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Table of Contents
1. Introduction
1.1 Background ..................................................................................... 2
1.2 Purpose of Research ....................................................................... 3
1.3 Summary of Findings ...................................................................... 4
1.4 Scope of Research .......................................................................... 5
1.5 Limitation of Research ................................................................... 6
2. Measuring Integrity
2.1 The Jungle of Governance Indicators .............................................. 7
2.1.1 International Country Risk Guide – ICRG ................................ 9
2.1.2 Transparency International Corruption Perception Index – CPI 9
2.1.3 Sustainable Governance Indicators SGI - Bertelsmann Stiftung 11
2.1.4 World Bank Institute ................................................................... 12
2.2 Global Integrity ................................................................................ 13
2.2.1 The methodology ......................................................................... 14
2.2.2 Research Approach ...................................................................... 15
2.2.3 Peer Review ................................................................................. 16
3. Role of IFA .................................................................................................... 17
4. Iceland Integrity Report
4.1 Corruption Timeline ........................................................................... 18
4.2 Highlights ........................................................................................... 22
4.3 The Integrity Scorecard ..................................................................... 24
4.4 Legal Framework – Actual Implementation
4.4.1 I Non-Governmental Organizations, Public Information and Media 25
4.4.2 II Elections ..................................................................................... 26
4.4.3 III Government Conflicts of Interest Safeguards & Checks .......... 27
4.4.4 IV Public Administration and Professionalism .............................. 28
4.4.5 V Governance Oversight and Control ............................................ 30
4.4.6 VI Anti-Corruption Legal Framework, Judicial Impartiality and
Law Enforcement Professionalism ..................................................... 31
5. “Where does the shoe hurt?”
5.1 I Non-Governmental Organizations, Public Information and Media ....... 32
5.2 II Elections ................................................................................................ 32
5.3 III Government Conflicts of Interest Safeguards & Checks and Balance 32
5.4 IV Public Administration and Professionalism ........................................ 33
5.5 V Governance Oversight and Control ...................................................... 34
5.6 VI Anti-Corruption Legal Framework, Judicial Impartiality and
Law Enforcement Professionalism ........................................................... 34
Bibliography ..................................................................................................................... 37
Appendix A Integrity Indicators page 1-106
Appendix B Integrity Indicators Score Summary
Appendix C Asset Disclosure – Members of Parliament
Integrity Scorecard Iceland 2012
Assessment of Anti-Corruption Safeguards
Research Project for Emerging Issues/Advanced Topics Course
Diploma in Investigative and Forensic Accounting Program
University of Toronto
Prepared by Jenný Stefanía Jensdóttir
May 31, 2012
For Prof. Leonard Brooks
2
1. INTRODUCTION
1.1 Background
The Icelandic economy collapsed almost completely in the fall of 2008, when 3 banks
constituting 85 percent of the country’s banking system crashed within a week period. The rest
of the banking system fell also shortly after. The natural and almost spontaneous things for
people to do, after having experienced the domestic equity market being wiped out overnight,
household debts sky rocketing and personal savings disappearing, is to analyse, evaluate and fix
the flaws that led to such a devastating disaster for the small country with population of only
320 thousand . Almost four years later, numerous flaws have been discovered, both in the
public, private and legislation sector. A Special Investigation Committee (SIC) delivered over
2500 pages report in April 2010, where alleged criminal wrongdoings by the banks and serious
negligence by politicians and public officials was exposed. Corruption, nepotism, cronyism,
weak control system and informality in communication within the administration and legislature
is commonly believed to be the ignition for the private banks to rapidly grow more than ten times
over the national GDP in only six years, last but not least an excessive greed combined with low
ethical values may have played an important role there as well. The editor for one of the largest
newspaper for Iceland, Morgunbladid, who was called before the SIC said: “ I have observed
this society for 50 years. It is disgusting society, everything is disgusting. There are no
principals, no passionate vision, nothing. There is only opportunism and power struggle.” 1
1 Styrmir Gunnarsson, The Special Investigating Commission (SIC) report, April 2010, Volume 8 page 179 (author’s
translation)
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These words, reflected somewhat perception of a corruption by a person with great influence at
the upper level of society, and sparked a big surprise and enormous attention, not only because
the former editor is affiliated with the Independence party who was at power in cabinet for 18
consecutive years prior to the economic collapse, but also because corruption had been a typo
topic at this level of society. This wannabe perception of “no corruption” was supported by
Transparency International and it’s Corruption Perception Index (CPI) , reported by media on
an annual basis. Iceland was always ranking among the top “very-clean” countries scoring 9,2
CPI in 2007, 10 being the highest. Undoubtedly, the CPI Index was reviewed and even taken
into consideration by the many foreign investors and banks that fuelled the expansion of the
Icelandic bank system, with excessive volume of cheap loans, which are now lost, almost
completely.
1.2 Purpose of Research Report.
The purpose and motivation for this report is to observe and apply an alternate method, which is
transparent and trackable to evaluate governance indicators in Iceland. The user or observer
of the report, can look for reasons why certain governance criteria is determined weak or strong.
The quantitative Integrity Scorecard conveys information about strength and weaknesses in
governance practices, reflecting the country’s integrity system and can serve as a parallel tool
for helping policy makers, citizens, investors and reformers to reach broad assessments and also
detailed diagnoses concerning the anticorruption mechanism in Iceland. Publicly available
indicators are not only useful for diverse user groups, they are likely to spark discussion and
greater understanding of the causal mechanisms that lie behind governance problems within a
country. Corruption affects the social responsibility and integrity of both citizens and
institutions. Failure to confront corruption will obstruct reform initiatives. In order to design
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measures to prevent and control corrupt behavior, one must identify the sources of corruptions.2
Assessment of Integrity indicators on a regular basis, can serve as a comparison and evaluation
tool on reform and improvement in governance.
1.3 Summary of Findings
While acknowledging that corruption is difficult or impossible to capture, the method of Global
Integrity (GI) approaches the issue opposite of corruption, by quantitatively assessing the
performance of key integrity-promoting mechanisms , such as media, judiciary ,the access to
government, the citizens ability to monitor, review and advocate for improved governance and
government accountability.
The GI methodology was used to create an Integrity Scorecard for Iceland 2012, providing
combination of objective and subjective governance indicators that establishes the gap between
regulations and their implementation. The scorecard is compiled by 325 indicators under
twenty-three subcategories and six head categories. The overall score for Iceland is 71, where
legal framework scores strong 80 but actual implementation score of 59 is considered “very
weak” by the GI performance tiers. The implementation score differs significantly from other
governance indices issued by various organizations. The Corruption Perception Index published
by Transparency International, has ranked Iceland among the “cleanest” countries in their survey
for many years. Another index, WGI from the World Bank Institute ranks Iceland over 90% in
four out of six Governance indicators, including Corruption Control.
2 Article “An analysis of the Causes of corruption in the Judiciary” by Edgardo Buscaglia, Maria Dakolias; Law and
Policy in International Business, 1999
5
In author’s opinion the Global Integrity Scorecard and report provides valuable, open and in-
depth information to the search for weakness in corruption prevention and safeguards. The
transparency of the whole process, allows readers to diagnose the reasons and arguments for the
outcome, whereas most organization do not provide the sources or reasoning for their
assessment. There is a jungle of governance indicators out there, and Global Integrity Report
provides yet another sharpness needed to cut edges that other rating systems don’t provide.
1.4 Scope of Research
The comments and findings noted in this report have been based on following research material:
Iceland Statutory Law and regulation
On line web sites of government agencies- parliament and judiciary
Presentation and reports by officials and administration employees
Articles by experts and academic journals in governance, administration and corruption.
On line interviews with senior analysts and various employees in government agencies and
administration in Iceland
Media websites
Indicators references are listed under each Indicator in appendix A. Complete listing of other
reference material is in the Bibliography at the end of this report.
The Global Integrity website provided all framework, platform and score criteria for the
research. In addition, assistance in form of general guidance was obtained from Carrie Golden,
Project manager at The Global Integrity in Washington DC.
6
Observation period for indicators is January 2011-May 2012, with few exceptions, where
incident or procedures being assessed haven’t occurred in past 18 months. For example;
indicators for election are based on last parliament election in 2009 and when scoring is built on
numerical statistic from the most recent government agency’s annual report.
Icelandic currency is krona (kr) , for Canada reader´s perspective, amounts have been converted
to CAD$ at the rate of 1 CAD$ = kr. 128
Double blinded peer review was conducted by two peers in Iceland, in accordance to the Global
Integrity methodology. Arrangement and selection of peers was provided by the mentor of the
research project, Sigurbjorg Sigurgeirsdottir Phd and professor of public police and governance
in Iceland.
1.5 Limitation of Research
The merit of the Global Integrity methodology is using in-country leader researcher with team
of experts to prepare the integrity scorecard. The author is born in Iceland, graduated with
Cand. oecon degree from the University of Iceland and worked in the private business sector
for twenty years and was appointed to board of directors in few state-owned corporations.
While living and working in Canada for the past 14 years, author has visited Iceland 2-3 times a
year and followed closely political, social, financial and environmental development through the
internet, especially after the Icelandic economy collapsed in 2008. Author solely conducted the
research and studies necessary to provide answers to all indicators and requested information
and verification from various government agencies. Absent from Iceland and the lack of team
work input is a limitation, however, whether expert assessments is in-country or abroad, does
7
not affect freedom from basic limitations, like the one that different experts may have different
views about similar aspect of governance.
Another limitation in this research is that the qualitative Reporter’s Notebook is not included,
which is one of two core elements in the Global Integrity Report. This report is supposed to be
done by a local journalists to bring broader context of the local culture of corruption. The
mission of the Notebook is to tell the story behind the Integrity Indicators. With this limitation
in mind, author tried to elaborate and “tell stories” in comments with indicators, especially if the
scoring revealed lacking of anti-corruption mechanism and therefore weakness in governance.
2. MEASURING INTEGRITY
2.1 The Jungle of Governance Indicators
Definition Governance:
“ the traditions and institutions by which authority in a country is exercised. This
includes the process by which governments are selected, monitored and replaced;
the capacity of the government to effectively formulate and implement sound
policies; and the respect of citizens and the state for the institutions that govern
economic and social interactions among them.” 3
3 “Governance Indicators: Where Are We, Where Should We Be Going?” By Daniel Kaufmann and Aart Kraay
8
Measurement is important when indicators of governance are analysed, however no single
indicator or combination of them can come up with a complete measure of all the defined
dimensions of governance.
The user groups of governance indicators are mainly international investors, officials,
national and multilateral aid agencies, development analysts and academics, all of whom
tend to use and widely misuse, governance indicators to compare the quality of governance
both among countries and over time in their decision making processes. 4 The most widely
used indicators are composite perception based. Although carefully constructed these
indicators lack transparency and comparability over time, and are not well suited for users
to identify how local governance can be improved in specific problem areas. There is no
such thing as a perfect governance indicator, however the more transparent they are, the
better they will serve the needs of users. In their article on Where Are We, Where Should
We Be Going, authors emphasize that combination of objective and subjective governance
indicators will establish the gap between rules and regulation “on the books” and their
implementation “on the ground” and suggest that although rules-based indicators provide
valuable information, they are insufficient to measure governance, without complementing
by and used in conjunction with fact-based indicators of governance.5 Global Integrity´s
methodology, which is applied in this research provides combination of these two.
4 “Uses and Abuses of Governance Indicators” by Christiane Arndt and Charles Oman, 2006 Paris OECD
Development Centre. 5 “Governance Indicators: Where Are We, Where Should We Be Going? By Daniel Kaufmann and Aart Kraay.
9
2.1.1 International Country Risk Guide (ICRG)
Privately-owned by PRS Group, International Country Risk rating system is designed to
assess financial, economic and political risks in countries and for comparison purpose
also. While the financial and economic risk is entirely based on objective measurements,
the political risk relies on experts subjective interpretations of pre-specified risk. The
political-risk components consist for example of governments ability to stay in office
and carry out its policies, contract viability, political violence and conflicts, corruptions,
democratic accountability and bureaucratic quality. Monthly and annual researches
dataset based on selected components can be bought on line. The economic indicators
and reports are unavailable free of charge, and was therefore not pursued any further in
this project .6
2.1.2 Transparency International
The Corruption Perceptions Index (CPI) published by Transparency International (TI)
since 1995, is undoubtedly the most famous and media attractive corruption index.
The CPI can be understood as a survey of surveys. It is an aggregate indicator that
compiles data from 17 sources (in 2011) by independent institutions,(i.e. ICRG, Freedom
House, World Bank, Bertelsmann Foundation) compiling the results of different surveys
of perceptions of resident and non resident business people and experts in order to
provide a snapshot of perception of corruption in a country, and ranking the 183
countries covered (in 2011)
The index quantifies perceptions of the extent of corruption in public institution in a
country, relative to other countries, at a given point in time. As a relative measure, a
6 “PRS Group website: http://www.prsgroup.com/ICRG.aspx
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country’s score in the index therefore depends upon perceived corruption in other
countries. Country’s score can improve if there is a perception in other country that
corruption has got worse, or simply because other countries have entered and exited the
index from one year to the next. As a result it is not appropriate to use a country’s CPI
score to measure that countries performance over time. 7 The CPI is widely used ,
misused or misunderstood by investors, donors, analysts and academics. In Iceland the
“very clean” scoring created both a cheerful and controversial atmosphere over the
years, the controversy was especially sitting among those, whose own perception,
analysis and experience of the local governance and business sector was not in
agreement with the scoring. Many academics and journalists have tried to scrutinize the
reasons for the, in their opinion, over-rated performance, and have come up with the
plausible explanation; that the definition of the word “bribery” 8 needs to broaden to
cover incidents where personal favours, political hiring, gifts and hospitality, nepotism,
cronyism and political financing constitute in fact bribery.
“[Transparency] International’s corruption perception indices for Iceland suggest that
corruption – in the narrow sense of abusing public office for private gain through bribery
– is largely absent. Yet while other more subtle forms of corruption are harder to
quantify, they almost surely exist.”9
Most governance indicators lack transparency and are not well suited for users to identify
how local governance can be improved. The lack of transparency of disaggregated data,
reduces the possibilities to identify where local governance can be improved.
7 Senior Research Coordinator at Transparency International in e-mail March, 2012
8 Special Investigation Commission (SIC) report asserts that Transparency International measures corruption on a
very narrow scale, mainly on people’s perception of bribery in the public sector. SIC report, April 2010, Volume 8 page 133 9 SGI Sustainable governance Indicators 2011, Iceland report, Corruption prevention page 14, Bertelsmann Stiftung
11
2.1.3 Bertelsmann Stiftung Sustainable Governance Indicators SGI
The SGI is a thorough cross-national survey of governance in the Organisation for
Economic Co-operation and Development (OECD). The project offers full access to the
data underlying 147 indicators, and can therefore identify reform and improvement
needs. SGI uses two indices to determine its scoring; Status Index which examines the
success of implemented polices and the Management Index that looks at accountability
of the policy-making processes. Recently SGI became one of the data providers to the
Transparency International’s CPI Index, where one question/indicator on corruptions
was taken from the country’s report and used as a source for the CPI Index. Curious to
observe the indicator and the underlying data for Iceland, author contacted project
manager at SGI, who answered promptly. The question addresses how the state and the
society prevent public servants and politicians from accepting bribes. The question
reads: “To what extend are public officeholder prevented from abusing their position for
private interests?”
The answer from the experts is disclosed in footnote 10
; but interestingly the score 9 was
10 Corruption among officeholders has not been a serious problem in Iceland. It does occur in the form of
politicians granting favors, and in some instances, paying for personal goods with public funds.[It] is very rare that
officeholders in Iceland are put on trial for corruption. In May 2007, however, shortly before the elections, it came
to the media’s attention that the girlfriend of the son of Minister of Environmental Affairs [...] had been granted
Icelandic citizenship on a fast track. The minister stated that she had had no knowledge of the matter, and
remained in office. No legal process followed as a consequence of this issue.
The state has no policy specifically addressing corruption, under the premise that no such policy is necessary. [T]o
be sure, Transparency International’s corruption perception indices for Iceland suggest that corruption – in the
narrow sense of abusing public office for private gain through bribery – is largely absent. Yet while other, more
subtle forms of corruption are harder to quantify, they almost surely exist. The collapse of the Icelandic banks in
2008 and the subsequent investigation by, inter alia, the parliament’s Special Investigation Commission (SIC), has
brought to light the subservience of the government and state administration to the banks.[M]oreover, it has come
to light that three of the four main political parties, as well as individual politicians, accepted large donations
from the banks and affiliated concerns. [..] the SIC reported that of 63 members of parliament, 10 owed the
failed banks €1 million or more each at the pre-crash exchange rate of the króna, with their personal debts ranging
from €1 million to €40 million. [..] Many appointments to public office, in the courts as well as in the central
bank, are politically motivated rather than based on merit – appointment corruption might thus be the right term
for this persistent practice.
12
given for this section in the SGI Report for Iceland11
, in spite of few significant
examples where preventing measures were lacking. Overall in 2011 Iceland scored
7.65 in the Status Index ranking 10th
of the 31 countries in the survey and 7.23 in the
Management Index ranking 8th
of the 31 countries. For comparison, Canada scored 7.89
in the Status Index and 7.04 in the Management Index.
2.1.4 World Bank Institute – WGI
The Worldwide Governance Indicators (WGI), available since 1996, are considered the
most comprehensive publicly available set of governance indicators. They composite of
indicators of each of six aspects of governance: i) Voice and Accountability; ii) Political
Stability; iii) Government Effectivenss; iv) Regulatory Quality; v) Rule of Law and vi)
Control and Corruption. The methodology used and changing composition of the
indicators over time, affects the reliability to compare governance levels over time.
Once again the disaggregated data used to produce the indicator are not available in
many cases. Like Transparency International, Worldwide Governance Indicators are
built on many different sources, including Global Integrity (GI) Scorecard, where
available. (GI has never produced a scorecard for Iceland)
11
Sustainable Governance Indicators 2011, Iceland report by Gretar Thor Eythorsson, Thorvaldur Gylfason, Detlef Jahn : http://sgi-network.org/index.php
13
Table 2.1 ICELAND Governance Score 2010
Source: Worldwide Governance Indicators, World Bank Institute
2.2 Global Integrity (GI)
Founded in 1999 by Charles Lewis, an investigative journalist and a former “60 minutes”
producer and political scientist Marianne Camerer, who both had been gathering
information about quality of governance, Lewis in the each of the 50 US states and
Camerer in South –Africa. They wanted to see if their approaches of ; blending
quantitative databases with hard hitting reporting in measuring the quality of governance,
could be applied globally. The two friends joined together their ideas and methodology and
in 2001, they had field tested a prototype of the Integrity Indicators in three diverse
countries (South Africa, Italy, and Indonesia).
Today, GI provides annual country assessments with detailed data and reporting in 30-35
countries. The volume of assessments is limited by funding resources and GI has never
done an assessment on Iceland. The Global Integrity’s team does not “assign” the
countries data, reporting or scoring, they are home-made, generated and peer reviewed by
in-country local experts. Originally the Global Integrity Report was mainly focused on
Percentile
Rank
Governance
Score
(0-100) (-2.5 to +2.5)
Voice and Accountability 9 2010 94.3 1.4 0.16
Political Stability/Absence of Violence 7 2010 85.4 1.01 0.25
Government Effectiveness 6 2010 92.8 1.58 0.23
Regulatory Quality 6 2010 78.5 0.91 0.25
Rule of Law 9 2010 92.9 1.69 0.17
Control of Corruption 7 2010 94.3 1.92 0.2
Governance Indicator Sources Year Standard
Error
14
“developing” countries, but soon they also included the “developed” countries, believing
that corruption is a problem in all countries and all have governance that can be improved.
Global Integrity Indicators are one of the sources the World Bank Institute uses to generate
their Worldwide Governance Indicators.
2.2.1 The Global Integrity Methodology
Global Integrity (GI) acknowledges the fact that corruption and bribery are difficult if
not impossible to capture. Rather than trying to measure corruption the method
quantitatively assesses the opposite of corruption; the access to government, the citizens
ability to monitor it’s behavior and their ability to seek review and advocate for
improved governance. Therefore it can be said that the integrity indicators are designed
to provide a quantitative assessment of anti-corruption safeguards.
The merit of the methodology compared to most governance indicators is that
quantitative data and qualitative reporting on the health of the country’s anti corruption
framework is generated by in-country researches and journalists. The quantitative data,
consists of the Integrity Scorecard, which was conducted by author and presented in this
research and the qualitative reporting is the Reporter’s Notebook, which is to be written
by an in-country journalists, but is not a part of this research project. GI report also
includes corruption timeline, that summarizes the main corruption-related events in the
country from the past 10-15 years.
The Integrity Scorecard assesses the existence, effectiveness and citizen access to key
governance and anti-corruption mechanism through 325 indicators. It assesses issues
such as transparency of the various government agencies processes, media freedom,
15
asset disclosure requirements, conflicts of interest regulations and political financing.
The scorecard takes both legal measures ‘de jure’ and ‘de facto’ realities of practical
implementation and identifies strengths and weaknesses in the anti-corruption system,
that can serve as a road map for possible reform.
2.2.2 The Research approach
Typically each country team consists of five to ten experts, working independently to
compile for material for the country assessment. One lead researcher compiles the
initial scores for the Integrity Indicators. To maintain independence of individual
responses and avoid peer-influenced consensus, Global Integrity has developed a
fieldwork management platform, that ensures that researchers, journalists and peer
reviewers are unaware of the identities of other members of the country team. Author of
the research project is here solely responsible for compiling and assessing the indicators,
after having researched and reached out to various local public agencies for verification
and confirmation of ‘de facto’ realities of practical implementation.
In summary, a given indicator or sub-indicator has the following three elements:
Indicator question, provided by Global Integrity
Indicator scoring criteria, provided on GI website.
Indicator score (either yes(100)/no (0) or ordinal scale of 0-100 with steps at
25,50,75), assigned by author based on:
References, provided by author
Comments (optional) provided by author
16
Peer review comments ( optional), as provided through a double blind
peer review process.
To produce the aggregate scorecard, a simple aggregation method is used. Each indicator
score is averaged within it’s parent subcategory , which produces a subcategory score,
that are then averaged with other subcategory scores into a parent category score.
Category scores are averaged to produce an overall country score. The report groups
country into five performance tiers: Very strong (90+), Strong (80+), Moderate (70+),
Weak (60+), Very Weak ( < 60).
Finally, the implementation gap is created, by generating the legal framework score and
actual implementation score., where the latter is subtracted from the legal score to
evaluate the implementation gap for the country. Implementation gap is interesting
measure, which can be used to see change within a country across years, but is very much
dependent on the context of each country, due to different laws. Therefore any
comparison of implementation gaps between countries is cautioned against by GI.
2.2.3 Peer Review
By utilizing a subjective measure approach where collective opinions are aggregated it is
important to ensure that data and reporting are as accurate and balanced as possible. The
quality control mechanism employed by Global Integrity includes a double-blind peer
review process which purpose is to ensure that peers are unrestrained in commentary,
which likely adds frankness when commenting on the draft report. Mentor of the
research selected two peers to conduct the review, whose comments have all been added
17
to the indicators. Peer review comments are used to interpret and sometimes adjust
scores that they identify as containing errors, bias, or out of date information. Author
conducted few adjustments after reading peers review, and noted the changes in the
comments as well.
3. ROLE OF INVESTIGATIVE FORENSIC ACCOUNTANT
The role of Investigative and Forensic Accountants (|IFA) is not limited with accounting
engagements, involving alleged fraudulent activity such as money laundering, embezzlement,
illegal transactions or damage evaluation. In addition to professional accounting skills, IFA
needs to possess investigative skills and investigative mindset, which requires a sceptical
attitude in the identification, pursuit, analysis and evaluation of relevant information. 12
As a researcher in assessing Governance Integrity indicators, IFA will provide experience in
corruption and fraud studies, ability to interpret relevant law and regulations, information
collection and research skills, where relevance to the subject is considered with unbiased,
independent and sceptical mindset. IFA needs a high degree of integrity, which enables
him/her to identify when integrity is compromised.
Another significant type of engagement that IFA practitioners perform is affiliated to corruption
or fraud prevention, consultation, evaluation of anti-corruption/fraud mechanism and
procedures. By applying his/her skills, IFA can therefore also play significant role in reforming
and improving anti-corruption mechanism and promote good governance.
12
Standard Practices for Investigative and Forensic Accounting Engagements, November 2006, Alliance for Excellence in Investigative and Forensic Accounting.
18
4. ICELAND INTEGRITY REPORT 2012
4.1 Corruption Timeline
Unique political/historical timeline of significant corruption-related events at the nation level
past 10-15 years.
April 1995 – New coalition government formed with the Independence party and the
Progressive party. David Oddsson from the Independence party is the Prime Minister and
Halldor Asgrimsson from the Progressive party is the Foreign affair Minister.
August 1998 – Formal privatization of the banks starts when the government agrees on
procedure and policy to sell the shares in the 3 state owned banks; Landsbanki, Bunadarbanki,
FBA (Investment bank of the business sector) 15% of shares in Landsbanki and Bunadarbanki
was offered to the public and 49% of shares in FBA. Committee on privatisation established.
May 1999 – Parliament election, government holds majority – Policy on privatization of the
banks introduced.
June 2001 - Government decides that the majority of the state shares in the two banks will be
sold to “strategic investors” which are defined as investors with knowledge and experience of
bank and financial operations.
March 2002 - Chairman of the Board of directors of the state owned Icelandic telecom resigns
along with other board members. The chairman had been under fire in February 2002, when it
was revealed that his private consulting company had received kr. 5,1 million for consulting
work in the year 2001 in regards to privatization. Other members of the board asserted that they
didn’t know anything about this arrangement.13
September 2002 - Chairman of the Privatisation committee, Steingrimur Ari Arason, resigns
asserting that all “work rules” set by the government had been breached by the government.14
November 2002- Privatisation of Bunadarbanki, (later Kaupthing bank) the state sells most of
its share to investment group called the S-group, politically connected to the Foreign affair
minister. One member of the group, Finnur Ingolfsson was former Minister of Commerce and
13
Visir March 2002 The complete board of Icelandic telecom removed http://timarit.is/view_page_init.jsp?issId=200919&pageId=3029117&lang=is&q=Landss%EDmans%20sem%20Fri%F0rik 14
SIC Report, April 2010, Volume 8 page 20
19
Industry from 1995-1999 and Governor of the Central bank from 2000-2002. Ingolfsson had
not finished his 5 years tenure as Governor, when he resigned to enter the private sector and
become a member of the S-group. 15
December 2002 – Privatisation of Landsbanki completed, sold to Samson, group of Investors
that had sold their beer factory in St. Petersbourg. The Samson group was led by a former CEO
of freight company in Iceland who was convicted by the Supreme Court in June1991 and got
probation sentence for 1 year in prison for financial fraud and accounting misconduct.
“This was a political decision of the Icelandic government, to privatize [the banks] and to give control of
one of them to someone who has a record as a convicted fraudster. What do you think will happen if
you put frauds in charge of financial institutions in situations where there are no effective regulations at
all? You'll have a disaster. So, certainly the ruling political parties at that time, if you had to start with
accountability, that's where you would start.” William Black, Associate Professor of Economics and Law
at the University of Missouri – Kansas City School of Law and author of The Best Way to Rob a Bank is to
Own One, May 2010, Article: What went wrong, Reykjavik Grapevine, May 2010.
http://grapevine.is/Features/ReadArticle/What-Went-Wrong-financial-collapse-William-Black
January 2003 – Chairman of the Board of Baugur (biggest retail chain in Iceland) tells Prime
Minister Oddsson, that the CEO of Baugur, Jon Asgeir had indicated that they would pay the
PM kr.300 million to let off his criticism on his company.16
Later the Chairman asserted this
was just a joke and taken out of context.
February 2003 - Member of parliament, Arni Johnsen found guilty of passive bribery offence,
various financial fraud and breaching his duties as civil servant, when serving as a Chairman of
the National Theatre construction committee. He was sentenced for 2 years in prison. In 2006
he was granted restoration of his civil rights and re-elected to parliament in June 2007. In May
2012, Arni Johnsen was in the news again as a chairman of construction organization that
received grants from the state, and the National Audit office had criticized the organization for
not submitting Financial statements. Reprehensible mistake said Johnsen´s partner on the
criticism. 17
March 2003 – National Audit Office issues reports where former CEO of state owned Icelandic
telecom (Landsiminn) is criticized for financial transactions; i.e. travel cost, credit card cost and
own personal expenses. The Auditor General requested that the CEO would repay transport
cost for truckloads of trees to the CEO’s own summerhouse , but request was not enforced by
the Board of Directors. Members of the opposition in parliament had debated about the CEO’s
15
MBL The S group buys the State´s majority shares in Bunadarbankinn , November 2002 http://www.mbl.is/greinasafn/grein/698882/
16 MBL, Prime Minister discloses bribery attempt in London http://www.mbl.is/greinasafn/grein/717681/
17 MBL,” Reprehensible mistake”: http://mbl.is/frettir/innlent/2012/05/07/amaelisverdur_klaufaskapur/
20
severance package who turned out to be unprecedentedly generous, once it was disclosed to the
public. 18
March 2003- Prime Minister Oddsson and Foreign Affair Minister Asgrimsson put Iceland on
the list ‘of the willing’ that support the Iraq War. People of Iceland learned about this decision
from a press meeting at the White House, where the country was among those who formed the
coalition of the willing. This decision was taken by the two Ministers, without any discussion
with the cabinet nor in the parliament.19
July 2005 - Icelandic telecom privatized, group of investors including Kaupthing bank, MP
bank under control of Exista buys the Icelandic telecom for kr. 66,7 billion .
May 2007- Revealed on the National TV, just before parliamentary election, that Minister of
Environmental Affairs son´s fiancé , had been granted Icelandic citizenship in 10 days, when
usual process time is 5 -12 months. The Minister was not re-elected to parliament May 12
200720
.
May 2007- New coalition government, Prime Minister Geir Haarde from the Independence
party and Foreign Affair Minister Ingibjorg S Gisladottir from the Social Democratic Alliance.
April 2008 – President of Iceland continues to support the privately owned banks by sending
recommendation letters to heads of state around the world; “I give Kaupthing Bank my strongest
personal recommendation. The professionalism of its leadership and their staff has made
Kaupthing into one of the most successful European banks ....” (Letter from the President of
Iceland to Crown Prince of the United Arabian union April 23, 2008)21
October 2008 – The bank system in Iceland collapses – their balance sheets constituting more
than 10 times GDP of Iceland´s economy.
January 2009 – ‘Pot and pan revolution’ succeeds its mission to push for resignation of the
government. New minority government formed with coalition of the Left Green Movement and
the Social Democratic Alliance.
February 2009 – The Special Prosecutor office established, to investigate suspicions of
criminal actions in the period preceding, in connection with or in the wake of the collapse of the
banks.
18
Frettabladid March 2003 on Auditor General report on former CEO of Icelandic telephone
http://timarit.is/view_page_init.jsp?issId=263600&pageId=3701169&lang=is&q=V%20%DE%F3rarins
19 The White house press release list of the Coalition of the Willing: http://georgewbush-
whitehouse.archives.gov/infocus/iraq/news/20030326-7.html 20
Web news;http://www.visir.is/siminn-seldur-a-taepa-67-milljarda/article/2005507290301 21
Special Investigating Commission (SIC) Report, April 2012, Volume 8 page 176
21
April 2009- Political donation scandal from 2007 discovered. Independence party promises to
return large donation from private bank that was generally interpreted as bribery.
April 2009 – Parliamentary election where the minority government gains majority, Prime
Minister Johanna Sigurdardottir from the Social Democratic Alliance and Minister of Finance
Steingrimur J Sigfusson from the Left Green Movement. The Independence party loses third of
its former support and 9 seats.
December 2009 – Competition Board fines Siminn (Icelandic Telecom) former State owned
company kr. 150 million, for repeated breach of Competition Act. 22
January 2010 – Member of parliament Asbjorn Ottarsson who is also chief executive, owner
and chairman of the board of a fishery Nesver, was accused for paying himself illegal dividends
in 2007 in spite of negative equity for fiscal year 2006. In an interview on the National TV,
Ottarsson said it was a mistake, he was no expert in book-keeping and didn’t know better. He
also didn’t want to involve his accountant because he had died.23
He promised to pay back the
dividend to his company.24
The leader of the Independence party, declared full support and trust
in the PM, since he had admitted the wrongdoing was a mistake and it shouldn’t affect in any
way his integrity or work in the parliament.
April 2010 – The Special Investigation Commission Report, (SIC report) published 9 volumes,
over 2500 pages in total. The purpose was to seek to clarify the events leading to, and the
reason for the collapse of the banks in October of 2008. The goal was also to assess whether the
banks´ failure reflected simply bad luck, or poor governance, poor oversight and/or poor credit
quality. The report revealed all those factors to be in place in addition to corruption at all stages,
from the privatisation of the banks, deregulation, political funding from private companies,
informality and lack of competence in the administration and supervisory authorities.
May 2010 - Member of parliament and former Mayor of Reykjavik resigns as a result of
extensive pressure from media and public, when it was discovered that she had accepted large
corporate donation for her election campaign. She apologized for being guilty of unethical
conduct. 25
April 2011 – Former Chief executive of the Ministry of Finance, Baldur Gudlaugsson found
guilty in district court for using inside information for his personal benefit, when he sold his
shares in Landsbanki, three weeks before the bank collapsed. Gudlaugsson was sentenced to 2
22
Web news DV Sanction 150 million http://www.dv.is/frettir/2009/12/ 23
MBL Paid illegal dividend by mistake, January 2010;
http://www.mbl.is/frettir/innlent/2010/01/26/greiddi_ologlegan_ard_fyrir_mistok/ 24
Income tax on dividend revenues is lower (10% at this time) than on regular revenues.
25 Declaration Steinunn Valdis on her resignation : http://www.svipan.is/?p=7400
22
years in prison and restoration of the ill gotten gain of kr. 190 million. The Supreme Court of
Iceland confirmed the verdict in February 2012.
November 2011 – Chief of State Correction Institution, Kviabryggja prosecuted for fraud,
misappropriation of assets and issuing false invoices. Verdict not issued yet.26
February 2012 - CEO of Financial Supervisory Authority (FME) is fired, after the board of
FME ruled his involvement in off-shore companies on behalf of state-owned bank he was
working for 10 years ago, was controversial, and impaired his qualification as CEO. Few days
later the CEO was charged to the police for allegedly collecting financial information on one
parliament member and sending them via private delivery by peer, to one of the newspapers.
The case is still under investigation.
April 2012 – Competition Board fines Siminn (Icelandic Telcom – kr. 390 million for price
fixing on the cellular/mobile market in addition to kr. 50 million for misleading and wrong
information during the investigation process of the Competition Board. The offence period is
from 2001-2007, and the company was state owned until 2005. The offence is considered very
serious by the Competition Board. 27
April 2012 – Former Prime Minister Geir Haarde found guilty of gross negligence for failing to
hold emergency cabinet meetings in the run up of the crisis. Haarde is the only politician in the
world who has faced prosecution for his role in the financial crisis in 2008.
4.2 Highlights
There are some significant anti-corruption challenges facing Iceland. The ability to
implement the legal framework is not effective. After some significant abusive incidents in
political financing, new law have not been able to raise the confidence level. Political
parties and candidates do not honour generous time limit given to disclose financial
information, and asset disclosures from members of parliament are not audited or verified,
and therefore not reliable. In general, conflicts of interest regulations are weak, allowing
individuals to self-assess their own professionalism and determine that minor conflicts may
not affect their judgement, decision or professional conduct. The Judicial branch is
26
MBL Chief of Kviabryggja prosecuted for fraud: November, 2011 http://mbl.is/frettir/innlent/2011/11/17/for_med_fjarmuni_fangelsis_sem_eigin/ 27
Competition Board, news April 3, 2012 http://www.samkeppni.is/utgafa/frettir/nr/1971
23
especially weak, lacking all safeguards in preventing conflicts of interest. Asset
disclosures of civil servants and officials do not exists. No rules are restricting post-tenure
employment in the private sector by heads of state or government official. This is
especially alerting after many significant incidents where politicians have become
extremely wealthy after suddenly leaving parliament or governor office, to become a owner
of a bank, or other recently privatized corporations. Whistle blowing protections is lacking
completely, with no active reporting mechanism. Privatization of banks and government
corporations in the dawn of the century, was shadowed with allegation of politically
affiliated privatization, based on nepotism, cronyism and patronage, which has not been
cleaned out of the closet, now when the second privatization of banks and many
government owned companies is in the horizon, after total collapse in the fall of 2008.
Despite those weaknesses there are some pillars in the society that are strong and effective.
The media is able to freely report on corruption cases, however political interference and
ownership issues are allegedly interfering with the editorial selection of reporting. Social
media (i.e. Facebook, Blogs and Readers comments) is slowly but surely claiming a bigger
portion of the overall media, which enriches the debate and diminishes the alleged political
power of the traditional media. The ombudsman, taxes and supreme audit agencies are
assessed as professional and independent but the inspection and control agencies are lacking
accountability to ensure that public safety standards are being met in few but significant
cases. Anti-corruption law are in place, but independent agency or mechanism to enforce
the law and address corruption does not exist.
