Alstom and Wesfarmers hit by Norwegian investment exclusion

KLP boycott follows allegations of human rights and extraction abuses.

Alstom, the French energy and rail infrastructure group, is the latest company to be hit by an institutional investor boycott over business links in Sudan.
KLP, the NOK196bn (€24bn), Norwegian life and pensions company, is excluding Alstom from its index portfolio for alleged violations of human rights at a Sudanese hydro-power project.
In a statement, KLP said: “A special envoy from the UN Human Rights Council urged Alstom, among others – Alstom being the project’s main supplier of electrical equipment – to cease operations due to reports of human rights being violated in connection with conditions being reprehensible and around 50,000 people being forcibly moved.”
The KLP exclusion suggests European institutions could follow a wave of Sudan boycotts by US public pension funds.
Investors including the Church of Sweden and Swedish insurance company Folksam may join the Alstom boycott as both recently began cooperating with KLP via GES Investment Services, the Swedish governance group, to initiate “precautionary engagement” with companies over alleged human rights abuses.
Last month, Massachusetts became the 21st US state to prompt public pension funds to divest from firms working with the Sudanese government. US funds have so far pulled assets worth hundreds of millions of dollars, although most have done so as a result of state-led political decisions.KLP is also excluding Wesfarmers, the Australian energy and fertilizer company and one of the country’s largest public companies, from its investments as a result of phosphate imports from West Sahara. KLP said that in 2002 the UN declared that all extraction of natural resources in West Sahara was illegal.
Mari Thjømøe, chief financial officer at KLP, said: ”These companies are being excluded for breaking KLP’s ethical rules and not rectifying reprehensible conditions, or for not in some other way having signalled their willingness to solve the problem.”
Like its Norwegian peer, the €250bn ($366bn) Government Pension Fund, KLP runs an active exclusion monitoring process for its investment portfolios. Its latest review has reinstated Halliburton, the US oil service company, to its investment list saying the company had ”put behind it” corruption charges levelled at its subsidiary, Kellog, Brown & Root (KBR) which led to a KLP exclusion in 2005. It has also reinvested in Anvil Mining, which was excluded in 2004 over alleged links to massacres of civilians in Congo. A spokeswoman from KLP said the company was ”open to further dialogue” with both Alstom and Wesfarmers. Alstom did not return calls prior to publication and Wesfarmers could not be reached for comment.
Since 2003, more than 200,000 people are estimated to have died as a result of the conflict in Darfur in Sudan where the government is accused of using militia death squads against its non-arab population.