Historical archive

Exclusions from the Government Pension Fund - Global

Historical archive

Published under: Regjeringen Stoltenberg II

Publisher Finansdepartementet

3/2006

The Ministry of Finance has excluded seven companies from the Government Pension Fund - Global (previously the Petroleum Fund) because they are involved in production of nuclear weapons.

Press release

No.: 3/2006
Date: 05.01.06
Contacts: Runar Malkenes, telephone 22 24 41 09 / mobile phone 95 21 42 83, Frank Vatne, telephone 22 24 41 31 / mobile phone 91 33 57 0

Exclusions from the Government Pension Fund - Global

The Ministry of Finance has excluded seven companies from the Government Pension Fund - Global (previously the Petroleum Fund) because they are involved in production of nuclear weapons. The exclusion is based on a recommendation from the Ethics Council for the fund. Following another recommendation from the Ethics Council, the Ministry has decided not to exclude the company Total from the fund. Total was considered based on its operations in Burma.

- The Council on Ethics has done thorough work with its recommendations, which gives a solid basis for the decision-making process in the Ministry. The framework that is established for cases of possible exclusions from the Pension Fund contribute to reaching sound decisions, says Minister of Finance Kristin Halvorsen.

Nuclear Weapons
According to the ethical guidelines for the Government Pension Fund – Global, companies that produce weapons that through normal use may violate fundamental humanitarian principles shall be excluded from the fund. Nuclear weapons are considered to be in this category of weapons.

In its recommendation of 19 September 2005, the Ethics Council advises that the following companies be excluded from the Pension Fund because they develop and/or produce central components for nuclear weapons: BAE Systems Plc, Boeing Co., Finmeccanica Sp.A., Honeywell International Inc., Northrop Grumman Corp., Safran SA and United Technologies Corp. The Council points out that the list of manufacturers of nuclear weapons contained in the recommendation is not exhaustive and that new exclusions may be called for at a later stage.

See the Council’s recommendation for a detailed account of the rationale behind the proposals to exclude each individual company.

According to the ethical guidelines, the seven companies have been given the opportunity to clarify whether they are involved in the production of nuclear weapons. One company has confirmed this. The other companies have either not responded or have declined to comment. Further to this, the Council has based its recommendation on information available on the companies’ web pages, or they have been confirmed through other sources, such as Jane’s Information Group.

The Ministry of Finance decided, while under the Bondevik II Government, to follow the recommendation from the Ethics Council to exclude the seven companies from the fund. The Ministry consequently instructed Norges Bank on 11 October to disinvest by the end of the year 2005. The current Government supports this decision. Disposal of stocks and bonds in the companies is now complete. According to Norges Bank, the fund’s investments in the companies prior to disinvestment totalled almost NOK 3.3 billion. Publication of the decision to exclude the companies was deferred until today to ensure an appropriate disinvestment process.

Total
In April 2005 the Ministry of Finance asked the Ethics Council to consider whether investing in the oil- and gas company Total, based on its operations in Burma, would be in breach of the ethical guidelines for the fund. Total is operating a gas pipeline in Burma, which the company helped build during the 90’. In its recommendation of 14 November the Council finds that investments in Total are not in breach with the ethical guidelines and advises not to exclude the company from the fund.

The Council has considered whether the Pension fund’s investments in Total constitutes “…an unacceptable risk of contributing to serious or systematic human rights violations…”, according to point 4.4 of the ethical guidelines. The Council concludes that the company’s operations in Burma do not constitute a breach of the ethical guidelines for the fund and finds that there is no unacceptable risk that breaches will take place in the future. The Council considers it likely that Total was aware that violations of human rights were taking place in connection with the construction of the pipeline in the period 1995-1998 and that the company made little effort to prevent such violations. The ethical guidelines are forward looking and do not entail that companies could be excluded because of unethical behaviour in the past. The Council sees no direct linkage today between the Burmese military regime’s human rights violations and Total’s operations in the country. The Council thus holds the view that Total is not contributing to Burma’s human rights violations.

The Ministry of Finance has decided to follow the advice from the Ethics Council not to exclude Total from the Government Pension Fund – Global.

The recommendations from the Council on Ethics can be found on the homepage of the Ministry of Finance.

Read more about the Council on Ethics for the Government Pension Fund – Global.