24
4.3 The Integrity Scorecard
Scorecard: Iceland 2012
Overall Score 71 Moderate
Legal Framework Score 80 Strong
Actual Implementation Score 59 Very Weak
Category I Non-Governmental Organizations, Public Information and Media 89
I-1 Anti-Corruption Non-Governmental Organizations 88
I-2 Media's Ability to Report on Corruption 93 Very strong
I-3 Public Requests for Government Information 85
Category II Elections 76
II-1 Voting and Party Formation 75
II-2 Election Integrity 93
II-3 Political Financing Transparency 59
Category III Government Conflicts of Interest Safeguards & Checks and Balances 66
III-1 Conflicts of Interest Safeguards & Checks and Balances: Executive Branch 72
III-2 Conflicts of Interest Safeguards & Checks and Balances: Legislative Branch 74
III-3 Conflicts of Interest Safeguards & Checks and Balances: Judicial Branch 39
III-4 Budget Process Oversight & Transparency 81
Category IV Public Administration and Professionalism 36
IV-1 Civil Service: Conflicts of Interest Safeguards and Political Independence 43
IV-2 Whistle-blowing Protections 0
IV-3 Government Procurement: Transparency, Fairness, and Conflicts of Interest Safeguards 73
IV-4 Privatization of Public Admin Functions: Transparency, Fairness, and Conflicts of Interest Safeguards 29
Category V Government Oversight and Controls 84
V-1 National Ombudsman 90
V-2 Supreme Audit Institution 95
V-3 Taxes and Customs: Fairness and Capacity 90
V-4 Oversight of State-Owned Enterprises 77
V-5 Business Licensing and Regulation 71
Category VI Anti-Corruption Legal Framework, Judicial Impartiality, and Law Enforcement Professionalism 76
VI-1 Anti-Corruption Law 100
VI-2 Anti-Corruption Agency or Equivalent Mechanisms 74
VI-3 Judicial Independence, Fairness, and Citizen Access to Justice 71
VI-4 Law Enforcement: Conflicts of Interest Safeguards and Professionalism 54
Source: DIFA Research Project, M ay 2012 University of Toronto, JSJ
25
4.4 Legal Framework – Actual Implementation
4.4.1 Category I Non-Governmental Organization, Public information and Media
Overal l Legal Implement Gap
Score Framework ation
I-1 Anti-Corruption Non-Governmental Organizations 88 100 83 17
I-2 Media's Ability to Report on Corruption 93 100 87 13
I-3 Public Requests for Government Information 85 100 71 29
Category I overall 89 100 80 20
Legal Framework is very strong, with good foundation for citizens to form anti-corruption
organization, and open access to information and media. The implementation gap however,
shows that there are still few hurdles on the way, especially in regards to government
information. The Information Act guarantees access to official information, with restrictions
that have led to accusations that documents are deliberately categorized as restricted, to keep
them unavailable for public eyes. This tendency was confirmed on witness stand at a recent trial,
where former Prime Minister was found guilty in a special court, for not holding cabinet
meetings at critical times, when financial crisis started to emerge. It was criticized by the court
that discussions about the financial sector was conducted under the topic “other issues” without
recording any further notes under that topic. Fear of confidentiality breach and information leak,
was the main reason given, for failing to meet formal protocols regarding memos and cabinet
meeting minutes.
26
4.1.2 Category II Elections
Overal l Legal Implement Gap
Score Framework ation
II-1 Voting and Party Formation 75 75 70 5
II-2 Election Integrity 93 100 88 12
II-3 Political Financing Transparency 59 92 43 49
Category II overall 76 89 67 22
Recent election of delegates for the Constitutional Assembly, created a new angle on otherwise
trouble free and relatively smooth voting and election procedure. The election was voided and
ruled illegal by the Supreme Court of Iceland. The Chief Electoral Officer and the whole
commission resigned, assuming responsibility of flaw election process. The Supreme Court’s
voidance was considered controversial and politically biased. The former Chief Electoral
Officer was appointed again to the National Electoral commission by the parliament, which by
many thought reflected the parliament’s objection to the Supreme court ruling.
Although new law have been issued to limit donations to political candidates, the confidence
level of the effectiveness has not risen to the occasion. Political donation scandals discovered in
2009, brought out a general disgust and disbelieve in political parties and candidates. The
amounts of many of the corporate donations, both to political parties and individual candidates
can hardly be categorized under anything but bribery in perspective to the maximum amount
limits on donation, that was established by new law.
27
4.1.3 Category III Government Conflicts of Interest Safeguards & Checks and Balances
Overal l Legal Implement Gap
Score Framework ation
III-1 Executive Branch 72 92 48 44
III-2 Legislative Branch 74 81 69 12
III-3 Judicial Branch 39 50 25 25
III-4 Budget Process Oversight & Transparency 81 100 71 29
Category III overall 66 81 53 28
The population of Iceland is only 320 thousand. It is a general accepted myth, that when a group
of five individuals come together, they will find some kind of relations, only 5 minutes into a
conversation, either through mutual friends, old schoolmates or relatives. Strictly defined
conflicts of interest in bigger communities, i.e. when even presumed or apparent conflicts impair
professionals’ integrity and objectivity in making an independent opinion, is difficult to pursue
in Iceland. However, there are many safeguards that are designed to diminish the negative effect
of assumed or actual conflicts of interest that can be effective in small communities as well, but
haven’t been implemented in Iceland.
The weakness of the Judicial branch is significant, both in the legal framework and
implementation. Appointment of judges has for decades been undermined by allegations of
political interference, even after the fact that new law was issued to ensure more transparency
and professionalism in judge appointments. Disqualification due to conflicts of interest is often
taken personally or offensively with reference to the personality of the individual (i.e. he is a
man of high principals that would never let friendship interfere with professional judgement)
With the exception of parliament, asset disclosure of heads and executives is lacking
everywhere in the government sector including judicial branches, and code of conducts are
28
lacking specific quantitative measurements for example in the gifts and hospitality sector. Asset
disclosure from parliament is lacking credibility, since declarations from MP’s are unverified
and unaudited.
4.1.4 Category IV Public Administration and Professionalism
Overal l Legal Implement Gap
Score Framework ation
IV-1Civil Service: Conflicts of Interest Safeguards and
political independence43 40 23 17
IV-2 Whistle-blowing Protections 0 0 0 0
IV-3Government Procurement: Transparency, Fairness and
Conflicts of Interest Safeguards73 88 69 19
IV-4Privatization of Public Admin Functions: Transparency,
Fairness and Conflicts of Interest Safeguards29 25 21 4
Category IV overall 36 38 28 10
The Public Administration is the weakest sector with lowest score in anti-corruption mechanism
and good governance. The same issues of conflicts of interest exist in the administration, as in
the government and judicial branch. Appointments to higher level positions in the
administration has been tainted by political interference, for many years. Privatization of
banks and other government corporations at the beginning of the century, was swamped with
allegation of conflicts of interest and political interference, which were provoked again and
partially blamed for, when the banks and former state corporations collapsed within six years
from privatization.
Public procurement is a “high risk corruption” process, that requires solid, clear regulation and
compliance control. The legal framework is relatively strong although fundamental monitor
29
mechanism in regards to procurement officials is missing. The implementation of regulation
regarding conflicts of interest for procurement officials is very weak.
The big challenge to strengthen a public institution lies in changing the prevailing organizational
culture and value system, especially where roles and relationships prevail over rules and
regulations. Informal relationships are often viewed more important than formal rules and
regulations. Strengthening government agencies and controlling corruption requires addressing
the sources of informality and emphasizing formal rules.28
Whistle-blowing protections do not exist, although some recent provision in law, affiliated with
the investigation of the financial crash, have aimed at conditional protection from recriminating
whistle blowers. The outcome in the administration category complies with analysis on serious
weakness in the administration that was done by the Special Investigation Commission (SIC)
with main factors being i) Lack of initiative and too much focus on responsibility of others; ii)
Independent or bossy government chief executives towards politicians 29
; iii) Negative
influence from political hiring; iv) Lack of professionalism; v) Lack of independence towards
the financial sector and fear to cause crisis; vi) Political paralysis syndrome.30
28
Article “An analysis of the Causes of corruption in the Judiciary” by Edgardo Buscaglia, Maria Dakolias; Law and Policy in International Business, 1999 29
It is asserted in the SIC report that independence from political interference is a good thing, however here the authors are referring to lack of trust between Ministers and the Chief executives of the ministries for example by boycotting the Minister from meetings and important decisions and even holding back important information. 30
Special Investigation Commission Report, April 2010, Volume 8 page 139 (translation by author)
30
4.1.5 Category V Government Oversight and Controls
Overal l Legal Implement Gap
Score Framework ation
V-1 National Ombudsman 90 100 83 17
V-2 Supreme Audit Institution 95 100 91 9
V-3 Taxes and Customs: Fairness and Capacity 90 100 84 16
V-4 Oversight of State-Owned Enterprises 77 67 69 -2
V-5 Business Licensing and Regulation 71 100 38 62
Category V overall 84 93 73 20
The National ombudsman, the National Audit office and Taxes and Custom institution, all
represent the countries strongest pillars in anti corruption measures and good governance both in
legal framework and implementation. All three agencies have established strong sense of
independence, professionalism and quality work. Inadequate funding may however influence
and diminish the effectiveness and performance of the National Audit office and Tax office.
The oversight of state-owned enterprises is mostly conducted by Board of directors, appointed by
the Minister respectively, but there is always a sense of political persistency to keep the control
within arm’s length.
The reputation of Inspection agencies to ensure public health standards, was seriously
downgraded during the observation period, when details on 3 cases were revealed in media,
underlining incompetence and lack of accountability within those agencies. It was mainly the
tendency to “cover up”, and not disclosing information about potential danger to the public
along with fear of public embarrassment that raised eyebrows and caused widespread anger.
31
4.1.6 Category VI Anti-Corruption Legal Framework, Judicial Impartiality and Law
Enforcement Professionalism
Overal l Legal Implement Gap
Score Framework ation
VI-1 Anti-Corruption Law 100 100
VI-2 Anti-Corruption Agency or Equivalent Mechanisms 74 75 63 12
VI-3Judicial Independence, Fairness and Citizen Access to
Justice71 94 65 29
VI-4Law Enforcement Conflicts of Interest Safeguards and
Professionalism54 67 42 25
Category VI overall 76 81 52 29
In a small country like Iceland, it is a rare privilege to have a separate agency, with specialized
task force. Different engagements are distributed between agencies, which can both be very
positive, as employees approach tasks with broader perspective and different experiences, but
negative effects exist when oversight and expertise in complex engagements is required and also
danger of overlapping mandates between agencies. Address of conflicts interest and ethical
issues within the administration and the government is therefore lacking consistency and global
oversight. The Judicial independence and fairness is guaranteed by law, however relatively
large implementation gap indicates controversy. There is no objective system that guarantees
random assignment of cases to judges, nor is the system transparent to the public. Although
public surveys reflect high trust in the law enforcement (police) agency, the lack of independent
mechanism for complaints and allegation of corruption by law enforcement brings down the
score for that section.
32
5. “Where does the shoe hurt?”
When issues and problems are analysed in Iceland it is common to refer to the phrase; “ where
does the shoe hurts” ( hvar skórinn kreppir) to highlight what the exact problem is and in what
area, so reform and improvement can be aimed at the source of the problem. In this last
section, few of the problems revealed from the indicators will be summarized in short notes
under each of the six cateogories.
5.1 Category I Non-Governmental Organization, Public information and Media
Media owners and government do not encourage self-censorship of corruption-related
stories.
Journalists and editors don’t adhere to strict, professional practices in their reporting.
Government information are deliberately being held from public, either by not recording
them or they are categorized as restricted.
5.2 Category II Elections
Political candidates and political parties do not fulfill their obligations to follow the time
restrictions in disclosing financial information, setting a false “tone at the top”. No penalty
mechanism available to improve reporting.
Lack of authority and audit capacity to verify that information regarding political financing
comply with the law.
No limits in effect on expenditure of political parties who receive public grants from state
and municipalities.
33
5.3 Category III Government conflicts of Interest Safeguards & Checks Balances
No restrictions on heads of state, government, ministers and parliament members entering
the private sector after leaving the government.
Regulations governing gifts and hospitality are blurry, without any quantitative measures
which allow public officials to self-assess whether or not gift or hospitality is within
reasonable value.
Accuracy of asset disclosure records from parliament members is not verified or audited,
and are therefore inconsistent and lacking quality.
Government functions and political functions are not kept separate.
Professional criteria has in some cases been set aside in selecting judges to the Supreme
court, reflecting low trust and confidence of the public in the judicial system in national
surveys.
Judicial disciplinary commissioner does not offer official opinion on controversial conflict
of interest cases, and no code of conducts exist in the Supreme Court.
Judges of the Supreme court are not required to file asset disclosure form and no regulations
are restricting post-government private sector employment for Supreme court judges.
Public expenditures and government projects are lacking discipline in staying within budget
and more accurate budgeting.
5.4 Category IV Public Administration and Professionalism
Political interference in hiring and appointments to higher level of the administration
remains persistent, regardless where; left, right, or in the middle the politicians stand.
Civil service management in hiring, firing and promotions are often based on nepotism,
cronyism or patronage.
34
Senior members or other servants of the civil service are not required to file an asset
disclosure form.
Quantity measures on gifts and hospitality are missing in most code of conducts issued by
government agencies.
No restrictions regarding post-government private sector employment for civil servants.
Validation on conflict of interests is done by self-assessment by civil servant if conflicts are
likely to influence his/her decision or judgement.
No law protect civil servants from negative consequences of “whistle-blowing”.
No internal mechanism ( phone hotline, e-mail address, local office) through which civil
servants can report corruption.
Officials in public procurement, a high risk of corruption process, do not have any specific
protocols in evaluating conflicts of interest other than the self evaluation that lacks all
transparency.
There is no mechanism that monitors assets, incomes or spending habits of public
procurement officials.
Results of procurement decisions are often privileged and confidential.
Laws, addressing privatization or sale of government assets do not exist.
5.5 Category V Government Oversight and Controls
Inadequate funding of control and oversight government agencies is influencing effective
performance.
35
Agencies or mechanism overseeing state-owned companies are not protected from political
interference and do not have capacity to initiate investigations or impose penalties on
offenders.
Bureaucracy, license fee, inspection fee and red tape technical barriers can be discouraging
for entrepreneurs and self-employed individuals.
Business inspections by government officials to ensure public health, safety and
environmental standards have proven to be seriously defected.
5.6 Category VI Anti Corruption Legal Framework, Judicial Impartiality, and Law
Consistency and global oversight is lacking when addressing conflicts of interest and ethical
issues within the administration and the government.
The independence of Supreme Court judges is protected by law, however political
interference in appointing judges influence confidence and trust.
There is no system by law for distributing cases to Supreme Court judges in a transparent
and objective manner, nor is it in appearance.
Judicial decisions are sometimes lacking explanations to qualify for precedent purpose and
sometimes the verdicts and sanctions for similar crimes appear to be inconsistent.
The cost of legal suit is a barrier for most citizen and alternative dispute mechanism or small
dispute courts is not available.
The law enforcement is operating with high deficit, indicating insufficient budget or poor
management.
There is no independent mechanism for citizens to complain about police action, or initiate
investigations into allegations of corruption.
36
It would be nice if all of the data which sociologists require could be enumerated because then we could
run them through IBM machines and draw charts as the economists do. However, not everything that can
be counted counts, and not everything that counts can be counted.
William Bruce Cameron, 1963
37
Bibliography
Arndt, Christiane & Oman, Charles, “Uses and Abuses of Governance Indicators” , 2006 Paris
OECD Development Centre
Beasancon, Marie; “Good Governance Rankings: The Art of Measurement”, 2003, World Peace
Foundation
Buscaglia Edgardo, Dakolias Maria; “An analysis of the causes of corruption in the Judiciary”,
1999, Law and Policy in International Business.
Black William; “ What went wrong”, Reykjavik Grapevine, May 2010
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Worldbank
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stiftung.de/cps/rde/xchg/bst_engl/hs.xsl/prj_52957.htm
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Going? 2008, The World Bank Research Observer volume 23 no.1
Internet Web sites:
Global Integrity : http://www.globalintegrity.org/
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http://info.worldbank.org/governance/wgi/index.asp
Bertelsmann Stiftung: Sustainable Governance Indicators: http://www.bertelsmann-
stiftung.de/cps/rde/xchg/bst_engl/hs.xsl/prj_52957.htm
Transparency International: http://transparency.org/
The PRS Group, International Country Risk Guide: https://www.prsgroup.com/
Bibliography
Arndt, Christiane & Oman, Charles, “Uses and Abuses of Governance Indicators” , 2006 Paris
OECD Development Centre
Beasancon, Marie; “Good Governance Rankings: The Art of Measurement”, 2003, World Peace
Foundation
Buscaglia Edgardo, Dakolias Maria; “An analysis of the causes of corruption in the Judiciary”,
1999, Law and Policy in International Business.
Black William; “ What went wrong”, Reykjavik Grapevine, May 2010
Dye, M Kenneth: “Corruption and Fraud Detection by Supreme Audit Institutions” Chapter 10,
Worldbank
http://siteresources.worldbank.org/INTWBIGOVANTCOR/Resources/CorruptionSupreme.pdf
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Bertelsmann Stiftung; http://www.bertelsmann-
stiftung.de/cps/rde/xchg/bst_engl/hs.xsl/prj_52957.htm
Kaufmann, Daniel, Kraay Aart; “Governance Indicators: Where Are We, Where Should We Be
Going? 2008, The World Bank Research Observer volume 23 no.1
Internet Web sites:
Global Integrity : http://www.globalintegrity.org/
World Bank, Worldwide Governance Indicators
http://info.worldbank.org/governance/wgi/index.asp
Bertelsmann Stiftung: Sustainable Governance Indicators: http://www.bertelsmann-
stiftung.de/cps/rde/xchg/bst_engl/hs.xsl/prj_52957.htm
Transparency International: http://transparency.org/
The PRS Group, International Country Risk Guide: https://www.prsgroup.com/
APPENDIX A
Table of Contents
I Non-Governmental Organizations, Public Information and Media
I-1 Anti-Corruption Non-Governmental Organizations ............................................ 1
I-2 Media’s Ability to Report on Corruption ............................................................. 4
I-3 Public request for Government Information ......................................................... 10
II Election
II-1 Voting and Party Formation ................................................................................. 13
II-2 Election Integrity ................................................................................................. 15
II-3 Political Financing Transparency ........................................................................ 18
III Government Conflicts of Interest Safeguards & Checks Balances
III-1 Executive Branch ................................................................................................ 27
III-2 Legislative Branch ............................................................................................. 34
III-3 Judicial Branch .................................................................................................. 38
III-4 Budget Process Oversight & Transparency ....................................................... 44
IV Public Administration and Professionalism
IV-1 Civil Service Conflicts of Interest Safeguards and Political Independence ..... 47
IV-2 Whistle-blowing Protections ............................................................................. 57
IV-3 Government Procurement, Transparency, Fairness & Conflicts Safeguards .... 60
IV-4 Privatization of Public Admin functions, Transparency, Fairness, Conflicts ... 64
V Government Oversight and Controls
V-1 National Ombudsman ............................................................................................ 68
V-2 Supreme Audit Institution ...................................................................................... 73
V-3 Taxes and Customs Fairness and Capacity ............................................................. 76
V-4 Oversight of State-Owned Enterprises ................................................................ 78
V-5 Business Licensing and Regulation ..................................................................... 81
VI Anti-Corruption Legal Framework, Judicial Impartiality and Law Enforcement
Professionalism
VI-1 Anti-Corruption Law ......................................................................................... 87
VI-2 Anti-Corruption Agency or Equivalent Mechanisms ........................................ 89
VI-3 Judicial Independence, Fairness and Citizen Access to Justice ......................... 96
VI-4 Law Enforcement: Conflicts of Interest Safeguards and Professionalism ......... 103
Appendix A - Integrity Indicators 2012 Page 1
Category I Non-Governmental Organizations, Public Information and Media
I-1. Anti-Corruption Non-Governmental Organizations
1 Are anti-corruption/good governance NGOs legally protected?
01a: In law, citizens have a right to form NGOs focused on anti-corruption or good governance.
Score Yes No
Constitution Act 33/1944 Article 74 - Freedom of association
Reference: Constitution http://www.althingi.is/lagas/nuna/1944033.html English version:
http://www.government.is/constitution/
Legal Framework for non-profit organizations in Iceland
http://skemman.is/stream/get/1946/10404/25903/1/a.2011.7.2.12.pdf
01b: In law, anti-corruption/good governance NGOs are free to accept funding from any foreign or
domestic sources.
Score: Yes No
With the exception of Election Act, which prohibits accepting donation from foreign sources, or any
unknown sources.
Reference: Election Act 24/2000 Chapter 3 : http://www.althingi.is/lagas/nuna/2006162.html
01c: In law, anti-corruption/good governance NGOs are required to disclose their sources of
funding.
Score : Yes No
Reference: Act 2/1995 on Public organizations : http://www.althingi.is/lagas/nuna/1995002.html
Act 138/1994 on Private organizations: http://www.althingi.is/lagas/nuna/1994138.html
2 Are anti-corruption/good governance NGOs able to operate freely?
02a: In practice, the government does not create barriers to the organization of new anti-
corruption/good governance NGOs.
Score: 100 75 50 25 0
Internet search did not produce any barriers to the organization of new anti corruption/good governance
NGO’s
Appendix A - Integrity Indicators 2012 Page 2
02b: In practice, anti-corruption/good governance NGOs actively engage in the political and
policymaking process.
Score: 100 75 50 25 0
Business and Industry Association, Labour Unions
Government consults with Business and Industry Associations and Labour Unions, frequently. The years
before the financial collapse the Chamber of Commerce had advocated for deregulation in every aspect
of business operation. Past few years the government has been criticized for not listening to the public
especially the Association that protects interest and fights for families with mortgages and loans that have
increased above the value of their home after the bank collapse and devaluation of the Icelandic Krona.
Reference: Association in support of households (“Hagsmunasamtök Heimilanna“)
http://www.heimilin.is/varnarthing/
Peer II comment: Can Labour unions, employers association or association in support of households be
defined anti-corruption/good governance NGO?
02c: In practice, no anti-corruption/good governance NGOs have been shut down by the
government for their work on corruption-related issues during the study period.
Score: Yes No
Internet search did not produce any NGOs that have been shut down during the study period.
3 Are anti-corruption/good governance NGO activists safe when working on corruption
issues?
03a: In practice, in the past year, no anti-corruption/good governance NGO activists working on
corruption issues have been imprisoned.
Score: Yes No
In February 2011 the District Court sentenced two protestors with suspended 4 months and 2 months in
prison, after being accused along with 7 others of attacking the Parliament Althingi , in protests in
January 2009. The court acquitted all of them for attacking the parliament, however the two were
sentenced for battering, and crime against the government.
The trial were controversial and Prime Minister herself said “ It makes me sad, that the only trial
connected to the economic collapse, in session now, is the one of the so-called nine protesters”
With reference to the peers comments, it is a general opinion that protesters were both protesting the
government and corruption in the society. The indicator however is covering imprisonment of protestors
for more than 24 hours, where corruption is defined broadly as any abuse of power.
Reference: Web news Visir: Sentenced for crime against the government: http://www.visir.is/daemd-
fyrir-brot-gegn-valdstjorninni/article/2011855957950
Appendix A - Integrity Indicators 2012 Page 3
Web bews Visir: Prime Minister sad over judicial process : http://www.visir.is/forsaetisradherra-segir-
framganginn-i-domskerfinu-dapurlegan/article/2011443726375
One protestor was arrested in September 2011 and later sentenced for disobeying police order. He was
standing on a side walk in front of the US embassy in Reykjavik, holding a sign that said “love the
peace”. He had rejected to leave, citing his constitutional protected rights to protest. This protestor can
be defined as activist protesting breach of his constitutional rights.
Reference: http://www.dv.is/frettir/2011/11/16/daemdur-fyrir-fridsamleg-motmaeli-fyrir-utan-sendiradid/
Peer I Comment: The protestors were not sentenced for attacking the Parliament. Can the compiler be
certain that the protestors were working on corruption issues rather than protesting the government’s
policies? (see above)
Peer II Comment: Protesters were protesting as individuals, they can hardly be defined as NGO anti
corruption/good governance activists .
03b: In practice, in the past year, no anti-corruption/good governance NGO activists working on
corruption issues have been physically harmed.
Score: Yes No
Protests in January 2009, became violent, few police men and protestors got minor injuries. Police used
tear gas and smoke bombs to clear the area where protestors gathered in front of the parliament building.
Protests have been frequent since the collapse 2008, but mainly without any injuries.
There were no occurs of physical harm for the period 2011-2012 confirmed either by police authorities or
leader of one of the most consistent activist group this period.
Peer I Comment: January 2009 is not “in the past year”.
Peer II Comment: Past year does not refer to 2009 and the protestors can hardly be defined as NGO anti
corruption/good governance activists.
03c: In practice, in the past year, no anti-corruption/good governance NGO activists working on
corruption issues have been killed.
Score: Yes No
4 Can citizens organize into trade unions?
04a: In law, citizens have a right to organize into trade unions.
Score: Yes No
Trade unions in Iceland have a long history and until 1994 it was even mandatory for all employees to
become a member of an applicable trade union. Article 11 of the European Convention of Human Right
was adopted in 1994, which protects not only the freedom of everyone to join trade unions but also
Appendix A - Integrity Indicators 2012 Page 4
people’s right to stay out of union. There are 51 individual unions that together form an Association of
Labour unions, called ASI which was established in 1916. Constitution freedom of assembly
Reference Constitution: http://www.althingi.is/lagas/nuna/1944033.html English version:
http://www.government.is/constitution/
Association of Labour unions : http://www.asi.is
04b: In practice, citizens are able to organize into trade unions.
Score: 100 75 50 25 0
Category I-2 Medias ability to report on corruption
5 Are media and free speech protected?
05a: In law, freedom of the media is guaranteed.
Score: Yes No
Reference: New Media Act 38 was adopted in 2011, that seeks to ensure freedom of speech and to
protect children from obscene content.
Media commission shall be created with the purpose of mediate between the media, the public and
government. This law is the first of it’s kind in Iceland covering both the press and broadcast media.
The new law has been criticized both from public and the press itself. Many fear that government-
controlled commission to protect and enforce freedom of press is a contradiction in terms and could end
up having opposite effect.
Reference: Media Act 38/2011: . http://www.althingi.is/altext/139/s/1324.html
http://www.editorsweblog.org/2011/04/18/iceland-passes-a-new-media-law-amid-controversy
In 2010 the parliament approved a resolution on an ambitious Icelandic Modern Media Initiative (Immi)
that aims to make the country an international safe haven for investigative journalists, with unprecedented
legal protection for the press, bloggers, and whistle-blowers.
The chairman of the IMMI project, Birgitta Jonsdottir MP and leader of the Movement wrote: “The
crises sharpened our perspective on what really matters. We found out the hard way that we did not have
a vibrant free press that could report without fear of those in power. If we had, perhaps some of the
calamities our country now faces could have been prevented. We need to learn from our experiences and
create a future for Iceland as a beacon of freedom of expression and information.”
Reference: Media Act 38/2011: . http://www.althingi.is/altext/139/s/1324.html
Editors web blog media law controversy: http://www.editorsweblog.org/2011/04/18/iceland-passes-a-
new-media-law-amid-controversy
Immi web site :http://immi.is/Icelandic_Modern_Media_Initiative#Translated_text_of_the_resolution
Appendix A - Integrity Indicators 2012 Page 5
05b: In law, freedom of speech is guaranteed.
Score: Yes No
However, past few year there have been number of threats of and actual prosecutions towards journalists
and editors especially those who have been writing about the executives and former owners and CEO’s
of the three collapsed banks, the biggest debtors, and international corporations that allegedly operated
secretly in tax havens.
One journalist, Svavar Halldorsson with the state owned National broadcasting service (RUV) was
acquitted twice in 2011 in two different slander cases, where he was reporting on former business
tycoons. Svavar said that the lawsuit against him was an attempt to scare other journalists away from
Reference: Constitution Act 33/1944 Article 73 Freedom of thought, believe, opinion and expression,
including freedom of the press. http://www.althingi.is/lagas/nuna/1944033.html English version:
http://www.government.is/constitution/
Article Grapevine, Undaunted by lawsuit from rich and powerful May 2011:
http://www.grapevine.is/News/ReadArticle/Journalist-Undaunted-By-Lawsuit-From-Rich-And-Powerful
6 Are citizens able to form print media entities?
06a: In practice, the government does not create barriers to form a print media entity.
Score 100 75 50 25 0
Reference: Internet search did not produce any barriers to form a print media. Print Media can be
formed under the Acts 138/1194 for private companies or act 2/1995 for public companies. Media needs
to be registered with the Media commission.
06b: In law, where a print media license is necessary, there is an appeals mechanism if a license is
denied or revoked.
Score: Yes No
Reference: No license is required for print media
06c: In practice, where necessary, citizens can obtain a print media license within a reasonable time
period.
Score: Yes No
Comments: No license is required for print media
7 Are citizens able to form broadcast (radio and TV) media entities?
07a: In practice, the government does not create barriers to form a broadcast (radio and TV) media
entity.
Appendix A - Integrity Indicators 2012 Page 6
Score 100 75 50 25 0
Media Act 38/2011 Chapter IV articles 14-23, describe the licence application process, duties and
responsibilities of the licence holder. Post and Telecom Administration in Iceland allocates frequencies
(which are limited) to all radio and TV broadcasters, upon licence from the Media commission.
There were total 16 privately owned and 2 state owned radio stations in operation between 1996-2011 .
TV stations were total 11 thereof 1 state owned, according to Hagstofa (Statistics Iceland)
Reference: Media Act 38/2011 http://www.althingi.is/altext/139/s/1324.html
Statistics Iceland http://www.hagstofa.is
07b: In law, where a broadcast (radio and TV) media license is necessary, there is an appeals
mechanism if a license is denied or revoked.
Score: Yes No
Decisions of the Media commission are final within the administration and cannot be appealed at that
level. Legal actions can be pursued in the District Court. Act 38/2011 article 55
07c: In practice, where necessary, citizens can obtain a broadcast (radio and TV) media license
within a reasonable time period.
Score 100 75 50 25 0
The application process is can be up to 30 days, but often less than that.
Reference: Verified by director of Media commission
07d: In practice, where necessary, citizens can obtain a broadcast (radio and TV) media license at a
reasonable cost.
Score 100 75 50 25 0
License fee is decided according to Act 88/1991, for TV is paid for 3, 5 or 7 years per license and for
radio for 1, 2, 3 or 5 years per license. Short term license (2 months) for radio can also be obtained.
Reference: Act 88/1991 Fee and cost http://www.althingi.is/lagas/nuna/1991088.html
8 Can citizens freely use the Internet?
08a: In practice, the government does not prevent citizens from accessing content published on-line.
Score 100 75 50 25 0
The internet in Iceland is completely open and access to content published on-line is not restricted. In
2011 and 2010, 95% of all individuals 16-74 years old were connected to the internet and other Internet
World Stats show even higher internet usage, 97,6% of the population in 2010.
Appendix A - Integrity Indicators 2012 Page 7
Reference: Statistics Iceland http://www.statice.is and Internet world stats
http://www.internetworldstats.com/euro/is.htm
08b: In practice, the government does not censor citizens creating content on-line.
Score: Yes No
Although there is no censorship of online content, there is an increasing debate relating to the fight
against child pornography about blocking websites with illegal content.
On an Icelandic Internet Governance Forum; “Safer Internet Day” held in February 2011 the Minister of
Education said in her speech, that even though there are no regulations regarding internet access or usage
other than following the standards of the net provider, there was no guarantee that the internet would
continue to be open in the future. The Minister also talked about the increasing pressure on Governments
to censor contents on the internet, to prevent illegal content from being exposed to users.
Reference: http://www.menntamalaraduneyti.is/radherra/raedur/2011/02/10/nr/5851 and http://saft.is/
09a: In law, it is legal to report accurate news even if it damages the reputation of a public figure.
Score: Yes No
Reports that are based on correct information are not restricted in any way, regardless of who is being
reported. This falls under the freedom of speech and is protected by the Constitution article 73.
Reference: Constitution Act 33/1944 http://www.althingi.is/lagas/nuna/1944033.html English
version: http://www.government.is/constitution/
09b: In practice, the government or media owners/distribution groups do not encourage self-
censorship of corruption-related stories.
Score 100 75 50 25 0
The Report of the Special Investigation Commission (SIC) has a separate chapter on” the media before
and during the economic collapse in 2008”. The mass media is criticized for not being critical enough in
their coverage about the banks and financial institution and argued that media coverage of the banks was
largely biased because the owners of the banks also owned the main newspapers and the main private TV
station.
Media in 2011 is still under suspicion of bias, as the main private TV station, newspaper and web news
site is still under control of one of the finance tycoons, who is expected to be a suspect in some of the
many cases investigated by the Special Prosecutor.
David Oddson, the editor of the second largest newspaper (Morgunblaðið / mbl.is) is former Prime
Minister and was also governor of the Central Bank of Iceland when the banks collapsed. Soon after, he
became known for his saying: “I warned them, but nobody would listen” referring to his attempt to
restrain the irresponsible banks. It is widely viewed that censorship on crash and corruption related issues
exists, especially issues related to the Independence Party (Oddson´s party) and the Central Bank during
the editors governing.
Appendix A - Integrity Indicators 2012 Page 8
Reference: SGI Sustainable Governance Indicators 2011, Iceland report, Gretar Thor Eythorsson,
Thorvaldur Gylfason, Detlef Jahn.: http://sgi-network.org/
09c: In practice, there is no prior government restraint (pre-publication censoring) on publishing
corruption-related stories.
Score 100 75 50 25 0
Recently the National TV (RUV) , initiated an investigation on alleged fraud relating to the currency
restriction Act and transfer pricing. One of the largest fishing company in Iceland “Samherji” had
allegedly sold fish to it´s subsidiary in Germany below market price, which is a violation of both Income
Tax Act and Foreign currency regulations. The Central Bank of Iceland and Special Prosecutor started
their own investigation after learning that RUV was inquiring about the case. They asked RUV not to
report on the investigation until they had finished their preliminary investigation. On March 27th they
received injunction order on Samherji´s accounting books. That same night RUV published their report
on the investigation, after holding it back for several weeks to protect investigation interests.
Reference: News Morgunbladid injunction Samherji
http://mbl.is/vidskipti/frettir/2012/03/27/husleit_hja_samherja/
Foreign exchange capital controls : http://sedlabanki.is/?PageID=1019
New concert and conference hall, Harpa was opened in Reykjavik in August 2011. The government and
the City took over the half finished building from a bankrupt former bank owner in the fall of 2008 and
finished the constructions. When DV newspaper asked one of the top executives about the guest list for
the Grand opening ceremony, she was overheard saying: “ Now I´m going to use the trick, they are going
to blew it up that there was an elite party on the ship and are asking for confirmation. Then I will use the
trick that the PR person taught me, just tell them that I’m going on a meeting and ask them to send
email”. There was a big media and blog discussions about this comment reflecting common dislike
among the public. After all this event was related to state and city owned property, and censoring
information about the grand opening guests was regarded improper. The discussions resulted in full
disclosure of the guest list, among who was former builder, the bankrupt banker and his wife.
Reference: News DV the “PR trick” http://www.dv.is/frettir/2011/9/23/steinunn-birna-um-pr-trikkid-
vandraedalegt/
10 Are the media credible sources of information?
10a: In law, print media companies are required to publicly disclose their ownership.
Score: Yes No
New media Act 38/2011 article 21 and 22 implemented public disclosure of their ownership for all media
Reference: Act 38/2011 http://www.althingi.is/altext/139/s/1324.html
Peer II Comment: Recent news indicate that ownership of one of the Media group, where owners are
registered private companies, does not disclose who the actual owners are of those companies. There
seems to be a loophole in the law.
Appendix A - Integrity Indicators 2012 Page 9
10b: In law, broadcast (radio and TV) media companies are required to publicly disclose their
ownership.
Score: Yes No
10c: In practice, journalists and editors adhere to strict, professional practices in their reporting.
Score 100 75 50 25 0
Journalists’ code of conduct has been signed by the unions of journalists and publishers. This one page,
code of conduct is seen as self-commitment. Infringement cases are brought to the ethical committee of
the journalist union which will rule in the cases. Rulings are not appealable. The committee will rule the
breach of code either as a) reprehensible b) serious or c) very serious . The number of cases sent to the
committee increased significantly for the period 2010/2011 total 12 cases, compared to only 2 cases in
2009/2010. In the most recent 10 cases, the committee dismissed 4 cases, ruled no breach in 4 cases and
ruled reprehensible in 2 cases.
