In conversation with Björk
Why the Icelandic singer wants a Canadian company booted from her country
In the summer and fall of 2009, barely a year after fraudulent investors bankrupted the country, Magma Energy Corp bought a 43 per cent share in Iceland’s third largest utility, HS Orka. Ross Beaty, the CEO of Magma—a Canadian company—said he wanted to invest in green energy for the benefit of the environment, his shareholders and Icelanders, and that he had no interest in a majority share of HS Orka. But Icelander’s weren’t happy; the public traditionally owns their natural resources, and the whole country is wary of foreign ownership, especially after the collapse of the economy.
Things have only gotten worse this year. Magma purchased additional stocks in May, bringing its control of HS Orka up to 98.53 per cent and sparking protests across the country. Thousands marched on the capital, and polls showed that 80 per cent of Icelander’s disapprove of the deal.
Icelandic musician Björk has become a spokesperson for the movement to cancel Magma’s contracts. She started a petition calling for a referendum on amending foreign ownership laws, and it bears the signatures of about 20,000 of her countrymen. She says that once that number reaches 30,000, or about 10 per cent of the population, the government will be forced to hold a referendum that could see Magma thrown out of the country.
She spoke to Maclean’s over the phone from Iceland.
Q: Why do you want to stop the Magma deal?
A: The case has been twisted a little bit—that we hate foreigners and we don’t want them here. That’s too black and white. This decision was made in a back room by two guys and the nation wasn’t even consulted.
If we decide, ‘let’s privatize,’ then we could do it properly and have really good legislation and make a really good deal. The bank crash has brought us to our knees and there are municipalities that are really broke so they’re selling. It would be better if we wait, once we’re in a better position to negotiate then maybe we can cut deals with foreigners that would be healthy.
Q: Is the problem with Magma specifically or foreign ownership generally?
A: Companies owned by Ross Beaty have a bad reputation for breaking serious humanitarian and union laws in South America—not giving farmers shares of profit they had promised and so on—but this is normal. This is the kind of beast you’re dealing with.
Icelanders have publicly owned their geothermal plants for a century now, why sell access to our energy sources for 65 years when this direction in business affairs has brought the nation to its knees? We should at least get a good deal—this one is appalling. 70 per cent of the price is paid with a seven-year bullet loan carrying an interest rate of 1.5 per cent. In other words the seller lent the buyer most of the money. The rest is financed with Icelandic currency bought at a serious discount on the offshore market.
Ross Beaty didn’t come to Iceland just out of kindness and consideration for us. He is a good businessman and he knew we were on the brink of bankruptcy. He knew he could get an unusually good deal for him, which is exceptionally bad for us. It is very hard for Icelanders to trust this man.
Q: Beaty says he regrets trying to engage you in the process. What happened?
A: Ross Beaty publicly offered me shares in the company. He invited me to his office where he said he could give me a good deal, which showed he totally misunderstood me. I don´t feel individuals should own this. It belongs to the nation.
When he bought the first section of HS Orka , which was a small share, he stated very publicly that he did not intend to own the majority in it. If the current sale goes through he will own more than 98 per cent. He has said that geothermal energy lasts for 1000 years. This is not true. It lasts about 50 years. Geothermal plants work similarly to mines, you drill and then there is only a limited amount down there. When magma’s current 65-year deal is over, the hole will be empty.
Q: You started a petition to force the government to have a referendum on privatizing natural resources.
A: We have collected 20,000 people, two thirds of what we need. When we have ten thousand more then the government has to have a national referendum.
Q: What is the general attitude in Iceland following the economic collapse?
A: A lot of people have lost their homes and their jobs. There’s a lot of anger. There were people standing outside parliament with pots and pans twenty-four-seven until the first government resigned. Now, after the backlash, we have a second government. They’ve been getting the same treatment. This used to be a peaceful place. We are in a situation we’ve never been in before.
Q: But you have dealt with colonization before.
A: We were a colony for 600 years, it took a lot of battles to secure our independence. Icelanders are strong and resilient. We will not give up.
Q: Won’t it be costly to buy these contracts back, especially when the Icelandic economy is doing so poorly?
A: It might be expensive, but to be honest, whatever it would cost us would be cheaper then the other option. We have a lot of other energy resources, and this isn’t that big a case, but this may only be the first privatization of many. The Chinese embassy just tripled in size and is looking into natural resources, especially fish. We could simply become a 21st century colony of international energy giants, Magma comes first, then the Chinese and so on.
Iceland has developed know-how and a graceful relationship between nature and technology for a century. We should be enjoying the harvest of these discoveries ourselves, not handing it over to an inexperienced Canadian mining company. Magma is right, green energy is the future, but we should enjoy the fruits of our own labour.
Q: What do you have to say to Canadians?
A: What kind of international energy direction are you going to have in the 21st century? How are you going to interact with other countries? In these times it is important to look at things long term. We have to unite technology and nature, get them to work together in an amicable way.
Q: Where did you get your concern for natural resources?
A: Our neighbors are not Canada or France or Brazil. Our neighbors are nature. Iceland is surrounded by mountains and ocean. Half of the food my family eats is from hunting. We’re an isolated island in the middle of the Atlantic, so we’re very aware of what we do to the island or to the ocean around us.
Q: You used to make a point of being apolitical. Why get so involved in all this?
A: It isn’t because I’m trying to convert people, the majority of people feel the same way; they just don’t have a spokesperson. If this goes through then we not only lose our banks and our homes, we loose our energy resources. They’re the only way that the next generation can get themselves out of this mess.
It’s a crossroads. It’s sort of terrible but it’s also kind of good because the bullshit is on the table. Everyone can see the corruption so it’s an opportunity to start a new society with new laws and new ethics. People are excited. That’s why people like myself are getting very heavily involved; they feel they can make a difference.
