The Ministry of Finance has excluded the Israeli company Elbit Systems Ltd. from the Government Pension Fund – Global, on the basis of the Council on Ethics’ recommendation. The Council on Ethics has found that investment in Elbit constitutes an unacceptable risk of contribution to serious violations of fundamental ethical norms as a result of the company’s integral involvement in Israel’s construction of a separation barrier on occupied territory. “We do not wish to fund companies that so directly contribute to violations of international humanitarian law,” says Minister of Finance Kristin Halvorsen.
In its recommendation dated 15 May on exclusion of the company Elbit, the Council on Ethics attached importance to a number of factors, including an advisory opinion from the International Court of Justice in the Hague from 2004. This opinion states clearly that the construction of the separation barrier and its associated control regime along the chosen route must be regarded as being in contravention of international law.
- The freedom of movement of the people living in the occupied territory has been unacceptably restricted. The International Court of Justice has pointed out the obligation of all State parties to the Fourth Geneva Convention to prevent breaches of the Convention such as the construction of the barrier. Norwegian authorities act in accordance with this, says the Minister of Finance.
The surveillance system that Elbit supplies to the Israeli authorities is one of the main components in the separation barrier and its associated control regime. The surveillance system has been specially designed in close collaboration with the buyer and has no other applications. Furthermore Elbit is clearly aware of exactly where and how the system is intended to be used. The Council on Ethics has ascribed particular importance to these elements in its assessment of the extent to which the company can be regarded as making a significant contribution to the construction of the separation barrier – and thus, the extent to which investment in Elbit entails an unacceptable risk of contribution to particularly serious violations of fundamental ethical norms (see the Ethical Guidelines for the Government Pension Fund – Global).
The Council on Ethics has assessed Elbit Systems Ltd. against the Ethical Guidelines for the Government Pension Fund – Global in the same way as it assesses other companies. “It is important to stress that the decision to exclude this company is not linked to the nationality of the company,” says Minister of Finance Kristin Halvorsen.
The Council on Ethics generally bases its evaluation on a company’s conduct, not possible violations committed by states or other actors. Nevertheless, a number of the criteria for exclusion are related to companies’ contribution to violations committed by states, such as violations of human rights. The Council has assessed the extent to which companies can be regarded as contributing to human rights violations committed by states in previous cases too, such as companies’ activities in Burma.
On 30 June 2009, the Ministry of Finance instructed Norges Bank that Elbit Systems Ltd. should be excluded from the Government Pension Fund – Global and gave 31 August 2009 as the deadline for completion. The sale of all shares in the company has now been completed. The decision to sell was made public after the shares had been sold, so as not to affect the sale.
The recommendation of the Council on Ethics is available here.
Read more about the Council on Ethics for the Government Pension Fund – Global at www.etikkradet.no
Companies Excluded from the Investment Universe