Reference: Journalists home page, code of conduct : http://press.is/page/yfirsida_sidanefndar
In 2009 former Prime Minister and leader of the Independence Party and former governor of the Central
bank, David Oddsson became chief editor og Morgunbladid, which is still viewed as highly controversial
appointment in view of the editors role in the financial collapse. The editorials reflect Oddsson´s strong
opinion about who is responsible for the financial collapse and who is not, mainly himself and his fellow
political partner and former Prime Minister Geir Haarde. Haarde is the first political leader in the world to
be indicted in connection to the financial crisis for failing to prevent the financial crash or minimize the
serious consequences of the collapse. During the trial Oddsson was one of the many witnesses called
before the Special Court, and in a short interview after his witness stand he told the media to read the
editorials in Morgunbladid, as he agrees fully with them.
Reference: http://www.huffingtonpost.com/2010/09/28/geir-haarde-indicted-iceland-financial-
crisis_n_742800.html http://www.visir.is/vidtalid-vid-david-oddsson-i-heild-sinni/article/2012120309235
The other main newspaper Frettabladid and the only private TV Station Stod 2 was owned by Baugur
Group which went bankrupt, but the media companies in that group, are still under control of the former
owner of Baugur, Jon Asgeir Johannesson a key player in the former financial tycoons club. Some
journalists that have been fired or resigned their employment from Johannesson’s company have later
said that they were happy to be free from the restriction of the financial tycoon, indicating strong
censorship and control by the owner of the media.
Reference: News Morgunbladid, “Free ...”
http://mbl.is/frettir/innlent/2009/01/22/frjals_undan_oki_audjofra/
10d: In practice, during the most recent election, political parties or independent candidates
received fair media coverage.
Score: Yes No
Formally, The National Broadcast station RUV and the private station offer political candidates equal
access to their media coverage regarding the election. The largest private media groups have tendency to
Appendix A - Integrity Indicators 2012 Page 10
favor the bigger parties and well known candidates in their coverage. In the coming presidential election,
June 30,2012 ,where 7 candidates are running for president, one private TV station offered only 2
candidates, which opinion polls consider to be the strongest, to come on a “president debate” show. This
has been objected widely among the public, but both candidates have accepted the invitation, and one of
them has written a letter to the producer of the show, asking for a review of this decision. Presuming
reconsideration of this decision, the score remains yes.
Reference: SGI Sustainable Governance Indicators 2011, Iceland report, Gretar Thor Eythorsson,
Thorvaldur Gylfason, Detlef Jahn.: http://sgi-network.org/
Web news Eyjan: “Presidential debate – for the two chosen” http://eyjan.is/2012/05/30/kappraedur-fyrir-
utvalda-thora-skoradi-a-stod-2-ad-endurskoda-akvordunina/
10e: In practice, political parties and candidates have equitable access to state-owned media outlets.
Score: Yes No
See 10d
11 Are journalists safe when investigating corruption?
11a: In practice, in the past year, no journalists investigating corruption have been imprisoned.
Score: Yes No
Internet search did not produce any such incidents.
11b: In practice, in the past year, no journalists investigating corruption have been physically
harmed.
Score: Yes No
Internet search did not produce any incidents where journalists have been harmed, however incidents of
threats to physically harm journalist was found, from gang members of alleged organized crime
operations.
Reference: http://www.pressan.is/Frettir/Lesa_Innlent/heidu-hotad-liflati-lysti-hvernig-hann-aetladi-
binda-mig-berja-ur-mer-othekktina-naudga-og-loks-drepa
11c: In practice, in the past year, no journalists investigating corruption have been killed.
Score: Yes No
Category I-3 Public Request for Government Information
12 Do citizens have a legal right to request information?
12a: In law, citizens have a right to request government information and basic government records.
Appendix A - Integrity Indicators 2012 Page 11
Score: Yes No
Information Act (Upplysingalög) No. 50/1996 guarantees with some restrictions, the right of access to
official information. Memoranda, working documents and material related to Council of State (Ríkisráð)
cabinet and ministerial meetings are exempted from the act. This act does not apply to court proceedings
correspondence, job applications, registration, liquidations, the division of estates at death or other official
divisions, investigations, or prosecutions in criminal cases. Personal and financial information are not
accessible without obtaining a permission from the person involved. Information regarding state security,
defense of the state and international correspondence.
Reference:Information Act 50/1996 http://www.althingi.is/lagas/139b/1996050.html
Reference: SGI Sustainable Governance Indicators 2011, Iceland report, Gretar Thor Eythorsson,
Thorvaldur Gylfason, Detlef Jahn.: http://sgi-network.org/ Access to government information
12b: In law, citizens have a right of appeal if a request for a basic government record is denied.
Score: Yes No
Denial of request to access information can be appealed to the Information committee, whose 3 member
are appointed by the Prime Minister. Information Act 50/1996 Articles 14-19
12c: In law, there is an established institutional mechanism through which citizens can request
government records.
Score: Yes No
Request for information are sent to applicable government entity, who is obliged to process the request
within 7 days or else explain the delay, and when decision can be expected. Information Act 50/1996
Article 10-13
13 Is the right to information requests effective?
13a: In practice, citizens receive responses to information requests within a reasonable time period.
Score 100 75 50 25 0
No information are available from different entity how long time it takes to process information request
other than referring to the 7 days required by law. Two cases were found among the appealed cases in
2011 that were complaints about long process time.
Reference: Information appealing committee: http://ursk.forsaetisraduneyti.is/urskurdir/
13b: In practice, citizens can use the information request mechanism at a reasonable cost.
Score 100 75 50 25 0
The fee that is permitted to charge for regular documents is reasonable; photocopies 20 kr per page
(0.15$) up till 100 pages and 15 kr per page after that. For all other information, data, photos, recordings
Appendix A - Integrity Indicators 2012 Page 12
and videos it is permitted to charge the full cost of obtaining the information. When the entity doesn’t
have resources to reproduce the information, it is permitted to hire 3rd
party at the cost of the person who
requested the information.
Reference Regulation on charges for information: http://www.forsaetisraduneyti.is/log-og-
reglugerdir/nr/232
Peer I comment: In practice citizens are not charged. I would say 100 and my opinion is that the
regulation is reasonable.
13c: In practice, responses to information requests are of high quality.
Score 100 75 50 25 0
The restrictions in the Information Act have led to accusations that documents are deliberately
categorized under restricted category, to keep them inaccessible.
The lack of formality and proper registry of meetings, discussions and decisions within the government
and administration was criticized as reprehensible both by the Special Investigation Commission (SIC)
and the parliament´s prosecutor.
The Government discussed the problems of the banks under the topic: “other issues” without any further
documentation on the issue. The explanation for this secrecy was to keep confidentiality and prevent
any leak of information that could be harmful for the economy.
Reference : SIC report 7.volume chapter 21 page 260
13d: In practice, citizens can resolve appeals to information requests within a reasonable time
period.
Score 100 75 50 25 0
The Information act doesn’t indicate time period for appeals, other than “ as soon as possible”.
The Information Appeal Committee ruled in 49 cases in 2011. Respond time in 47% of the cases was 3-6
months, in 24% of cases was 6-9 months, in 16% of cases over 9 months and only 12% were answered
within 3 months, which is considered “asap” in this rating.
Reference: Information appealing committee: http://www.forsaetisraduneyti.is/log-og-
reglugerdir/nr/232
13e: In practice, citizens can resolve appeals to information requests at a reasonable cost.
Score 100 75 50 25 0
There is no charge for the appealing process, and the decision of the Information Committee can not be
overruled.
Appendix A - Integrity Indicators 2012 Page 13
13f: In practice, the government gives reasons for denying an information request.
Score 100 75 50 25 0
All rulings are listed on the web site in compliance with the Information Act. For each ruling the
conclusion chapter is detailed and descriptive with reference to the applicable act.
Category II. Elections
Category II-1 Voting and Party Formation
14 Is there a legal framework guaranteeing the right to vote?
14a: In law, universal and equal adult suffrage is guaranteed to all citizens.
Score: Yes No
Article 33 of the constitution guarantees any citizen who has reached age 18 the right to vote. Another
condition is to have legal residential home in Iceland. Icelandic citizens with residents abroad can apply
for their voting right for parliament and presidential elections.
Reference: http://www.althingi.is/lagas/nuna/1944033.html
14b: In law, there is a legal framework requiring that elections be held at regular intervals.
Score: Yes No
According to the constitution election for parliament (Althingi) is to be held every four year, same rule
applies for municipality and presidential elections.
Reference: http://www.althingi.is/lagas/nuna/1944033.html
15 Can all citizens exercise their right to vote?
15a: In practice, all adult citizens can vote.
Score 100 75 50 25 0
As a principle all citizens have the right to vote. Before a referendum held in April 2011 on the loan
guarantees repayment by Iceland to UK and Netherland, there were complaints from fishing men
working 30 days shifts on sea, that couldn´t vote because pre-poll stations were not open until 17 days
prior to the referendum. Article 48 and 49 in the Election for parliament Act no 24/2000 allows captains
on fishing boats to assume the role of director of pre-polling station usually 3-4 weeks before elections.
However in this referendum no pre-poll stations were open on fishing boats.
Reference:Election Act 24/2000 http://www.althingi.is/lagas/nuna/2000024.html
Appendix A - Integrity Indicators 2012 Page 14
News article, “ not able to vote” http://visir.is/fa-ekki-ad-kjosa-um-icesave/article/2011703149951
15b: In practice, ballots are secret or equivalently protected.
Score 100 75 50 25 0
The low score reflects recent case that was ruled by the Supreme Court. Election of delegates for the
Constitutional Assembly held in November 2010 was voided and ruled illegal by the Supreme Court of
Iceland in January 2011. The judges believed that so many candidates (522) for the 25 assembly spots
created a logistical problem. They felt rights may have been violated because ballots were numbered,
while open voting carton booths and ballot boxes did not adequately shield the choices people made.
Ballots were also not counted publicly, in violation of Iceland law, according to the court.
Reference: Article Supreme court of Iceland nullifies Constitutional Assembly elections by Dave Sutor,
February 2011 http://voices.yahoo.com/supreme-court-iceland-nullifies-constitutional-7763126.html
15c: In practice, elections are held according to a regular schedule.
Score 100 75 50 25 0
Election for Althingi shall be held for a term of four years. However the president, upon the proposal of
the Prime Minister may dissolve Althingi if a motion for a vote of confidence is not supported by the
majority of the members of Althingi. On 23rd
of January 2009 the majority Government resigned less
than two years into its term, as a result of demands and protests of the “Pot and Pan revolution”. New
elections were held in April 2009.
16 Are citizens able to participate equally in the political process?
16a: In law, all citizens have a right to form political parties.
Score: Yes No
Constitution Act 33/1944 Article 74 - Freedom of association and assembly includes all political parties.
Reference: Constitution Act 33/1944 http://www.althingi.is/lagas/nuna/1944033.html
16b: In law, all citizens have a right to run for political office.
Score: Yes No
Article 34 in the Constitution guarantees right for all citizens to run for political office with the exception
of those who have been charged for violation of the Criminal code . Supreme court judges cannot run for
political office.
Reference: http://www.althingi.is/lagas/nuna/1944033.html
16c: In practice, all citizens are able to form political parties.
Score 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 15
Before every elections new political parties are formed without any barriers. Late 2009, The Best Party
(Besti flokkurinn) was founded, by a comedian actor and writer Jon Gnarr. A practical joke party, which
from the beginning promised to break all promises given before the election. The party received the
majority of the vote and Jon Gnarr became the Mayor of Reykjavik. Since the election he has shown
genuine interest in serious governing. Next elections for Althingi will be held no later than 2013, and 4
new political parties have already been formed.
Reference: Article The Telegraph, The Best party wins in Iceland May 2010:
http://www.telegraph.co.uk/news/worldnews/europe/iceland/7787422/The-Best-party-wins-in-
Iceland.html
16d: In practice, all citizens can run for political office.
Score 100 75 50 25 0
Criminal offenders and Supreme court judges are excluded from running for political office.
Candidates who want to run for political office must have signed endorsement from minimum 30 and
maximum 40 people.
16e: In practice, an opposition party is represented in the legislature.
Score 100 75 50 25 0
Act No 55/1991 governance of the legislator, committee appointments and rules of procedure.
Reference: Act 55/1991 http://www.althingi.is/altext/139/s/1805.html
Category II-2 Election Integrity
17 In law, is there an election monitoring agency or set of election monitoring
agencies/entities?
17a In law, is there an election monitoring agency or set of election monitoring agencies/entities?
Score: Yes No
Reference: Section 13 Election Act http://www.althingi.is/lagas/nuna/2000024.html
18 Is the election monitoring agency effective?
18a: In law, the agency or set of agencies/entities is protected from political interference.
Appendix A - Integrity Indicators 2012 Page 16
Score: Yes No
There are 3 levels of election agencies. National electoral commission, Regional commission
and Local commission. Althingi appoints delegates for the National and Regional commission.
It is a civil duty to serve on a election commission. Article 11 Election act No 24/2000
Reference: National electoral commission: http://www.landskjor.is/english
18b: In practice, agency (or set of agencies/entities) appointments are made that support
the independence of the agency.
Score 100 75 50 25 0
National electoral commission and Regional commission are appointed after each election to
Althingi. Parliament members elect 5 member and 5 spare, both to the National and Regional
commission. After Supreme court voided the election of delegates for the Constitutional
Assembly in the end of January 2011, the Chief Electoral Officer resigned, and so did the whole
commission. A month later February 28, 2011 Althingi elected the Chief Electoral Officer,
Astradur Haraldsson again to the National electoral commission. The verdict of the Supreme
court was controversial, and viewed as politically biased by those who objected the whole
Constitutional Assembly idea. Many viewed that the Government and majority of Althingi was
expressing their opinion of the voidance of the Supreme Court, by electing the former Chief
Electoral again to the commission.
New electoral commission appointed: http://www.visir.is/astradur-situr-i-nykjorinni-
landskjorstjorn/article/2011110228944
National electoral commission resigns: http://www.visir.is/landskjorstjorn-segir-af-
ser/article/2011616688895
Peer II comment: This is a good example, which implies that perhaps other factors than
ensuring that election procedure are proper, are in force.
18c: In practice, the agency or set of agencies/entities has a professional, full-time staff.
Score 100 75 50 25 0
There are no requirements in law in regards to any professional qualifications . New commission
was elected 2011, after the previous commission resigned when Supreme court voided the
election of delegates for the Constitutional Assembly. By resigning from the commission the
Chief Electoral Officer along with the other members assumed responsibility for not fulfilling
obligation by law. However they declared that they had prepared the elections to the best of
their abilities and in accordance with the law. The Electoral commission assembles prior to new
elections, and does not have a full-time staff between election. The Internal Affair Ministry is
responsible for Electoral matters.
Appendix A - Integrity Indicators 2012 Page 17
Reference: http://www.landskjor.is/
http://www.visir.is/landskjorstjorn-segir-af-ser/article/2011616688895
18d: In practice, the agency or set of agencies/entities makes timely, publicly available reports
following an election cycle.
Score 100 75 50 25 0
In Iceland, elections are viewed as major social event. Participation in last 3 election to Althingi was over
85% on average. The media interviews electoral officials and agents in every riding and reports
participation updates regularly during the election day which is always on a Saturday . When polls are
closed usually at 10 pm, first numbers from the ridings are presented, as counting of votes starts earlier
in the day. Families and friends gather together at homes or at restaurants and wait with much
anticipation for the first numbers. The whole reporting process is very formal, electoral officers in every
riding, read out loud the results, and the event is broadcasted life from 2 main TV stations, whose only
program for that night is the election wake (kosningavaka)
18e: In practice, when necessary, the agency or set of agencies/entities imposes penalties on
offenders.
Score 100 75 50 25 0
Articles 124-127 in Election Act provides detailed provisions to impose fines. Article 128 sanction up
to 4 years in prison for serious offenses. Criminal code 19/1940 also sanction offenses that can occur
during the election process. The legal framework provides sufficient deterrence to prevent offenses.
Reference: Election Act Section 124-128 ; http://www.althingi.is/lagas/nuna/2000024.html
Criminal Code Act 19/1940 http://www.althingi.is/lagas/nuna/1940019.html
19 Are elections systems transparent and effective?
19a: In practice, there is a clear and transparent system of voter registration.
Score 100 75 50 25 0
All citizens are registered in the Registers Iceland (Thjodskra). They whose residence is registered in
Iceland are automatically included in the voter register. Voters who have moved shortly before the
election date are asked to verify their poll station or ridings in time. There is no known concerns about
the system of voter registration.
19b: In law, election results can be contested through the judicial system.
Score: Yes No
Article 118 and 119 Election Act no 24/2000 http://www.althingi.is/lagas/nuna/2000024.html
Appendix A - Integrity Indicators 2012 Page 18
19c: In practice, election results can be effectively appealed through the judicial system.
Score 100 75 50 25 0
Recent example from January 2011, when the Supreme Court voided the election of delegates for the
Constitutional Assembly. The judges believed that so many candidates (522) for the 25 assembly spots
created a logistical problem. They felt rights may have been violated because ballots were numbered,
while open voting carton booths and ballot boxes did not adequately shield the choices people made.
Ballots were also not counted publicly, in violation of Iceland law, according to the court.
Reference: Article Supreme court of Iceland nullifies Constitutional Assembly elections by Dave Sutor,
February 2011 http://voices.yahoo.com/supreme-court-iceland-nullifies-constitutional-7763126.html
19d: In practice, the military and security forces remain neutral during elections.
Score 100 75 50 25 0
Does not apply,there is no military in Iceland.
19e: In law, domestic and international election observers are allowed to monitor elections.
Score: Yes No
Section 94 Election Act 24/2000 permits agents from political parties to observe the voting process and
they can complain to the electoral commission, if necessary. Internet search did not produce any
international observers, and they are not specifically mentioned in law.
Reference: Section 94 Election Act 24/2000 http://www.althingi.is/lagas/nuna/2000024.html
19f: In practice, election observers are able to effectively monitor elections.
Score 100 75 50 25 0
Referendum process Act 162/2010 article 9, specifically requires appointment of agents to protect
different views, at the poll stations and counting station to solve disputes.
In election to parliament, all political parties are allowed to have their agent present at poll stations and
counting stations to observe the process.
Reference: Referendum process Act 162/2010 http://www.kosning.is/thjodaratkvaedagreidslur2011
Category II-3 Political Financing Transparency
20 Are there regulations governing the financing of political parties?
20a: In law, there are limits on individual donations to political parties.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 19
Maximum individual donations to a political party is kr 400,000 (CAD$ 3,000) It is prohibited to receive
donation from unknown donors, corporations that are majority owned by state or city and foreign citizens
or corporations.
Reference: Article 6-7 Act 162/2006 Political party financing
http://www.althingi.is/lagas/nuna/2006162.html
20b: In law, there are limits on corporate donations to political parties.
Score: Yes No
Maximum corporate donations to a political party is kr 400,000 (CAD$ 3,000) ) It is prohibited to
receive donation from unknown donors, corporations that are majority owned by state or city, foreign
citizens or corporations.
Section 6- 7 Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
20c: In law, there are limits on total political party expenditures.
Score: Yes No
The political parties receive public grants from the state both proportional to number of serving members
and received votes. Municipalities also pay grants in proportion to serving members in local council.
The limits of expenditures in elections only refers to individual candidates.
Reference: Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
20d: In law, there are requirements for the disclosure of donations to political parties.
Score: Yes No
Article 9 Act 162/2006 requires disclosure of donations from all corporations and for donations over kr.
200,000 from individuals.
Reference: Article 9 Act 162/2006 http://www.althingi.is/lagas/nuna/2006162.html
20e: In law, there are requirements for the independent auditing of the finances and expenditures
of political parties when financial irregularities are uncovered.
Score: Yes No
All political parties and individual candidates are required to send their financial statements signed by
auditor to the National Audit office for monitoring, with or without irregularities.
Reference: Article 8-11 Act 162/2006 http://www.althingi.is/lagas/nuna/2006162.html
20f: In law, there is an agency or entity that monitors the financing of political parties.
Appendix A - Integrity Indicators 2012 Page 20
Score: Yes No
The National Audit office monitors financing of political parties.
Reference: Section 8-11 Act 162/2006 http://www.althingi.is/lagas/nuna/2006162.html
21 Are there regulations governing the financing of individual political candidates?
21a: In law, there are limits on individual donations to political candidates.
Score: Yes No
Maximum individual donations to a political candidates is kr. 400,000 (CAD$ 3,000) ) It is prohibited
to receive donation from unknown donors, corporations majority owned by state or city and foreign
citizens or corporations.
Article 6-7 Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
21b: In law, there are limits on corporate donations to individual political candidates.
Score: Yes No
Maximum individual donations to a political candidates is kr. 400,000 (CAD$ 3,000) ) It is prohibited
to receive donation from unknown donors, corporations majority owned by state or city, foreign citizens
or corporations.
Article 6-7 Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
21c: In law, there are requirements for the disclosure of donations to individual political
candidates.
Score: Yes No
Article 9 Act 162/2006 requires disclosure of donations from all corporations and for donations over kr.
200,000 from individuals.
Reference: Article 9 Act 162/2006 Political party financing:
http://www.althingi.is/lagas/nuna/2006162.html
21d: In law, there are requirements for the independent auditing of the campaign finances of
individual political candidates when irregularities are uncovered.
Score: Yes No
All individual candidates are required to send their financial statement signed by auditor or bookkeeper
to the National Audit office for monitoring. Individual candidates are exempt from disclosing their
finances if their total cost or revenues is less than kr. 400,000 , simple declaration is required.
Appendix A - Integrity Indicators 2012 Page 21
Reference: Article 8-11 Act 162/2006 Political party financing:
http://www.althingi.is/lagas/nuna/2006162.html
21e: In law, there is an agency or entity that monitors the financing of individual political
candidates' campaigns.
Score: Yes No
The National Audit office monitors financing of individual political candidates’ campaigns
Reference: 162/2006 Political party financing: http://www.althingi.is/lagas/nuna/2006162.html
22 Are the regulations governing the political financing of parties effective?
22a: In practice, the limits on individual donations to political parties are effective in regulating an
individual's ability to financially support a political party.
Score 100 75 50 25 0
The Act 162/2006 took effect as of January 1, 2007. Before that time the finance of political parties and
individual campaigns was not disclosed to the public. In August 2009 Althingi added a temporary
article to the act, permitting The National Audit office to invite political parties to receive and disclose
information about donations over Kr. 200,000 for the period 2002-2006. The same applied also to
individual candidates campaigning for seat in pre-selection within their political party, for the period
2005-2007 ( The act took effect as of June 2007 for individual candidates.)
The reason for this amendment was pressure and allegation from the public that large donations to parties
and individuals could be defined as bribery and if these donations were not disclosed it would
compromise integrity both of the political party and the individual.
Early in April 2009 it was revealed that the Independence party had received over Kr. 55 million (CAD$
430.000) before the 2007 election from one of the fallen banks and investment firm related to the former
business tycoons. The timing of this reveal was most unfortunate for the party, as new elections was to be
held later in the month. The media pounded and the public was angry. The Chief Executive Officer of
the party resigned. Other party members were ‘pointing finger’ at who knew and didn’t know about these
donations. The new leader of the Independence party Bjarni Benediktsson, declared no knowledge of the
donations, and said that they compromised the ethical standards that he wanted his party to follow. He
promised that the party would repay these donation. Many viewed that by repaying the donations, the
leader had acknowledged that they were unethical. It was the former Prime Minister Geir Haarde who
took responsibility of receiving these donations, but he had already resigned from his political career.
Although the legal framework seems to provide strict limits on donations, there could be some loopholes
around it in effect, waiting to be discovered. The benefit of doubt is towards the latter which reflects the
low score. I am not confident about the effectiveness of the limits, it is too soon to tell after many
“beyond ethical” examples were revealed in last parliament election.
Reference: Amendment to act 162/2006 August 2009 http://www.althingi.is/altext/stjt/2009.099.html
Appendix A - Integrity Indicators 2012 Page 22
Web News Visir, The donation case of the Independence party, 2009 http://www.visir.is/styrkjamal-
sjalfstaedisflokksins-i-hnotskurn/article/200914871316
Peer I Comment: I agree with the comments of the compiler. Time will tell how Act no. 162/2006 with
subsequent amendments will work.
Peer II Comment: I would have given higher score, because the Act is very clear and therefore the
disclosure of high donation to the Independence party after the act came into force resulted in strong
responds.
22b: In practice, the limits on corporate donations to political parties are effective in regulating a
company's ability to financially support a political party.
Score 100 75 50 25 0
See answer in 22a
Peer II Comment: I would have given 50
22c: In practice, the limits on total party expenditures are effective in regulating a political party's
ability to fund campaigns or politically-related activities.
Score 100 75 50 25 0
There are no limits on total party expenditures in effect. The political parties receive public grants from
the state both proportional to number of serving members and received votes. Municipalities also pay
grants in proportion to serving members in local council. The limits of expenditures in elections only
refers to individual candidates.
Reference: Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
22d: In practice, when necessary, an agency or entity monitoring the financing of political parties
independently initiates investigations.
Score 100 75 50 25 0
There have not been any investigations initiated by the National Audit Office (NAO) The Act 162/2006
was amended as of October 1, 2010 giving the NAO authority to ask for data and supporting documents
from political parties. Up until that time the NAO did not have any investigation authority other than
reviewing Financial statements and summarize them in a consistent manner and present the summary on
the NAO’s web page, in accordance to article 9 of the Act.
Reference: Interview with senior employee at the Icelandic National Audit Office.
Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
22e: In practice, when necessary, an agency or entity monitoring the financing of political parties
imposes penalties on offenders.
Appendix A - Integrity Indicators 2012 Page 23
Score 100 75 50 25 0
No penalties have been imposed on offenders. The National Audit office (NAO) has sent inquiries and
suggestions to political parties regarding donations from some corporations. The reason is that some of
the corporations have been majority state-owned, and therefore against the law to receive donations from
them. Due to the financial crisis, many corporations have gone bankrupt and taken over by the new
banks, which at some point in time were state owned. For that reason the NAO has sent inquiries about
dates of donations, to verify that they are legible at the time when donations were received by the political
party. If the donations turned out to be illegal, the political party returned them in all cases, so the NAO
has not acted any further. Although NAO has not imposed any penalties, this example shows that the
NAO is monitoring and requesting return of illegal donations, which some may view as a penalty. After
October 2010, new amendment to the act allows the national treasury to seizure illegal donations.
Reference: Interview with senior employee at the Icelandic National Audit Office.
22f: In practice, contributions to political parties are audited.
Score 100 75 50 25 0
Political parties are required to have their Financial Statement audited and signed by certified auditor in
accordance to International Audit Standards. The National Audit Office, also reviews contributions to
verify that they comply with the law. The National Audit Office can only be engaged in audit that is
required by law.
Reference: Interview with senior employee at the Icelandic National Audit Office.
Peer II comment: The political parties are required to send audited Financial statements, the problem
however is that they send it in late .
23 Are the regulations governing the political financing of individual candidates effective?
23a: In practice, the limits on individual donations to political candidates are effective in regulating
an individual's ability to financially support a particular candidate.
Score 100 75 50 25 0
The Act 162/2006 took effect as of January 1, 2007, with the exception of pre-election of political
candidates within the political parties which took effect as of June 30, 2007. Before that time the finance
of political parties and individual campaigns was not disclosed to the public and all the individual pre-
selection campaigns before the parliament election in 2007 were exempt from disclosure of finances.
However, in August 2009 Althingi added a temporary article to the act, permitting The National Audit
office to invite political candidates to receive and disclose information about donations over Kr. 200,000
for the period 2005-2007.
The reason for this amendment was pressure and allegation from the public that large donations to parties
and individuals could be defined as bribery and if these donations were not disclosed it would
compromise integrity both of the political party and the individual.
Appendix A - Integrity Indicators 2012 Page 24
In May 2010 Steinunn Valdis Oskarsdottir member of parliament, resigned as a result of extensive
media and public pressure, when it was revealed that she had accepted large corporate donations for her
election campaign in 2006. She was not the only candidate to receive such large donation, however other
candidates did not step up to the resignation plate. Steinunn Valdis, apologized to the public for being
guilty of unethical conduct by receiving donations from corporation. The declaration was viewed by
many as acknowledgement to the opinion that large donations from corporations is “not a free lunch” and
is a red flag for corruption.
Although the legal framework seems to provide strict limits on donations, there could be some loopholes
around it in effect, waiting to be discovered. The benefit of doubt is towards the latter which reflects my
scoring. I am not confident about the effectiveness of the limits, it is too soon to tell after many “beyond
ethical” examples were revealed in last parliament election.
Reference: http://www.icenews.is/index.php/2010/05/28/icelandic-mp-resigns-over-campaign-funding/
Resignation declaration Steinunn Valdis : http://www.svipan.is/?p=7400
23b: In practice, the limits on corporate donations to individual candidates are effective in
regulating a company's ability to financially support a candidate.
Score 100 75 50 25 0
See answer 23a
Reference: http://www.icenews.is/index.php/2010/05/28/icelandic-mp-resigns-over-campaign-funding/
Declaration Steinunn Valdis on her resignation : http://www.svipan.is/?p=7400
23c: In practice, when necessary, an agency or entity monitoring the financing of individual
candidates' campaigns independently initiates investigations.
Score 100 75 50 25 0
There have not been any investigations initiated by the National Audit Office (NAO) as investigations
authority towards individual candidates is not provided by law.
Reference: Interview with senior employee at the Icelandic National Audit Office.
23d: In practice, when necessary, an agency or entity monitoring the financing of individual
candidates' campaigns imposes penalties on offenders.
Score 100 75 50 25 0
No penalties have been imposed. The National Audit Office is authorized to request for data and
supporting documents from individual candidates to verify that donations from individuals and
corporations are within lawful limit, according to article 10 Act 162/2006
Reference: Interview with senior employee at the Icelandic National Audit Office.
Appendix A - Integrity Indicators 2012 Page 25
Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
23e: In practice, the finances of individual candidates' campaigns are audited.
Score 100 75 50 25 0
Individual candidates are required to send financial statement signed by auditor or person with accounting
knowledge. If revenues or cost don’t exceed kr. 400,000 the individual candidate is exempt from
sending financial statement, a simple declaration with signature thereof is needed. Majority, 86% of
individual candidates in the 2009 parliament election sent in declaration that their campaign did not
exceed kr. 400,000 in revenues or cost. It is not known if the financial statement from the remaining 14%
of the candidates was audited or signed by a person with accounting knowledge.
Reference: Interview with senior employee at the Icelandic National Audit Office.
Financial information from candidates, The National Audit website: http://www.rikisendurskodun.is/
24 Can citizens access records related to the financing of political parties?
24a: In practice, political parties disclose data relating to financial support and expenditures within
a reasonable time period.
Score 100 75 50 25 0
The parties are requested to submit their statement of accounts before October 1, of each year for the
preceding year according to article 9 of the Act. Only the smallest political parties have sent their
statement before requested time, but the rest of them disclosed their financial statement for 2010 before
end of year 2011. Political parties can not apply for any grants from the government or municipalities
unless their information obligation to the National Audit office has been fulfilled.
Reference: Interview with senior employee at the Icelandic National Audit Office.
24b: In practice, citizens can access the financial records of political parties within a reasonable
time period.
Score 100 75 50 25 0
The National Audit website discloses summary statement from the political party after they have been
reviewed, and necessary information been gathered, including explanations from the party if needed. The
time period from the financial statement is received by the National Audit Office and disclosed on their
website is usually not longer than 3 weeks, which is reasonable.
Reference: Interview with senior employee at the Icelandic National Audit Office.
24c: In practice, citizens can access the financial records of political parties at a reasonable cost.
Score 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 26
The summary of financial records of political parties are accessible free of charge on The National Audit
website in accordance to article 10-11 Act 162/2006
Reference: Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
The National Audit website: http://www.rikisendurskodun.is/
24d: In practice, the publicly available records of political parties' finances are of high quality.
Score 100 75 50 25 0
Section 9 Act 162/2006 requires The National Audit office to disclose summary statement that is
consistent for all political parties. Revenues are categorized by source; grants from state and
municipality, memberships, corporate donations, individual donations. Received discount under market
price and sold assets over market price shall be disclosed. Name of all corporation with donated amount.
Name of individuals whose donations are higher than kr. 200,000 (CAD$ 1,500)
Financial records for 2007-2010 for all political parties are accessible on The National Audit website,
and the information are in accordance to the law. However the summary information in the Balance
sheet, only exhibits summary amounts for current and fixed assets, debts and equity. The revenue side of
the income statement is more detailed, but operation cost is usually summarized to one amount.
Reference: Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
The National Audit website: http://www.rikisendurskodun.is/
25 Can citizens access records related to the financing of individual candidates' campaigns?
25a: In practice, individual political candidates disclose data relating to financial support and
expenditures within a reasonable time period.
Score 100 75 50 25 0
Of 325 candidates for the parliament election in April 2009, 86% of them sent in simple declaration that
their campaign cost or revenues did not exceed kr. 400,000 and 87% of the candidates sent in information
later than the 3 months from election, obligated due date. When this is written in April 2012, majority
of the candidates of two parties Independence party and Social democrats party in the municipality
elections in the spring of 2010 have not sent in required information.
Peer is right, zero can indicate that no-one discloses data, however the criteria with the zero score also
indicates rarely published information with more than a year in between publication also deservers a zero
score. There is a tendency to withhold politically sensitive information from public disclosure.
Reference: Summary reports from individual candidates. The National Audit website:
http://www.rikisendurskodun.is/
Peer II comment: I would give 25, because zero in my understanding indicates that no-one discloses
data. (see above)
Appendix A - Integrity Indicators 2012 Page 27
25b: In practice, citizens can access the financial records of individual candidates (their campaign
revenues and expenditures) within a reasonable time period.
Score 100 75 50 25 0
The National Audit website discloses list of all candidates with dates of when the office received
statement or declaration. If candidate has disclosed financial statement, a summary is also disclosed. The
time period from the financial statement is received by the National Audit Office and disclosed on their
website is usually not longer than 3 weeks, which is reasonable.
Reference: The National Audit website: http://www.rikisendurskodun.is/
25c: In practice, citizens can access the financial records of individual candidates (their campaign
revenues and expenditures) at a reasonable cost.
Score 100 75 50 25 0
The summary of financial records of individual candidates are accessible free of charge on The National
Audit website in accordance to section 10-11 Act 162/2006
Reference: Act 162/2006 Political party financing http://www.althingi.is/lagas/nuna/2006162.html
The National Audit website: http://www.rikisendurskodun.is/
25d: In practice, the publicly available records of political candidates' campaign finances are of
high quality.
Score 100 75 50 25 0
Majority of the political candidates for the parliamentary election in April 2009, or 87% were exempt
from sending financial reports, as their campaign expenses didn’t exceed kr. 400,000 according to
simple declaration thereof signed by the candidate.
Total 47 candidates who sent in financial statement for total cost kr. 49,4 million (CAD$ 385,000)
almost half (49%) of which was financed by the individual candidate with own debts or financing.
Anonymous individuals donated 29% and 22% from corporations that were identified. No candidate
disclosed received discounts or any other non- monetary donations, as is required by the Act.
Reference: Reference: Financial reports from individual candidates. The National Audit website:
http://www.rikisendurskodun.is/
Category III Government Conflicts of Interest Safeguards & Checks and Balances:
Executive Branch
Category III-1 Conflicts of Interest Safeguards & Checks and Balances: Executive Branch
26 In law, can citizens sue the government for infringement of their civil rights?
Appendix A - Integrity Indicators 2012 Page 28
26a: In law, can citizens sue the government for infringement of their civil rights?
Score: Yes No
The civil rights are defined in Articles 63-76 of the Icelandic Constitution. If no infringement of civil
rights is found on the national level, citizens can take their case before the European Court of Human
Rights in Strasbourg. According to Section 46 of the European Convention of Human Rights, Iceland
has to abide by the court’s ruling, having ratified the convention.
In 2008 the United Nations Committee on Human Rights declared the fishery management system, under
which boat owners were granted fishing quotas free of charge, violation of human rights and instructed
the Icelandic government to rectify the system by removing the discriminatory element.
Reference: Icelandic constitution: http://www.althingi.is/lagas/nuna/1944033.html
Convention for the Protection of Human Rights and Fundamental freedom Council of Europe
http://www.conventions.coe.int/Treaty/en/Treaties/Html/005.htm
SGI Sustainable Governance Indicators 2011, Iceland Report Civil rights http://www.sgi-
network.org/index
27 Can the chief executive be held accountable for his/her actions?
27a: In practice, the chief executive gives reasons for his/her policy decisions.
Score: 100 75 50 25 0
The media questions Ministers and Prime Minister on a regular basis about policy or decisions that will
make the news. When Althingi is in session, members of parliament have opportunity to enquire for
reasons or request answers to specific questions, according to the parliament protocols under the topic
“Enquiries to Ministers”. There is no formal duty to give reasons, and if no one asks, chances are no
reason will be given.
The new Constitutional bill that is before Althingi, awaiting a national referendum has a new provision
that puts a duty on Ministers to give members of Althingi “correct, proper and complete information”.
