Norway Dumps Wal-mart StockPublished by MAC on 2006-06-07
Source: Aftenposten ()
Norway dumps Wal-Mart stock
7th June 2006
The huge fund that's meant to preserve Norway's oil wealth for future generations is pulling out of shares that don't meet the government's ethical standards. Among them is the Wal-Mart discount store chain.
Norwegian Finance Minister Kristin Halvorsen revealed Tuesday that two new stocks will be banned from the country's so-called "oil fund," which now is called the Norwegian Government Pension Fund - Global and currently is worth about USD 250 billion. It ranks as one of the biggest pension funds in the world.
The ministry reported that it's excluding Wal-Mart Stores Inc, Wal-Mart de Mexico and Freeport McMoRan Copper and Gold Inc from the fund "in line with recommendations from the Council on Ethics for the Fund."
Halvorsen's finance ministry officials cited "serious" and "systematic violations of human rights and labour rights" as its reason for pulling out of its Wal-Mart investments.
Another decision to dump shares in Freeport McMoRan was based on "serious environmental damage" incurred by the company.
Halvorsen was quoted in a government statement as saying that the exclusions "reflect our refusal to contribute to serious, systematic or gross violations of ethical norms in these areas through our investments in the Government Pension Fund - Global."
Investing in either Wal-Mart or Freeport, Halvorsen claimed, "entails an unacceptable risk that the Fund may be complicit in serious... violations of norms."Wal-Mart's offenses
US-based Wal-Mart, the world's largest retailer with revenues of nearly USD 300 billion, has been harshly criticized for its labour practices. Norway's Council on Ethics claimed that an "extensive body of material indicates that Wal-Mart consistently and systematically employs minors in contravention of international rules, that working conditions at many of its suppliers are dangerous or health-hazardous, that workers are pressured into working overtime without compensations, that the company systematically discriminates against women in pay," and that attempts to organize workers into unions are stopped.
The council's assessments involve Wal-Mart's business operations in the US and Canada and at its suppliers in Nicaragua, El Salvador, Honduras, Lesotho, Kenya, Uganda, Namibia, Malawi, Madagascar, Swaziland, Bangladesh, China and Indonesia.
The council and Norway's central bank wrote to Wal-Mart last fall, asking them to comment on the allegations of violations of human rights. The Norwegian Finance Ministry said Wal-Mart never responded.
The Finance Ministry said that Freeport, which operates one of the world's largest copper mines on the island of New Guinea in Indonesia, is using a natural river system to dispose of 230,000 tons of tailings a day. This, claims the ministry, inflicts "extensive and serious damage on the environment" because the disposal releases large quantities... copper, cadmium and mercury into the watercourse."
The Council on Ethics found the environmental damage cause by Freeport's mining operations to be "extensive, long-term and irreversible," with "considerable negative consequences for the indigenous peoples residing in the area."
Freeport, Halvorsen's staff claimed, "gives no indication of intending to alter the way the company manages waste in the future, or initiating mearues that will significantly reduce the damage to the environment," even though Freeport's management "has long been aware of the environmental damage caused by the company's practices."
Norway's central bank (Norges Bank) also asked Freeport to comment on the Council's assessments last December. Freeport responded on January 20. "While Freeport refutes the allegations levelled at the company, it chooses not to provide evidence in support of its position," stated the Finance Ministry.
Continuing to invest in Freeport, Halvorsen said, would leave Norway's pension fund with an "unacceptable risk of contributing to severe environmental damage."
Norway's disinvestment procedures gives Norges Bank two months to disinvest from a company before a decision on exclusion is made public. It sold off about NOK 2.5 billion worth of Wal-Mart stock and NOK 116 million worth of Freeport stock by the end of May.