serious energy waste, as the current plants use only 13% of the energy while 87% goes into the air or into underutilized run off-water. These enlarging lagoons — not only evident in Hellisheiði but also by the geothermal power plants in Reykjanes, Svartsengi, Nesjavellir and Bjarnarflag — suggest that the energy companies’ promises regarding the pumping of run-off water, are far from easily kept.

The Fight Over Iceland’s Energy Master Plan Continues

During the last few weeks, the Icelandic Parliament’s Industries Committee received 333 remarks in connection with the committee’s work on a parliamentary resolution for Iceland’s Energy Master Plan. The resolution, which was presented by the Ministers of Industry and of Environment in April this year, gives a green light for a monstrous plan to turn the Reykjanes peninsula’s geothermal areas into a continuous industrial zone.

The remarks can generally be split into two groups based on senders and views: Firstly, individuals and environmentalist associations who, above all, protest the afore-mentioned Reykjanes plans. Secondly, companies and institutions with vested interests in the further heavy industrialization of Iceland who demand that the Master Plan’s second phase goes unaltered through parliament — that is, as it was before the parliamentary resolution was presented, in which the much-debated Þjórsá dams and other hydro power plants were still included in the exploitation category. Saving Iceland has published one of the remarks, written by Helga Katrín Tryggvadóttir, which differs from these two groups as it evaluates energy production and nature conservation in a larger, long-term context.

During the process, the head of the Industries Committee, Kristján Möller — MP for the social-democratic People’s Alliance, known for his stand in favour of heavy industry — ordered and paid for a remark sent by management company GAMMA. The company first entered discussion about one year ago after publishing a report, which promised that the national energy company Landsvirkjun could become the equivalent of the Norwegian Oil Fund, if the company would only be permitted to build dams like there is no tomorrow.

In a similarly gold-filled rhetoric, GAMMA’s remark regarding the Energy Master Plan states that the changes made by the two ministers — which in fact are the results of another public reviewing process last year — will cost Iceland’s society about 270 billion ISK and 5 thousand jobs. According to the company’s report, these amount are the would-be benefits of forcefully continuing the heavy industrialization of Iceland, a plan that has proved to be not only ecologically but also economically disastrous. Seen from that perspective, it does not come as a surprise realizing that the management company is largely staffed with economists who before the economic collapse of 2008 lead the disastrous adventures of Kaupþing, one of the three biggest Icelandic bubble banks.

Alterra Power: Decreases Revenue, Enlargement Plans in Iceland

Canadian energy company Alterra Power, the majority stakeholder of Icelandic energy company HS Orka, recently published the financial and operating results for the first quarter of this year. “Consolidated revenue for the current quarter was $16.4 million compared to $18.9 million in the comparative quarter,” the report states, “due to lower revenue from our Icelandic operations as a result of lower aluminium prices, which declined 13.9% versus the comparative quarter.”

At the same time, the company’s Executive Chairman Ross Beaty stated that Alterra is preparing for an enlargement of the Reykjanesvirkjun geothermal power plant, located at the south-west tip of the Reykjanes peninsula, which should increase the plant’s production capacity from the current 100 MW to 180 MW. The construction is supposed to start at the end of this year and to be financed with the 38 million USD purchase of new shares in HS Orka by Jarðvarmi, a company owned by fourteen Icelandic pension funds.

According to Alterra, permission for all construction-related activities is in place. However, as Saving Iceland has reported, Iceland’s National Energy Authority has officially stated their fears that increased energy production will lead to an over-exploitation of the plant’s geothermal reservoir. Furthermore, Ásgeir Margeirsson, Chairman of HS Orka, responded to Alterra’s claims stating that due to a conflict between the energy company and aluminium producer Norðurál, the construction might not start this year. According to existing contracts, the energy from the enlargement is supposed to power Norðurál’s planned aluminium smelter in Helguvík. That project, however, has been on hold for years due to financial and energy crisis, and seems to be nothing but a fantasy never to be realised.

Greenland: Cheap Chinese Labour and Toxic Dumping

The home rule government of Greenland is split in their stand on Alcoa’s plans to import 2 thousand Chinese workers for the construction of the company’s planned smelter in Maniitsoq. The biggest governing party, Inuit Ataqatigiit, is against the plan as the workers will not be paid the same amount as Greenlandic labour. On the other hand, the Democratic Party, which has two of the government’s nine ministerial seats, is in favour of the plans on the grounds that the workers’ working condition and payments will be better than in China.