In 2003, Prime Minister and foreign affair Minister decided , to put Iceland on the “list of the willing”
that supported the war on Iraq. There were no discussions about the subject in Althingi or with other
members of the cabinet The people of Iceland learned about this decision on a press briefing in the US
department of State where Iceland name appeared as a member of the “Coalition of the willing”
Reference: New Constitution Bill, Chapter 5, Article 93
http://stjornlagathing.is/starfid/frumvarp/#V__kafli__Radherrar_og_rikisstjorn
The White house press release list of the Coalition of the Willing: http://georgewbush-
whitehouse.archives.gov/infocus/iraq/news/20030326-7.html
27b: In law, the judiciary can review the actions of the executive.
Appendix A - Integrity Indicators 2012 Page 29
Score: Yes No
Act 3/1963 Landsdomur a special court that handles cases prosecuted by Althingi against government
Ministers for breaching their duty and responsibilities as a member of the cabinet.
Article 60 of the Constitution: “ Judges settle all disputes regarding the competence of the authorities. No
one seeking a ruling thereon can, however, temporarily evade obeying an order from the authorities by
submitting the matter for a judicial decision.”
Reference: Act 3/1963 Special court : http://www.althingi.is/lagas/nuna/1963003.html
Peer I Comment: I understand this question also as referring to judicial review of administrative
decisions, i.e. the authority of the courts to review whether such decisions are taken on the basis of law.
See Art. 60 of the Constitution. (see above)
27c: In practice, when necessary, the judiciary reviews the actions of the executive.
Score: 100 75 50 25 0
For the first time in history, Landsdomur the special court assembled early March 2012 after Althingi had
prosecuted former Prime Minister Geir Haarde for his role in financial collapse of the country in the fall
2008. Geir Haarde is accused of negligence in failing to prevent the financial implosion, from which
Iceland is still struggling to emerge. The Prime Minister is accused of violating the Minister’s
Accountability Act.
The Special Investigation Commission (SIC) expressed their opinion in the report that was issued 2010,
that the prime minister and two other ministers (finance and business affairs) had shown negligence by
omitting to respond in an appropriate fashion to the impending danger for the Icelandic economy in 2008.
Althingi voted 33 against 30 for Haarde’s prosecution but voted against prosecution of other ministers.
The verdict came on April 23, 2012, where the former PM was found guilty of violating article 17 of the
constitution by failing to hold emergency cabinet meetings, when financial crisis was emerging.
It is my understanding that the Executive Branch refers to the Cabinet Ministers and the executives in the
government ministries, but Category IV addresses the executives in the Administration.
Reference: Article Guardian, Trial of former prime minister of Iceland begins
http://www.guardian.co.uk/world/2012/mar/05/iceland-pm-charged-crisis
Act 4/1963 Minister Accountability : http://www.althingi.is/lagas/nuna/1963004.html
Landsdomur, special court website http://landsdómur.is/
Special Investigation Commission, SIC Report: http://sic.althingi.is/
Guardian UK Iceland ex-PM found guilty: http://www.guardian.co.uk/world/2012/apr/23/iceland-geir-
haarde-found-guilty
Constitution Act 33/1944 http article 17: http://www.government.is/constitution/
Appendix A - Integrity Indicators 2012 Page 30
Peer I comment: I understand this question also as referring to judicial review of administrative
decisions, i.e. the authority of the courts to review whether such decisions are taken on the basis
of law. See Art. 60 of the Constitution. (See note above)
Peer II comment: I am questioning if this score is fair, since Landsdomur has only once been
called together.
27d: In practice, the chief executive limits the use of executive orders for establishing new
regulations, policies, or government practices.
Score: 100 75 50 25 0
Past 5 years there have been issued on average 1250 regulations annually by the Government Ministers.
In 2011 issued regulations peaked at 1357, compared to 1160 in 2010. It is difficult to determine if the
number of regulations is normal and in accordance to natural course of governance. However it is a
common opinion that new regulations during a year are excessive, reflecting the score of 50.
Reference: Regulation issuance: http://www.reglugerd.is/interpro/dkm/WebGuard.nsf/dk_2?openview
28 Is the executive leadership subject to criminal proceedings?
28a: In law, the heads of state and government can be prosecuted for crimes they commit.
Score: Yes No
However, Article 49 of the Constitution gives members of parliament immunity protecting them from
criminal prosecution, unless they are caught in the act of committing crime.
Reference: Constitution act 33/1944 article 49 http://www.government.is/constitution/
Act 4/1963 Minister ‘s Accountability http://www.althingi.is/lagas/nuna/1963004.html
Penal Code 19/1940 Article 128-141 http://www.althingi.is/lagas/nuna/1940019.html
28b: In law, ministerial-level officials can be prosecuted for crimes they commit.
Score: Yes No
Penal Code 19/1940 Article 128-141 http://www.althingi.is/lagas/nuna/1940019.html
Act 4/1963 Minister’s Accountability http://www.althingi.is/lagas/nuna/1963004.html
29 Are there regulations governing conflicts of interest by the executive branch?
29a: In law, the heads of state and government are required to file a regular asset disclosure form.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 31
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
29b: In law, ministerial-level officials are required to file a regular asset disclosure form.
Score: Yes No
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
29c: In law, there are regulations governing gifts and hospitality offered to members of the
executive branch.
Score: Yes No
Act 115/2011 Government of Iceland, article Chapter 6, Ethical standards in the Government, requires all
government branches to issue code of ethics. In March 2011, the Prime Minister signed the code of ethics
for Ministers of the cabinet. Article 3 of the code about Finances and payroll requires that a gift register
shall be maintained for all gifts received by Minister, and they shall become a property of the applicable
ministry. Petty personal gifts are exempt, but no amount are defined as petty. Minister shall not accept
hospitality trips from private entitites, unless part of the trip is performing official government duties.
Reference: Act 115/2011 Government of Iceland : http://www.althingi.is/altext/stjt/2011.115.html
Siðdareglur Radherra, code of ethics for Ministers: http://www.stjr.is/rikisstjorn/sidareglur/
29d: In law, there are requirements for the independent auditing of the executive branch asset
disclosure forms (defined here as ministers and heads of state and government).
Score: Yes No
There is no provision in law or regulation regarding audit of the asset disclosure.
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
29e: In law, there are restrictions on heads of state and government and ministers entering the
private sector after leaving the government.
Score: Yes No
There are no law or regulation, restricting heads of state or ministers to enter the private sector after
leaving the government.
29f: In practice, the regulations restricting post-government private sector employment for heads of
state and government and ministers are effective.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 32
No restriction regulations regarding post government private sector.
29g: In practice, the regulations governing gifts and hospitality offered to members of the executive
branch are effective.
Score: 100 75 50 25 0
The regulations for Cabinet Ministers came into effect in March 2011. Prior to the financial collapse in
2008 it was common for Cabinet Ministers and even the President of Iceland to accept flights on private
jets owned by private companies and banks, when they were attending meeting with them to introduce
Icelandic businesses and banks or attending sport events. This practice was criticized in the Special
Investigation Commission Report (SIC), and called for strict regulations thereof. There has not been any
incident to determine the effectiveness after the new regulations and it is too soon to deem them effective.
Reference: SIC report Volume 8 page Appendix 1
Code of ethics for Ministers of cabinet: http://www.stjr.is/rikisstjorn/sidareglur/
Morgunbladid; Passenger log books for private jets, incomplete:
http://www.mbl.is/frettir/forsida/2010/04/12/ofullkomnir_farthegalistar_einkathotna/
29h: In practice, executive branch asset disclosures (defined here as ministers and above) are
audited.
Score: 100 75 50 25 0
There is no provision in law or regulation regarding audit of the asset disclosure.
30 Can citizens access the asset disclosure records of the heads of state and government?
30a: In law, citizens can access the asset disclosure records of the heads of state and government.
Score: Yes No
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
30b: In practice, citizens can access the asset disclosure records of the heads of state and
government within a reasonable time period.
Score: 100 75 50 25 0
All parliament members are required to disclose asset records, within 30 days from new parliament has
been elected.
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
Appendix A - Integrity Indicators 2012 Page 33
30c: In practice, citizens can access the asset disclosure records of the heads of state and
government at a reasonable cost.
Score: 100 75 50 25 0
Access to records is free of charge on the parliament website.
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
30d: In practice, the asset disclosure records of the heads of state and government are of high
quality.
Score: 100 75 50 25 0
One of the requirements in the asset disclosure is to disclose if members of parliament have got any
debts forgiven. The Special Investigation Commission (SIC) reported that of 63 members of parliament,
10 owed the failed banks kr. 100 million or more each, at the pre-crash exchange rate of the krona, with
their personal debts ranging from kr. 113 million to kr. 3,6 billion (CAD$ 2,8 million) . Of these 10, 3
are still members of parliament for the Independence party. No member of parliament declares any debt
forgiveness or changes in terms. The leader of the Independence party Bjarni Benediktsson (BB)
declares no assets. In an interview in February 2012, on RUV National TV station, he was asked what
he did with the money he got from selling stocks of estimated value kr. 126 million in Glitnir bank, 8
months before it collapsed , he answered that he built a home for his family for the money. Resident
house is excluded from asset disclosure. No one of 63 parliament members has received gifts with value
over kr. 50.000 and only 2 PM’s declare support or donation from individual or corporation more than kr.
50.000 . Appendix C exhibits asset disclosures compiled from Althingi’s website. In general PM’s seem
to be free from conflicts, don’t accept gifts, or donation, only 13 PM’s own at least third in real estate, and
10 PM declare owing shares in corporations. On the other hand the table in appendix C may disclose that
the asset declaration are inconsistent of low quality.
Bank confidentiality article prohibits any disclosure of individual or corporate finances. Therefore it is
not possible to verify if the disclosures of assets are accurate or of high quality.
Refences: Act 161/2000 on Financial institution article 58 confidentiality:
http://www.althingi.is/lagas/137/2002161.html
SIC Report, volume 2 page 200, April 2010
Interview RUV National TV with the leader of the Independence party February 2012 :
http://www.ruv.is/sarpurinn/kastljos/14022012/bjarni-benendiktsson
31 In practice, official government functions are kept separate and distinct from the
functions of the ruling political party.
31a: In practice, official government functions are kept separate and distinct from the functions of
the ruling political party.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 34
Code of ethics for Ministers article 5, requires minister to clearly separate political party functions from
the ministry and government functions.
There have been some recent incidents, when government functions have been delayed and postponed
due to political view of the Minister involved. One example is when a foreign businessman wanted to
purchase a land in the highlands of Iceland, with the purpose of operating a tourist related business there.
The law requires that foreigner outside the European Economic Area (EEA) that wants to invest in
Iceland, needs permit from the minister. However the law does not allow the minister to postpone or
delay the decision, because he is not in favor of the idea.
Former Minister of fisheries and agriculture was fired from cabinet in December 2011 for being
uncooperative and preventing discussion of important issues and bills to be submitted to Althingi.
Recently Prime Minister Johanna Sigurdardottir explained to Althingi that the late presentation of the
quota bill, was the former Minister’s fault, he had delayed the new (fish)quota bill for 2 years and been
late with all tasks and did not cooperate with other Ministersof the cabinet.
Internet search did not produce any recent incident of misuse of government money for political party
function.
Reference: Code of ethics for Ministers if cabinet: http://www.stjr.is/rikisstjorn/sidareglur/
Visir Article About [.....] minster power, by Robert Spano:
http://m2.visir.is/Umraedan/Frett?ArticleID=2011709209993
Visir: Johanna blames Jon for delay of quotabill: http://www.visir.is/johanna-kenndi-joni-bjarna-um-
seinagang-kvotafrumvarpsins/article/2012120328843
32 Can members of the legislature be held accountable for their actions?
32a: In law, the judiciary can review laws passed by the legislature.
Score: Yes No
Reference Constitution http://www.althingi.is/lagas/nuna/1944033.html English version:
http://www.government.is/constitution/
32b: In practice, when necessary, the judiciary reviews laws passed by the legislature.
Score: Yes No
The Supreme court ruled in June 2010 that bank loans indexed to foreign currencies were in violation of a
law passed by parliament in 2001. This verdict was significant and indicated that the asset portfolios of
the failed banks contained loans that turned out to be illegal. The parliament Althingi issued new law
151/2010 to clarify how the interest on the illegal loans should be calculated. This meant interest should
be based on highest interest rate authorized by the Central bank instead. In September the Supreme
court ruled these interest clarification illegal, the initial contractual interest should hold.
Reference: http://www.icenews.is/index.php/2010/06/19/foreign-currency-car-loans-confirmed-as-
illegal-in-iceland/
Appendix A - Integrity Indicators 2012 Page 35
http://www.icenews.is/index.php/2010/09/17/supreme-court-rules-on-interest-for-iceland-foreign-
currency-loans/
32c: In law, are members of the national legislature subject to criminal proceedings?
Score: Yes No
However, Article 49 of the Constitution gives members of parliament immunity, protecting them from
criminal prosecution, unless they are caught in the act of committing crime.
Reference: Constitution act 33/1944 article 49 http://www.government.is/constitution/
Act 4/1963 Minister’s Accountability http://www.althingi.is/lagas/nuna/1963004.html
Penal Code 19/1940 Article 128-141 http://www.althingi.is/lagas/nuna/1940019.html
33 Are there regulations governing conflicts of interest by members of the national
legislature?
33a: In law, members of the national legislature are required to file an asset disclosure form.
Score: Yes No
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
33b: In law, there are restrictions for national legislators entering the private sector after leaving
the government.
Score: Yes No
There are no law, restricting national legislators entering the private sector. In fact some members of the
parliament are business owners in the private sector.
33c: In law, there are regulations governing gifts and hospitality offered to members of the national
legislature.
Score: Yes No
Code of ethics for parliament has not been completed.
Reference: The office of Althingi.is
33d: In law, there are requirements for the independent auditing of the asset disclosure forms of
members of the national legislature.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 36
There is no provision in law or regulation regarding audit of the asset disclosure.
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
33e: In practice, the regulations restricting post-government private sector employment for
national legislators are effective.
Score: 100 75 50 25 0
No regulations restricting post government private sector employment.
33f: In practice, the regulations governing gifts and hospitality offered to national legislators are
effective.
Score: 100 75 50 25 0
No regulations governing gifts and hospitality for parliament.
33g: In practice, national legislative branch asset disclosures are audited.
Score: 100 75 50 25 0
There is no provision in law or regulation regarding audit of the asset disclosure.
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
34 Can citizens access the asset disclosure records of members of the national legislature?
34a: In law, citizens can access the asset disclosure records of members of the national legislature.
Score: Yes No
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
34b: In practice, citizens can access legislative asset disclosure records within a reasonable time
period.
Score: 100 75 50 25 0
All parliament members are required to disclose asset records, within 30 days from new parliament has
been elected.
Reference: Regulation to file asset disclosure form
http://www.althingi.is/vefur/hagsmunaskraning_reglur.html
Appendix A - Integrity Indicators 2012 Page 37
34c: In practice, citizens can access legislative asset disclosure records at a reasonable cost.
Score: 100 75 50 25 0
Access to disclosure records are free of charge
34d: In practice, the asset disclosure records of members of the national legislature are of high
quality.
Score: 100 75 50 25 0
Same as 30d
One of the requirements in the asset disclosure is to disclose if members of parliament have got any
debts forgiven. The Special Investigation Commission (SIC) reported that of 63 members of parliament,
10 owed the failed banks kr. 100 million or more each, at the pre-crash exchange rate of the krona, with
their personal debts ranging from kr. 113 million to kr. 3,6 billion (CAD$ 2,8 million) . Of these 10, 3
are still members of parliament for the Independence party. No member of parliament declares any debt
forgiveness or changes in terms. The leader of the Independence party Bjarni Benediktsson (BB)
declares no assets. In an interview in February 2012, on RUV National TV station, he was asked what
he did with the money he got from selling stocks of estimated value kr. 126 million in Glitnir bank, 8
months before it collapsed , he answered that he built a home for his family for the money. Resident
house is excluded from asset disclosure. No one of 63 parliament members has received gifts with value
over kr. 50.000 and only 2 PM’s declare support or donation from individual or corporation more than kr.
50.000 . Appendix C exhibits asset disclosures compiled from Althingi’s website. In general PM’s seem
to be free from conflicts, don’t accept gifts, or donation, only 13 PM’s own at least third in real estate, and
10 PM declare owing shares in corporations. On the other hand the table in appendix C may disclose that
the asset declaration are inconsistent of low quality.
Bank confidentiality article prohibits any disclosure of individual or corporate finances. Therefore it is
not possible to verify if the disclosures of assets are accurate or of high quality.
Refences: Act 161/2000 on Financial institution article 58 confidentiality:
http://www.althingi.is/lagas/137/2002161.html
SIC Report, volume 2 page 200, April 2010
Interview RUV National TV with the leader of the Independence party February 2012 :
http://www.ruv.is/sarpurinn/kastljos/14022012/bjarni-benendiktsson
35 Can citizens access legislative processes and documents?
35a: In law, citizens can access records of legislative processes and documents.
Score: Yes No
Constitution Act Article 27 requires all laws to be published. Article 57 requires all meetings of Althingi
to be held in public. The state owned TV station RUV, broadcasts all meetings of Althingi during
session.
Appendix A - Integrity Indicators 2012 Page 38
Reference Constitution http://www.althingi.is/lagas/nuna/1944033.html English version:
http://www.government.is/constitution/
35b: In practice, citizens can access records of legislative processes and documents within a
reasonable time period.
Score: 100 75 50 25 0
Audio and video recording of all speeches held at Althingi, including text version is available on the
Althingi web site . Documents on legislation process and topical information are also accessible on the
Government website under applicable ministry.
Reference Web site Althingi: http://www.althingi.is/ web site Government:http://www.stjr.is/
35c: In practice, citizens can access records of legislative processes and documents at a reasonable
cost.
Score: 100 75 50 25 0
Information on the ministry and Althingi web sites are accessible free of charge.
Access to complete Act legislation is available at no cost.
Regulation 623/2005 mandates issue of electronic newspaper about new act and regulation passed in the
legislation. In addition to new act and regulations the paper contains government announcements and
rulings, advertisements regarding judicial issues, foreclosures etc. The subscription cost is reasonable
but according to the regulation, access to information may be limited, for privacy act reasons.
Regulation 623/2005 Government Act and regulations presentation. http://brunnur.stjr.is/interpro/dkm/lbb/stjrtid.nsf/0/268e5d7349be50b90025703000698970?OpenDocume
nt&Click=
III – 3 Conflicts of Interest Safeguards & Checks and Balances: Judicial Branch
36 Are judges appointed fairly?
36a: In law, there is a transparent procedure for selecting national-level judges.
Score: Yes No
All judges, both in the Supreme Court and in district courts, are appointed by the President of Iceland as
proposed by the Minister of Internal affairs. There has never been an incident where the President
objected the Minister´s proposal. Before 2010 the procedure for judge selection was criticized by many
for being political tainted and bias in favour of personal friends and family of the Ministers and political
party in power. In 2010 new amendment Act 45/2010 came in force with section 4a that required more
transparency and professionalism in judge selection. Evaluation committee shall be appointed to select
the applicant with the most qualification. The Minister can not appoint to the office of judge any one that
the evaluation committee has not designated as the most qualified.
Appendix A - Integrity Indicators 2012 Page 39
Reference: Act 15/1998 on the Judiciary, Section 4 and 4a English translation:
http://www.innanrikisraduneyti.is/log-og-reglugerdir/thydingar/nr/109
36b: In practice, professional criteria are followed in selecting national-level judges.
Score: 100 75 50 25 0
The judges for the Supreme Court are appointed for an indefinite period of time. The score of 25 for
the practice and professional criteria reflects reality before the act was amended in 2010 prohibiting
Minister to appoint a judge that had not been designated with the most qualifications, by evaluation
committee. In 2003 a Supreme Court judge was appointed against the recommendation of the evaluation
committee. This person was a close relative to serving Prime Minister, David Oddsson.
In January 2008, the son of former Prime Minister, David Oddson1, was appointed district court judge,
by acting minister of justice, the Minister of Finance Árni Mathiesen, who stepped in for the Minister of
Justice because he had declared conflict of interest due to close relationship to the applicant who had
served as his assistant for a period of time. Both Ministers were member of the Independence party, the
same that Oddson had served as leader from 1991-2005. In April 2008 the Supreme Court ruled the
appointment reprehensible, based on the fact that the successful applicant was not designated with most
qualifications. The acting Minister decided against the committee proposal when appointing less
qualified person as judge. Compensation damages to the applicant who was designated most qualified,
was ruled to be paid for loss of reputation by the national treasury and the Minister. The appointment of
the judge was not withdrawn.
Most of all Supreme Court judges have been appointed by the Minister of Justice from the Independence
Party. This party has been a member of coalition government in 22 of the 32 government that have been
formed since the party was founded in 1929. Most of the Supreme Court judges 8 out of 12 did not have
any prior judge experience at lower court level when they were appointed to the Supreme Court. In 2011
3 new judges were appointed, there of only 1 with prior judge experience.
For decades, the appointment of judges has undermined the public confidence in the courts. In a recent
survey called “The National pulse” from Capacent about trust and confidence in various government
entities, the public confidence in the judicial system is rated 38%, while the police department is rated
83% indicating stronger public confidence in the police than the judicial system.
Reference: Sustainable Governance Indicators 2011 Iceland report: http://sgi-network.org/
Web news Eyjan about Supreme Court decision; http://eyjan.is/2011/04/14/haestirettur-stadfestir-dom-
yfir-arna-mathiesen-vegna-skipan-thorsteins-davidssonar/
Supreme Court ruling 412/2010: http://www.haestirettur.is/domar?nr=7336&leit=t
The saga of the Independence party: http://sjalfstaedisflokkurinn.blogg.is/saga-sjalfstaedisflokksins/
The National pulse March 2012 confidence in government entities: http://www.capacent.is/frettir-og-
frodleikur/thjodarpulsinn/thjodarpulsinn/2012/03/06/Traust-til-stofnana/
1 David Oddsson was Mayor of Reykjavik 1982-1991, Prime Minister 1991-2004 , Foreign affair Minister 2004-
2005, Leader of the Independence party 1991-2005, Governor of the Central Bank of Iceland 2005-2008, Main Editor of the daily newspaper Morgunbladid from 2009 till date.
Appendix A - Integrity Indicators 2012 Page 40
Peer I comment: I agree with the comments of the compiler but I would rather say 50 out of 100 than
25. It is more accurate to say that the Supreme court awarded damages to another applicant
rather than saying that the Supreme Court found that the appointment was illegal. (see above)
36c: In law, there is a confirmation process for national-level judges (i.e. conducted by the
legislature or an independent body).
Score: Yes No
The amendment bill to Act 15/1998 has a provision for the legislature Althingi to confirm the
appointment process, when the Minister wants to appoint judge who is not evaluated with most
qualification. The Minister shall place the motion before Althingi and it must be approved, or the
Minister will be bound to the opinion of the evaluation committee.
Reference: Reference: Act 15/1998 on the Judiciary, Section 4a English translation:
http://www.innanrikisraduneyti.is/log-og-reglugerdir/thydingar/nr/109
37 Can members of the judiciary be held accountable for their actions?
37a: In law, members of the national-level judiciary are obliged to give reasons for their decisions.
Score: Yes No
Act 91/1991 on Private Court : http://www.althingi.is/altext/stjt/1991.091.html
Act 88/2008 on Criminal Court: http://www.althingi.is/lagas/nuna/2008088.html
37b: In practice, members of the national-level judiciary give reasons for their decisions.
Score: 100 75 50 25 0
Court decisions are published by the respective court, on a daily basis. The explanations are accessible
on the respective court´s homepage.
Some critics have arisen in regards to recent court decisions regarding Act 151/2010 issued by the
parliament to clarify how interest on illegal currency indexed loan should be calculated. In September
2011, the Supreme court ruled it was illegal to change contractual interest for future payments of loans,
but did not extend the decision or the precedent of the ruling to retrospective interest of loan payments of
the illegal loans. Another case had to be brought before the Supreme court, regarding the same act,
which was also ruled illegal in February 2012. It is a common view that since it was foreseeable that
many debtors were waiting for the ruling in September, the Supreme court should have explained the
ruling to the extend that it could be interpreted for all illegal loans, retrospectively and going forward.
Reference: Web News Mbl.is Supreme Court ruling February 2012:
http://www.mbl.is/frettir/innlent/2012/02/15/midi_vid_erlendu_vextina/
Peer I comment: I agree with the comments of the compiler. The [judiciary] reasoning could be better in
some cases.
Appendix A - Integrity Indicators 2012 Page 41
Peer II comment: One thing is to give reason for decision, another thing is to explain how judge came to
that conclusion and how it should be interpreted.
37c: In law, there is a disciplinary agency (or equivalent mechanism) for the national-level judicial
system.
Score: Yes No
Judicial Council is appointed by the Minister to handle organizational, financial issues, determine
number of judges in each district court, issue general rules, and to make proposals on any matter
conducive to improving the function of the district courts or amending the legislation applicable to them.
The president of the Supreme court is in charge of similar functions in the Supreme court, including
administration of the court´s functions, assigning tasks to individual judges and exercise disciplinary
authority over them.
Reference: Reference: Act 15/1998 on the Judiciary, Section 5, 13,14 English translation:
http://www.innanrikisraduneyti.is/log-og-reglugerdir/thydingar/nr/109
37d: In law, the judicial disciplinary agency (or equivalent mechanism) is protected from political
interference.
Score: Yes No
Judges are required to discharge their judicial functions independently and on their own responsibility.
They shall respect any decisions lawfully taken by the Judicial council.
Reference: Reference: Act 15/1998 on the Judiciary, Section 24 English translation:
http://www.innanrikisraduneyti.is/log-og-reglugerdir/thydingar/nr/109
37e: In practice, when necessary, the judicial disciplinary agency (or equivalent mechanism)
initiates investigations.
Score: 100 75 50 25 0
Internet search did not produce any incident on the investigations initiated by Judicial Council or the
President of the Supreme Court.
The chairman of the Icelandic Bar Association, whose role is to represent the legal profession to judicial
and administrative authorities, recently expressed his opinion in regards to a possible conflict of interest
incident when a Supreme court judge was seen with the defendant lawyer in a movie theatre during court
proceedings of a high profile case that marked the first lawsuit in regards to the financial collapse. In the
chairman´s opinion this incident was not subject to conflicts of interest, “ I suspect that this is not the first
time they go to the theatre together. I don´t see how this movie trip and it’s timing has anything to do
with evaluation of qualification of judge in general. [ I ] know the judge and the defence lawyer very
well. They are both professionals that conduct their work in high level of principals” added the chairman
Brynjar Nielsson. Many opposed the chairman’s opinion.
Appendix A - Integrity Indicators 2012 Page 42
The scoring here would have been higher, if the disciplinary agency of the Supreme court or the Judicial
Council would also have expressed their opinion on this incident in public. The Supreme court has not
issued code of conduct for their judges, according to the Supreme court office.
Reference: Web News Eyjan, Judge not subject to conflict of interest though he goes to the movies with
a defendant lawyer : http://eyjan.is/2012/02/10/ekki-oedlilegt-ad-domari-og-verjandi-fari-saman-i-bio-
grunar-ad-thad-hafi-gerst-oftar/
37f: In practice, when necessary, the judicial disciplinary agency (or equivalent mechanism)
imposes penalties on offenders.
Score: 100 75 50 25 0
With reference to answer in 37f no penalty incident were produced from internet search.
38 Are there regulations governing conflicts of interest for the national-level judiciary?
38a: In law, members of the national-level judiciary are required to file an asset disclosure form.
Score: Yes No
Members of the judiciary are not required to file an asset disclosure form. Salaries of judges are decided
by Kjararad (Salary and benefit council) according to section 25 of Act 15/1988 on Judiciary. Secondary
employment is allowed only if it does not compromise judge’s independence and impartiality, section 26.
Reference: Reference: Act 15/1998 on the Judiciary, Section 25 - 26 English translation:
http://www.innanrikisraduneyti.is/log-og-reglugerdir/thydingar/nr/109
Salary and benefit council, salary tables: http://www.kjararad.is/launatoflur/
38b: In law, there are regulations governing gifts and hospitality offered to members of the
national-level judiciary.
Score: Yes No
Members of the judiciary are not required to file an asset disclosure form.
38c: In law, there are requirements for the independent auditing of the asset disclosure forms of
members of the national-level judiciary.
Score: Yes No
Members of the judiciary are not required to file an asset disclosure form.
38d: In law, there are restrictions for national-level judges entering the private sector after leaving
the government.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 43
No restrictions for judges regarding post-government employment. Judges are allowed to have secondary
employment or run a business if it does not compromise their independence and impartiality.
Reference: Act 15/1998 on the Judiciary, Section 26 English translation:
http://www.innanrikisraduneyti.is/log-og-reglugerdir/thydingar/nr/109
38e: In practice, the regulations restricting post-government private sector employment for
national-level judges are effective.
Score: 100 75 50 25 0
No restrictions for judges regarding post-government employment.
38f: In practice, the regulations governing gifts and hospitality offered to members of the national-
level judiciary are effective.
Score: 100 75 50 25 0
38g: In practice, national-level judiciary asset disclosures are audited.
Score: 100 75 50 25 0
Members of the judiciary are not required to file an asset disclosure form.
39 Can citizens access the asset disclosure records of members of the national-level judiciary?
39a: In law, citizens can access the asset disclosure records of members of the national-level
judiciary.
Score: Yes No
Members of the judiciary are not required to file an asset disclosure form.
39b: In practice, citizens can access judicial asset disclosure records within a reasonable time
period.
Score: 100 75 50 25 0
39c: In practice, citizens can access judicial asset disclosure records at a reasonable cost.
Score: 100 75 50 25 0
39d: In practice, the asset disclosure records of the national-level judiciary are of high quality.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 44
III-4 Budget Process Oversight & Transparency
40 Can the legislature provide input to the national budget?
40a: In law, the legislature can amend the budget.
Score: Yes No
Reference Constitution article 42 http://www.althingi.is/lagas/nuna/1944033.html English version:
http://www.government.is/constitution/
40b: In practice, significant public expenditures require legislative approval.
Score: 100 75 50 25 0
Article 41 in the Constitution prohibits any disbursement to be made unless authorized in the budget or
supplementary budget. Every year, supplement budget is approved, which in practice is often approval of
overriding the initial budget.
Recent interview on the National Broadcast station RUV, with a lecturer at the University of Reykjavik
who conducted an investigation on government projects, indicated 90% probabilities that expensive
government projects will go over the budget. Few projects were exhibited going 150% over initial
budget.
Reference Constitution article 41 http://www.althingi.is/lagas/nuna/1944033.html English version:
http://www.government.is/constitution/
RUV News, Government projects are underestimated: http://ruv.is/frett/vanmeta-kostnad-opinberra-
framkvaemda
40c: In practice, the legislature has sufficient capacity to monitor the budget process and provide
input or changes.
Score: 100 75 50 25 0
The annual budget process plan is defined in details on the website Ministry of Finance. The process is
split in 6 phases, with defined timeline. The ideology behind the process is to strengthen the role of the
government in setting policy and making decisions, and give the ministries and the government entities
scope to execute the process within the global budget. The government decides on total expenses in the
beginning of the process, which is based on general view on the economy and revenue forecast for the
treasury. The most important decision is setting profit or deficit target i.e. as a percentage of GDP. The
legislature, ministries and government entities all have access to a mutual database, operated by the
Finance ministry that plays important role in the whole budget process both for monitoring purposes and
to provide input or changes.
Reference: Budget process, ministry of Finance: http://www.stjornendavefur.is/Fjarmal-stjv/fjarlagagerd/
Appendix A - Integrity Indicators 2012 Page 45
41 Can citizens access the national budgetary process?
41a: In practice, the national budgetary process is conducted in a transparent manner in the
debating stage (i.e. before final approval).
Score: 100 75 50 25 0
Although the meeting minutes from the Budget committee are very limited, the budgetary process in
debating stage is conducted in a transparent manner because all sessions in Althingi are open to public
and broadcasted on National TV. Not surprisingly the budget plan sessions are met with big interest by
the media and budget plan is accessible under dedicated website for the Budget. The process is very
transparent.
Budget committee minutes:
http://www.althingi.is/vefur/nefndafundargerd.html?nemenu=1&nefnd1=fl<hing1
Budget website: http://hamar.stjr.is/
41b: In practice, citizens provide input at budget hearings.
Score: 100 75 50 25 0
There are no defined budget hearings for citizens conducted in the budgetary process. However, NGO’s
and media reporting on specific topics or problems, may raise awareness and contribute to the budgetary
process.
A significant budget input by citizens was conducted, two times in the past two year, when the president
of Iceland refused to sign bills on Icesave, after being petitioned by thousands dissatisfied populace. The
dispute was brought to a referendum process, first in March 2010 and then the second time in April 2011
after the president refused to sign another bill on new agreement in April 2011. Both referendums
defeated the bills, indicating that the majority of Icelandic voters refused to accept bills, on guaranteeing
loans that were provided by the governments of UK and Holland to repay depositors who lost their
deposits when two private Icelandic banks collapsed. Branches from those banks in UK and Holland had
offered the Icesave internet deposit accounts.
In December 2011, the EFTA (European Free Trade Association) filed a formal application with the
EFTA court after the Icelandic government had refused a ruling from EFTA to pay the full amount to UK
and Holland.
Reference: The Icesave dispute: Vox, Anne Sibert, 2010: http://www.voxeu.org/index.php?q=node/4611
Factbox: What is the Icesave dispute all about, Reuters 2011:
http://www.reuters.com/article/2011/04/08/iceland-referendum-deal-idUSLDE73721Z20110408
The Icesave dispute on Wikipedia: http://en.wikipedia.org/wiki/Icesave_dispute
41c: In practice, citizens can access itemized budget allocations.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 46
Itemized budget allocations are accessible on budget website.
Datamarket.com is an Icelandic corporation that provides access to thousands of data sets, holding
millions of facts and figures from a wide range of public and private date, both internationally and locally.
Users can access itemized budget allocations over long period.
Reference: Budget website: http://hamar.stjr.is/
Datamarket Icelandic Budget: http://datamarket.com/data/set/1wzi/malaflokkar-fjarlaga-med-
flokkatre#!display=line&ds=1wzi!1zlp=e
42 In law, is there a separate legislative committee which provides oversight of public funds?
42a: In law, is there a separate legislative committee which provides oversight of public funds?
Score: Yes No
Budget committee Act 55/1991 article 13 and 25
Reference: Act 55/1991 on parliament protocols: http://www.althingi.is/altext/stjt/1991.055.html
43 Is the legislative committee overseeing the expenditure of public funds effective?
43a: In practice, department heads regularly submit reports to this committee.
Score: 100 75 50 25 0
According to the minutes from the committee for the budget year 2011/2012, department heads have
submitted reports regarding financial need, operation and future plans for their departments. Some
department heads have also met with the committee. Every government entity has been under a strict
expenditure reduction order since 2009, as a result of the financial meltdown. This rapid down-sizing of
government services and obligations are starting to compromise both quality and quantity of the service.
The heads of every department, are therefore fighting hard to get their fair share of the pie, so they can
fulfill the obligation of the department.
Reference: Minutes, the Budget committee:
http://www.althingi.is/vefur/nefndafundargerd.html?nemenu=1&nefnd1=fl<hing1=.
43b: In practice, the committee acts in a non-partisan manner with members of opposition parties
serving on the committee in an equitable fashion.
Score: 100 75 50 25 0
The meetings of the budget committee are being scrutinised by the media more than any other parliament
committee meetings. Most of the time the media reports arguments and criticism between the opposition
parties and the ruling parties on the committee. The ruling parties hold majority of the seats in the
committee, which undermines the purpose of holding the government accountable.
Reference: Media reports around budget committee deadline to finish the 2012 Budget:
Appendix A - Integrity Indicators 2012 Page 47
http://ruv.is/frett/velferdarmal-i-fjarlaganefnd
http://www.visir.is/fjarlaganefnd-tokst-ekki-ad-klara-i-dag/article/2011111209662 December 3 2011
43c: In practice, when necessary, this committee initiates independent investigations into financial
irregularities.
Score: 100 75 50 25 0
According to DV news on December 5th 2011, the budget committee agreed to request an independent
investigation into overall operation of the Financial Supervisory Authority (FME). The minutes from this
meeting on December 4th did not indicate any such request. The secretary of the Budget committee has
confirmed that the news is not accurate. Instead of requesting investigation to be conducted, they agreed
to ask the Minister overseeing the FME to initiate impartial evaluation on the FME operation, as their
finance need for their operations had increased significantly. On the other hand, the secretary
confirmed that the Budget committee has initiated investigation on various projects or agencies in past,
including the Grimsey-ferry and other government project that have gone significantly over the initial
budget.
In June 2011 new act 68/2011 on Investigation committee came into force. The committee will take over
all investigations on matters that regards to public interests and that the Chief of Althingi may request .
Since the act came into force, two investigation committees have been established. One to investigate the
Housing Financing fund, and the other one to investigate the events that lead to and the reason for the
difficulties of the Credit Unions and their fall.
Reference: News DV http://www.dv.is/frettir/2011/12/5/fjarlaganefnd-kallar-eftir-rannsokn-fme/
Confirmation from the secretary of the Budget committee.
Act 68/2011 Investigation committee: http://www.althingi.is/altext/139/s/1711.html
Investigation committee website: http://rna.althingi.is/
Peer II comment: Is it the committee role to initiate investigations? According to Act 55/1991 the role
of the budget committee is to monitor the execution of budget.
