Hero Norway’s for-profit model offers lodging for asylum seekers.
It’s a scene that could possibly warm even the two-sizes-too-small heart of the Grinch. Here in a little village in Norway, as dusky midday light filters in through the forest outside a classroom, a half-dozen Afghan teenagers hunch over a long wooden table, assiduously scissoring colored sheets of construction paper. These are 15- to 18-year-old boys who’ve endured miseries no child deserves—gunfire, explosions, the killing of a parent by Islamic State—and they’ve traveled here from their homeland on foot and in suffocatingly crowded vans. They sneaked through the woods on the Turkey-Bulgaria border, and they’ve been chased and bitten by police dogs and beaten by their smugglers. Now they’re celebrating Christmas and inscribing cards with some of the very first Norwegian words they’ve learned: God Jul. Merry Christmas.
Are they happy to be here?
“It is calm and peaceful,” says Bilal, 15, in Pashto.
“It is nice,” says Ahmad, also 15, “but why isn’t there a cricket pitch?”
Their middle-aged teachers—a Syrian and an Eritrean, both onetime refugees themselves—hover over them, benevolent, smiling, as a commuter train rattles in the distance. This, arguably, is the Scandinavia that the self-proclaimed socialist presidential candidate Bernie Sanders was referring to in October when he suggested that Americans “should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished”—particularly when it comes to government programs that assist those in need.
Except there’s this other guy in the room, standing off to the side, almost invisible as he handles incoming e-mail on his smartphone. Kristian Adolfsen, 55, wears a V-neck sweater, a striped button-down, and glasses. This is his first visit to this refugee center in Hvalstad, but he owns the operation with his brother, Roger, 51, and they run 90 such centers in Norway and 10 more in Sweden. Refugees represent a huge opportunity for them; the Adolfsens’ Oslo-based company, Hero Norway, is the leader of a burgeoning Scandinavian industry that charges the Norwegian and Swedish governments a fixed fee—$31 to $75 per person per night in Norway—to house and feed refugees.
In Norway, Hero operates several different kinds of refugee lodging, among them short-stay dormitories where asylum seekers sleep a few nights, waiting to be screened by police after crossing the border; a second phalanx of facilities where refugees wait a couple of weeks to be interviewed by immigration officials, taking their meals in a cafeteria; and longer-term camps where they live more independently, in detached houses, cooking their own meals, as they wait, often for years, to be settled in Norway with protected refugee status.
For 2015, Hero Norway expects revenue of $63 million, with profits of 3.5 percent. In the rest of Europe, where asylum seekers typically are cared for by nongovernmental organizations such as the Red Cross, only one for-profit is larger than the Adolfsens’ operation, ORS Services, a Swiss company that in 2014 generated $99 million in profit caring for refugees in Switzerland, Austria, and Germany. (ORS won’t disclose its 2015 profits.)
The Adolfsens have succeeded in part because they have a background in hospitality. In the three decades since they founded Adolfsen Group, Kristian and Roger have built an $800 million-a-year network of businesses that includes preschools and nursing homes, as well as hotels, apartment buildings, cruise lines, and ski resorts. The two entered the refugee sector in May 2014, when they paid a Danish company, ISS Facility Services, $22 million for Hero Norway, a 27-year-old company that ran 32 refugee centers.
At first the Adolfsens set their sights on Sweden. Almost immediately, though, refugee arrivals in Norway exploded, and they’ve kept arriving since. A country of 5 million people—a relatively sleepy, snow-clad, 1,600-mile-long, lutefish-eating kingdom that had never seen more than 17,000 refugees in a single year—received more than 31,500 asylum seekers in 2015 as Syria continued to fall apart and wars in Afghanistan, Iraq, and Eritrea drove refugees to Europe. The Norwegian Directorate of Immigration (UDI) can’t cope with the influx, so it’s turning to entrepreneurs, desperately, lest more refugees sleep in the streets. “UDI calls for capitalists,” blared a recent headline in Oslo’s Aftenposten newspaper.
For-profits now care for about 90 percent of Norway’s refugees. A gold rush has commenced, and it’s also a bit of a circus. Just outside Oslo, a savvy entrepreneur named Ola Moe recently rented a vacant hospital for $10,000 a month, did minimal upgrades, and began charging the government $460,000 a month to house and feed 200 refugees. At a refugee center in Southern Norway, 50 resident asylum seekers went on a two-hour march in November to protest the poor food, prompting one politician, an Iranian Norwegian named Mazyar Keshvari, to proclaim, “These ungrateful people should immediately leave the country.”
Amid such controversy, the Adolfsens appear like poised professionals. In press photographs, they flash can-do smiles as they sit before gleaming conference tables in airy office towers. One Oslo paper, Dagens Naeringsliv, has called them “Norway’s least known billionaires.” Yet concerns remain. In their monetization of the refugee crisis, will the Adolfsens provide superior, more efficient havens, or will they cut corners and skimp on services to improve profits? And does their bottom-line approach threaten a depth of caring that transcends hard cash?
Kristian and Roger grew up in Northern Norway, a sparsely peopled region imbued with a provincial, gloomy, Southern Rock vibe. Moonshine is popular there, along with fishing and hunting, and the Adolfsen brothers pride themselves on speaking a northern dialect, which Kristian says “is filled with swear words—not bad ones, but you know, stuff like ‘devil hell.’ ” Their hometown of Andenes, population 3,500, situated on Andoya Island, is so windy there are almost no trees. Their father, Kolbjorn, an engineer, worked days at the Andoya Space Center, launching rockets to study the northern lights. In the evening, he ran a TV sales and repair shop. Eventually he built a hotel. “A lot of people in Norway have cabins,” says Kristian. “Our second home was the TV shop. That’s where we saw our father.”
