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Parliament wants answers on Hydro

The Norwegian Parliament’s disciplinary committee is demanding to know who owns a company registered in a Caribbean tax haven that one of Norway’s biggest international companies, Norsk Hydro, did business with for years. The business was related to Hydro’s controversial involvement with an aluminum plant in Tajikistan, which is considered to be one of the most corrupt countries in the world.

Jette Christensen of the Labour Party (left) is among committee members demanding more openness from partially state-owned Norsk Hydro. PHOTO: Arbeiderpartiet
Jette Christensen of the Labour Party (left) is among committee members demanding more openness from partially state-owned Norsk Hydro. PHOTO: Arbeiderpartiet

The committee’s Members of Parliament are especially keen to address growing corruption concerns at Norwegian companies, and the state itself has has a large ownership stake in Hydro. Several other Norwegian companies in which the state has invested have been involved in corruption cases recently, defying both the state’s and their own so-called “zero tolerance” for corruption.

The committee has thus sent a list of questions to the government minister in charge of overseeing the state’s investments in Norwegian companies, Monica Mæland of the Conservative Party. She in turn has said she is not satisfied with the answers she has received from Hydro to her own questions about Hydro’s business dealings in the former Soviet republic of Tajikistan.

‘This is an order’
Now both she and the committee want more information about the mysterious company based in the British Virgin Islands, Talco Management Ltd (TML), with which Hydro did business. TML had exclusive rights to conduct trade on behalf of the large Talco aluminum plant in Tajikistan, which itself is controlled by the authoritarian regime of President Emomalii Rahmon.

Newspaper Dagens Næringsliv (DN) has written extensively about Hydro’s questionable history of selling metals to and buying aluminum from the plant in Tajikistan, via tax havens. For nearly 20 years, Hydro sent and received payments to the plant’s affiliated companies in the tax havens of both Guernsey and the British Virgin Islands, with DN reporting how the actual owners of those companies have remained hidden from public view. Hydro has refused to reveal the owners of the companies, claiming it’s bound by the terms of its agreement with TML.

That doesn’t sit well with either Mæland or Members of Parliament who’ve been alarmed by DN’s revelations. “We and the minister must find out who are the hidden owners, therefore this is an order to both Hydro and the minister,” Jette F Christensen, a member of the committee and MP for the Labour Party, told DN this week. “We also believe that we must see the entire contract Hydro had with TML.”

Other members of the parliamentary committee agreed, saying they want the ownership information that in turn should also be made publicly available. “I can’t see that there should be any commercial reasons that such ownership shouldn’t be made public,” the deputy leader of the committee, Michael Tetzschner of the Conservative Party, told DN. It would at any rate, he added, “need to be justified very well” as to why it should be “acceptable” for Hydro’s business associates to remain hidden.

Long list of questions
DN reported that the committee is demanding several answers regarding Hydro’s business with TML, also over the concerns several international organizations and institutions have had over whether Tajikistan’s president and his family have enriched themselves through transactions tied to the aluminum plant. The committee further wants Mæland’s own evaluation of Hydro’s engagement in Tajikistan, “seen in the light of Norway’s anti-corruption laws, the parliament’s intentions behind the laws and Hydro’s own anti-corruption handbook.” DN has also reported that the business in Tajikistan defied Hydro’s own guidelines for avoiding corruption.

At issue is whether the political elite controlling Tajikistan enriched themselves on business deals involving the aluminum plant. DN has reported that Hydro received warnings from, for example, the World Bank against doing business with the plant, and that top Hydro executives negotiated with the president of the country himself and his brother-in-law. Top foreign ministry officials serving during Norway’s former Labour-led government coalition were also involved, but all of them including Mæland’s own predecessors as trade minister have either distanced themselves from Hydro’s business in Tajikistan or claimed they have no memory of it.

Ties cited to Tajikistan’s regime
Hydro entered into its agreement with TML in 2007. A court-appointed administrator in the British Virgin Islands, Matthew Richardson, has told DN that there was “no rational commercial reason” for the aluminum plant in Tajikistan to do business through a so-called “offshore” company like TML, based in the British Virgin Islands and with no “track record” with the aluminum business.

DN reported that Richardson was appointed by The Eastern Caribbean Supreme Court in another case involving TML and an offshore company that Hydro also dealt with before TML was created called CDH. The two companies handled international trading for the aluminum plant Talco, which Richardson has stated in court documents is controlled by the president of Tajikistan and members of his family. He has stated they also have controlled both TML and CDH “directly or indirectly” through the various companies and individuals listed as TML’s and CDN’s owners, who operate “under orders or instructions from business partners to the president and his family.” The aluminum business in Tajikistan, he has claimed, “generates hundreds of millions of dollars” every year. DN, citing court documents, reported that money was transferred or channeled through CDH and later to TML in an effort to deplete CDH’s resources and make them unavailable for creditors.

Hydro chided for ‘lack of openness’
Mæland has also summoned Hydro’s chairman, Dag Mejdell, in for questioning while Christensen of the parliamentary committee claims that Hydro’s business in Tajikistan “displays a lack of openness that should not be found in a state-owned company.”

Hydro officials, who have been channeling all information about their Tajikistan business through their communications department, claimed they were unaware of the claims about and against CDH and TML in court documents. Hydro spokesman Erik Brynhildsbakken wrote in an email to DN that it would respond to the demands for answers by first preparing “a thorough account” for the business and trade ministry (politically led by Mæland), and did not want to comment further at this time.

Hydro has earlier stated that its activities in Tajikistan occurred “with support from Norway’s foreign ministry, the World Bank and the European Bank for Reconstruction and Development (EBRD).” That counters reports of warnings against doing such business in DN.

“If Hydro didn’t inform the (government) ministers about everything that’s come forward in DN’s coverage of the case, that’s worrisome,” Christensen said. “If memories are weak, they should be strengthened.” Berglund



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