Category IV Public Administration and Professionalism
IV-1 Civil Service: Conflicts of Interest Safeguards and Political Independence
44 Are there national regulations for the civil service encompassing, at least, the managerial
and professional staff?
44a: In law, there are regulations requiring an impartial, independent and fairly managed civil
service.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 48
Act 70/1996 on Rights and obligation of civil servants, Chapter IV on Rights requires civil servants to
conduct their work in impartial, independent and farily manner. The Administration Act 37/1993, also
requires independent and overall fairly managed civil service.
Reference 70/1996 on Rights and obligation of civil servants :
http://www.althingi.is/lagas/nuna/1996070.html
Act 37/1993 on Administration http://www.althingi.is/lagas/nuna/1993037.html
44b: In law, there are regulations to prevent nepotism, cronyism, and patronage within the civil
service.
Score: Yes No
In the constitution there is a general provision about equal rights and article 11 “the equality rule” in the
Administration act prohibits discrimination based on gender, nationality, religion, political views, social
status, nepotism or other similar situations.
Reference: Act 37/1993 on Administration article 10 and 11:
http://www.althingi.is/lagas/nuna/1993037.html
Constitution Act 33/1944 article 11: : http://www.government.is/constitution
44c: In law, there is an independent redress mechanism for the civil service.
Score: Yes No
Act 37/1993 on Administration Chapter IV on right to protest decision of government agency and Chapter
VI on Recall of decision.
Reference: Act 37/1993 on Administration: http://www.althingi.is/lagas/nuna/1993037.html
44d: In law, civil servants convicted of corruption are prohibited from future government
employment.
Score: Yes No
Act 70/1996 on rights and obligations of civil servants article 6, prohibits convicted offenders from
government employment.
Penal code, article 68 “ Civil servant that is convicted of crime can be deprived of his civil servant
employment if he doesn’t qualify for the position.”
Reference: Act 70/1996 Rights and obligations of civil servants:
http://www.althingi.is/lagas/nuna/1996070.html
45 Is the law governing the administration and civil service effective?
45a: In practice, civil servants are protected from political interference.
Appendix A - Integrity Indicators 2012 Page 49
Score: 100 75 50 25 0
The executives of government, administration and political departments discussed performance and
human resources on a meeting in February 2011. Slides from the meeting indicate concerns regarding
nepotism and cronyism that affects the hiring process and compromises professionalism.
“Political interference is influencing the executive´s work both when the government is on the “right” or
the “wrong” side”. (Guðlaug Kristjánsdottir, chairman of BHM (association of academics)
Open discussions about political hiring and interference are “everyday debate” in Iceland. Prime
Minister Johanna Sigurdadottir asserted in an article in January 2011, that since she and her coalition
government came to power, political influence in hiring was declining and the whole hiring process for
executives of the civil service had become more professional and transparent oriented. She was opposing
to the executive of the Ethical institution of the University of Iceland, Salvor Nordal, who had said in an
interview few days earlier, that there were still no signs of declining in political interference in the hiring
process. Salvor was one of the author of Volume 8 of the Special Investigation Report (SIC) 2010 that
criticized political hiring at top level executive positions within the government.
Executives in top positions within the government are in practice hired indefinitely, so alleged political
influence within the civil service will last for long time.
In article written in 2006 by Gunnar Helgi Kristinsson, it was concluded that political interference in
appointments especially in the higher level of the administrations is very common. Kristinsson observed
111 appointments for 5 years period, and concluded that 44% of the time the hiring was political.
Reference: Meeting February 23,2011 The executives of government, administration and political
departments, Guðlaug Kristjansdottir presentation : http://www.stjornsyslustofnun.hi.is/mvf_23_februar_storf_stjornenda
Article Prime Minister Johanna Sigurðardottir , Professional hiring of executives in the civil service :
http://timarit.is/view_page_init.jsp?requestedFileType=Web%20display&isDisplayThumbnails=false&pd
fView=Fit
Article: Political interference appointments/hiring, by Gunnar Helgi Kristinsson, 2006
http://skemman.is/is/stream/get/1946/8856/23716/1/a.2006.2.1.1.pdf
Peer II comment: Would it not be more appropriate to refer to article from Gunnar Helgi Kristinsson on
political hiring? (see above)
45b: In practice, civil servants are appointed and evaluated according to professional criteria.
Score: 100 75 50 25 0
On the surface, the evaluation is performed in accordance to professional and qualification criteria that is
described in the job advertisement and in accordance to Act on Rights and obligations of civil servants,
chapter II. Competitors that are not being chosen can take action against the entity if they believe they
have more qualification than the chosen candidate, or if the hiring and evaluation process is some how
questionable. The administration act 37/1993 article 10 “ the investigation rule” requires the government
Appendix A - Integrity Indicators 2012 Page 50
entity to ensure sufficient information gathered before decision is made, and article 11 “the equality rule”
prohibits discrimination based on gender, political views, religions, nepotism or other similar reasons.
The Althing Ombudsman handles many complaints regarding hiring of civil servants. From December 30
2008 – December 30 2011, total 20 civil servant hiring cases were found, where the Ombudsman either
concluded through an act of remedy or issued an opinion as to whether the authority had by its actions
infringed the law or good administration practice. In 13 of those cases the Ombudsman concluded the
hiring decision reprehensible, or infringement to the administration act. In 7 cases the Ombudsman could
not see any grounds to object the decision of the authority, but in few of them additional suggestions for
reprehensible actions in the process was sent to the applicable authority, and followed up on with letter
correspondence.
The score of 25 also reflects the overall public opinion that in some cases, the candidate for a vacant
position has been hired even before the position is advertised, the job requirement are customized to that
candidate and the whole hiring decision process, interviews and evaluations is just formality to fulfill the
requirements by law. “Everybody knows someone who knows someone” is a common phrase in Iceland,
which also applies within the civil service as to the private business.
“Who do you know that can call the Minister?” is the answer to the question “how to get a position in the
foreign ministry” (Slide show on a meeting with heads of government departments in February 2011 by
Guðlaug Kristjánsdottir chairman of Association of academics)
Reference: Act 37/1993 on Administration article 10 and 11:
http://www.althingi.is/lagas/nuna/1993037.html
Act 70/1996 Rights and obligations of civil servants: http://www.althingi.is/lagas/nuna/1996070.html
The Althing Ombudsman website: http://www.umbodsmaduralthingis.is/
Peer I comment: Though the Parliamentary Ombudsman has handled many complaints regarding the
appointment of civil servants it does not necessarily mean that the appointment was based on
unprofessional criteria as many such cases relate to procedural flaws.
45c: In practice, civil service management actions (e.g. hiring, firing, promotions) are not based on
nepotism, cronyism, or patronage.
Score: 100 75 50 25 0
Many would even argue that both in public and private sector, management actions are very much based
on nepotism, cronyism, patronage or political affiliates.
The executives of government agencies, administration and political departments discussed performance
and human resources on a meeting in February 2011. Slides from the meeting indicate concerns
regarding nepotism and cronyism that affects the hiring process and compromises professionalism.
The score of 25 also reflects the overall public opinion that in some cases, the candidate for a vacant
position has been hired even before the position is advertised, the job requirements are customized to that
candidate and the whole hiring decision process, interviews and evaluations is just formality to fulfill the
Appendix A - Integrity Indicators 2012 Page 51
requirements by law. “Everybody knows someone who knows someone” is a common phrase in Iceland,
which applies both within the civil service and the private sector.
“Who do you know that can call the Minister?” is the answer to the question “how to get a position in the
foreign ministry” (Slide show on a meeting with heads of government departments in February 2011 by
Guðlaug Kristjánsdottir chairman of Association of academics)
Reference: Meeting February 23,2011 The executives of government, administration and political
departments, Guðlaug Kristjansdottir presentation : http://www.stjornsyslustofnun.hi.is/mvf_23_februar_storf_stjornenda
45d: In practice, civil servants have clear job descriptions.
Score: 100 75 50 25 0
Every job title within the civil service is affiliated to a written job description, to which salary and other
benefits are determined. Job descriptions can also be seen in job advertisements.
The executives of government agencies , administration and political departments discussed performance
and human resources on a meeting in February 2011. Slides from that meeting indicate concerns
regarding inconsistency in qualification criteria between government agencies and one of the suggestions
of the meeting was “clear job descriptions” which indicates that in practice the job descriptions at the
executive level of civil service are unclear and need improvement.
Reference: Meeting February 23,2011 The executives of government, administration and political
departments, Guðlaug Kristjansdottir presentation : http://www.stjornsyslustofnun.hi.is/mvf_23_februar_storf_stjornenda
Peer I comment: I agree. Due to the small administration in Iceland civil servants have to be able to be
flexible and operate in many positions.
45e: In practice, civil servant bonuses constitute only a small fraction of total pay.
Score: 100 75 50 25 0
According to Article 9, act on Rights and obligations of civil servants , executives of government
agencies may temporarily pay civil servants extra pay for special qualifications, extra ordinary job
pressure and for special achievements at the service. Information from the Ministry of Finance about
these extra pay show that in 2011 they were 0.025% of total salaries.
Reference: Act 70/1996 Rights and obligation of civil servants :
http://www.althingi.is/lagas/nuna/1996070.html
Information from Ministry of Finance regarding total salaries 2011 and proportional extra pay.
45f: In practice, the government publishes the number of authorized civil service positions along
with the number of positions actually filled.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 52
Article 7 Act 70/1996 on Rights and obligations of civil servants, asserts every vacant position to be
advertised, with at least 2 weeks pre-application period. There are also provisions regarding appointment
without advertisement; when the employment period of an executive has expired without resignation, the
next 5 year period automatically come into force, or in transfer or sick leave cases.
Every executive of a government agency is permitted to issue the agency´s own regulations about
publishing positions, which the applicable minister needs to confirm. In these regulation the executive
may exempt job positions from being published, that do not require special education, expertise or
knowledge. As peer points out, no such thing as authorized civil servants positions exists.
The Government official open position website : starfatorg.is
Reference: Regulation 464/1996 on publication of open job position within the government.
http://www.starfatorg.is/um_starfatorgid/nr/1342
Peer II comment: Is this correct answer? There is no such thing as “authorized civil servants positions
in the administration”.
45g: In practice, the independent redress mechanism for the civil service is effective.
Score: 100 75 50 25 0
Every ministry has a redress mechanism in form of a ruling committee that rules on administration
decisions and complaints. There are many designated ruling committees, for example: committee on
information Act, on Icelandic wilderness, on consumer issues, on competitive issues, on business with
financial institution, on special insurance for disastrous nature events, on procurement, on taxes, on
custom and tariff, on power plants, on tourism, on given names of children, on remedy for expropriation,
on post and telecom, on transportation, on property assessment, on educational issues, on fishery,
agriculture, on sport fishing, environmental issues, constructions and development, childcare, social
insurance, equality issues, unemployment and material leave. If special issues arise that need to be
redressed and they don’t fall under existing committees, new committee is formed to handle disputes.
The ombudsman also rules on disputes within the civil service and from the public that can send
complaints on government or the administration for alleged mistreatment.
Internet search did not produce many specific cases about delay in the ruling committee decision. The
redress mechanism is therefore considered effective.
Administration website on Ruling Committees within the government: http://www.rettarheimild.is/
45h: In practice, in the past year, the government has paid civil servants on time.
Score: 100 75 50 25 0
Internet search did not produce any problems in regards to late payment to civil servants.
However the governor of the Central bank has sued the Central bank for not fulfilling the obligations of
his hiring contract. The lawsuit was filed in January 2012. Initially the Board of Central bank negotiated
his salary, but soon after the act was amended and the negotiation authority transferred to Civil salary
council. The act also declared that no heads of government entities could receive higher salary than the
Appendix A - Integrity Indicators 2012 Page 53
Prime Minister, which at that time were 40% lower than the initial hiring contract with the governor had
promised. The result of this lawsuit is still pending. Although this case is referring to “not fulfilling” the
employment agreement by paying less than was negotiated , rather than late payment, it is considered
significant, and therefore impacting the perfect score to 75.
Reference: Governor of The Central bank sues The Central bank:
http://www.dv.is/frettir/2012/1/11/sedlabankastjori-i-mal-vid-sedlabankann/
Peer I comment: I do not agree. Scoring can not be based on one ore few very specific examples. I
would say 100 out of 100.
Peer II comment: Civil servants always get paid on time. I don’t think the governors lawsuit is
applicable here.
45i: In practice, civil servants convicted of corruption are prohibited from future government
employment.
Score: 100 75 50 25 0
Conviction will automatically lead to disqualification of a civil servant after the final judgment ,
according to article 6 Act 70/1996 on Rights and obligation of civil servants. The government
advertises approximately 2000 vacant positions annually. The job postings do not require presentation of
criminal record. There can also be cases where the corruption situation is dealt with by firing the
employee, without disclosing publicly that he/she have been fired. This employee can apply for other
government job without being identified for former unethical and corrupted conducts.
New code of conduct for civil servants employed in the government offices (ministries) was issued May
3,2012. Article 5 of the code puts a duty to tell on civil servants who become aware of any illegal or
unethical conduct
Same Act for civil servants applies to government employees and general civil servants.
Reference: Act 70/1996 Rights and obligation of civil servants :
http://www.althingi.is/lagas/nuna/1996070.html
Peer I comment: The compiler does not mention the new code of ethics for civil servants in ministries:
http://www.forsaetisraduneyti.is/verkefni/sidareglur/starfsfolk/ (see above)
Peer II comment: Is it not necessary to distinct between the employees and executives of the
government branches on one hand and general civil servants on the other side? (see above) Perhaps it is
right to mention that prior to firing an employee, a formal warning has to be issued, which is executives
are reluctant to use.
46 Are there regulations addressing conflicts of interest for civil servants?
46a: In law, senior members of the civil service are required to file an asset disclosure form.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 54
Members of the civil service are not required to file an asset disclosure form. However in some recent
high level executive postings with the government, there is an increasing pressure that applicants
disclose their financial status, assets and debts, in order to verify any potential conflicts of interests. This
is especially important for positions affiliated with the financial market, the Financial Supervisory
Authority and various boards of directors and councils whose mandate is to deal with the aftermath of the
financial crash in 2008.
46b: In law, there are requirements for civil servants to recuse themselves from policy decisions
where their personal interests may be affected.
Score: Yes No
Act 37/1993 on Administration article 3. However last paragraph of the article says: “ no conflict of
interest exists if interests are minor, and it is believed that the person´s view will not be bias or influenced
in his decision”.
Reference: Act 37/1993 on Administration: http://www.althingi.is/lagas/137/1993037.html
46c: In law, there are restrictions for civil servants entering the private sector after leaving the
government.
Score: Yes No
46d: In law, there are regulations governing gifts and hospitality offered to civil servants.
Score: Yes No
In 2006 the Ministry of Finance circulated letter to all Ministers and executives of government agencies,
on general considerations and values that civil servants are expected to observe in the execution of their
work. It was requested that each agency would issue their own code of conducts , customized to their
own diligence. Article 4 in this Circular prohibits civil servants to accept or request gifts or hospitality
from individuals or corporations, if it can be assumed that the gift is given for special favor or service.
Birthday presents or other such presents within reasonable value can be accepted. Supervisor or manager
must be consulted if civil servant is in doubt of accepting gifts.
It can be said, in light of what later was discovered both in the Special Investigation Report 2010 and in
media reports, that these measures have been defined very broadly and not regarded as regulation or
law, only measurements. (see 46g)
Reference: Letter circulated to Ministries and government agency executives February 2006:
http://www.fjarmalaraduneyti.is/starfsmenn-rikisins/dreifibref/yfirlit/nr/5544
46e: In law, there are requirements for the independent auditing of the asset disclosure forms of
senior members of the civil service.
Score: Yes No
46f: In practice, the regulations restricting post-government private sector employment for civil
servants are effective.
Appendix A - Integrity Indicators 2012 Page 55
Score: 100 75 50 25 0
There are no restrictions on post government employment with the private sector.
46g: In practice, the regulations governing gifts and hospitality offered to civil servants are
effective.
Score: 100 75 50 25 0
In light of what later was disclosed in the Special Investigation Commission Report (SIC) 2010 about
gifts and hospitality received by: politicians, heads of government, pension funds executives, executives
of government agencies and even the President, from banks and big corporations , it is clear that the
ethical measures have been broadly defined at the top. Gifts and hospitality included, expensive
fishing trips, “business “ related trips abroad on yachts and to exotic locations.
Employees of the Financial Supervisory Authority, each received a bottle of wine as a x-mas presents
from one of the banks. When this was reported in the media in January 2008, the Minister of Business
and bank affairs, declared that he would issue clear regulation on gifts to civil servants that also would
apply to politicians. Internet search did not produce specific execution of this declaration.
In their Evaluation Report on Iceland in April 2008, GRECO (Group of States against corruption Europe)
expressed deep concerns on lack of clarity of the gift and hospitality provision in the guidance on ethical
measurements from February 2006. Although the officials in Iceland had asserted that there was a
culture of zero tolerance to bribes, and indicated that minimum gifts were gift of a very low value, they
recognized that there are no rules or practices which would establish value thresholds on gifts, one must
use “common sense” when considering if gift is appropriate or not. GRECO recommended to clarify in
an appropriate manner what should be considered “due” and/or “undue” gift/other advantage for all forms
of bribery offences.
Out of 32 Government agencies that answered researcher’s questions regarding code of ethics, 21 have
issued Code of Ethics , thereof 10 that have provision on gift and hospitality included. Only one
agency: the Directorate of Fisheries clarified in details what is considered undue gifts, including alcohol
and lunch/dinner offer, and even fish to take home and cook. Some agencies indicated they were
working after the Circular from February 2006 on measures for ethical parameters and values.
On May 3rd
2012, code of ethics for employees of the Government offices of Iceland were issued. The
article regarding gifts and hospitality does not meet the GRECO recommendation, because it says quote:
“employees don’t accept personal valuable gifts given to them as an employee”. Here the word
“valuable” can be interpreted from different perspectives and thresholds.
Reference: Special Investigation Commission report, April 2010
Web news Eyjan “Regulations on gifts to civil servants will be issued” January 2008:
http://eyjan.is/2008/01/07/settar-ver%C3%B0a-reglur-um-gjafir-til-emb%C3%A6ttismanna/
Evaluation Report on Iceland Incrimination, Theme I, April 2008 GRECO :
http://www.coe.int/t/dghl/monitoring/greco/default_en.asp
Code of Ethics the Directorate of Fisheries : http://www.fiskistofa.is/umfiskistofu/hlutverk/Sidareglur/
Appendix A - Integrity Indicators 2012 Page 56
Letter circulated to Ministries and government agency executives February 2006:
http://www.fjarmalaraduneyti.is/starfsmenn-rikisins/dreifibref/yfirlit/nr/5544
Code of Ethics for Employees of teh Government offices of Iceland:
http://www.forsaetisraduneyti.is/frettir/nr/7157
46h: In practice, the requirements for civil service recusal from policy decisions affecting personal
interests are effective.
Score: 100 75 50 25 0
The Administration act defines few types of conflicts of interest that disqualifies civil servants ,
notwithstanding there is a provision that allows the civil servant to self-assess if the conflicts are minor
and not likely to influence his/her decisions. This fact puts less weight on the qualification validation.
Unless there are family connections or other obvious conflicts, civil servants are reluctant to declare
conflicts, because they believe that their decision will be based on professionalism and principals.
Recent incident regarding Supreme court judge and defensive lawyer is a good example of the mindset, in
a small country where everyone knows everybody, are school colleagues, friends, or in other way related.
The chairman of the Icelandic Bar Association, whose role is to represent the legal profession to judicial
and administrative authorities, recently expressed his opinion in regards to a possible conflict of interest
incident when a Supreme court judge was seen with the defendant lawyer in a movie theatre during court
proceedings of a high profile case that marked the first lawsuit in regards to the financial collapse. In the
chairman´s opinion this incident was not subject to conflicts of interest, “ I suspect that this is not the first
time they go to the theatre together. I don´t see how this movie trip and it’s timing has anything to do
with evaluation of qualification of judge in general. [ I ] know the judge and the defence lawyer very
well. They are both professionals that conduct their work in high level of principals” added the chairman
of the Bar Association.
Although this example is from the judicial system, it applies to the public and private sector as well. The
sense of atmosphere in regards to conflict of interests is to point out an example that is controversial like
the one of the judge and the defensive lawyer, set the bar there and say: “ if they can do it, so can I, this
case is no different from that one”.
Reference: Web News Eyjan, “Judge not subject to conflict of interest though he goes to the movies with
a defendant lawyer” : http://eyjan.is/2012/02/10/ekki-oedlilegt-ad-domari-og-verjandi-fari-saman-i-bio-
grunar-ad-thad-hafi-gerst-oftar/
46i: In practice, civil service asset disclosures are audited.
Score: 100 75 50 25 0
Members of the civil service are not required to file an asset disclosure form
Peer I comment: I agree but I would like to mention that insiders are obliged by law to file an asset
disclosure form.
Appendix A - Integrity Indicators 2012 Page 57
47 Can citizens access the asset disclosure records of senior civil servants?
47a: In law, citizens can access the asset disclosure records of senior civil servants.
Score: Yes No
47b: In practice, citizens can access the asset disclosure records of senior civil servants within a
reasonable time period.
Score: 100 75 50 25 0
47c: In practice, citizens can access the asset disclosure records of senior civil servants at a
reasonable cost.
Score: 100 75 50 25 0
47d: In practice, the asset disclosure records of senior civil servants are of high quality.
Score: 100 75 50 25 0
Category IV-2 Whistle-blowing Protections
48 Are employees protected from recrimination or other negative consequences when
reporting corruption (i.e. whistle-blowing)?
48a: In law, civil servants who report cases of corruption, graft, abuse of power, or abuse of
resources are protected from recrimination or other negative consequences.
Score: Yes No
In February 2006, the Minister of Finance issued a General Circular to all civil servant agencies, stating
that civil servants who give information in good faith on corruption offences, or other unlawful or
improper activities, will not suffer in any way for doing so. The good faith information are to be given to
proper authority, such as the executive of the government agency, applicable Ministry, or the National
Audit Office or the police.
Act 135/2008 on Special Prosecutor, article 5 has a provision for the Special Prosecutor to grant
immunity to “whistle blowers” from prosecution of alleged crime, when information can lead to self
incrimination of the whistle blower. There are certain conditions that need to exist, such as likelihood of
successfully proofing the case, based on evidence or information provided by the whistle blower. This is
the first time that such protection has been put in law and was viewed necessary for the newly founded
agency of The Special Prosecutor, whose mandate is to investigate suspicions of criminal actions in the
period preceding, in connection with or in the wake of the collapse of the Icelandic bank.
Act 68/2011 on Investigation committee, established by Parliament, article 9 protects whistle blowers
from negative consequences, when giving information in good faith to the committee. This article also
has a provision for immunity from prosecution if information will lead to self-incrimination.
Appendix A - Integrity Indicators 2012 Page 58
Reference: Letter circulated to Ministries and government agency executives February 2006:
http://www.fjarmalaraduneyti.is/starfsmenn-rikisins/dreifibref/yfirlit/nr/5544
Act 68/2011 on Investigation committee : http://www.althingi.is/lagas/nuna/2011068.html
48b: In practice, civil servants who report cases of corruption, graft, abuse of power, or abuse of
resources are protected from recrimination or other negative consequences.
Score: 100 75 50 25 0
One channel that whistle blowers have, is to report corruption through the Media. However that is not
considered proper, the information must be given to right authorities, and if the journalist is unable to
protect his/her source, the whistle blower suffers negative consequences, usually by being fired or even
criminalized.
In a recent controversial case, the Chief executive (CEO) of the Financial Supervisory Authority,(FSA)
was suspended by the Board of Directors, following an internal probe into his 10 years old involvement
with offshore companies when he was manager at then state-owned bank Landsbanki. He was accused of
giving misleading information regarding the offshore companies, although the information were given in
consultation with lawyers and other executives of the Financial authorities. According to the Act on
Rights and obligation of civil servants, the CEO assumed his right to redress the decision and was
working on it with his lawyer. However, anonymous package of information about Landsbanki
operations with account information on Parliament member was delivered to one of the newspapers. The
delivery messenger claimed that the CEO of FSA had requested the information to be delivered to the
paper. The Chairman of the Board of FSA, immediately passed the case to the police for investigation and
fired the CEO. The reason for the controversy in this case is not the least because the former CEO was
very effective in investigating alleged criminal cases of the fallen banks, and had passed almost 100 such
cases over to The Special Prosecutor, when he was fired. Allegations about political involvement are
pounding.
Reference: Bloomberg on Chief of FSA being fired, February 2012:
http://www.bloomberg.com/news/2012-02-18/iceland-s-financial-supervisory-authority-moves-to-fire-
ceo.html
Article “The Strange Case of Iceland: how to discredit a financial regulator”, by Silla Sigurgeirsdottir
and Robert Wade, March 2012 http://mondediplo.com/blogs/the-strange-case-of-iceland-how-to-
discredit-a
48c: In law, private sector employees who report cases of corruption, graft, abuse of power, or
abuse of resources are protected from recrimination or other negative consequences.
Score: Yes No
48d: In practice, private sector employees who report cases of corruption, graft, abuse of power, or
abuse of resources are protected from recrimination or other negative consequences.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 59
The usual consequences of whistle blower cases that have been reported in the Media, where the whistle
blower name was discovered or revealed, are negative. The whistle blower is usually fired or forced out
of the workplace. Other potential whistle blower cases in the private sector that are supposedly dealt with
in a proper manner, are usually not published and therefore difficult to assess or comment on. There is a
fine line between whistle blowing in good faith or bad faith. The protection of whistleblowers is an
international requirement from all organizations that fight corruption.
49 In law, is there an internal mechanism (i.e. phone hotline, e-mail address, local office)
through which civil servants can report corruption?
49a: In law, is there an internal mechanism (i.e. phone hotline, e-mail address, local office) through
which civil servants can report corruption?
Score: Yes No
In February 2006, the Minister of Finance issued a General Circular to all civil servant agencies, stating
that civil servants who give information in good faith on corruption offences, or other unlawful or
improper activities, will not suffer in any way for doing so. The good faith information are to be given to
proper authority, such as the executive of the government agency, applicable Ministry, or the National
Audit Office or the police.
Reference: Letter circulated to Ministries and government agency executives February 2006:
http://www.fjarmalaraduneyti.is/starfsmenn-rikisins/dreifibref/yfirlit/nr/5544
50 In practice, is the internal mechanism (i.e. phone hotline, e-mail address, local office)
through which civil servants can report corruption effective?
50a: In practice, the internal reporting mechanism for public sector corruption has a professional,
full-time staff.
Score: 100 75 50 25 0
There is no reporting mechanism for public sector corruption. The National Audit Office has observed
less than 10 cases, for the last 6 years where either anonymous or named person have reported
corruption cases.
Reference: Information from a Senior Attorney at the National Audit Office.
50b: In practice, the internal reporting mechanism for public sector corruption receives regular
funding.
Score: 100 75 50 25 0
50c: In practice, the internal reporting mechanism for public sector corruption acts on complaints
within a reasonable time period.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 60
50d: In practice, when necessary, the internal reporting mechanism for public sector corruption
initiates investigations.
Score: 100 75 50 25 0
Category IV- 3 Government Procurement: Transparency, Fairness, and Conflicts of Interest
Safeguards
51 Is the public procurement process effective?
51a: In law, there are regulations addressing conflicts of interest for public procurement officials.
Score : Yes No
The Act 84/2007 on Public procurement does not indicate specific provision on conflicts of interest for
public procurement officials. However, the act specifies in details qualifications of potential suppliers
and contractors in the procurement process. Code of conduct for the Public procurement agency
consists of only 10 sentences, that start with: We are, we respect, we will .... The sentences about
conflicts of interest read: “We are impartial and strive for equality” and “We take objective decisions”.
The Act 37/1993 on Administration, chapter II on qualification of civil servants in regards to conflicts of
interests, applies to civil servants in general, including officials of the Public procurement.
Code of conduct The Public procurement: http://www.rikiskaup.is/um-rikiskaup/sidareglur/
Act 37/1993 on Administration: http://www.althingi.is/lagas/nuna/1993037.html
51b: In law, there is mandatory professional training for public procurement officials.
Score: Yes No
Act 84/2007 on Public procurement does not mandate specific training for public procurement officials.
However, all new employees undergo orientation seminar, where procurement acts and regulations are
introduced. Every employee is given a handbook on public procurement acts and regulation.
Reference: Interview with lawyer at the Public procurement office.
51c: In practice, the conflicts of interest regulations for public procurement officials are enforced.
Score: 100 75 50 25 0
Although there are no specific regulations addressing conflicts of interest for public procurement
officials, the act on Administration 37/1993 article 3 , specifies the incidents that will disqualify officials
from participating in particular procurement bids. However, the second paragraph of article 3 excludes
“minor interest” from being a reason for disqualification, putting it in the hands of the procurement
official to evaluate minor vs. major conflicts and if they are likely to impair their decision. The score 25
reflects the lack of transparency in self-evaluating conflicts of interest, in one of the “high-risk
corruption” agency of the public sector.
Reference: Act 37/1993 on Administration http://www.althingi.is/lagas/nuna/1993037.html
Appendix A - Integrity Indicators 2012 Page 61
Peer II comment: I would give higher score, although I admit the law could be more clear.
51d: In law, there is a mechanism that monitors the assets, incomes and spending habits of public
procurement officials.
Score: Yes No
There is no legal mechanism for monitoring the income and spending habits of public procurement
officials.
51e: In law, major procurements require competitive bidding.
Score: Yes No
Act 84/2007 article 1 on main purpose of public procurement is to assure the compliance of the principle
of equality between bidders with the aim of taking advantage of competition that will keep the authorities
expenditure to a minimum.
Reference: Act 84/2007 on Public Procurement: http://www.althingi.is/altext/stjt/2007.084.html
51f: In law, strict formal requirements limit the extent of sole sourcing.
Score: Yes No
Act 84/2007 article 20 exhibits formal amount limits that require competitive bidding procedure,
procurement of products over kr. 5 million (CAD$ 39.000) and service and construction over kr. 10
million (CAD$ 78.000) . However, for all procurement under the limit, buyer must conduct thorough
and traceable price comparison, supporting the decision of supplier. There are also formal requirements
limit that require bidding to the European Economic Area, for construction the amount has to be kr. 450
million (CAD$ 3.5 million) but lower and closer to the national limit for products and services.
Reference: Reference: Act 84/2007 on Public Procurement:
http://www.althingi.is/altext/stjt/2007.084.html
Procurement Handbook page 41 and 42: http://www.rikiskaup.is/fraedsla/utgefidefni/nr/666
51g: In law, unsuccessful bidders can instigate an official review of procurement decisions.
Score: Yes No
A formal appeal process for unsuccessful bidders is ensured by law. Minister of Finance appoints 3
persons and 3 spare on an Appeal and Ruling committee for public procurement. The ruling of the
committee is final and can not be appealed to other authorities.
51h: In law, unsuccessful bidders can challenge procurement decisions in a court of law.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 62
Act 84/2007, article 98, unsuccessful bidder can challenge the ruling of the committee in a court of law,
within 6 months from the committee’s ruling.
Reference: Reference: Act 84/2007 on Public Procurement:
http://www.althingi.is/altext/stjt/2007.084.html
51i: In law, companies guilty of major violations of procurement regulations (i.e. bribery) are
prohibited from participating in future procurement bids.
Score: Yes No
Act 84/2007 article 47 details the violations that prohibits bidder from participating in procurement bid:
a) participation/member in organized crime associations
b) corruption
c) fraud
d) money laundry
Furthermore it is permitted to exclude corporation from procurement if any of the following applies:
Bankruptcy protection, financial reconstructing by forgiven debts, has been convicted of criminal
conduct, negligence, owing taxes or public fees or misrepresentation of any of the facts that matters in
the procurement process.
Reference: Act 84/2007 on Public procurement: http://www.althingi.is/altext/stjt/2007.084.html
51j: In practice, companies guilty of major violations of procurement regulations (i.e. bribery) are
prohibited from participating in future procurement bids.
Score: 100 75 50 25 0
In practice, major concern regarding companies that don’t fulfill the qualification requirements for public
procurement is that the company has changed id number, but are still operating under same control and
ownership. When a bidder is suspected of having violated any of the regulations in the past under old id
number or name, there is a provision in the public procurement handbook that permits evaluation of past
business history, that can result in an exclusion from bidding. This provision was added after many
complaints of contractors that had gone bankrupt with one project, or had failed to fulfill the quality
standards of projects, then shown up as a new bidder for similar project, but under new identity number
and name.
Of 25 rulings observed from the appeal committee on public procurement, only 4 cases referred to lack of
financial qualification of bidder or successor. None of these cases referred to new company with cloudy
history, indicating that the provision on investigating those companies further, and exclude them from
bidding, is effective.
Reference: Handbook Public Procurement, provision on new companies with bad history page 71:
http://www.rikiskaup.is/media/eplica-uppsetning/HandbokOI_Final.pdf
Appeal and Ruling committee of Public Procurement:
http://www.rettarheimild.is/Fjaramala/KaerunefndUtbodsmala/
Appendix A - Integrity Indicators 2012 Page 63
52 Can citizens access the public procurement process?
52a: In law, citizens can access public procurement regulations.
Score: Yes No
The Public Procurement website is accessible to citizens, with intensive volume of information about
regulation, and bidding process. On a regular basis the agency issues a Handbook, last one was issued
2008, over 200 pages of information for bidders and tender requirements.
Reference Web site The Public Procurement: http://www.rikiskaup.is/
52b: In law, the government is required to publicly announce the results of procurement decisions.
Score: Yes No
Act 84/2007 on Public Procurement request results of procurement decisions to be made available to
other bidders. However, confidential technical, business or other matters privileged in the bid are not to
be disclosed. How much information are disclosed afterwards depends on each tender.
Reference: Act 84/2007 on Public procurement: http://www.althingi.is/altext/stjt/2007.084.html
52c: In practice, citizens can access public procurement regulations within a reasonable time
period.
Score: 100 75 50 25 0
The Public Procurement website is accessible to citizens, with high volume of information about
regulation, and bidding process. On a regular basis the agency issues a Handbook, last one was issued
2008, over 200 pages of information for bidders and tender requirements.
Reference Web site The Public Procurement: http://www.rikiskaup.is/
52d: In practice, citizens can access public procurement regulations at a reasonable cost.
Score: 100 75 50 25 0
The Public Procurement website is accessible to citizens, with high volume of information about
regulation, and bidding process. On a regular basis the agency issues a Handbook, last one was issued
2008, over 200 pages of information for bidders and tender requirements.
Reference: website The Public Procurement: http://www.rikiskaup.is/
52e: In practice, major public procurements are effectively advertised.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 64
Act 65/1993 on Public procurement procedure , article 3 requires all general public procurements to be
advertised in newspapers, radio or other effective way. This is done in practice in two major newspapers
and on the Public Procurement website.
Reference: Act 65/1993 on Public procurement procedure:
http://www.althingi.is/lagas/131b/1993065.html
52f: In practice, citizens can access the results of major public procurement bids.
Score: 100 75 50 25 0
On the Public Procurement website, results of public procurement bids and tenders are accessible with
information of the successor. However, some of the information are insufficient and don’t include the
total value of the bid, and sometimes the name of the successful bidder is not revealed. Results of total 10
bids were available on the website, when it was observed, indicating only small portion of bids. Access
to Public Procurement website is available to all citizens with two exceptions: 1. Tender information for
potential bidders are available for fee. 2. Only actual buyers (government agencies) within the public
procurement system have access to all information including price from the supplies.
Reference: Interview with project manager at the Public Procurement office
Category IV- 4 Privatization of Public Administrative Functions: Transparency, Fairness, and
Conflicts of Interest Safeguards
53 Is the privatization process effective?
53a: In law, all businesses are eligible to compete for privatized state assets.
Score: Yes No
Peer comment recommended Yes with reference to the Act on Administration 37/1993 article 11, called
the “Equality rule” prohibiting any kind of discrimination towards individuals or identities. The No score
is earned if anyone is excluded by law. Therefore the score is changed to yes.
Policy on privatization of state assets has been developed as new governments come and go. From 1999-
2003 most of state owned corporations were privatized, including 2 state owned banks in 2002-3,
government investment funds that had been merged prior to privatization, and the Icelandic telecom in
2005.
Within 6 years after privatization, both banks collapsed, with devastating consequences for the whole
economy in Iceland. The 2 banks are now under state control again.
Prior to privatization of state owned assets, there structure of the organizations was changed towards
private company rules and all privileges of state-owned company removed. The state was the only
shareholder, until shares were offered to public and other investors, authorized by special laws. For
every state-owned company, new law was issued, one of which was Act 50/1997 on the 2 state owned
banks: Landsbanki and Bunadarbanki. Article 6 authorized privatization of the banks, but without any
indication of who and how many would be eligible to compete for the shares.
