Norway govt fund blacklists world’s biggest gold producer

Fund also excludes Textron Inc. for links to cluster bomb production.

The €250bn ($322bn) Norwegian Government Pension Fund has blacklisted two new companies, Canada’s Barrick Gold Corporation and Textron Inc in the US, for breaching its ethical codes. The fund said it had already sold shares worth NOK1,248m (€140m) in Barrick Gold, the world’s largest gold producer, because of concerns about environmental damage at the Porgera mine in Papua New Guinea, which is run by Porgera Joint Venture, in which Barrick Gold has a 95% stake. The Norwegian fund’s corporate exclusion decisions are followed closely by investors around the world because of the resources employed in their research by the fund’s Council of Ethics. The decisions are regularly used as a proxy for other institutional investors to blacklist the same companies. The Norwegian fund said it had limited its investigation to the Porgera mine, but added that it had concerns about other mining operations run by Barrick Gold, which have come under fire from environmental groups. It said: “According to the Council’s assessment, the company’s riverine disposal practice is in breach of international norms. In the Council’s view, the company’s assertions that its operations do not cause long-term and irreversible environmental damage carry little credibility. This is reinforced by the lack of openness and transparencyin the company’s environmental reporting.
Considering the intentions presented by the company with regard to production expansion, the Council finds reason to believe that the company’s unacceptable practice will continue in the future.”
Barrick Gold could not be reached for comment at the time of going to press.
The fund has also sold shares worth NOK 249 (€28m) in Textron Inc., the US aircraft and defence group, because of the company’s role in the production of cluster bombs, which it said went against Norway’s ratification of the international treaty banning cluster weapons that was signed in Oslo in December 2008. Kristin Halvorsen, Norwegian finance minister, said: “We cannot participate in the funding of this type of production.” The fund said the technical definition of what constitutes cluster munitions laid down in the Cluster Munitions Convention had been slightly more stringent than its own previous policy, incorporating some munitions that had previously not qualified for recommendation of exclusion. The Norwegian Ministry of Finance has to date excluded nine producers of cluster weapons from the investment universe of the fund on the basis of recommendations from the Council on Ethics.