Latvia’s police chief has confirmed likely criminal proceedings against companies and public agencies involved in the Maxima Zolitude disaster, following an investigation of the causes of the supermarket’s collapse on 21 November last year.
A criminal prosecution of the corporate bodies will be a landmark in the history of Latvian law relating to “legal entities”. Although corporate criminal liability has been on the statute books since 2005 it has yet to be tested in the courts.
In an interview with BQ Baltic, Latvia’s chief of State Police Criminal Office Andrejs Grišins said: “[The liability of legal entities] is a new concept that has also been introduced in criminal law in Latvia. We have discussed this with prosecutors, however in any case [corporate liability] depends on the actions or responsibility of specific people... First we need a suspect.”
He continued: “The principle is this: If a worker of the company has committed [an offence] in the interests of the company, then the company is prosecuted under criminal law as well.”
The effects of the collapse of the Lithuanian supermarket chain’s suburban Riga store continue to reverberate as recovery and investigation work goes on, more than three months after the roof collapsed on the busy shop.
Long-serving prime minister Valdis Dombrovskis resigned in the week following the disaster, taking responsibility for the worst loss of life in Latvia’s post-independence history. BQ Baltic has learned that a total of 48 investigators are now at work on behalf of a total of 169 victims of the disaster, 54 of whom lost their lives.
Previously 94 relatives of the deceased were classed as victims in the criminal investigation, along with the 42 people injured in the collapse. Lieutenant Colonel Grišins told BQ that a further 33 people have now been classed as suffering “material or moral damage” from the event.
These include those who were uninjured but whose cars were damaged, or who lost belongings while escaping the collapsing store.
So far official investigations have been limited to probing violations of building regulations.
Such offences carry a maximum sentence of four years in prison, a tariff considered inadequate by many Latvians.
Two days after the tragedy Latvian President Andris Berzinš was seen to reflect the
public mood when he declared that the disaster amounted to “murder of unprotected people”.
The chief of police said: “The fact that the store collapsed alone means that there was neglect. But we cannot yet say if it was intentionally, accidently or because of ignorance.”
Grišins has previously expressed regret at Latvia’s failure to convene a cross-disciplinary expert investigation committee to analyse the systemic failures that led to the tragedy.
He said: “The Police [investigation] will not solve all the problems. The subject of the investigation is what it is but we don’t analyse the construction industry.
“While investigating the reasons for this tragedy we see that there are problems
and [negative] habits in the field.
“Of course I understand that people are publicly calling it murder, those are emotions and I understand completely. I am shocked myself and for the investigators [the tragedy] still continues.
“In my entire professional career I haven’t encountered anything like this. Many of
the investigators consider it the case of their lives,” he added.
As well as individuals, several companies, mostly stores that shared a roof with Maxima, plus landlords, insurance companies and others – are also being classed as victims.
Construction workers are still making sure the site is safe for the police and expert investigators.
The financial value of potential claims against the wrongdoers is still being calculated as police investigate and companies assess losses.
After sifting through thousands of tons of evidence, experts are expected to carry out
a series of experiments – including stress tests on the remaining roof beams - in an attempt to determine the source of the failure which brought down the roof.
“The supermarket went from design to execution and now we are tracing it back from execution to design,” Mr Grišins said.
The disaster has led to a wave of building inspections across Latvia, and millions of
euros have been donated to victims and their families.
Over the coming years and months, many more millions are expected to be paid out following court rulings, or in out-of-court settlements.
The legal and criminal repercussions of the supermarket collapse are likely to be lengthened by the complex international ownership structure of the building in the Latvian capital’s western Zolitude district.
The initial sole owner of the supermarket and an adjacent apartment block was Homburg Zolitude, owned by the Netherlands-based Homburg Eastern Europe Fund. The supermarket was later sold to Tineo which shares the same Lithuanian owners as Maxima, the pan-Baltic supermarket chain.
The project’s developer however was the Lithuanian company Homburg Valda, a subsidiary of Canada’s Homburg International Group.
Interviewed by BQ Baltic, Jamie Torpey, a Canadian director of Homberg Valda called for greater transparency in the Latvian construction industry.
He risked stoking existing tensions between Latvian and Lithuanian governments over the tragedy, by hinting at shortcomings with Latvian building standards.
“You’re hoping that they’re building properly and that you have a whole team that is checking what has been done [by the builders] and that there are the city inspectors and government inspectors. There have been problems since we have come to Latvia and
it hasn’t always been easy,” Torpey said.
“It makes you question a lot of things,” he added.“It’s not about the building, it’s about the victims. Money has no bearing in this, it’s about lives.
“The concern is that you had a brand new award-winning building. It was supposed to be the best. So how are the others? Has the industry really been run properly?”
So far the Latvian construction industry, including the Latvian builders of the Zolitude supermarket Re&Re, which, along with Maxima and Homburg, has donated small sums of money to the victims in the aftermath of the collapse, has avoided the public spotlight.
Jos Fruytier of the Homburg’s Dutch investment fund parent company, which owns part of the collapsed building said: “Something terrible happened, but it is not a cause to question whether you can [invest in] this country, or whether you can trust
“[The disaster] has had a tremendous impact but it doesn’t mean that everybody involved is at fault or did not act like professionals. Unfortunately it is too early to say what caused it.”
Fruytier stressed that Homburg’s other commercial property developments in
Latvia have been checked since the November collapse.
As Latvian commentators have noted, the Baltic nation has some of the most stringent building regulations in Europe, leading lawmakers to seek to improve the country’s ranking in the World Bank’s “Ease of Doing Business” index.
Another background factor that might be considered is that the depth of the 2008-2009 financial crisis dramatically increased the appetite for foreign commercial investment
Homburg was among the most prominent companies lobbying lawmakers to relax rules surrounding planning and development, although there is no suggestion that the company tolerated poor building standards.
In discussions with BQ Baltic, Homburg’s Jamie Torpey revealed that the company was committed to Latvia although he claims it has never earned a profit in the country.
“Even though we have had many problems we’ve never thought of leaving. The Homburg Eastern European Fund which owns Zolitude has made no money here. It has lost money from day one.
“We bought before the crisis, then the crisis happened and we slowly invested money just to return it.”
He admitted that the firm was likely to face civil claims in court.
The last survivor of the Maxima disaster to leave hospital, a 19-year-old cashier called Martinš Plasis who spent nine hours trapped beneath the rubble, was discharged on