Appendix A - Integrity Indicators 2012 Page 65
Initially the official government policy for privatization was to make the state owned companies well
diversified public companies with many shareholders, but in reality it was not the case. The majority
shares in the 2 banks were sold to two business groups, one group politically connected with the Prime
Minister from the Independence party and the other group to the Foreign Affair Minister from the
Progressive party. One member of that group was a former Minister of business and industry, that had
become governor of the Central bank, but resigned suddenly half way through his tenure at the central
bank, to go into the private sector, forming an investment group that bought a bank few months later.
The sale of the banks was viewed as: “Close friends privatization”.
The government had formalized it’s policy and rules for the privatization, upon which the evaluation of
the successful bidder was based on. In the heat of the moment the chairman of The Committee on
Privatization resigned in 2002, when the government had finished negotiation with the Samson group on
buying Landsbanki. The former chairman, explained his resignation, by saying that basically all “work
rules” and policies of the committee had been broken, for example there was a provision to only accept
the highest bid, in addition to other qualifications, such as former bank experience, etc. Samson’s bid was
not the highest and the member of the group had become wealthy after selling their Beer factory in St.
Petersburg, Russia, but no prior bank experience.
Initially, the qualification criteria that was mandatory to possess in the bid competition for the banks i.e.
bank experience, foreign bank connection, financial capacity, excluded many businesses to compete.
Allegedly, the criteria was then adjusted afterwards, to the bidder’s tender that was likeable to the 2
Ministers and leaders of the coalition government.
Reference: Act 50/1997 on establishing public banks Landsbanki and Bunadarbanki
http://www.althingi.is/lagas/140a/1997050.html
Special Investigation Commission Report. April 2010
Work rules on privatization, 1996 : http://www.forsaetisraduneyti.is/utgefid-efni/nr/771
Peer I comment: I do not agree. Under art. 11 of the administration act no. 37/1993 all
businesses are eligible to compete for privatized state assets. One must distinguish between law
and practice. (see note above)
53b: In law, there are regulations addressing conflicts of interest for government officials involved
in privatization.
Score: Yes No
There are no laws addressing privatization or sale of government assets. However, Act 37/1996 on
Administration chapter II defines criteria and incidents that will cause conflicts of interest which
government officials involved in privatization would be obliged to follow.
Prime Minister issued so called work rules in 1996 on Privatization, tender and sale of government assets
and companies, but conflict of interest for government officials was not specifically addressed.
The Althingi’s ombudsman sent an enquiry to the Prime Minister on December 30, 2010, about issuing
specific law on privatisation and sale of government assets and shares in corporations. This was not the
first time the Ombudsman had sent enquiry regarding this issue. The Prime Minister answered in 2009,
Appendix A - Integrity Indicators 2012 Page 66
that there were no privatization on the agenda, so there was no need to set new laws. In January 2011 the
Prime Minister, established a committee to review the situation again, as circumstances had changed. The
government had become a big shareholder in many companies through the state-owned banks, that the
banks were trying hard to find new buyers for, or negotiating debt forgiveness with former owners.
The committee finished their review and issued a report in February 2012. The committee concluded
that the process and work rules that are being followed, do not ensure transparency or equality and
suggested that new law on sale of government shares in corporation would be issued, that would also
include provision regarding conflicts of interest of the government officials, as they are listed in the
Administration act.
Reference: Letter from the Althingi’s Ombudsman to Prime Minister, December 30 2010:
http://www.umbodsmaduralthingis.is/ViewCase.aspx?Key=1376&skoda=mal
The Prime Minster office on establishing a committee to review regulation on privatization January 2011:
http://www.forsaetisraduneyti.is/frettir/nr/6643
Report from Committee on regulation for selling government (financial companies) assets or partial
assets, February 2012: http://www.forsaetisraduneyti.is/media/utgefidefni/skyrsla-sala-a-eignarhluta-
rikis.pdf
Work rules on privatization, 1996 : http://www.forsaetisraduneyti.is/utgefid-efni/nr/771
53c: In practice, conflicts of interest regulations for government officials involved in privatization
are enforced.
Score: 100 75 50 25 0
The example in 53a demonstrates that the privatization in the dawn of the century was swamped with
allegation of conflicts of interest, which eventually led to the collapse of the whole economy. The
Second Privatization of the banks has not been launched, however there seems to be strong will in the
Government and in the Administration branches, to prepare laws and regulation with diligence to
prevent any mishaps, the second time around. Recently the Administration and control committee in the
parliament agreed a proposal to initiate a formal investigation on the privatisation of the banks 10 years
ago.
Reference: RUV National TV May 23, 2012 “Investigation on banks privatization”
http://www.ruv.is/frett/vill-rannsaka-einkavaedingu-bankanna
54 Can citizens access the terms and conditions of privatization bids?
54a: In law, citizens can access privatization regulations.
Score: Yes No
There are now specific laws in force on privatization.
54b: In practice, privatizations are effectively advertised.
Appendix A - Integrity Indicators 2012 Page 67
Score: 100 75 50 25 0
The privatization plans are generally reported by the Media as a part of the government policy. Work
rules on sale and tender of government assets, are advertised effectively so everyone knows the intention
of the government in regards to privatization or selling assets.
Work rules on privatization, 1996 : http://www.forsaetisraduneyti.is/utgefid-efni/nr/771
54c: In law, the government is required to publicly announce the results of privatization decisions.
Score: Yes No
There is no specific law in force on privatization.
After the financial collapse, lot of assets, insurance companies, retail businesses, car dealership and
various type of construction businesses and services, that were competing in the private sector, have been
shuffled to the state’s lap through the take over of the fallen banks.
The Central bank of Iceland became a majority owner of a large Insurance Company through collaterals
in fallen bank. At the end of July 2011, the Central bank announced it had sold 52,4% of shares to a
private company after 2 years sale process. The sale process was eventually narrowed down to 6 potential
bidders and in January 2011, sale agreement was signed, but the successor was not ready with the
financing of the project. At the end of July the financing was ready and the sale went through. The
evaluation process and how other bidders were eliminated in the mid of the process is not made public. If
people wanted further information they are asked to contact the Governor of the Central bank.
The Ombudsman of Althingi, referred to complaints he had received about the Central bank’s sale
process of the Insurance company , when he wrote the letter to the Prime Minister urging the need to issue
law on privatization.
Reference: Announcement from the Central bank on sale of its share in the insurance company Sjova,
July 2011: http://www.m5.is/?gluggi=frett&id=147426
Letter from the Althingi’s Ombudsman to Prime Minister, December 30 2010:
http://www.umbodsmaduralthingis.is/ViewCase.aspx?Key=1376&skoda=mal
54d: In practice, citizens can access privatization regulations within a reasonable time period.
Score: 100 75 50 25 0
The only official regulation found regarding privatization are the “work rules” from 1996. Committee
appointed by Prime Minister, has suggested new Law on privatization that will apply for all government
assets and shares in corporation and financial institutions.
54e: In practice, citizens can access privatization regulations at a reasonable cost.
Score: 100 75 50 25 0
If regulations exist they are accessible at no cost.
Appendix A - Integrity Indicators 2012 Page 68
Category V Government Oversight and Controls
Category V-1 National Ombudsman
55 In law, is there a national ombudsman, public protector or equivalent agency (or
collection of agencies) covering the entire public sector?
55a: In law, is there a national ombudsman, public protector or equivalent agency (or collection of
agencies) covering the entire public sector?
Score: Yes No
The Althingi Ombudsman´s role is to monitor the administration of the State and local authorities and
safeguard the rights of the citizens against the authorities. The Ombudsman mandate is to ensure that the
principle of equality is observed and that administration is in other respects conducted in conformity with
the law and good administrative practice.
The Ombudsman for children´s role is to further the wellbeing of children and to look after their interests,
rights and needs towards public as well as private parties in all walks of life. The Ombudsman for
children is expected to be a protector for all children up to the age of 18.
The Ombudsman for debtor´s role is to provide free consultation and advice to individuals and
households who are in financial trouble, as a result of the bank crash and assist in negotiations and
solutions. The Ombudsman for debtors shall protect his clients’ interest and look after their interests,
rights and needs towards the financial institutions (debt owners)
Reference Act 85/1997 on The Althingi Ombudsman; http://www.althingi.is/lagas/nuna/1997085.html
The Althingi Ombudsman website: http://www.umbodsmaduralthingis.is/category.aspx?catID=18
Act 83/1994 on The Ombudsman for children; http://www.althingi.is/lagas/nuna/1994083.html
The Ombudsman for children website : http://www.barn.is/barn/adalsida/english/
Act 100/2010 The Ombudsman for debtors: http://www.althingi.is/lagas/nuna/2010100.html
The Ombudsman for debtors website: http://www.ums.is/
56 Is the national ombudsman effective?
56a: In law, the ombudsman is protected from political interference.
Score: Yes No
Act 85/1197 on The Althingi Ombudsman article 2: “The Ombudsman shall not, in the
discharge of his functions, have to take instructions from anybody, Althing included.
Reference Act 85/1997 on The Althingi Ombudsman;
http://www.althingi.is/lagas/nuna/1997085.html
56b: In practice, the ombudsman is protected from political interference.
Appendix A - Integrity Indicators 2012 Page 69
Score: 100 75 50 25 0
The Althingi Ombudsman, is generally highly respected for impartiality and independence.
However, The “Nation pulse” survey in March 2012, ranked the Ombudsman 49%, that
indicates the level of public trust toward the agency.
One must bear in mind that comparably trust level for Althingi is only 10%, which could have
tainted the opinion pool somewhat. It is also worth noting that one of three members of the
Special Investigation Commission that finished their work in April 2010, is the Althingi
Ombudsman, another member is a judge in the Supreme Court, and third member a professor at
Yale University in Economics, all of whom, respected for their impartiality before, during and
after they had submitted the final report.
I would personally rank the Ombudsman higher than 49%, as I have not been able to produce
any cases in the past that have been brought up questioning the impartiality of the
Ombudsman. Article 11 in the Act 85/1997 discusses the Ombudsmen obligation to detects
legal flaws in the legislation or public rules, which he shall notify Althingi . Since the act came
into force the Ombudsman has notified Althingi or municipialities about numerous acts or rules
with legal flaws, indicating high level of professionalism and independence. These notifications
are all listed on the Ombudsman website.
Reference: The Ombudsman website: http://www.umbodsmaduralthingis.is/
The “National pulse” survey, March 2012: http://www.capacent.is/frettir-og-
frodleikur/thjodarpulsinn/thjodarpulsinn/2012/03/06/Traust-til-stofnana/
Act 85/1997 on The Althingi Ombudsman; http://www.althingi.is/lagas/nuna/1997085.html
Peer I comment: I agree with the compiler. It is at least 75 out of 100
56c: In practice, the head of the ombudsman agency/entity is protected from removal without
relevant justification.
Score: 100 75 50 25 0
The Act 70/1996 on Rights and obligations of civil servants, protects removal of any civil servants
without relevant justification. From the foundation of the Ombudsman in 1988 there have only been
three appointed, there of one as substitute while the Ombudsman was appointed to the Special
Investigation Commission in 2009.
Reference: Act 70/1996 on Rights and obligations of civil servants :
http://www.althingi.is/lagas/nuna/1996070.html
56d: In practice, the ombudsman agency (or agencies) has a professional, full-time staff.
Score: 100 75 50 25 0
The Althingi Ombudsman has 10 full-time staff, 9 lawyers and one administrator.
Appendix A - Integrity Indicators 2012 Page 70
The Ombudsman for Children, has 5 full-time staff, 3 lawyers, two with graduation degree in child
support, education and history related topics.
The Ombudsman for debtors has 80 full-time staff in 3 district offices.
Reference: The Althingi Ombudsman website:
http://www.umbodsmaduralthingis.is/category.aspx?catID=18
The Ombudsman for children website : http://www.barn.is/barn/adalsida/english/
The Ombudsman for debtors website: http://www.ums.is/
56e: In practice, agency appointments support the independence of the ombudsman agency (or
agencies).
Score: 100 75 50 25 0
The qualification for the Althingi Ombudsman is same as of Supreme Court judge. Internet search did
not produce any incident supporting doubts of the Ombudsman´s independence. Specific regulations are
in force on relationship between the executives of the Administration and the Ombudsman, ensuring
formality and independence.
Reference: Regulations on relationship with executives of the Administration:
http://www.umbodsmaduralthingis.is/category.aspx?catID=29
56f: In practice, the ombudsman agency (or agencies) receives regular funding.
Score: 100 75 50 25 0
As any other government agency, the Ombudsman operates under strict budget, which is subject to
supplementary budget if conditions in the society change significantly.
56g: In practice, the ombudsman agency (or agencies) makes publicly available reports.
Score: 100 75 50 25 0
The Althingi Ombudsman issues annually reports, with statistics on complaints, opinions, ruling and
conclusion of the cases he has taken on. All reports, opinions, rulings and conclusions are available on
the Ombudsman website.
The Ombudsman for debtors has not issued annual report, the only reports available on the website are
those from, the Consultation for homes and households 2000-2009
The Ombudsman for children issues annual reports to Prime minister, which are available on the website.
Reference: The Althingi Ombudsman website:
http://www.umbodsmaduralthingis.is/category.aspx?catID=5
The Ombudsman for debtors website: http://www.ums.is/um-umbodsmann/eldra-efni/
Appendix A - Integrity Indicators 2012 Page 71
The Ombudsman for children website:
http://www.barn.is/barn/adalsida/utgefid_efni/arlegar_skyrslur_til_forsaetisradherra/
56h: In practice, when necessary, the national ombudsman (or equivalent agency or agencies)
initiates investigations.
Score: 100 75 50 25 0
According to statistics from the Althingi Ombudsman for the period 2006-2010 the Ombudsman initiated
investigations on average 10 cases annually out of 318 total cases, which is 3% initiative index.
Reference: The Althingi Ombudsman website:
http://www.umbodsmaduralthingis.is/category.aspx?catID=5
56i: In practice, when necessary, the national ombudsman (or equivalent agency or agencies)
imposes penalties on offenders.
Score: 100 75 50 25 0
Conclusions by the Althingi Ombudsman in cases submitted for his consideration are not by law binding
on the authorities, yet they are normally followed. The Ombudsman does not have authority to impose
penalties.
56j: In practice, the government acts on the findings of the ombudsman agency (or agencies).
Score: 100 75 50 25 0
Conclusions by the Althingi Ombudsman in cases submitted for his consideration are not by law binding
on the authorities, yet they are normally followed. Cases are normally concluded through an act of
remedy by the authority involved, or an opinion issued by the Ombudsman as to whether the authority has
by its actions infringed the law or good administrative practice. Where the actions of an authority form
the object of reproach or criticism by the Ombudsman he will address to such authority a recommendation
to make amends and follow up with them accordingly.
Reference: The Althingi Ombudsman website:
http://www.umbodsmaduralthingis.is/category.aspx?catID=18
Peer I Comment: The parliamentary Ombudsman has pointed out that the government has not
reacted to the findings.
56k: In practice, the ombudsman agency (or agencies) acts on citizen complaints within a
reasonable time period.
Score: 100 75 50 25 0
According to the Ombudsman annual report from 2009, there were 338 new cases registered. At the end
of the year 123 were still pending, and 319 concluded. Half of the unfinished cases or 61 were on hold
because information or explanation from government/ administration were pending, in 15 cases
information from the initiator was pending and 47 cases still being investigated. Of 25 cases that were
Appendix A - Integrity Indicators 2012 Page 72
viewed, 17 cases did not indicate day of complaint, so actual time period was not known, but determined
reasonable, as they were concluded within 2 months period, since the case number referred to 2012 case
and they were all concluded before end of February. 6 cases were concluded within a month from
complaint and 2 cases took 8 months from complaint to conclusion. The ombudsman receives various
kind of complaints, some of which can be dealt with in a day, while some need a thorough investigation
that can take months.
After consideration from peer comments the score has been changed from 75 to 50.
Reference: The Althingi Ombudsman website:
http://www.umbodsmaduralthingis.is/category.aspx?catID=5
Peer I comment: I do not agree. I would say 50 or 25 out of 100. The findings are well
reasoned but it is necessary to find balance between good reasoning and reasonable time. (see
above)
57 Can citizens access the reports of the ombudsman?
57a: In law, citizens can access reports of the ombudsman(s).
Score: Yes No
Act 85/1997 article 12 requires annual report for previous year to be issued before Septmber 1st and made
publish . However it was noticed that annual report after 2009 on Ombudsman activities has not been
published on the website but statistical numbers are available for the year 2010.
Reference: Act 85/1997 on The Althingi Ombudsman; http://www.althingi.is/lagas/nuna/1997085.html
57b: In practice, citizens can access the reports of the ombudsman(s) within a reasonable time
period.
Score: 100 75 50 25 0
The annual report has not been published on the website after 2009 and statistical numbers are not
available after 2010. However, the case log is updated frequently, with detail information about
conclusion, opinions and rulings of the Ombudsman. Citizen can review letters and suggestions sent by
the Ombudsman, in addition to explanation for each conclusion.
The Ombudsman for children has published annual report up till 2010 on his website, but the
Ombudsman for debtors, who was founded in 2010, has not published any annual report yet.
Reference: The Althingi Ombudsman website:
http://www.umbodsmaduralthingis.is/category.aspx?catID=5
57c: In practice, citizens can access the reports of the ombudsman(s) at a reasonable cost.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 73
Annual reports on the Ombudsmen websites are accessible by all citizens free of charge.
Category V-2 Supreme Audit Institution
58 In law, is there a national supreme audit institution, auditor general or equivalent agency
covering the entire public sector?
58a: In law, is there a national supreme audit institution, auditor general or equivalent agency
covering the entire public sector?
Score: Yes No
Act 86/1997 on The National Audit Office (NAO) is an independent entity operating under the auspices
of Althingi. NAO´s main role is to audit the financial statement of central government agencies, monitor
and promote improvements in the financial management of the State and in the use of public funds.
Reference: Act 86/1997 on The National Audit Office: http://www.althingi.is/lagas/139a/1997086.html
The National Audit Office website: http://www.rikisendurskodun.is/index.php?id=44
59 Is the supreme audit institution effective?
59a: In law, the supreme audit institution is protected from political interference.
Score: Yes No
Act 86/1997 article 3 declares the National Audit Office (NAO) full and complete independence in its
engagement. The Committee of Prime Minister may request reports on issues or branches that fall under
NAO district. Employees of the NAO are also fully independent from other government agencies.
Reference: Act 86/1997 on The National Audit Office: http://www.althingi.is/lagas/139a/1997086.html
59b: In practice, the head of the audit agency is protected from removal without relevant
justification.
Score: 100 75 50 25 0
The Act 70/1996 on Rights and obligations of civil servants, protects removal of any civil servants
without relevant justification.
The Committee of Prime Minister hires the Auditor General, and fires him upon majority votes from
Althingi. The Auditor General of Iceland has never been removed from his office with or without
justification. The Auditor General was hired in 2008, but his tenure at the National Audit Office goes
back to 1976. His predecessor was 16 year in office and resigned due to retirement.
The score of 75 is reflecting recent incident, where a head of a the FSA Financial Supervisory Authority
was removed from office without relevant justification, that is known of at this time, indicating that any
head of similar agency could experience the same under certain circumstances.
Appendix A - Integrity Indicators 2012 Page 74
Reference: Act 70/1996 on Rights and obligations of civil servants :
http://www.althingi.is/lagas/nuna/1996070.html
Peer II comment: I would give 100 here.
59c: In practice, the audit agency has a professional, full-time staff.
Score: 100 75 50 25 0
The National Audit Office has total 47 employees, 80% of whom with University degree and Master
degree. Most employees have BS Financial and Accounting degree, 5 are Certified Professional
Auditors, 2 are lawyers, 5 have degree in political and administration and 2 computer scientist.
The National Audit Office website: http://www.rikisendurskodun.is/index.php?id=44
59d: In practice, audit agency appointments support the independence of the agency.
Score: 100 75 50 25 0
Recent incident where the independence of the Auditor General was challenged, indicates in a significant
way that the Auditor General enjoys independence in practice. The State Police Chief, demanded that
the Auditor General would step aside while the procurement of the police office was being investigated
by the Auditor General. The Police chief refused to disclose document or submit information and
claimed breach of trust between the two government agencies. The Ministry of Internal affairs had to rule
on the issue, with the conclusion that The Police Chief was ordered to disclose all requested information.
Reference: RUV news “The Police Chief submitted requested documents”:
http://ruv.is/frett/rikislogreglustjori-afhenti-gogn
59e: In practice, the audit agency receives regular funding.
Score: 100 75 50 25 0
In the 2010 budget the National Audit Office received 425 million in funding, while in 2011 the budget
bill was 389 million or 8,5% cut down in funding. At the same time the projects and engagements of the
National Office have increased. The state owned bank, became the Auditor General´s responsibility to
audit, and Act on the Political financing added few more projects to the busy office. The National
Auditor Office is not the only government agency that faces cut down in funding, but it seem inadequate
to increase projects without financial support. Although the office reports to parliament and seem to
perform all required function effectively, it performance may be weakened due to lack of financial
resources.
The criteria for score 50 is that the agency gets regular funding but is being pressured by cuts in the
budget, which is the case, both by cutting the funding and adding projects.
Reference: Datamarket on Budget, funding government agencies :
http://gallery.datamarket.com/fjarlagafrumvarp_2011/?lidur=00
Appendix A - Integrity Indicators 2012 Page 75
Peer II comment: Perhaps, the National Audit Office doesn’t get sufficient funding, but hardly it is
true that it doesn’t get “regular funding” (see above)
59f: In practice, the audit agency makes regular public reports.
Score: 100 75 50 25 0
On the National Audit Office website, all reports, opinions, guidance and reports on special investigations
are published in a organized chronological manner.
Reference: The National Audit Office website, published matter:
http://www.rikisendurskodun.is/utgefid-efni.html
59g: In practice, the government acts on the findings of the audit agency.
Score: 100 75 50 25 0
The government agencies generally act on the findings of the National Audit office (NAO). Follow up is
a regular part of administration audit, where it is investigated if the agencies have executed the NAO´s
suggestions or findings. According to senior analyst at the Administration audit department, in 2008
90% of suggestions had been executed by the applicable agencies, in 2009 the execution rate was 76%
and in 2010 71% execution rate. The National Audit office aims to receive 80% execution rate, 3 years
from the findings or suggestions were initially reported.
Reference: Interview senior Analysts at the National Audit office, Administration audit department.
59h: In practice, the audit agency is able to initiate its own investigations.
Score: 100 75 50 25 0
The national Audit Office has initiated its own investigations in numerous cases, most recently the
procurement procedure of the Police Office, which sparked controversy.
The score 75 reflects concerns that insufficient financing is a hurdle to the office ability to initiate
necessary investigation. See answer 59e
60 Can citizens access reports of the supreme audit institution?
60a: In law, citizens can access reports of the audit agency.
Score: Yes No
Act 86/1997 article 12 requires the National Audit Office to present it´s annual report before Althingi.
These reports are published on the website accessible to all citizens.
Reference: Act 86/1997 on the National Audit Office: http://www.althingi.is/lagas/139a/1997086.html
60b: In practice, citizens can access audit reports within a reasonable time period.
Appendix A - Integrity Indicators 2012 Page 76
Score: 100 75 50 25 0
On the National Audit Office website, all reports, opinions, guidance and reports on special investigations
are published in a organized chronological manner, within a reasonable time period.
Reference: The National Audit Office website, published matter:
http://www.rikisendurskodun.is/utgefid-efni.html
60c: In practice, citizens can access the audit reports at a reasonable cost.
Score: 100 75 50 25 0
All reports on the National Audit Office website, are accessible to citizens free of charge.
Category V-3 Taxes and Customs: Fairness and Capacity
61 In law, is there a national tax collection agency?
61a: In law, is there a national tax collection agency?
Score: Yes No
Act 90/2003, article 85-88 on Tax collection agency.
Reference: Revenue Tax Act 90/2003 http://www.althingi.is/lagas/137/2003090.html
62 Is the tax collection agency effective?
62a: In practice, the tax collection agency has a professional, full-time staff.
Score: 100 75 50 25 0
According to annual report 2010, there were total 268 employees at the National tax collection agency,
there of 51% holding University degree. Most employees have long work experience with the agency.
The average work age at the end of 2010, among the employees was 12 years and 3 months
Reference; Annual report the National Tax agency : http://rsk.is/
62b: In practice, the tax agency receives regular funding.
Score: 100 75 50 25 0
In 2010 many regional tax agencies were merged to one NationalTax agency. The funding for 2010 and
2011 is of similar amount kr. 2,400 million . (CAD$ 18,7 million) 70% of funding covers salaries of the
agency.
Reference: Data market, Financial Budget 2011/2010:
http://gallery.datamarket.com/fjarlagafrumvarp_2011/?lidur=09
Appendix A - Integrity Indicators 2012 Page 77
63 In practice, are tax laws enforced uniformly and without discrimination?
63a: In practice, are tax laws enforced uniformly and without discrimination?
Score: 100 75 50 25 0
Tax laws are enforced consistently to all citizens. The tax evasion inspection sometimes targets certain
groups of individuals based on their jobs, and that they are more likely to evade the tax laws, because the
opportunity to write off own expenses, or not declare revenues, is there. For example, self-employed
trade people with certain trade; i.e. carpenters, electricians, mechanics are sometimes subject to
inspection, while other self-employed or professions are not targeted. In an article in the December issue
of “Tiund” magazine, issued by the National Tax agency, inspector on tax evasion was interviewed. The
most concerns of the inspection office, is that on a daily basis they are unable to act effectively on tax
evasion due to lack of authority or provisions to enforce the law, even though they have solid evidence
proofing tax evasion. “This is costing the society tens of billions on a yearly basis” , adds the inspector.
To reflect this inefficiency in enforcement the score 50 is given.
The scoring criteria for 50 says that tax laws are generally enforced consistently but some exception
exists. For example, some groups may occasionally evade tax law, which above example verifies.
Reference: The National Tax magazine “Tiund” : http://rsk.is/rsk/tiund
Peer I comment: I do not agree with the reasoning. I would say it is at least 75 out of 100. (see above
note about scoring criteria)
Peer II comment: Is the question not referring to equality? I think it is not accurate to say that only few
groups of trades are audited, and others not. Doesn’t the RSK (tax agency) take random tests, as I recall
“self employed artists” were at one time audited.
64 In law, is there a national customs and excise agency?
64a: In law, is there a national customs and excise agency?
Score: Yes No
Act 88/2005 on Customs article 38-46
Reference: Acto 88/2005: http://www.althingi.is/lagas/140a/2005088.html
65 Is the customs and excise agency effective?
65a: In practice, the customs and excise agency has a professional, full-time staff.
Score: 100 75 50 25 0
The Customs authorities operate Customs-school, which is mandatory for every customs agent to attend
and graduate from, before getting an occupation as a customs agent. The customs agency employs total
Appendix A - Integrity Indicators 2012 Page 78
250 employees, which is slightly less than the tax agency. The customs agency also collects fees and
taxes other than personal income tax.
In 2011, the agency revealed numerous counterfeit cases, when counterfeit clothing and other consumer
goods, including medicine were discovered during inspection in custom. The agency participates in
International task forces, targeting globally growing violation as counterfeit medicine. The customs
agency is also very active in drug smuggling cases, both at the international airport, and in various ports
around the country.
65b: In practice, the customs and excise agency receives regular funding.
Score: 100 75 50 25 0
The funding in 2011 for the Customs agency was kr. 1,948 million, slightly higher amount than previous
year.
Reference: Data market, Financial Budget 2011/2010:
http://gallery.datamarket.com/fjarlagafrumvarp_2011/?lidur=09
66 In practice, are customs and excise laws enforced uniformly and without discrimination?
66a: In practice, are customs and excise laws enforced uniformly and without discrimination?
Score: 100 75 50 25 0
Customs and excise laws are enforced consistently to all citizens. Internet search did not produce any
evidence of discrimination of the customs agency.
Category V.-4 Oversight of State-Owned Enterprises
67 In law, is there an agency, series of agencies, or equivalent mechanism overseeing state-
owned companies?
67a: In law, is there an agency, series of agencies, or equivalent mechanism overseeing state-owned
companies?
Score: Yes No
There is not one agency that oversees state-owned companies; the Board of directors appointed by the
government is the most common monitoring and governing mechanism for state-owned corporations.
For example the operational structure of the National Broadcast station RUV, was changed few years
ago, to a government owned shareholder company, where the Board of directors oversee the operations,
oppose to the Ministry of Education who was the monitoring and governing body for this corporation
prior to the change.
The National Audit office’s objective is to audit (oversee) all government agencies and corporations.
Appendix A - Integrity Indicators 2012 Page 79
After the Government became majority owner in two of the fallen banks and partial owner in other banks
and credit funds in 2009, a new government agency was established; The Bank agency “Bankasyslan”
whose mandate by act 88/2009 is to oversee the government shares, while the bank system goes under
reconfiguration and reconstructing. The Bank agency is supposed to close in 2014 as it is anticipated that
the banks will be sold by then.
Reference: Bankasyslan website : http://bankasysla.is/forsida/
Act 88/2009 on the Bank agency: http://www.althingi.is/lagas/nuna/2009088.html
Peer I comment: The compiler does not mention the work on behalf of the Prime Minister office
concerning the necessity to clarify the boundaries between different objectives of the government by
selling state-owned enterprises: http://www.forsaetisraduneyti.is/frettir/nr/7093
68 Is the agency, series of agencies, or equivalent mechanism overseeing state-owned
companies effective?
68a: In law, the agency, series of agencies, or equivalent mechanism overseeing state-owned
companies is protected from political interference.
Score: Yes No
One of the announced purpose of the new Bank agency was to hinder any political interference in regards
to the ownership of the banks, keep them beyond an arms length from the politicians. It is especially
viewed important by the government, when the banks will be sold again – in a transparent open sale
process. The Act 88/2009 does however not have a provision that protects the Board from political
interference, rather there is an exceptional provision that permits the Minister to bring orders to the Board.
The Board may give the Ministry their opinion on the order before it is executed.
The former CEO of the Bank agency resigned last year, after one year in office. The Board hired new
CEO, that caused huge controversy, as he was a former assistant of former Bank Minister, at the time
when the banks were privatized at the dawn of the century. This hiring caused a lot of anger, accusing the
Board of political inappropriateness and unprofessional hiring. (The applicant did not have any
professional or educational experience in bank operation) The Board of directors ended up by resigning
and new Board was appointed, who hired new CEO.
Exception is The National Audit Office which is seen as independent from political interference, per
scoring in questions 59 and 60. These category of questions will not regard the National Audit Office as
an agency that oversees state-owned company, otherwise the scoring will be similar or the same as
questions 59 and 60.
Reference: Act 88/2009 on the Bank agency: http://www.althingi.is/lagas/nuna/2009088.html
Web news Eyjan; CEO of the Bank agency resigns: http://eyjan.is/2011/08/04/forstjori-bankasyslu-
rikisins-segir-ovaent-upp-storfum/
News Visir: Minister; devastating experience from political interference in banking operation:
http://www.visir.is/bitur-reynsla-af-thvi-ad-stjornmalamenn-krukki-i-bankarekstri/article/2011111029366
Appendix A - Integrity Indicators 2012 Page 80
68b: In practice, the agency, series of agencies, or equivalent mechanism overseeing state-owned
companies has a professional, full-time staff.
Score: 100 75 50 25 0
The Board of directors in state owned companies are not manned with full-time staff. According to
annual report of the Bank agency it employs 4 full-time staff, all of whom professional with University
degree.
Reference: The annual report of the Bank Agency 2011 :
http://bankasysla.is/files/SkyrslaBR_2011_net_74617143.pdf
68c: In practice, the agency, series of agencies, or equivalent mechanism overseeing state-owned
companies receives regular funding.
Score: 100 75 50 25 0
The Bank agency receives regular funding, kr. 72 million for the year 2011. One of the reason however,
that the former CEO of the Bank agency gave for her resignation was insufficient funding of the agency.
Reference: The annual report of the Bank Agency 2011 :
http://bankasysla.is/files/SkyrslaBR_2011_net_74617143.pdf
68d: In practice, when necessary, the agency, series of agencies, or equivalent mechanism
overseeing state-owned companies independently initiates investigations.
Score: 100 75 50 25 0
This scoring is based on the Bank agency only, which mandate is not to initiate investigation by law.
68e: In practice, when necessary, the agency, series of agencies, or equivalent mechanism
overseeing state-owned companies imposes penalties on offenders.
Score: 100 75 50 25 0
There is no penalty mechanism available.
69 Can citizens access the financial records of state-owned companies?
69a: In law, citizens can access the financial records of state-owned companies.
Score : Yes No
Financial records of all state-owned companies are published. The state-owned companies are obliged to
follow same laws as public company on the stock market.
69b: In practice, the financial records of state-owned companies are regularly updated.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 81
All state-owned companies have websites where financial records are regularly updated.
Example the state owned Broadcasting station RUV : http://www.ruv.is/um-ruv/arsskyrslur-og-reikningar
Landsvirkjun electricity producer owned by the state: http://www.landsvirkjun.com/
69c: In practice, the financial records of state-owned companies are audited according to
international accounting standards.
Score: 100 75 50 25 0
The National Audit Office is the Supervision authority that performs audits on state-owned companies or
tenders the audit to Audit companies, that comply to international accounting standards.
Reference: The National Audit office website:
http://www.rikisendurskodun.is/hlutverk/fjarhagsendurskodun.html
69d: In practice, citizens can access the financial records of state-owned companies within a
reasonable time period.
Score: 100 75 50 25 0
The state-owned companies are role model for good and timely published financial records. The state
owned electricity producer, Landsvirkjun, published their annual financial statement at the end of March,
and it was available on the website right then. Another example is the state-owned National University
Hospital, that has published its Financial statement for 2011 on its web site.
Landsvirkjun electricity producer owned by the state: http://www.landsvirkjun.com/
The National Hospital website: http://www.landspitali.is/gagnasafn?branch=4810.5010
Peer I comment: The National Hospital is by law a part of the governmental administration but
not a state-owned company.
69e: In practice, citizens can access the financial records of state-owned companies at a reasonable
cost.
Score: 100 75 50 25 0
Financial records of state-owned companies are accessible to citizens free of charge.
Category V-5 Business Licensing and Regulation
70 Are business licenses available to all citizens?
70a: In law, anyone may apply for a business license.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 82
The Icelandic constitution article 75, guarantees that all citizens have the right to freely choose their
occupation or profession. However, most businesses require prior permission to operate, especially
business related to food, health, alcohol, fishery, finance, insurance, medicine, broadcasting, nature, and
wherever resources are limited and where health, safety and environmental risk is involved. For retail
business and similar businesses, by registering the business with the Business register, the company is
ready to start, and doesn’t need any other particular business license, unless there is health or safety risk
involved.
Reference: Constitution http://www.althingi.is/lagas/nuna/1944033.html English version:
http://www.government.is/constitution/
70b: In law, a complaint mechanism exists if a business license request is denied.
Score: Yes No
There is always a complaint mechanism available through the Ombudsman. Each Ministry also has
appeal and ruling committees, where applicants for business license can complain. If there is no special
appeal committee on the issue, complaints can be sent straight to the applicable Ministry if license
request is denied by the local authorities, who handle licenses.
Reference: The Ombudsman website: http://www.umbodsmaduralthingis.is/
Rettarheimild, the website for appeals and complaints: http://www.rettarheimild.is/
70c: In practice, citizens can obtain any necessary business license (i.e. for a small import
business) within a reasonable time period.
Score: 100 75 50 25 0
Small import business would only have to register with the Business registry, get identification number,
which is applicable to tax account number, apply for VAT tax number, and preferably register with the
Customs for electronic customs clearance. This registry can be done within a reasonable time period,
approximately 7 days. However, if the imported products are of health and safety risk nature, or for
other reasons license required, the time to get these license will take much longer ( 3-6 months ) time and
effort.
Recent discussions on news and in the Parliament about shellfish farming indicate that new act and
regulation about this farming industry is suffocating the business idea before it even launches. Farmers
need to apply for numerous licenses and pay inspection fees to both the Food and Veterinary Authority
and the Environment Agency. For an ordinary self-employed farmer, who wants to start this simple
business, it is made impossible both in terms of time length, high cost and other technical barriers. For
entrepreneurs who want to start new business, complicated bureaucracy may prevent prosperity of new
ideas and businesses.
The score 25 is not reflecting small import business which can be started in a short time, rather it is
reflecting the common view that new businesses and new ideas are sometimes suffocated within the
bureaucracy, instead of cutting red tapes to support small businesses and self-employed entrepreneurs to
blossom. Fishery and fish related technology is the most important industry in Iceland, therefore it is
considered proper to take an example from that industry. It is commonly viewed that small and middle
Appendix A - Integrity Indicators 2012 Page 83
size businesses play the biggest role in job creation, therefore this fish farmer issue is considered
controversial.
Reference the National Tax office, business registry: http://rsk.is/fyrirtaekjaskra/felog/ehfeinn
News Visir.is “New act should rather be on banning shell fish farming , May 2012”: http://visir.is/ny-log-
aetti-frekar-ad-kalla-log-um-bann-vid-skeldyraraekt/article/2012120509955
News Visir.is “Shellfish farming discussed in parliament”, May 2012: http://visir.is/kraeklingaraekt-
raedd-a-thingi---frett-stodvar-2-var-slaandi-/article/2012120509818
Peer II comment: Don’t think this example alone can reflect score of 25. Perhaps my opinion is biased
for the fact that last years before the collapse there was deregulation in the whole business environment
that in the end contributed to the collapse.
