Summary of the development of the conflict

Written by Halvdan Jakobsen

Haydom Development Company Ltd. (HDC) was established in 2004 on an initiative by the late Dr Ole Halgrim Evjen Olsen of the Haydom Lutheran Hospital (HLH) in Tanzania. HDC Ltd was established for the purpose of owning and operating  Mulbadaw Farm (5 400ha) and the  Central Maintenance and Service Centre of the former Hanang Wheat Complex because the Haydom Lutheran Hospital is not a legal entity permitted to own and run agricultural commercial enterprises.  

The company was registered on November 16^th 2004 (see official document here) with an objective of taking on the agricultural development and production activities previous carried out by HLH; the hospital being advised that it is not a legal entity entitled to own and operate commercial farms in Tanzania.  Before this advice, HLH had participated in bidding for the purchase of Mulbadaw Farm, but did not win the bid.  However, based on the “Business Plan” (Project Document) describing the planned investment and activity and the political goodwill of the HLH, the Liquidator of the Mulbadaw Farm offered HLH to buy the farm at a price equivalent to the highest bid.  On seeing the bad state of the tractors and farm machinery at Mulbadaw on December 6^th 2004, the late Dr Ole Halgrim Evjen Olsen refused to sign the sales agreement.  

The Board of Directors negotiated with the Seller and an agreement for HDC Ltd to purchase Mulbadaw Farm was reached on 11^th February 2005 and for the Central Maintenance and Service Centre on November 4^th the same year after HDC Ltd had paid more than 50 % of the purchasing price for each of the properties.  The financing was organized as a loan from the Foundation Friends of Haydom (FoH) in Norway on a request from Dr Olsen dated 29^th October 2004.

During the “reign” of “Dr Olsen” he was in all practical terms in control not only of the hospital but also of the Foundation Friends of Haydom (FoH)in Norway.  After the decease of Dr O. H. E. Olsen in 2005, it seems as if  FoH in Norway decided to take direct control over properties and institutions in Tanzania.  One of the Board members of HDC , the one proposed by FoH, received in November 2005 instructions to see to it that HLH did not take control of HDC Ltd and Mulbadaw Farm.

The Board of HDC Ltd was committed to operate the company in such a way that it would benefit the hospital and the local communities.  Two of the Board Members were senior employees of the hospital and a third one the legal advisers to HLH during a long time. One Board Member was proposed by FoH in Norway; the Managing Director was also requested to sit on the Board.  All were elected by the Annual General Meeting.  In addition; another lawyer from the law company providing legal services to the hospital was appointed as Secretary to the Board and legal adviser also the HDC Ltd in corporate law.

The HDC Board member proposed by SHV received in November 2005 instructions to see to it that the Haydom Hospital did not take control of HDC Ltd and Mulbadaw Farm; an instruction by then regarded as incomprehensive.  There were no indications whatsoever of any conflict of interests between HLH and HDC Ltd.  In retrospect; the only explanation for the demand to prevent HLH from having an influence over HDC Ltd was that somebody in Norway wanted to take full control of HDC Ltd; - and possibly also over the hospital.

That Norwegian control is the issue became evident 2^nd of January 2006 when a member of the FoH in Norway called upon two of HDC Board members and declared that FoH had appointed a new Board of Directors of HDC Ltd consisting of three named Norwegians only.  This “Board” had then in turn appointed a new Managing Director; a Norwegian Prison Officer with no working experiences whatsoever from outside Norway.  The following day; 3^rd January 2006, the new “Board” together with the new “Managing Director” called upon the same two members of the Tanzanian HDC Board to “discuss”.  The “discussions” included consultations for legal advice from the HDC Board Secretary. “Discussions” continued on various venues in Tanzania until 28^th May 2006 when the Board of Directors of HDC Ltd by majority vote turned down the demands from FoH in Norway; honouring the advice that accepting it would be illegal.

The Chairman of the Board of Directors of HDC Ltd, Medical Director of Haydom Hospital, Dr Øystein Evjen Olsen, son of the late Dr O.H.E. Olsen and grandson of the founder of Haydom Hospital Dr Olaf E. Olsen, was not informed nor consulted about the demand to take full control over  HDC Ltd from Norway. When the Managing Director of HDC Ltd on January 3^rd 2006 informed him, as Chairman of the Board, he did not believe it and he did not approve of it.

Dr Øystein Evjen Olsen changed his mind in April 2006, probably realizing that the support not only to HDC Ltd from FoH was at risk, but also to the hospital.  FoH is supporting the hospital and paying his salary and all family allowances.  Later in 2006 it became evident that he, without the approval by nor knowledge of the HDC Board, had negotiated both with the FoH and with the Liquidator Joseph Tadayo to cancel the valid Purchase Agreements and entered a new purchase agreement that in all practical manners gave full control to the “Board” in Norway.  He signed a letter to that effect; stating that the Chairman of the Norwegian “Board “  and the Norwegian Prison Officer appointed by this “Board” as Managing Director total authority over Mulbadaw Farm and CMSC. See the document here. 