When Kristian was 5, he began selling the local newspaper, the Andoya Avis. At 7, he got involved with the production of a Northern Norway ocean delicacy, cod tongue. It was his job each winter afternoon to jab hundreds of cod down onto a metal spike, one by one, before lopping off the fish’s tongues with a knife. “As soon as the last bell rang at school,” he says, “I began sprinting. You had to be the first on the pier. There were only so many fish.” He cut quickly, running behind his wheelbarrow in the 10F to 15F air to fetch loads of fish. After three hours, he’d spend three more selling cod tongues door to door. “But that wasn’t so bad,” he says, “because then you could wear gloves.”
Roger stayed out of the cod tongue industry (by the time he came of age, his mother was weary of living in a household smelling of fish), but he soon followed his brother into competitive running and cross-country skiing. The brothers served as delivery boys, Kristian carrying groceries on his sled and Roger baked goods. Both worked as salesmen in the TV shop, and during the late 1970s—as Norwegian conservative Kare Willoch rose to power, eventually becoming prime minister in 1981—the brothers grew infectiously excited over his staunch opposition to the social democratic state that took root in Norway after World War II.
Kristian and Roger ran for the Andenes City Council as teenagers. Both won seats and fought for the privatization of road services and garbage pickup in Andenes. “My first speech was about privatizing the road grading,” Kristian says. “I spent hours writing and correcting many times what I would say. I tried to memorize every word.”
When the Adolfsens made their first major business move in 1991, purchasing the 44-room Andrikken Hotel in Andenes, the gesture had an almost holy resonance: They were buying the very hotel their father had built. In 1981, Kolbjorn had lost the business to bankruptcy. But he kept its giant sign in his basement. It depicted a long-necked duck flying into the midnight sun. The brothers rehung it—then staffed the hotel with old friends from Andenes, establishing a tone. “We have a coast culture in our companies,” Kristian says. “We are professional but informal, and we base everything on trust. When you grow up in a small place, you can’t do anything wrong. You get a bad reputation.”
Over the next decade, the Adolfsens built Norlandia Hotel Group, which now manages about 30 establishments, many of them Best Westerns, throughout Norway and Sweden. As the Norwegian government started allowing private companies to make money on social welfare work, they ventured into nursing homes, then preschools. “We are like sportsmen,” Kristian says calmly and clinically, explaining his and Roger’s drive. “We set goals, and then we reach our goals, and then we have to set new goals. It is not about the money. It is about the excitement.”
Europe’s refugee crisis has been bubbling since the Arab Spring of 2011. When it boiled over last summer, many Norwegians traveled to Lesbos, Greece, on the edge of the Aegean Sea to help refugees land their boats in Europe. They set up tents, served food, and offered trauma counseling. Back in Norway, groups such as Refugees Welcome to Norway supplied the newcomers with clothes and toys as other volunteers taught them to knit. The Adolfsens, meanwhile, enlisted an aide to cast about Norway’s hinterlands for abandoned or little-used properties: defunct boarding schools, onetime rehab centers, hospitals, mountain hotels that go dead in autumn—any and all structures where refugees could be housed temporarily or permanently at a profit. As Roger tended to other aspects of the Adolfsens’ business, Kristian expanded the refugee services. “We see it as a niche in the health and care industry,” he says.
On Norway’s political left, the Adolfsens are regarded as distasteful and greedy, especially by Linn Herning, deputy director of Norway’s Campaign for the Welfare State and the author of a 2015 book, Velferdsprofitorene (The Welfare Profiteers), which traces the gradual expansion since the late 1990s of entrepreneurs in Norway’s preschools and nursing homes. The cover features detailed, anatomically correct drawings of creepy insects—parasites—and Herning devotes several pages to the Adolfsens, who, she says, are “the biggest players, the only welfare profiteers in every sector.” In early December, she helped Norway’s Socialist Party and Social Democratic Party call in Parliament for a study looking into the feasibility of banning profiteering in refugee care.
Still, Herning could point to only one specific example of the Adolfsens’ supposed treachery. In the small Norwegian city of Moss, an hour south of Oslo, Orkerod, a respected, publicly owned, 88-bed nursing home for dementia patients, went into tumult after the Adolfsens’ Norlandia Care Group began managing it in 2014. “The focus on specialized dementia care disappeared,” says Lorentz Nitter, the clinic’s lead doctor until he quit in June. “Such care is very expensive,” about $125,000 annually per person, he says, “and Norlandia didn’t want to pay for it.” When highly paid nurses trained in dementia work quit, Norlandia replaced them with cheaper nonspecialists. “They began treating all patients the same way,” Nitter says, and this was dangerous. About 30 percent of all dementia patients are “aggressive,” he says, “and they walk around causing many problems.”
In Orkerod’s first 12 months under Norlandia’s guidance, 19 nurses quit. In a recent op-ed in Moss Avis, Nitter joined two other Orkerod doctors in complaining that the clinic’s excellence, built over its first 13 years of operation, had been “torn down in a single year.”
Kristian denies that the quality of the service at Orkerod declined and argues that departed staffers were disgruntled simply because Norlandia shook them from long-standing work habits. “These were people who’d been there for many years,” he says. “They were used to doing things their way, and then we made changes. It’s a lot more demanding to work for a private company because we focus on providing better quality at lower prices.”
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