70d: In practice, citizens can obtain any necessary business license (i.e. for a small import business)
at a reasonable cost.
Score: 100 75 50 25 0
The register fee for a private business is kr. 130,500 one time cost (CAD$ 1,000) Registration fee for
Incorporated business is more expensive kr. 256,000 (CAD$ 2,000). The register fee for identification
number is kr. 5,000 (CAD$ 40) In general the cost to establish a small private business is viewed,
medium to high in Iceland.
Businesses that require license to operate, need to pay for the license on a yearly basis. For example
initial license to operate a restaurant with no restrictions is kr. 208,500 and kr. 64,500 annual renewal fee.
The example in 70b about the shell fish farming, exhibits that inspection and license fees, prior to
granting the actual license for new business, is in practice a “no-show burden” for small businesses and
self-employed.
Reference: Register fee, the National Tax office: http://rsk.is/fyrirtaekjaskra/gjald
Act 88/1991 on Extra Revenues for Treasury: http://www.althingi.is/lagas/nuna/1991088.html
71 Are there transparent business regulatory requirements for basic health, environmental,
and safety standards?
71a: In law, basic business regulatory requirements for meeting public health standards are
transparent and publicly available.
Score: Yes No
The Icelandic Food and Veterinary Authority enforces legislation and provides education and services to
consumers, to businesses and to the fisheries and agricultural sectors. Some of it´s functions involve food
legislation, disease control and prevention, import and export control and administration. The website of
the Icelandic Food and Veterinary Authority displays health standards for various businesses and
Appendix A - Integrity Indicators 2012 Page 84
requirements. The website is well organized and informative on any issues that are relevant to the
business . The acts and regulation under each category is accessible .
The Icelandic Medicine Agency is responsible for assessing quality and safety of medical products, to
perform inspections and being a source of information for health professional and the public.
Reference: The Icelandic Food and Veterinary Authority website: http://mast.is/umlbs/matvaelastofnun
Act 80/2005 on The Icelandic Food and Veterinary Authority
The Icelandic Medicine Agency website: http://www.imca.is/IMA/
Act 93/1994 on Medicines: http://www.althingi.is/altext/stjt/1994.093.html
71b: In law, basic business regulatory requirements for meeting public environmental standards
are transparent and publicly available.
Score: Yes No
The Environment Agency´s role is to promote the protection and sustainable use of Iceland´s natural
resources, as well as public welfare, by helping to ensure a healthy environment and safe consumer
goods. Areas of operations include providing information and advice for the public and businesses. The
agency also conducts inspections, operation supervision and issues operating permits. It may happened
that some operations overlap operations of the Food and Veterinary Authority, such as health related
inspections and issues regarding genetically modified foods, protection of animals etc. It can be
confusing for citizens to determine which authority handles various issues, and sometimes businesses
need to deal with both agencies for similar matters.
The agency monitors the air quality in Iceland and publishes it on the website,. Warnings are issued on
National broadcast stations if air quality goes below acceptable level.
Reference: Act 90/2002 on Environmental agency: http://www.althingi.is/lagas/nuna/2002090.html
The Environmental agency website: www.ust.is/the-environment-agency-of-iceland/
71c: In law, basic business regulatory requirements for meeting public safety standards are
transparent and publicly available.
Score: Yes No
The Administration of Occupational Safety and Health’s main role is to prevent accidents and health
damage at the workplace
Reference: Act 46/1980 on Working Conditions, Health and Safety in the Workplace
The Administration of Occupational Safety and Health website: http://vinnueftirlit.is/vinnueftirlit/is
Appendix A - Integrity Indicators 2012 Page 85
72 Does government effectively enforce basic health, environmental, and safety standards on
businesses?
72a: In practice, business inspections by government officials to ensure public health standards are
being met and are carried out in a uniform and even-handed manner.
Score: 100 75 50 25 0
The initial scoring of zero, is changed to 50, after reviewing the marks and criteria that Global Integrity
discloses with each question. Peers comments also strongly disagree that these examples can constitute a
total failure. Although no bribing incidents around the inspections industry has been discovered, which is
one of the criteria that would knock down the scoring, the scoring reflects the strong reluctance of
informing the public when hazard has occurred, there seems to be a certain element of embarrassment
and pointing fingers surrounding these incidents, which is not acceptable when public health and safety
are at stake.
Defected PIP breast implants were subject to Medical Advice Alert in 2010, following a global recall.
The Chief of cosmetic surgery in the National Hospital in Iceland, was also operating a private cosmetic
clinic, where he used these breast implants. The Chief himself imported the PIP implants through his
private import company. When the story of silicone leak from the implants started to unfold in January
2012, the Chief said that he knew about this alert in 2010, and wanted to send all his patients a letter
warning them about the potential defect. He said that the Directorate of Health did not agree it was a
good idea to send out these letters. The Directorate denies accusations of slow reaction to this alert. All
women with those implants were offered scanning procedure and removal of defected implants at the
State cost. The Chief and his import company is a subject to liability class suit, although he claims he
doesn’t have any liability insurance to cover the claim. The Directorate ordered all cosmetic doctors to
submit names of their patients, so the agency could follow up with them, as the percentage of defection
had proofed to be over 70% in scanned patients. This request was denied by the doctors and the Privacy
and Data Protection Commissioner confirmed this denial based on doctor-patient confidentiality. The
legislation is now considering to amend the law, so an exception order can be issued to doctors to submit
the names of patient to the Directorate. This case is also subject for review in regulations regarding civil
servants operating private business on the side, according to the Minister of Welfare.
In January 2012 it was discovered that industrial salt, not intended for human consumption had been
sold in Iceland as food salt for 13 years. The salt bags were clearly marked as industrial salt from the
producer in Denmark, but neither the employees or the management of the importer did react. “A stupid
mistake, we thought it was for the food industry” said the CEO on the National news when this was
discovered. This salt has been used by many of the largest food producers and bakeries all this time.
According to news, it was an inspector at the Food and Veterinary Authority (Matvaelastofnun) that
discovered the mistake.
This shocking salt case is an example of the sense of carelessness and incompetence in the control and
inspection sector in Iceland. The Salt and the PIP case initiated discussions and debate about the
effectiveness of the Health and public safety authorities. There seems to be no shortage of regulations,
directives and legislations regarding the issues, it is the actual execution and the monitoring that seems to
be lacking seriousness and diligence. There are also concerns if there are too many agencies drowning in
bureaucracy and sometimes overlapping each others role and objectives with the result that everyone
thinks it is someone else duty to act.
Appendix A - Integrity Indicators 2012 Page 86
Web news Pressan: “Medical alert in 2010, the Directorate of Health puts it in the hand of the cosmetic
doctors to assess the danger” http://www.pressan.is/Frettir/Lesafrett/varad-vid-silikonpudunum-2010-
landlaeknir-let-thad-i-hendur-laeknanna-ad-meta-haettuna---fleiri-en-jens
Web news Eyjan: “ ..[] no liability insurance for defected implants, January 2012:
http://eyjan.is/2012/01/13/lytalaeknir-ekki-tryggdur-fyrir-skadabotum-vegna-galladra-brjostapuda/
Yahoo Health news, January 2012 Industrial salt sold as food salt in Iceland for 13 years:
http://health.yahoo.net/news/s/afp/industrial-salt-sold-as-food-salt-in-iceland-for-13-years
RUV National Broadcast on discovery of Industry salt: http://www.ruv.is/frett/abyrgist-ekki-saltid-i-
matvaeli
Peer I comment : I do not agree. Scoring can not be based on one ore few very specific examples. (see
above)
Peer II comment: Good examples, but don’t think they justify zero score.
72b: In practice, business inspections by government officials to ensure public environmental
standards are being met are carried out in a uniform and even-handed manner.
Score: 100 75 50 25 0
The initial scoring of zero, is changed to 50, after reviewing the marks and explanation that Global
Integrity discloses with each question. Peer comments also strongly disagree that these examples can
constitute a total failure. Although no bribing incidents around the inspections industry has been
discovered, which is one of the criteria that would knock down the scoring, the scoring reflects the strong
reluctance of informing the public when hazard has occurred, there seems to be a certain element of
embarrassment and pointing fingers surrounding these incidents, which is not acceptable when public
health and safety are at stake.
A trash-burning factory in the Vestfjords in Iceland operated for many years. In 2007, a measurement of
toxic chemicals from the factory turned out to be twenty times more than permitted limits for such
factories. In spite of this, the operational permit for the factory was extended until 2018, by the
Environmental agency, but with orders to improve pollution protections. To make this look even worse,
these toxic measures were not brought to the public attention until 3 years later, when toxic chemicals
were found in milk from farms in the area, by the Dairy producer conducting quality measurements.
Concerns ignited regarding public health, and many came on the news complaining about health issues.
The Environmental Committee on Althingi, discussed this and issued a report in January 2011. The
permit for the trash-burning factory was cancelled and it has now been closed. The Committee
concluded that the local authorities lacked formality in decisions and competence and that the 10 years
extension of the operational permit by the Environmental agency had been reprehensible.
Reference: Report Parliament Environment Committee, January 2011:
http://www.althingi.is/pdf/139_funi_greinargerd_oth.pdf
Peer I comment: I do not agree. Scoring can not be based on one ore few very specific examples. (see
above)
Appendix A - Integrity Indicators 2012 Page 87
Peer II comment: Good examples, but don’t think they justify zero score.
72c: In practice, business inspections by government officials to ensure public safety standards are
being met are carried out in a uniform and even-handed manner.
Score: 100 75 50 25 0
The initial scoring of zero, is changed to 50, after reviewing the marks and explanation that Global
Integrity discloses with each question. Peer comments also strongly disagree that these examples can
constitute a total failure. Although no bribing incidents around the inspections industry has been
discovered, which is one of the criteria that would knock down the scoring, the scoring reflects the strong
reluctance of informing the public when hazard has occurred, there seems to be a certain element of
embarrassment and pointing fingers surrounding these incidents, which is not acceptable when public
health and safety are at stake.
The example in 72b addresses public safety standards as well as environmental standards not being met.
Peer I comments: I do not agree. Scoring can not be based on one ore few very specific examples. (see
above)
Peer II comment: Good examples, but don’t think they justify zero score.
Category VI Anti-Corruption Legal Framwork, Judicial Impartiality, and Law Enforcement
Professionalism
Category VI-1 Anti-Corruption Law
73 Is there legislation criminalizing corruption?
73a: In law, attempted corruption is illegal.
Score: Yes No
Penal Code 19/1940 article 109 , article 128 and article 264
Reference: Penal Code 19/1940: http://www.althingi.is/lagas/nuna/1940019.html
73b: In law, extortion is illegal.
Score: Yes No
Penal Code 19/1940 article 109 , article 128-129 and article 264
Reference: Penal Code 19/1940: http://www.althingi.is/lagas/nuna/1940019.html
73c: In law, offering a bribe (i.e. active corruption) is illegal.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 88
Penal Code 19/1940 article 109 and article 264
Reference: Penal Code 19/1940: http://www.althingi.is/lagas/nuna/1940019.html
73d: In law, receiving a bribe (i.e. passive corruption) is illegal.
Score: Yes No
Penal Code 19/1940 article 128, 129 and article 264
Reference: Penal Code 19/1940: http://www.althingi.is/lagas/nuna/1940019.html
73e: In law, bribing a foreign official is illegal.
Score: Yes No
Penal Code 19/1940 article 109 and article 128
Reference: Penal Code 19/1940: http://www.althingi.is/lagas/nuna/1940019.html
73f: In law, using public resources for private gain is illegal.
Score: Yes No
Penal Code 19/1940 article 139
Reference: Penal Code 19/1940: http://www.althingi.is/lagas/nuna/1940019.html
73g: In law, using confidential state information for private gain is illegal.
Score: Yes No
Penal Code 19/1940 article 136
Reference: Penal Code 19/1940: http://www.althingi.is/lagas/nuna/1940019.html
73h: In law, money laundering is illegal.
Score: Yes No
Reference Act 64/2006 on Actions to prevent money laundering and terrorist financing:
http://www.althingi.is/altext/stjt/2006.064.html
73i: In law, conspiracy to commit a crime (i.e. organized crime) is illegal.
Score: Yes No
Appendix A - Integrity Indicators 2012 Page 89
Although conspiracy or organized crime is not mentioned in the Penal code, it applies to all crimes
conducted by an individual or group of individuals.
There is however increasing debate both at Althingi and within the police over organized crime groups,
i.e. Hells Angels and similar motorbike groups, as to whether the establishment and operation of those
groups should be banned by law. The existence of these international groups, allegedly connected to
organized crime, has been emerging in Iceland for the past few years, and in 2011 the first Hells Angels
group in Iceland obtained full status.
Europol published in 2011 Organized Crime Threat Assessment (OCTA). "Internet technology has now
emerged as a key facilitator for the vast majority of offline organized crime activity," the report reads,
adding that cooperation happens between groups, regardless of their national, ethnic or business
differences.
Reference:Article “Internet, mobile tech now a primary tool for organized crime:
http://www.digitaljournal.com/article/306307
Category VI-2 Anti-Corruption Agency or Equivalent Mechanisms
74 In law, is there an agency (or group of agencies) with a legal mandate to address
corruption?
74a: In law, is there an agency (or group of agencies) with a legal mandate to address corruption?
Score: Yes No
The group of agencies with a legal mandate to address corruption are as follows:
The National Commissioner of the Icelandic police: http://www.logreglan.is/default.asp?cat_id=214
The National Audit Office: http://www.rikisendurskodun.is/index.php?id=44 who is the front line
independent investigator with the mandate to ensure that the federal government and it’s agencies comply
with the acts and regulations, and its own spending codes, budgets, policies and guidelines.
The Ombudsman of Althingi: http://www.umbodsmaduralthingis.is/category.aspx?catID=18 whose role
is to monitor the administration of the State and local authorities and safeguard the rights of the citizens
vis-a-vis the authorities.
The Special Prosecutor: http://www.serstakursaksoknari.is/english established in February 2009 to
investigate suspicions of criminal actions in the period preceding, in connection with or in the wake of the
collapse of the Icelandic banks, whether connected to activities of financial undertakings, other legal
entities or individuals.
There is no such agency or commissioner that specifically addresses: Conflicts of interest and ethics
within the administration and the government. Mandates concerning those issues are randomly
distributed between the Chief of Althingi, The Ombudsman of Althingi, The National Audit Office and
Appendix A - Integrity Indicators 2012 Page 90
other agencies authorized to monitor, control and inspect other agencies. The overall rulings on conflicts
of interest and ethics are therefore lacking consistency and global oversight.
75 Is the anti-corruption agency effective?
75a: In law, the anti-corruption agency (or agencies) is protected from political interference.
Score: Yes and No
The National Commissioner of the Icelandic police, is by law under supervision from the Minister of
Internal affair (former Minister of Justice), who is politically elected. The Police Act 90/1996:
http://eng.innanrikisraduneyti.is/laws-and-regulations/nr/120
The National Audit Office, Act 86/1997 article 3, is declared fully and completely independent in its
engagement. Act 86/1997 on The National Audit Office: http://www.althingi.is/lagas/139a/1997086.html
The Ombudsman of Althingi Act 85/1197 article 2: “The Ombudsman shall not, in the discharge of his
functions, have to take instructions from anybody, Althingi included. Act 85/1997 on The Althingi
Ombudsman; http://www.althingi.is/lagas/nuna/1997085.html
The Special Prosecutor is appointed by law by the Minister of the Interior (former Minister of Justice)
http://www.serstakursaksoknari.is/english/laws-and-regulations/ There is no provision in the act
indicating protection from political interference. When this agency was established in 2009, potential
candidates who applied were very few. There was a sense of reluctance to take on this important office,
with the defined scope and high public expectations to reveal and prosecute frauds and financial crimes
surrounding the fall of the banks.
Peer II comment: I am questioning if the National commissioner of the police belongs there as it’s
mandate is hardly inspection or monitoring
75b: In practice, the anti-corruption agency (or agencies) is protected from political interference.
Score: 100 75 50 25 0
Following example indicates full independency of the National Audit Office, but lack of independency of
the National Commissioner of the Icelandic Police: The State Police Commissioner demanded that the
Auditor General would step aside while the procurement of the police office was being investigated by
the Auditor General in the fall of 2011. The Police Commissioner refused to disclose documents or
submit information and claimed breach of trust between the two government agencies. The Ministry of
the Interior had to rule on the issue, and concluded by ordering the Police Commissioner to disclose all
requested information.
Reference: RUV news “The Police Chief submitted requested documents”:
http://ruv.is/frett/rikislogreglustjori-afhenti-gogn
The Althingi Ombudsman, is generally highly respected for impartiality and independence.
However, The “Nation pulse” survey in March 2012, ranked the Ombudsman 49%, that
indicates the level of public trust toward the agency. Internet search does not produce any cases
in the past that have been brought up questioning the impartiality of the Ombudsman.
Appendix A - Integrity Indicators 2012 Page 91
Reference: See score in question 56b=75
After the Special Prosecutor was appointed, the Government of Iceland employed Eva Joly, a world
famous crusader against corruption as a special advisor to investigate if “white-collar” crime may have
played a role in the Icelandic financial crisis in 2008 and on. Eva Joly worked closely with the Special
Prosecutor, offering her expertise in investigating and prosecuting financial fraud. In June 2010, Eva Joly
threatened to resign as an advisor, claiming that many within the administration were trying to intervene
and hinder the investigation. She criticized the investigation process, pointing out many obvious conflicts
of interest in the small society, for example one of the State Prosecutor being the father of former CEO
of Exista Investment company and one of the biggest shareholder in the collapsed bank Kaupthing, and
also subject to investigation of alleged white-collar crimes. Eva Joly eventually resigned as an advisor in
October 2010, when she decided to pursue the candidate of Presidency in France. This example of the
Special Prosecutor indicates political interference in practice. Although the governments’ decision of
hiring Eva Joly as an advisor, was welcomed by many, it was also criticized by group of people and
advocates for those who are considered to be on the white-collar side of the society.
Web news MBL.is on Eva Joly considers resigning:
http://mbl.is/frettir/innlent/2009/06/10/eva_joly_ihugar_ad_haetta/
Web news Eyjan on Prosecutors investigating the fall of the bank and their sons affiliated with the bank
http://eyjan.is/2008/10/30/saksoknarar-sem-kanna-bankahrunid-synir-beggja-tengjast-malinu/
75c: In practice, the head of the anti-corruption agency (or agencies) is protected from removal
without relevant justification.
Score: 100 75 50 25 0
The Act 70/1996 on Rights and obligations of civil servants, protects removal of any civil servants
without relevant justification.
The National Commissioner of the Icelandic police is appointed by the Minister of Internal affairs
(former Minister of Justice). Although this position has been under suspicion of political hiring for many
years, the Commissioner has never been removed from office, with or without relevant justification.
The National Audit Office : The Committee of Prime Minister hires the Auditor General, and fires him
upon majority votes from Althingi. The Auditor General of Iceland has never been removed from his
office with or without justification. The present Auditor General was hired in 2008, but his tenure at the
National Audit Office goes back to 1976. His predecessor was 16 year in office and resigned due to
retirement.
The Althingi Ombudsman : From the foundation of the Ombudsman in 1988 there have only been three
appointed, there of one as substitute while the Ombudsman was appointed to the Special Investigation
Commission in 2009.
The Special Prosecutor was appointed 2009, to conduct specific task, and after January 1, 2011 the
Minister of Internal affair may, after obtaining the opinion of the Director of Public Prosecutions,
propose that the office be abolished.
Reference: Act on the Office of a Special Prosecutor 135/2008 article 7:
http://www.serstakursaksoknari.is/english/laws-and-regulations/
Appendix A - Integrity Indicators 2012 Page 92
Act 70/1996 on Rights and obligations of civil servants : http://www.althingi.is/lagas/nuna/1996070.html
75d: In practice, appointments to the anti-corruption agency (or agencies) are based on
professional criteria.
Score: 100 75 50 25 0
The National Commissioner of the Icelandic police is appointed by the Minister of the Interior (former
Minister of Justice) This position has been under suspicion of political hiring for many years.
The National Audit Office : The Committee of Prime Minister hires the Auditor General The Auditor
General was hired in 2008, but his tenure at the National Audit Office goes back to 1976. His
predecessor was 16 year in office and resigned due to retirement.
The Althingi Ombudsman: The qualification for the Althingi Ombudsman is same as of Supreme Court
judge. Internet search did not produce any incident supporting doubts of the Ombudsman´s
professionalism. Specific regulations are in force on relationship between the executives of the
Administration and the Ombudsman, ensuring formality and independence.
The Special Prosecutor : There was a sense of reluctance among potential candidates for the position of
Special Prosecutor. The requirement according to law, was same as made for appointment to the
position of district court judge. The successful candidate was a former sheriff in a small district, with no
prior experience in fraud and financial crimes or knowledge of banking operations. However, one of the
requirements for this position was to disclose financial assets, debts and other connections to the financial
sector to verify that no conflicts of interest exist. It was a common believe that the reason for the
reluctance in seeking for this position had been that candidates who met the professional criteria, would
have been disqualified due to conflicts of interest in relation to the financial sector and perhaps personal
financial matters.
After reconsideration I agree with the peer that score of 50 is too low in this case, as the only controversy
in regards to professional requirements is surrounding the Special Prosecutor, which was due to lack of
interest among lawyers, or them not meeting the qualification as to conflict of interests criteria.
Reference About The Special prosecutor : http://www.serstakursaksoknari.is/um-embaettid/serstakur-
saksoknari/
Peer I comment: It was a common belief among lawyers that the reason was lack of interest among
qualified lawyers rather then disqualification or political hiring.
I do not completely agree with the scoring of the compiler based on the comments. I would say 75 out of
100. (see above)
75e: In practice, the anti-corruption agency (or agencies) has a professional, full-time staff.
Score: 100 75 50 25 0
The National Commissioner of the Icelandic police has total 87 full time staff according to Annual report
in 2010. Reference the National Commissioner Police website:
http://www.logreglan.is/embaettin.asp?cat_id=74
Appendix A - Integrity Indicators 2012 Page 93
The National Audit Office has total 47 employees, 80% of whom with University degree and Master
degree. Most employees have BS financial and accounting degree, 5 are certified professional auditors, 2
are lawyers, 5 have degree in political and administration and 2 computer scientist. Reference: The
National Audit Office website: http://www.rikisendurskodun.is/index.php?id=44
The Althingi Ombudsman has 10 full-time staff, 9 lawyers and one administrator. Reference: The
Althingi Ombudsman website: http://www.umbodsmaduralthingis.is/category.aspx?catID=5
The Special Prosecutor has 80 full-time staff in 2011 according to memo from Special Prosecutor.
Reference: http://www.visir.is/serstakur-saksoknari-ekki-nad-markmidum-sinum/article/2012120128775
75f: In practice, the anti-corruption agency (or agencies) receives regular funding.
Score: 100 75 50 25 0
All four agencies receive regular funding, but it may not be sufficient in many cases to fulfill their
obligations by law.
The National Audit Office funding was cut by 8,5 % in 2011 from the year before. At the same time the
projects and engagements of the National Office have increased. The state owned bank, became the
Auditor General´s responsibility to audit, and Act on the Political financing added few more projects to
the busy office. Lack of funding may weaken the office ability to effectively conduct its mandate.
The Special Prosecutor requested a supplement funding in 2010 , to be able to carry on its investigation
engagements, which is considered to be on slow phase already, due to lack of funding and high level of
complicity of cases.
Reference: Annual report The National Audit Office: http://www.rikisendurskodun.is/index.php?id=44
Wen news Visir on The special prosecutor funding: http://www.visir.is/serstakur-saksoknari-ekki-nad-
markmidum-sinum/article/2012120128775
75g: In practice, the anti-corruption agency (or agencies) makes regular public reports.
Score: 100 75 50 25 0
The National Audit Office, The National Commissioner of the police, and The Althingi Ombudsman. all
publish annual reports about their operations, statistics, analysis, financial information and other matters
relating to their agency. The Special Prosecutor has not published any report, and the website is not
updated frequently.
Reference: Annual report The National Audit Office: http://rikisendurskodun.is/ Annual report The
National Commissioner of the Icelandic police: http://www.logreglan.is/embaettin.asp?cat_id=74
Annual Report The Althingi Ombudsman: http://umbodsmadur.is/assets/skyrsla_2010.pdf
The Special Prosecutor website: http://www.serstakursaksoknari.is/
75h: In practice, the anti-corruption agency (or agencies) has sufficient powers to carry out its
mandate.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 94
Recent case in the fall of 2011 where the National Audit Office was requesting documents and
information from another agency to investigate alleged procurement corruption, ignited a power battle
between the State Police Commissioner, who demanded that the Auditor General would step aside while
the procurement of the police office was being investigated by the Auditor General Office. The Police
Commissioner refused to disclose documents or submit information and claimed breach of trust between
the two government agencies. The Minister of Internal affairs had to rule on the issue, with the
conclusion that The Police Commissioner was ordered to disclose all requested information.
The Ombudsman of Althingi, The Auditor General and the Special Prosecutor are provided sufficient
authority to carry out their mandate by law.
The National Commissioner of the Police is concerned that the police is lacking power to carry out their
mandate and is requesting additional authority to initiate investigations for preventive purposes, when
there are suspicions of crime being committed in future. The concerns are especially aimed at the
increasing connection of Icelandic bike groups and other similar groups to international organized crime
groups. The Minister of Internal affairs has issued a Bill that is still in discussion phase, where the
National Commissioner and the State prosecutor have written a note on it, saying that the Bill is too
narrow, and only provides preventive investigation authority towards organized crime groups, instead of
all individuals who can be dangerous and likely to commit a crime. This is very controversial debate, as
the privacy of individuals can be compromised.
Web news MBL.is on Bill on preventive investigative authority:
http://www.mbl.is/frettir/innlent/2012/04/17/felur_ekki_i_ser_auknar_heimildir/
75i: In practice, when necessary, the anti-corruption agency (or agencies) independently initiates
investigations.
Score: 100 75 50 25 0
All four agencies being defined here as anti-corruption agency, initiate investigations.
76 Can citizens access the anti-corruption agency?
76a: In practice, the anti-corruption agency (or agencies) acts on complaints within a reasonable
time period.
Score: 100 75 50 25 0
The usual restrictive factor in acting within reasonable time period is insufficient funding, according to
the chiefs executives, which limits the agencies capacity to act sooner.
According to the Ombudsman annual report from 2009, there were 338 new cases registered. At the end
of the year 123 cases were still pending, and 319 concluded. Half of the unfinished cases or 61 were on
hold because information or explanation from government/ administration were pending, in 15 cases
information from the initiator was pending and 47 cases still being investigated.
Of 25 cases that were viewed, 17 cases did not indicate day of complaint, so actual time period was not
known, but determined reasonable, as they were concluded within 2 months period, since the case
number referred to 2012 case and they were all concluded before end of February . The ombudsman
Appendix A - Integrity Indicators 2012 Page 95
receives various kind of complaints, some of which can be dealt with in a day, while some need a
thorough investigation that can take months. The same question no 56k on the Ombudsman scored 50.
Reference: The Althingi Ombudsman website:
http://www.umbodsmaduralthingis.is/category.aspx?catID=5
The Special prosecutor has now been investigating close to 100 cases for over 3 years. At this time, one
case from his office has been judged by the Supreme Court, where a former Chief of the Ministry of
Finance was found guilty of using inside information for his own personal enrichment. He sold his stock
in one of the bank 3 weeks before it collapsed. The verdict was 2 years in prison, and restoration of the
ill gotten gain of 192 million kr. CAD$ 1,5 million.
There is a high anticipation among the public to get some closure and results from the investigations.
Few other cases are in the beginning phase in district court, however it is a common view that the process
of the Special prosecutor is too slow.
Reference: RUV the National TV on Supreme court verdict in the first case from the Special Prosecutor.
http://www.ruv.is/frett/innlent/baldur-hlytur-dom-i-haestaretti
Peer I comments: I agree with the careful comments of the compiler.
76b: In practice, citizens can complain to the anti-corruption agency (or agencies) without fear of
recrimination.
Score: 100 75 50 25 0
Act 135/2008 on Special Prosecutor, article 5 has a provision for the Special Prosecutor to grant
immunity to “whistle blowers” from prosecution of alleged crime, when information can lead to self
incrimination of the whistle blower. There are certain conditions that need to exist, such as likelihood of
successfully proofing the case, based on evidence or information provided by the whistle blower. This is
the first time that such protection has been put in law and was viewed necessary for the newly founded
agency of The Special Prosecutor, whose mandate is to investigate suspicions of criminal actions in the
period preceding, in connection with or in the wake of the collapse of the Icelandic bank.
Act 68/2011 on Investigation committee, established by Parliament, article 9 protects whistle blowers
from negative consequences, when giving information in good faith to the committee. This article also
has a provision for immunity from prosecution if information will lead to self-incrimination.
Score 50 reflects that there is not any knowledge of incidents in practice where citizens are protected from
being recriminated with reference to these provisions.
In 2008, a whistle blower in a high level, lengthy trial suit (Baugsmalid) against one of the biggest players
in the financial sector, was convicted by the Supreme court for his participation in the fraud of issuing
false credit invoice.
Reference: Act 135/2008 Special Prosecutor: http://www.serstakursaksoknari.is/english/laws-and-
regulations/
Act 68/2011 on Investigation committee : http://www.althingi.is/altext/139/s/1711.html
Appendix A - Integrity Indicators 2012 Page 96
http://www.visir.is/haestirettur-stadfestir-dom-heradsdoms-i-baugsmali/article/2008270957446
Category VI-3 Judicial Independence, Fairness, and Citizen Access to Justice
77 Is there an appeals mechanism for challenging criminal judgments?
77a: In law, there is a general right of appeal.
Score: Yes No
Act 88/2008 on Criminal case procedures chapter XXXI article 196-210 on appeal procedure.
Act 91/1991 on Civil case procedure chapter XXV article 151-166 on appeal procedure.
Constitution article 67 protects appeal right when individual is imprisoned by judge order after arrest.
Reference: Act 88/2008 on Criminal Case procedure: http://www.althingi.is/altext/stjt/2008.088.html
Act 91/1991 on Civil Case procedure: http://www.althingi.is/lagas/137/1991091.html
Act 33/1944 Constitution : http://www.althingi.is/lagas/nuna/1944033.html
77b: In practice, appeals are resolved within a reasonable time period.
Score: 100 75 50 25 0
Annual Report 2011 from the Supreme Court reports on appeals:
Total Civil Criminal
New Appeals 326 252 74
Verdicts 264 193 71
Pending Appeals 176 138 38
Backlog of pending appeals at year end is 54% of total new appeals during the year, which is considered
to be in the middle of the reasonable time period scale.
Reference: Annual Report 2011 The Supreme Court: http://haestirettur.is/control/index?pid=954
77c: In practice, citizens can use the appeals mechanism at a reasonable cost.
Score: 100 75 50 25 0
The general rule regarding trial cost, is that the person who loses the case is deemed to pay the legal cost
for his/her opponent according to article 131 Act 91/1991. In the verdict it is determined how much the
party that lost shall pay for legal cost of his opponent. The cost is based on time records from the lawyer,
but it is a general opinion among lawyers in the bar association, that only 50-75% of the actual cost is
being reimbursed.
Appendix A - Integrity Indicators 2012 Page 97
Legal cost in trial cases is generally considered a barrier for most citizens. There is a pro-bono system for
low income individuals, where the State takes on the legal cost that the judge determines. The score is
determined 50, which reflects the different perspectives, where citizens consider legal cost a barrier, while
lawyers criticize the inconsistency in verdicts when legal cost is determined and complain that they are
not getting paid their cost.
Reference Act 91/1991 on Civil case procedure: http://www.althingi.is/lagas/137/1991091.html
The Icelandic Bar Association magazine 2012, on legal cost determined by judges, lacking consistency:
http://www.lmfi.is/files/L%C3%B6gmannabl.%201.tbl.mars%202012-skj%C3%A1_884742709.pdf
78 In practice, do judgments in the criminal system follow written law?
78a: In practice, do judgments in the criminal system follow written law?
Score: 100 75 50 25 0
The judiciary is bound by law and justice, article 61 of the Constitution . There was no case found for
the period 2010-2011 indicating that verdicts were not according to written law.
However, in November 2011, the Minister of Internal affairs (Minister of Justice) appointed an
investigation committee, to review a double missing man case since 1974, where 5 individuals in their
twenties were convicted for murdering the two men and sent to prison for many years. The two men have
never been found, and no evidence was presented that they were connected in any way. This case has
been like a skeleton in the closet of the judicial system all these years, as it is commonly viewed that the
judgments did not follow law, and constitutional rights were broken on the five individuals, while the
case was being investigated. It is considered positive that the trial procedure is being investigated, to get
some closure for the convicted individuals who still declare their innocence and any involvement in the
missing cases.
Reference: Web news DV on Minister to establish Investigation committee:
http://www.dv.is/frettir/2011/10/3/akvordun-um-gudmundar-og-geirfinnsmalid-i-vikunni/
Peer I comment: Law in the meaning of art. 61 of the Constitution is both statutory (written) law (law in
a narrow sense) and unwritten law (law in a broader sense) such as judgments, general principles ect. I
agree with the compiler because in criminal proceedings judgments can not be based on unwritten law,
see e.g. art. 69 of the Constitution.
Peer II comment: Perhaps the “Geirfinnsmalid” (the Geirfinn’s case) would better represent this answer
as the case mentioned did never go to court. (Peer is perhaps confusing the above case to another case but
the case that is mentioned is in fact the Geirfinn’s and Gudmundar case)
79 In practice, are judicial decisions enforced by the state?
79a: In practice, are judicial decisions enforced by the state?
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 98
The National Institute of Correction is responsible to enforce judicial decisions according to Act
49/2005 on Enforcement of judgements. Numerical statistic regarding enforcement and capacity of the
prison system is available from 2000-2008. The capacity is well over 90% in use in the two main prisons
for the years 2004-2008, indicating prison space as a limited factor in judicial enforcement.
According to Pressan news in March 2012, there are 300 people waiting to start their prison sentence,
with anticipated waiting time up till 4 years.
Due to limited space the National Institute of Correction changed their approach in 2007 and started to
prioritise the waiting list so the individuals with 3 year sentences and more were called in to prison soon
after verdict. This change increased the proportion of prisoners with long sentences. Alternate solutions
are being pursued such as community service and monitored house arrests, where prisoner can attend
work, but are otherwise restricted from leaving their home.
Long waiting time is viewed serious, as some of the convicted individuals, have started their
rehabilitation in life, when they are taken out of normal family and work routine to fulfill their sentence.
This is considered negative and reflects the 50 score of enforcement.
Reference: Act 49/2005 Enforcement of Judgements : http://www.althingi.is/lagas/nuna/2005049.html
Chart showing waiting list for enforcement of judgements in the correctional system:
http://www.fangelsi.is/media/stofnunin/Fjoldi-domthola-i-bodun-til-afplanunar-oskb.fang.refs.-i-lok-
hvers-ars-1989-til-2011.pdf
Web news Pressan on 300 waiting to fulfill prison sentence:
http://www.pressan.is/Frettir/Lesafrett/rumlega-300-bida-afplanunar-en-baldur-gudlaugs-settur-fremst-i-
rodina-settur-inn-manudi-eftir-dom
Information from Administration officer at the National Institute of Correction.
80 Is the judiciary able to act independently?
80a: In law, the independence of the judiciary is guaranteed.
Score: Yes No
The Constitution article 2, asserts the independence of the judiciary system.
Judges are appointed indefinitely until retirement, no later than the age of 70, which sets out the
independence in addition to accountability for the administration of the judiciary.
Chapter IV in Act 15/1998, on Rights and obligations of judges, further confirms the independence and
accountability of judges.
Reference: Act 15/1998 on the Judicial system: http://www.althingi.is/lagas/130a/1998015.html
Act 33/1944 Constitution : http://www.althingi.is/lagas/nuna/1944033.html
80b: In practice, national-level judges are protected from political interference.
Appendix A - Integrity Indicators 2012 Page 99
Score: 100 75 50 25 0
The score of 25 in question 36b indicated that the appointment of judges has been politically clouded for
long time. For many years, the appointment of judges has undermined the public confidence in the
courts. In a recent survey called “The National pulse” from Capacent about trust and confidence in
various government entities, the public confidence in the judicial system is rated 38%, while the police
department is rated 83% indicating stronger public confidence in the police than the judicial system.
In a recent article in the magazine Nytt Lif (New life) it was asserted that judges of the Supreme court
had interpreted two appointments of judges to the Supreme court as a strong political interference to the
judicial system. The Supreme Court had ruled against the Government in 3 high level cases, and soon
after, in 2003 and 2004 two new judges were appointed, one very close personal friend of the Prime
minister and the other was his relative.
