The NOK3.1trn (€392bn) Norwegian Government Pension Fund has been condemned by the EarthRights International non-governmental organisation for its investments in oil and gas companies operating in Burma.
EarthRights has analysed the fund’s holdings and asserts it has $4.7bn invested in 15 oil and gas companies from eight countries operating in the southeast Asian country.
The investments include $2.6bn in France’s Total and $908m in Chevron Corp. It says the companies are “complicit in abuses such as forced labour, killings, and land confiscation” which mean the fund is in violation of its own Ethical Guidelines for responsible investment.
EarthRights claims there is a “high likelihood that the Fund is contributing to grave unethical actions in Burma through its holdings”.
It is calling for the Ethical Council which oversees the fund’s ethical investments to recommend exclusion or observation of the companies named in the report.
The Norwegian Finance Ministry said it is worried about the situation for human rights in Burma and that it supports the European Union’s common position, which includes some restrictive measures. It has also barred the fund from investing in Burmese government debt.
It added it was important to note that the fund does not have any investments in Burmese companies and that the extent of the fund’s investments in Burma is “therefore sometimes misinterpreted”. The Ministry’s full response is here
The NGO’s findings are detailed in a 40-page report called Broken Ethics, which is based on its own investigations on the ground in Burma and includes what it says is evidence of human rights abuses.EarthRights makes the point that Norway is the global leader in ethical investment – and its decisions on the ethics of its investments “carry enormous influence in the international investment community”.
Total’s operations in Burma have been on the Ethics Council’s radar screen since 2005, when it said the risk of grave human rights violations to do with Burmese infrastructure was “considerable”.
But in 2007 the Council recommended against excluding Total as it found no evidence of ongoing human rights violations or an “unacceptable risk” of future violations.
The fund already excludes 51 companies for involvement in anti-personnel land mines, cluster munitions, nuclear arms, tobacco, human rights, and environmental damage. Dongfeng Motor Group was excluded in February last year for the supplying arms to Burma.
Jeanett Bergan, head of responsible investment at fellow Norwegian institutional investor KLP, said you have take these issues seriously and that it’s a very complicated situation.
“You can’t exclude just for being in Burma,” she told Responsible-Investor.com, although KLP would look at the EarthRights report.
KLP is itself in dialogue with oil companies on Burma, Bergan said, adding that it wrote to them earlier this year asking them about their risk and control systems on human rights. KLP has been invited to go to Burma, which it now might take up.
Bloomberg News reported that EarthRights receives funding from about 30 philanthropic groups, including the Ford Foundation. It is co-chaired by Rebecca Rockefeller Lambert, trustee of the Rockefeller Family Fund.