On August 12^th 2006, two days after signing the letter documenting that FoH in Norway, not HLH, is in charge at Mulbadaw and CMSC, the demand to take full control from Norway over Tanzanian land and businesses was implemented by commanding “migambo”, security guards from Haydom Lutheran Hospital, to chase away HDC Ltd from Mulbadaw and from CMSC.  The “migambo” were armed with “rungu”; the common and deadly baton used by police and security guards.  It was in reaction to this that the Managing Director of HDC Ltd was requested to inform the Friends of Haydom in Norway that Tanzania is not a colony under Norway.

The Board of Directors of FoH had as late as October 2005 confirmed the resolution to provide a loan to HDC Ltd for the financing Mulbadaw Farm and the CMSC. It had become obvious that FoH no longer could be relied upon as a source of financing a HDC Ltd as a Tanzanian legal entity.

The acting Medical Director of HLH had received instructions from Norway on 6^th of August to chase away HDC Ltd. On 10^th August he informed the HDC management that he was under threat of losing his job if he did not implement the order immediately.  On 12^th August he commanded the unit occupying the properties himself. FoH had not provided him with any court injunction or any other document legalizing the occupation; no such document was produced after the occupation either.

Questioned about whether any Tanzanian or Norwegian authorities had approved of the occupation; HDC Ltd was informed that the Royal Norwegian Embassy, the Minister of Justice in Tanzania, the Manyara Regional Commissioner and Hanang District Commissioner had all approved.  The Managing Director of HDC Ltd had later an opportunity to meet the Manyara Regional Commissioner and the Minister Councillor in the Royal Norwegian Embassy in Dar es Salaam over the issue. None of them could confirm the claim that they had approved the actions taken by FoH on 12^th August 2006.  It was later admitted that FoH had acted on advice from Joseph Tadayo, the Liquidator who sold and handed over the properties to HDC Ltd in 2005 and to SHV/HLH in June 2006, without taking notice of relevant legal procedures.

HDC Ltd is left with an impression that the legacy of Haydom Hospital and the late Dr Olsen and “Mama Kari” has been used instead of the legal institution of Tanzania.  There has been a persistent demand at all “crossroads” to avoid making use of the legal institute and only when HDC Ltd could not avoid taking FoH and HLH to court has it been possible to negotiate issues.

Following information that could indicate a third assault on HDC property at Setchet Farm in 2007; second assault was when 350 tonnes of wheat seed belonging to HDC Ltd was locked in at Mulbadaw by SHV in December 2006, it was decided to let the Tanzanian High Court consider the case.

For various “reasons”, the court has not been able to make a judgement about who is the rightful owner to Mulbadaw Farm and CMSC.  Neither judge nor anybody representing SHV or HLH turned up in December when the parties were to meet in court; only HDC Ltd met as called.  The case is supposed to be mentioned in April this year; but shall the court be able to consider the case now?

Good Governance?

HDC was advised already in August 2006 to bring this case to court; also by officials representing regional government authorities in Manyara; stating that the conflict was a matter for the court and not for the political and administrative authorities to deal with. 

HDC has also been advised to bring this case to the attention of the institutions in Tanzania and in Norway investigating corruption and misconduct.  HDC has heeded the advice given.

The Foundation Friends of Haydom in Norway (FoH) has not wanted to permit the Tanzanian High Court consider the case.  Instead, FoH has made use of the legacy of HLH and the late Dr O.H.E. Olsen and his wife “Mama Kari” to mobilize high level political support in Tanzania and in Norway in a way that seems to be in serious conflict with the policy of “Good Governance” that Norway is demanding from Tanzania as a condition for aid.

There is also information from more than one source indicating that large amount of cash has changed hands with an  intention of avoiding the case to be considered by the court.

This case and the manner it has developed is unfortunately not exceptional; it has in fact developed exactly how a senior Tanzanian adviser to HDC already in 2006 said that it would develop based on his experiences.  It is also in line with the more general observations of Transparency International (TI) who says:

“Corruption in East Africa, from petty bribery to large-scale larceny, can have a devastating impact. Undermining development, destroying public trust and burdening the lives of many, in particular the poor, corruption’s reach is insidious and effect destructive.

The need to counter corruption is evident. Ethiopia, Kenya, Rwanda, Tanzania and Uganda all scored lower than 3.0 out of a possible 10 in Transparency International’s (TI) 2008 Corruption Perception’s Index (CPI), indicating high-levels of public sector corruption throughout the region.

Yet corruption is surmountable. TI chapters are committed to driving change in their respective countries and region, demanding transparency, accountability and good governance, and providing the public, private sector and government with the means to improve the lives and futures of many.