In Iceland, during the construction of the Kárahnjúkar dams and Alcoa’s aluminium smelter in Reyðarfjörður, Chinese and Portuguese migrant workers were imported on a mass scale. More than 1700 work-related injuries were reported during the building of the dams, ten workers ended up with irrecoverable injuries and five workers died. In 2010, the Occupational Safety and Health Authority stated that the Kárahnjúkar project was in a different league to any other project in Iceland, with regard to work-related accidents.

At the same time as Greenland’s government argued over Alcoa, Danish newspaper Politiken reported that the Scottish oil company Cairn Energy — a company that, along with Indian mining giant Vedanta, shares the ownership of oil and gas company Cairn India — is responsible for dumping 160 tons of toxic materials into the ocean in the years of 2010 and 2011. The dumping is linked to the company’s search for oil off Greenland’s shore and is five times higher than the amount of comparable materials dumped in 2009 by every single oil platform of Denmark and Norway combined.

A special report for Saving Iceland by Dónal O’Driscoll

Preface

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

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

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By Miriam Rose

After many years of preparations the Greenlandic government say the final decision on Alcoa’s proposed smelter will be taken at the spring 2012 of the parliament. It is more likely, as the global history of the industry and the evidence in Greenland tells us, that the decision has in fact already been made undemocratically behind closed doors, despite the decreasing support of the Greenlandic people. In fact Alcoa and the Greenland government are so keen on passing the project that they have just hired an eighth employee at their national company Greenland Development- formed to enable the industry to go ahead. Juaaka Lyberth’s explicit remit is to influence public opinion on the smelter through the media. Greenland Development paints a rosy picture of an aluminium future for Greenland, but will their promises of prosperity come true? A comparison to Alcoa’s Fjardaal project in East Iceland suggests that many will not. Read More

Below is a press release sent to the media in Greenland jointly by two organizations: “Against Aluminium Smelter in Greenland” and “Avataq” (environmental organization).

Who is in power? Naalakkersuisut or Alcoa?

Last week’s meeting between members of the Greenland Government (Naalakkersuisut) and Alcoa clearly shows the power relationship between the industry giant and our nation, that has characterized the project’s development from the beginning, Alcoa dictates and Naalakkersuisut obey across the population.

This form of government is undemocratic and demeaning to our people who are still recovering from 250 years of colonial rule.

Alcoa has made it clear to Naalakkersuisut that a condition to continue the aluminum project in Maniitsoq is the issue of cheap foreign labor will be resolved immediately. Read More

By Tord Björk

Social Forum Journey / Malmö-Belem-Istanbul

Abstract: This article looks at how the national mass protests against neoliberal regimes in Iceland, Tunisia, Egypt and other African and Arabic countries and the Wisconsin in the US are linked with the climate justice movement. Both national protests and the climate justice movement are developing unevenly. National protests in some hot spots, the climate campaigning more even all over the world. By looking at how countries like Denmark and its organized civil society acts it can be possible to understand how the struggle both for defensive goals and constructive solutions can strengthen each other by what lacked in Denmark but exists on the global level. That is solidarity against repression and building resistance which enables solutions uniting anti-neoliberal struggles in general and specific areas. Read More

Since 2002, when work began on constructing the Kárahnjúkar dam, which today provides electricity to Alcoa’s aluminum smelter in Reyðarfjörður, until end of the year 2009, 1700 work related injuries have been reported in relation to the dam’s construction. 120 of those injured are still disabled from work, ten of them having irrecoverable injuries – and four workers have died as results of their accidents.

When put into context with work related accidents in the rest of Iceland during that same eight year period, it becomes crystal clear that Kárahnjúkar was by far the single most dangerous workplace in the country. The 120 workers still disabled from work ammount to over 70% of all work related disabilities registered in the period, with eight times as many disabilities spawned from Kárahnjúkar than the rest of the country combined. The four who died as results of their accidents count 15% of all work related deaths in the country for those eight years, but they were 26 in all. Read More

“They are saying in the paper every day, let’s throw up these aluminium smelters because of the economic crisis. This is a bad idea because in a way building smelters is part of the economic crisis. These huge loans that companies take is too big a chunk for the Icelandic economy to pay. We are on an economic roller coaster ride right now,” said Björk in a recent interview with ITN news. Read More