Judges of the Supreme court have strongly denied political interference allegations. However, statistics
on minority rulings and special rulings indicate that the two judges appointed by the former Prime
Minister have submitted the most minority rulings. Of 119 separate opinions submitted by the judges
since 2009, one judge, the close friend of former PM submitted 60 of them. This statistic does not
reveal any political interference per se, rather that two judges have strong and often different opinions
than the rest of the judge panel. Every case by the Supreme Court is judged by either 3, 5 or even 7
judges in high level cases. The score 50 is given to indicate a certain faith in the professionalism of the
judges in spite of allegations of political hiring.
The National pulse March 2012 confidence in government entities: http://www.capacent.is/frettir-og-
frodleikur/thjodarpulsinn/thjodarpulsinn/2012/03/06/Traust-til-stofnana/
Web news Visir “ Friends and relatives appointed as judges”2007 : http://www.visir.is/vinir-og-
vandamenn-i-domarasaetin/article/200771221066
Web news DV “ Supreme Court judge interpreted the Prime Minister speech as a threat”
http://www.dv.is/frettir/2012/4/3/haestarettardomarar-tulkudu-ord-davids-sem-hotun-i-sinn-gard/
Web news Eyjan Supreme Court being politically interefered : http://eyjan.is/2012/04/03/atlaga-
davids-af-haestaretti/
80c: In law, there is a transparent and objective system for distributing cases to national-level
judges.
Score: Yes No
In law, the judicial independence includes control over assigning judges, by the Chief justice of the
Supreme court, who also decides how to administer the court and is in responsible for discipline matters.
There is no objective system that guarantees random assignment of cases to judges, nor is the system
transparent to the public.
Reference: Act 15/1998 on the Judicial system: http://www.althingi.is/lagas/130a/1998015.html
Peer I comment: I agree completely. The Supreme court case no. 155/2011 (Landsbankinn hf. v. the
estate of Mótormax ehf.) was argued before a panel of five justices but subsequently the president of the
Appendix A - Integrity Indicators 2012 Page 100
Court decided that the case would be re-heard before a panel of seven justices. This decision was not
reasoned and no trace of this process can be found in the published judgment in the case. Interestingly,
three of the justices from the original panel of five formed a minority in the final judgment and one can
therefore contemplate whether the outcome of the case was altered by changing the composition of the
panel.
80d: In law, national-level judges are protected from removal without relevant justification.
Score: Yes No
According to Act 15/1998 Chapter IV on rights and obligations of judges, all judges are protected from
removal without relevant justification. The President of Iceland removes Supreme court judges from
office as proposed by the Minister of Internal Affairs, as proposed by Chief of Justice or a special
committee established by the Minister. Judges are also protected by Civil rights and obligation act.
Reference: Act 15/1998 on the Judicial system: http://www.althingi.is/lagas/130a/1998015.html
81 Are judges safe when adjudicating corruption cases?
81a: In practice, in the last year, no judges have been physically harmed because of adjudicating
corruption cases.
Score: Yes No
81b: In practice, in the last year, no judges have been killed because of adjudicating corruption
cases.
Score: Yes No
82 Do citizens have equal access to the justice system?
82a: In practice, judicial decisions are not affected by racial or ethnic bias.
Score: 100 75 50 25 0
The score of 50 is given because of general perception that comparison of verdicts and criminal
sanctions for similar crimes are not consistent, whether the victim is child, woman or man, or John or Sir
John.
In May 2012 two boys said to be 15 and 16 years old from Algeria and Morocco claimed fugitive status
after being caught at the international airport in Iceland with false passports. Judge sent them to 30 days
in prison on falsifying documents charges and reluctant to believe their age. The perception is that this
would never have been done, with Icelandic teenagers, or even teenagers from Europe, leaving the only
reason that racial or ethnic bias have affected the decision. The chief of Child Protection agency,
strongly criticized the judge’s ruling, and now a dental age analysis will be performed to determine their
actual age, which is a fundamental factor on solving this case.
Appendix A - Integrity Indicators 2012 Page 101
Reference: Web news Visir May 2012 on fugitives: http://visir.is/einfalt-ad-aaetla-aldur-haelisleitenda-
med-tanngreiningu/article/2012120519748
Peer II comment: I would probably have given higher score, although the example given is significant.
82b: In practice, women have full access to the judicial system.
Score: 100 75 50 25 0
Absolutely, Iceland was the first republic to elect a women as President in 1980. The Prime Minister of
Iceland is a woman, the first woman as a bishop of Iceland was elected recently. There are total 9
ministers in the cabinet, there of 5 women. New law is coming into force this year, were Boards of
directors in public and private companies are of equal gender.
The reasoning is set forward to underline that there is no profession in particular including the judicial
system that is bias for either gender.
The Supreme Court of Iceland is rather conservative still, out of 9 judges there are only 2 women. Out
of 33 district court judges in two of the biggest district courts in the capital area, there were 16 men and
17 women. The head of State prosecutor is a woman and there are also 8 other prosecutors, 6 women
and 2 men.
Web news Visir: “Althingi agrees on new law regarding gender quota in Boards of directors”
http://www.visir.is/althingi-samthykkti-log-um-kynjakvota-i-stjornum-fyrirtaekja/article/2010744103429
Peer I comment: I agree completely with the compiler but this reasoning has little to do with access to
the judicial system. (see note above)
Peer II comment: I don’t think the reasoning is relevant. Aren’t they referring to that women and men
have equal access to the justice system. If the question is referring to judge appointments etc it would be
better to look at gender combination of judges and prosecutors. (see note above)
82c: In law, the state provides legal counsel for defendants in criminal cases who cannot afford it.
Score: Yes No
Act 88/2008 on Criminal case, provides all defendants in criminal cases legal counsel which fee is
decided by the judge and is paid from the treasury. The defendant can in addition hire his own lawyer to
protect his interest, but on his cost.
Reference: Act 88/2008 chapter IV : http://www.althingi.is/altext/stjt/2008.088.html
82d: In practice, the state provides adequate legal counsel for defendants in criminal cases who
cannot afford it.
Score: 100 75 50 25 0
Appendix A - Integrity Indicators 2012 Page 102
Act 88/2008 on Criminal case, provides all defendants in criminal cases legal counsel and his fee is
decided by the judge and paid from the treasury. The defendant can in addition hire his own lawyer to
protect his interest, but on his cost.
The Bar Association is concerned that the actual legal cost deemed by judge is based on hourly rate that
has not changed for many years, in spite of inflation and increased cost, which reflect the score of 75. In
long term this gap between actual and paid cost, can affect the adequacy of the legal counsel.
Reference: Act 88/2008 chapter IV : http://www.althingi.is/altext/stjt/2008.088.html
The Icelandic Bar Association magazine 2012, on legal cost determined by judges, lacking consistency:
http://www.lmfi.is/files/L%C3%B6gmannabl.%201.tbl.mars%202012-skj%C3%A1_884742709.pdf
Peer II comment: Do the concerns of the defence lawyers have anything to do with the legal counsel
that the accused are in title to?
82e: In practice, citizens earning the median yearly income can afford to bring a legal suit.
Score: 100 75 50 25 0
The cost of legal civil suit has been identified as a barrier for most citizens. There is a pro-bono system
for low income individuals, where the State takes on the legal cost that the judge determines. For a
median yearly income citizen it is considered almost impossible to bring a legal suit, without outside
financial support.
Internet search did not produce any statistic of legal cost of typical civil case. However some individuals
were identified claiming that cost of legal suit, is a barrier that will affect the household for many years,
due to increased debts, to pay the legal cost. This debate has been mounting past years in regards to
increasing threats of slander and defamation lawsuits , from high rollers in the financial sectors against
bloggers and journalists. Some go even so far to say that the infamous rich people, are using their wealth
to shut down necessary debate and criticism in the society, by threatening lawsuit against anyone who
writes an article or expresses blunt opinion about them on the blog and social media.
Web news MBL regarding defamation lawsuit against blogger:
http://www.mbl.is/frettir/forsida/2011/12/19/faer_ad_baeta_vid_ummaelum_i_meidyrdamali/
82f: In practice, a typical small retail business can afford to bring a legal suit.
Score: 100 75 50 25 0
No information were found about average cost of typical lawsuit that small retail business would launch.
The Bar Association website describes two types of legal cost: 1) Cost based on time records multiplied
by hourly rate amount. 2) Contingency fee, where the objective of the lawsuit is to seek monetary relief .
When courts decide legal cost, they use kr. 10,000 hourly rate, which is considered significantly lower
than the average hourly rate of law firms. Survey conducted in 2007 by the Bar Association revealed
that 64% of lawyers collect hourly rate kr.10,000-13,900 and 20% of lawyers collect kr. 14,000-17,900.
The average consumer price index was 273.7 in 2007 and 377.7 in 2011, or 38% increase in 5 years
indicating increasing gap between the court hourly rate and actual rate.
Appendix A - Integrity Indicators 2012 Page 103
In practice it is considered slightly more affordable for small retail business to bring a legal suit, than
median income citizens.
Reference: The Bar Association website: http://www.lmfi.is/logmenn-og-thjonusta/hvad-kostar-
thjonusta-logmanns/
The Statistics Iceland, consumer price index: http://www.hagstofa.is/Hagtolur/Verdlag-og-neysla
82g: In practice, all citizens have access to a court of law, regardless of geographic location.
Score: 100 75 50 25 0
There are 8 district courts around Iceland. They are located in cities and towns with highest population in
each region. Two of them are located in the Reykjavik and Reykjanes area where 70% of the population
resides. The smallest district court is located on Vestmann Island, serving 4,192 residents.
Reference: Statistic of Iceland : http://www.hagstofa.is/Hagtolur/Mannfjoldi
Region of the the district courts of Iceland: http://www.domstolar.is/domstolarad/forsida/
Peer I comments: There are 8 district courts around Iceland. The court in south of Iceland (Héraðsdómur
Suðurlands) has two locations; Selfoss and Vestmann Island, see regulation
1109/2010.http://www.reglugerd.is/interpro/dkm/WebGuard.nsf/aa0d47377abc977400256a090053ff91/8
21ff9272a17fa4500257843000f033c?OpenDocument&Highlight=0,1109%2F2010
Category VI-4 Law Enforcement: Conflicts of Interest Safeguards and Professionalism
83 Is the law enforcement agency (i.e. the police) effective?
83a: In practice, appointments to the law enforcement agency (or agencies) are made according to
professional criteria.
Score: 100 75 50 25 0
The National Commissioner of the Icelandic police is appointed by the Minister of Internal affairs,
(former Minister of Justice) This position has been under suspicion of political interference in hiring
matters for many years. However, the National Commissioner position has always been a promotion to a
higher position, where the successful candidate had been working in the law enforcement agency for a
long time, and therefore considered meeting professional criteria.
83b: In practice, the law enforcement agency (or agencies) has a budget sufficient to carry out its
mandate.
Score: 100 75 50 25 0
Average operating cost of the law enforcement for the years 2008-2010 is 7,800 million pr year.
Recently the Auditor General issued a report on 19 government agencies with highest accumulated
deficit. Thereof were 3 law enforcement agencies. The deficit of these agencies indicates either lack of
Appendix A - Integrity Indicators 2012 Page 104
financing and /or the agency is poorly managed. Most government agencies complain about insufficient
budget, especially past 3 years as a result of the financial crisis.
Law enforcement employees do not have right to go on strike. They have been unsatisfied with their
salaries and work conditions for a long time. At the end of September 2011, the negotiation came to a
stall and the police enforcement refused to stand honour guard when Althingi came back to session after
summer vacation. This act was viewed as an absent protest, but the Chief commissioner claimed this was
done to save cost, as no law or regulation required them to stand honour guard for the opening of
Althingi.
Reference: Annual report the law enforcement agency : http://logregla.is/displayer.asp?cat_id=342
The National Audit office on 19 government agencies with deficit, May 2012:
http://www.rikisendurskodun.is/frettir/nanar/article/fjarlaganefnd-kalli-radherra-fyrir-vegna-vanda-
stofnana-med-verulegan-uppsafnadan-
halla.html?tx_ttnews[backPid]=1&cHash=ca67183724404cfac34cb3692b9b5cf3
Web news MBL about honour guard at Althingi opening session, September 28 2011:
http://www.mbl.is/frettir/innlent/2011/09/28/ekki_hlutverk_bjorgunarsveita_ad_standa_heidursvord/
Grapevine, article on Police want right to strike, September 30 2011
http://www.grapevine.is/Home/ReadArticle/Police-Want-Right-To-Strike
83c: In practice, the law enforcement agency is protected from political interference.
Score: 100 75 50 25 0
Apart from the appointment to the chief position at the law enforcement, which has been under suspicion
of political interference for many years, the overall agency is open and available for all interested
applicants. The law enforcement scored very high, 83% in citizens trust according to the National
Pulse” in February 2012, indicating common public trust and confidence in the law enforcement as a
whole.
Reference: Capacent survey, The National Pulse, February 2012: http://www.capacent.is/frettir-og-
frodleikur/thjodarpulsinn/thjodarpulsinn/2012/03/06/Traust-til-stofnana/
84 Can law enforcement officials be held accountable for their actions?
84a: In law, there is an independent mechanism for citizens to complain about police action.
Score: Yes No
There is no specific independent mechanism for complaints about police in law.
In 2009 The Althingi Ombudsman issued an opinion about case where a citizen is complaining about
police actions. In his letter to the Minister of Justice (now Minister of the Interior), he mentioned that
authority was lacking for Ombudsman to rule on complaints before the citizen had searched solution at
higher level within the governance. By law the State prosecutor, investigates and prosecutes cases against
Appendix A - Integrity Indicators 2012 Page 105
the police, however complaints regarding non-criminal issues are supposed to be addressed to the Chief
commissioner of the police.
Reference: Letter from the Althingi Ombudsman to Minister of Justice December 2009:
http://www.umbodsmaduralthingis.is/ViewCase.aspx?Key=1340&skoda=mal
Peer I comments: There is a mechanism for citizens to complain to the State Prosecutor but one can
argue that the mechanism is not independent.
84b: In practice, the independent law enforcement complaint reporting mechanism responds to
citizen's complaints within a reasonable time period.
Score: 100 75 50 25 0
There is no independent law enforcement complaint reporting mechanism available. When citizen need
to complain about non criminal police action, they are supposed to go complain to the office of the Chief
commissioner of the police. No statistical information about complaints on law enforcement were found
in the Annual report of the Chief commissioner of the police for 2010.
84c: In law, there is an agency/entity to investigate and prosecute corruption committed by law
enforcement officials.
Score: Yes No
Act 90/1996 on Law enforcement article 35 says that charges against police enforcement shall be sent to
the State Prosecutor, who investigates and prosecutes corruption committed by law enforcement officials.
Reference: Act 90/1996 on Law enforcement: http://www.althingi.is/dba-
bin/unds.pl?txti=/wwwtext/html/lagasofn/140a/1996090.html&leito=peninga%FEv%E6tti#word1
84d: In practice, when necessary, the agency/entity independently initiates investigations into
allegations of corruption by law enforcement officials.
Score: 100 75 50 25 0
The latest available annual report from 2008 of the State Prosecutor did not indicate any initiated
investigations according to article 35, on corruptions of law enforcement official. However there were
total 26 complaints or charges sent to the State Prosecutor, on which only in one case the policeman was
prosecuted.
Reference: Annual report State Prosecutor 2008 page 31 chapter 2.7:
http://www.rikissaksoknari.is/utgefid-efni/arsskyrslur/
84e: In law, law enforcement officials are not immune from criminal proceedings.
Score: Yes No
Law enforcement officials are not immune from criminal proceedings.
Appendix A - Integrity Indicators 2012 Page 106
On May 23rd ,
2012 the Special Prosecutor charged two policemen who had been his employees, for
breaching their duty and confidentiality when they started their own independent investigation company,
wrote a report for the company Milestone, the same company they had been investigating under the
Special Prosecutor office, and sold it for kr. 30 million.
Reference: RUV National TV “ Sold information for 30 million” http://ruv.is/frett/seldu-upplysingar-a-
30-milljonir
84f: In practice, law enforcement officials are not immune from criminal proceedings.
Score: 100 75 50 25 0
The latest available annual report from 2008 of the State Prosecutor on proceedings on charges against
law enforcement, discloses total 26 complaints or charges sent to the State Prosecutor, on which only one
case was prosecuted. Charges were dismissed in 4 cases, 8 cases were dismissed after thorough
investigation, due to insufficient evidence, investigation was ceased in 11 cases and prosecution in 2
cases was cancelled. The statistic from the annual report from 2007 is similar, total 29 charges, and only
one case prosecuted.
The above statistic is either indicating that the complaints and charges against law enforcement are not
built on sufficient credibility, or perception of immunity in practice.
Reference: Annual report State Prosecutor 2008 page 31 chapter 2.7:
http://www.rikissaksoknari.is/utgefid-efni/arsskyrslur/
Iceland Integrity Indicators 2012 Total Score Legal Score Implementation
I Non-Governmental Organizations, Public Information and Media 89 100 80
I-1 Anti-Corruption Non Governmental Organizations 88 100 83
1. Are they legally protected? 01a 01b 01c
Yes Yes Yes 100 100
2. Are they able to operate freely? 02a 02b 02c
100 50 Yes 83 83
3. Are activists save when working on corruption issues? 03a 03b 03c
No Yes Yes 67 67
4. Can citizens organize into trade union? 04a 04b
Yes 100 100 100 100
I-2 Medias ability to report on corruption 93 100 87
5. Are media and free speech protected? 05a 05b
Yes Yes 100 100
6. Are citizen able to form print media entities? 06a 06b 06c
100 Yes Yes 100 100 100
7. Are citizens able to form broadcast radio and TV media? 07a 07b 07c 07d
100 Yes 100 100 100 100 100
8. Can citizens freely use the Internet? 08a 08b
100 Yes 100 100
9. Are the media able to report corruption? 09a 09b 09c
Yes 25 50 58 100 38
10. Are the media credible sources of information 10a 10b 10c 10d 10e
Yes Yes 50 Yes Yes 90 100 83
11. Are journalists safe when investigating corruption 11a 11b 11c
Yes Yes Yes 100 100
I-3 Public Request for Government Information 85 100 71
12. Do citizens have legal right to request information? 12a 12b 12c
Yes Yes Yes 100 100
13. Is the right to information request effective? 13a 13b 13c 13d 13e 13f
75 75 50 25 100 100 71 71
II Elections 76 89 67
II-1 Voting and Party Formation 75 75 70
14. Is there a legal framwork guaranteeing the right to vote? 14a 14b
Yes Yes 100 100
15. Can all citizens exercise their right to vote? 15a 15b 15c
75 25 75 56 56
16. Are citizens able to participate equally in the political process 16a 16b 16c 16d 16e
Yes No 100 50 100 70 50 83
II-2 Election Integrity 93 100 88
17. In law, is there an election monitoring agency or set of election monitoring
agencies/entities? 17a
Yes 100 100
Appendix B - Integrity Indicators Score
Iceland Integrity Indicators 2012 Total Score Legal Score Implementation
18. Is the election monitoring agency effective? 18a 18b 18c 18d 18e
Yes 50 50 100 100 80 100 75
19. Are elections system transparent and effective? 19a 19b 19c 19d 19e 19f
100 Yes 100 100 Yes 100 100 100 100
II-3 Political Financing Transperency 59 92 43
20. Are there regulations governing the financing of political parties? 20a 20b 20c 20d 20e 20f
Yes Yes No Yes Yes Yes 83 83
21. Are there regulations governing the financing of individual political
candidates? 21a 21b 21c 21d 21e
Yes Yes Yes Yes Yes 100 100
22. Are the regulations governing the political parties effective? 22a 22b 22c 22d 22e 22f
25 25 0 0 25 75 25 2523. Are the regulations governing the political financing of individual candidates
effective? 23a 23b 23c 23d 23e
25 25 0 0 25 15 15
24. Can citizens access records related to the financing of political parties? 24a 24b 24c 24d
50 75 100 75 75 7525. Can citizens access records related to the financing of individual candidates'
campaigns? 25a 25b 25c 25d
0 75 100 50 56 56
III Government Conflicts of Interest Safeguards & Checks and Balances 66 81 53
III-1 Conflicts of Interest Safeguards & Checks and Balances: Executive Branch 72 92 48
26. In law, can citizens sue the government for infringement of their civil rights? 26a
Yes 100 100
27. Can the chief executive be held accountable for his/her actions? 27a 27b 27c 27d
Yes Yes 75 50 81 100 75
28. Is the executive leadership subject to criminal proceedings? 28a 28b
Yes Yes 100 100
29. Are there regulations governing conflicts of interest by the executive branch? 29a 29b 29c 29d 29e 29f 29g 29h
Yes Yes Yes No No 0 50 0 44 60 17
30. Can citizens access the asset disclosure records of the heads of state and government?30a 30b 30c 30d
Yes 100 100 25 81 100 75
31. In practice, official governement functions are kept separate and distinct from
the functions of the ruling political party. 31a
25 25 25
III-2 Conflicts of Interest Safeguards & Checks and Balances: Legislative Branch 74 81 69
32. Can members of the legislature be held accountable for their actions? 32a 32b 32c
Yes Yes Yes 100 100 100
33. Are there regulations governing conflicts of interest by members of the
national legislature? 33a 33b 33c 33d 33e 33f 33g
Yes No No No 0 0 0 14 25 0
34. Can citizens access the asset disclosure records of members of the national legislature?34a 34b 34c 34d
Yes 100 100 25 81 100 75
35. Can citizens access legislative processes and documents? 35a 35b 35c
Yes 100 100 100 100 100
Appendix B - Integrity Indicators Score
Iceland Integrity Indicators 2012 Total Score Legal Score Implementation
III-3 Conflicts of Interest Safeguards & Checks and Balances: Judicial Branch 39 50 25
36. Are judges appointed fairly? 36a 36b 36c
Yes 25 Yes 75 100 25
37. Can members of the judiciary be held accountable for their actions? 37a 37b 37c 37d 37e 37f
Yes 75 Yes Yes 50 50 79 100 75
38. Are there regulations governing conflicts of interest for the national-level judiciary?38a 38b 38c 38d 38e 38f 38g
No No No No 0 0 0 0 0 0
39. Can citizens access the asset disclosure records of members of the national-level judiciary?39a 39b 39c 39d
No 0 0 0 0 0 0
III-4 Budget Process Oversight & Transparaency 81 100 71
40. Can the legislature provide input to the national budget? 40a 40b 40c
Yes 50 75 75 100 63
41. Can citizens access the national budgetary process? 41a 41b 41c
75 50 100 75 75
42. In law, is there a separate legislative committee which provides oversight of public funds?42a
Yes 100 100
43. Is the legislative committee overseeing the expenditure of public funds effective?43a 43b 43c
75 50 100 75 75
IV Public Administration and Professionalism 36 38 28
IV-1 Civil Service: Conflicts of Interest Safeguards and Political Indipendence 43 40 23
44. Are there national regulations for the civil service encompassing, at least, the
managerial and professional staff? 44a 44b 44c 44d
Yes Yes Yes Yes 100 100
45. Is the law governing the administration and civil service effective? 45a 45b 45c 45d 45e 45f 45g 45h 45i
25 25 25 50 100 50 100 75 50 56 56
46. Are there regulations addressing conflicts of interest for civil servants? 46a 46b 46c 46d 46e 46f 46g 46h 46i
No Yes No No No 0 25 25 0 17 20 13
47. Can citizens access the asset disclosure records of senior civil servants? 47a 47b 47c 47d
No 0 0 0 0 0 0
IV-2 Whistle-blowing Protections 0 0 0
48. Are employees protected from recrimination or other negative consequences
when reporting corruption (i.e. whistle-blowing)? 48a 48b 48c 48d
No 0 No 0 0 0 0
49. In law, is there an internal mechanism (i.e. phone hotline, e-mail address,
local office) through which civil servants can report corruption? 49a
No 0 0
50. In practice, is the internal mechanism (i.e. phone hotline, e-mail address, local
office) through which civil servants can report corruption effective? 50a 50b 50c 50d
0 0 0 0 0 0
IV-3 Government Procurement: Transparency, Fairness and Conflicts of
Interest Safeguards 73 88 69
51. Is the public procurement process effective? 51a 51b 51c 51d 51e 51f 51g 51h 51i 51j
Yes No 25 No Yes Yes Yes Yes Yes 75 70 75 50
Appendix B - Integrity Indicators Score
Iceland Integrity Indicators 2012 Total Score Legal Score Implementation
52. Can citizens access the public procurement process? 52a 52b 52c 52d 52e 52f
Yes No 100 100 100 50 75 100 88
IV-4 Privatization of Public Administrative Functions: Transparency,
Fairness and Conflicts 29 25 21
53. Is the privatization process effective? 53a 53b 53c
Yes No 0 33 50 0
54. Can citizens access the terms and conditions of privatization bids? 54a 54b 54c 54d 54e
No 75 No 25 25 25 0 42
V. Government oversight and control 84 93 73
V-1 National Ombudsman 90 100 83
55. In law, is there a national ombudsman, public protector covering the entire public sector?55a
Yes 100 100
56. Is the national ombudsman effective? 56a 56b 56c 56d 56e 56f 56g 56h 56i 56j 56k
Yes 75 100 100 100 100 75 75 0 75 50 77 100 78
57. Can citizens access the reports of the ombudsman? 57a 57b 57c
100 75 100 92 100 88
V-2 Supreme Audit Institution 95 100 91
58. In law, is there a national supreme audit institution, covering the entire public sector?58a
Yes 100 100
59. Is the supreme audit institution effective? 59a 59b 59c 59d 59e 59f 59g 59h
Yes 75 100 100 50 100 75 75 84 100 82
60. Can citizens access reports of the supreme audit institution? 60a 60b 60c
Yes 100 100 100 100 100
V-3 Taxes and Customs: Fairness and Capacity 90 100 84
61. In law, is there a national tax collection agency? 61a
100 100 100
62. Is the tax collection agency effective? 62a 62b
75 100 88 88
63. In practice, are tax laws enforced uniformly and without discrimination? 63a
50 50 50
64. In law, is there a national customs and excise agency? 64a
Yes 100 100
65. Is the customs and excise agency effective? 65a 65b
100 100 100 100
66. In practice, are customs and excise laws enforced uniformly and without discrimination?66a
100 100 100
V-4 Oversight of State-Owned Enterprises 77 67 69
67. In law, is there an agency, series of agencies, overseeing state-owned companies? 67a
Yes 100 100
68. Is the agency, series of agencies, overseeing state-owned companies effective? 68a 68b 68c 68d 68e
No 50 100 0 0 30 0 38
69. Can citizens access the financial records of state-owned companies? 69a 69b 69c 69d 69e
Yes 100 100 100 100 100 100 100
Appendix B - Integrity Indicators Score
Iceland Integrity Indicators 2012 Total Score Legal Score Implementation
V-5 Business Licensing and Regulation 71 100 38
70. Are business licenses available to all citizens? 70a 70b 70c 70d
Yes Yes 25 25 63 100 25
71. Are there transparent business regulatory requirements for basic health,
environmental, and safety standards? 71a 71b 71c
Yes Yes Yes 100 100
72. Does government effectively enforce basic health, environmental, and safety standards on businesses?72a 72b 72c
50 50 50 50 50
VI Anti-Corruption Legal Framework, Judicial Impartiality, and Law Enforcement Professionalism 76 81 52
VI-1 Anti-Corruption Law 100 100
73. Is there legislation criminalizing corruption? 73a 73b 73c 73d 73e 73f 73g 73h 73i
Yes Yes Yes Yes Yes Yes Yes Yes Yes 100 100
VI-2 Anti-Corruption Agency or Equivalent Mechanisms 74 75 63
74. In law, is there an agency (or group of agencies) with a legal mandate to address corruption?74a
Yes 100 100
75. Is the anti-corruption agency effective? 75a 75b 75c 75d 75e 75f 75g 75h 75i
50 50 75 75 100 50 75 75 100 72 50 75
76. Can citizens access the anti-corruption agency? 76a 76b
50 50 50 50
VI-3 Judicial Independence, Fairness, and Citizen Access to Justice 71 94 65
77. Is there an appeals mechanism for challenging criminal judgments? 77a 77b 77c
Yes 50 50 67 100 50
78. In practice, do judgments in the criminal system follow written law? 78a
75 75 75
79. In practice, are judicial decisions enforced by the state? 79a
50 50 50
80. Is the judiciary able to act independently? 80a 80b 80c 80d
Yes 50 No Yes 63 83 50
81. Are judges safe when adjudicating corruption cases? 81a 81b
Yes Yes 100 100
82. Do citizens have equal access to the justice system? 82a 82b 82c 82d 82e 82f 82g
50 100 Yes 75 25 50 100 71 100 67
VI-4 Law Enforcement: Conflicts of Interest Safeguards and Professionalism 54 67 42
83. Is the law enforcement agency (i.e. the police) effective? 83a 83b 83c
75 50 75 67 67
84. Can law enforcement officials be held accountable for their actions? 84a 84b 84c 84d 84e 84f
No 0 Yes 0 Yes 50 42 67 17
Overall score 71 80 59
Appendix B - Integrity Indicators Score
Asset Disclosure form - Questions to Members of Parliament (MP)
Q-1 Paid Board membership in private or public companies
Q-2 Paid employment or work other than MP
Q-3 Revenue generating operation parrallel to MP
Q-4Financial support/donation from local or foreign donors, indivudals or corporation and
annual support is more than kr. 50.000. Also discount or monetary support that is given
because individual is parliamentary member.
Q-5 Gifts valued over kr. 50.000 presumed given due to parliamentary status.
Q-6 Travel/visits local and abroad in connection to parliament but aren´t paid in full from
the treasury, the MP him/herself or respective political party.
Q-7 Debt forgiveness or term changes on loan in favour of the debtor (MP)
Q-8Real estate, 1/3 ownership or more by MP or corporation which MP has 1/4 or more
stake in, other than real estate for own and or family use
Q-9
Name of corporation or business entity that MP owns share in that exceeds any of
following: a) Market value of share is more than kr. 1 million b) Share is 1% or more in
corporation or assets are more than kr. 230 million or revenues are more than kr. 460
million
Q-10
Agreement with former employer, that has financial impact, i.e. Vacation, unpaid leave
of absence , continuing salary payments, pension or similar benefits while being
member of parliament
Q-11 Agreement on post-parliament employment
Q-12Information about membership on boards or work for NGO´s, public agencies,
municipalities, or any association other than political parties, regardless if this work is
paid or voluntary.
Answer No or none = 0
Answer Yes and details = 1
Appendix C Asset Disclosure Members of Parliament
Member of parliament Party Q-1 Q-2 Q-3 Q-4 Q-5 Q-6 Q-7 Q-8 Q-9 Q-10 Q-11 Q-12
Atli Gíslason G 0 1 1 0 0 0 0 1 1 0 1 0Álfheiður Ingadóttir G 0 0 0 0 0 1 0 1 0 0 0 1Árni Páll Árnason S 0 1 0 0 0 0 0 1 1 0 0 0Árni Johnsen D 0 0 0 0 0 0 0 0 0 0 0 0Árni Þór Sigurðsson G 0 0 0 0 0 0 0 1 0 0 0 1Ásbjörn Óttarsson D 0 0 0 0 0 0 0 0 1 0 0 0Ásmundur E Davíðsson B 0 0 0 0 0 0 0 0 0 0 0 0Ásta R. Jóhannesdóttir S 0 0 0 0 0 0 0 0 0 0 0 0Birgir Ármansson D 0 0 0 0 0 0 0 0 0 0 0 0Birgitta Jónsdóttir H 0 0 0 0 0 0 0 0 0 0 0 0Birkir Jón Jónsson B 0 0 0 0 0 0 0 0 0 0 0 1Bjarni Benediktsson D 0 1 0 0 0 0 0 0 0 0 0 1Björgvin G Sigurðsson S 0 0 0 0 0 0 0 0 0 0 0 0Björn V Gíslason G 0 0 0 0 0 0 0 1 0 0 0 0Einar K Guðfinnsson D 0 0 0 0 0 0 0 0 1 0 0 0Eygló Harðardóttir B 0 0 0 0 0 1 0 0 0 0 0 1Guðbjartur Hannesson S 0 0 0 0 0 0 0 0 0 0 0 0Guðfríður L Grétarsdóttir G 0 0 0 0 0 0 0 0 0 0 0 0Guðlaugur Þór Þórðarson D 0 0 0 0 0 0 0 0 0 0 0 0Guðmundur Steingrímsson S 0 0 0 0 0 0 0 0 0 0 0 0Gunnar B Sveinsson B 0 0 0 0 0 0 0 0 0 0 0 1Helgi Hjörvar S 0 0 0 0 0 0 0 0 0 0 0 0Höskuldur Þórhallsson B 0 0 0 0 0 0 0 0 0 0 0 0Illugi Gunnarsson D 0 1 0 0 0 0 0 0 0 0 0 1Jóhanna Sigurðardóttir S 0 0 0 0 0 0 0 0 0 0 0 0Jón Bjarnason G 0 0 0 0 0 0 0 0 0 0 0 0Jón Gunnarsson D 0 0 1 0 0 0 0 0 0 0 0 0Jónína R Guðmundsdóttir S 0 0 0 0 0 0 0 0 0 0 1 1Katrín Jakobsdóttir G 0 0 1 0 0 0 0 0 0 0 0 0Katrín Júlíusdóttir S 0 0 0 0 0 0 0 0 0 0 0 0Kristján Þ Júlíusson D 1 1 0 0 0 0 0 0 0 0 0 1Kristján L Möller S 0 0 0 0 0 0 0 0 0 0 0 0Lilja R Magnúsdóttir G 1 1 0 0 0 0 0 0 0 0 0 1Lilja Mósesdóttir G 1 1 0 0 0 0 0 0 0 0 0 1Lúðvík Geirsson S 0 0 0 0 0 0 0 0 0 0 0 0Magnús Orri Schram S 0 1 1 0 0 0 0 0 1 0 0 1Margrét Tryggvadóttir H 0 0 1 0 0 0 0 1 0 0 0 0Mörður Árnason S 0 0 1 0 0 0 0 0 0 0 0 1Oddný G Harðardóttir S 0 0 0 0 0 0 0 0 0 0 0 1Ólína Þorvarðardóttir S 0 0 0 0 0 0 0 0 0 0 0 0Ólöf Nordal D 0 0 0 0 0 0 0 1 0 0 0 1Pétur H Blöndal D 1 1 1 1 0 0 0 1 1 0 0 0Ragnheiður E Árnadóttir D 0 0 0 0 0 0 0 0 0 0 0 0Ragnheiður Ríkharðsdóttir D 0 1 0 0 0 0 0 0 0 0 0 0Róbert Marshall S 0 0 0 0 0 0 0 0 0 0 0 0Sigmundur D Gunnlaugsson B 0 1 0 0 0 0 0 0 1 0 0 1Sigmundur E Rúnarsson S 1 1 0 0 0 0 0 1 0 1 0 1Sigríður I Ingadóttir S 0 0 0 0 0 0 0 0 0 0 0 0Sigurður I Jóhannsson B 0 0 0 0 0 0 0 0 1 1 0 1Siv Friðleifsdóttir B 0 0 0 0 0 0 0 0 0 0 0 1Skúli Helgason S 0 0 0 0 0 0 0 0 0 0 0 1Steingrímur J Sigfússon G 0 0 0 0 0 0 0 0 0 0 0 0Svandís Svavarsdóttir G 0 0 0 0 0 0 0 0 0 0 0 0Tryggvi Þór Herbertsson D 0 1 1 0 0 0 0 1 0 0 0 0Unnur B Konráðsdóttir D 0 1 1 0 0 0 0 1 1 0 0 0Valgerður Bjarnadóttir S 1 0 1 0 0 0 0 0 0 1 0 0Vigdís Hauksdóttir B 0 0 0 0 0 0 0 0 0 0 0 0Þorgerður K Gunnarsdóttir D 0 0 0 0 0 0 0 1 0 0 0 1Þór Saari H 0 1 1 0 0 0 0 0 0 0 0 1Þráinn Bertelsson G 0 0 1 1 0 0 0 1 1 0 0 0Þuríður Backmann G 0 0 0 0 0 1 0 0 0 0 0 0Ögmundur Jónasson G 0 0 0 0 0 1 0 0 0 0 0 1Össur Skarphéðinsson S 0 0 0 0 0 0 0 0 0 0 0 0Total 63 6 15 12 2 0 4 0 13 10 3 2 23
10% 24% 19% 3% 0% 6% 0% 21% 16% 5% 3% 37%
Social Democrats S 2 3 3 0 0 0 0 2 2 2 1 6Left Green Movement G 1 2 3 1 0 3 0 5 2 0 1 4Independence Party D 2 7 4 1 0 0 0 5 4 0 0 5Progressive Party B 0 1 0 0 0 1 0 0 2 1 0 6The Movement H 0 1 2 0 0 0 0 1 0 0 0 1Indepentent no party G/S 1 1 0 0 0 0 0 0 0 0 0 1
6 15 12 2 0 4 0 13 10 3 2 23
Source: Parliament website, May 2012 : http://www.althingi.is/vefur/thingme.html Answer No or none = 0
Answer Yes and details = 1
Asset Disclosure Legislation and Government
Appendix C Asset Disclosure- Legislation and Government