MAC: Mines and Communities

Norway Fund Closes The Door On Wal-mart

Published by MAC on 2006-06-07
Source: International Herald Tribune ()

Norway fund closes the door on Wal-Mart

By Beate Evensen, Bloomberg News
International Herald Tribune

7th June 2006

OSLO: Norway's global pension fund, worth $242 billion and one of the biggest such funds in the world, has sold its holdings in Wal-Mart Stores, alleging "serious and systematic violations of human rights and labor rights," the Finance Ministry said Tuesday.

Over the past two months, the fund has sold its stock and bond holdings in Wal-Mart and Wal-Mart de Mexico. The holdings were worth 2.5 billion kroner, or $415 million, at the end of 2005. The fund also sold 116 million kroner worth of stock in Freeport-McMoRan Copper & Gold because of the company's "complicity in serious damage" to the environment in New Guinea, the fund said.

The fund sold its holdings in Wal- Mart, the world's largest retailer, because of "extensive" material indicating violations of the fund's ethics guidelines in areas like employment of minors and dangerous working conditions at suppliers, the fund's ethics committee said. Wal-Mart did not respond to a letter from the fund inviting the company to comment, the ministry said. Wal-Mart officials declined to comment Tuesday.

Also this year, the fund divested its holdings in Boeing, BAE Systems and Northrop Grumman, saying those companies contribute to the production of nuclear weapons.

The moves are based on recommendations from the fund's ethics council, which was set up in 2004 to halt investments in companies with activities that breach human rights, are involved in corruption or damage the environment.

"Exercise of ownership rights is the instrument best suited to influencing companies in a desired direction," the finance minister, Kristin Halvorsen, said Tuesday about Wal-Mart. "However, in this particular case, the Council on Ethics is clear in its recommendation for exclusion and the council views the risk of complicity in future norm violations as unacceptable."

Wal-Mart needs to ensure good working conditions in its suppliers' factories to protect its reputation, the company's global procurement chief, Lawrence Jackson, told analysts at a meeting last week in Rogers, Arkansas. Wal-Mart, based in Bentonville, Arkansas, is the largest U.S. private employer, with 1.3 million workers.

"We have a responsibility for any time that something happens in a facility," Jackson said. "No matter how minute the amount of product that we may have in that manufacturer, or dealing with that supplier, we're the ones that the world looks at and says, 'O.K., why is that happening?' So we have to take accountability for that."

Freeport-McMoRan, based in New Orleans, runs the world's biggest gold mine in Indonesia and one of the largest copper mines there. Freeport's operations on the island of New Guinea have been the target of protests over the disposal of tailings from mining into a river.

"Freeport gives no indication of intending to alter the way the company manages waste in the future or initiating measures that will significantly reduce the damage to the environment," the Finance Ministry said.

Freeport shares fell 17 cents to $52 in afternoon trading in New York, and Wal-Mart shares were down 12 cents at $47.07.

OSLO: Norway's global pension fund, worth $242 billion and one of the biggest such funds in the world, has sold its holdings in Wal-Mart Stores, alleging "serious and systematic violations of human rights and labor rights," the Finance Ministry said Tuesday.

Over the past two months, the fund has sold its stock and bond holdings in Wal-Mart and Wal-Mart de Mexico. The holdings were worth 2.5 billion kroner, or $415 million, at the end of 2005. The fund also sold 116 million kroner worth of stock in Freeport-McMoRan Copper & Gold because of the company's "complicity in serious damage" to the environment in New Guinea, the fund said.

The fund sold its holdings in Wal- Mart, the world's largest retailer, because of "extensive" material indicating violations of the fund's ethics guidelines in areas like employment of minors and dangerous working conditions at suppliers, the fund's ethics committee said. Wal-Mart did not respond to a letter from the fund inviting the company to comment, the ministry said. Wal-Mart officials declined to comment Tuesday.

Also this year, the fund divested its holdings in Boeing, BAE Systems and Northrop Grumman, saying those companies contribute to the production of nuclear weapons.

The moves are based on recommendations from the fund's ethics council, which was set up in 2004 to halt investments in companies with activities that breach human rights, are involved in corruption or damage the environment.

"Exercise of ownership rights is the instrument best suited to influencing companies in a desired direction," the finance minister, Kristin Halvorsen, said Tuesday about Wal-Mart. "However, in this particular case, the Council on Ethics is clear in its recommendation for exclusion and the council views the risk of complicity in future norm violations as unacceptable."

Wal-Mart needs to ensure good working conditions in its suppliers' factories to protect its reputation, the company's global procurement chief, Lawrence Jackson, told analysts at a meeting last week in Rogers, Arkansas. Wal-Mart, based in Bentonville, Arkansas, is the largest U.S. private employer, with 1.3 million workers.

"We have a responsibility for any time that something happens in a facility," Jackson said. "No matter how minute the amount of product that we may have in that manufacturer, or dealing with that supplier, we're the ones that the world looks at and says, 'O.K., why is that happening?' So we have to take accountability for that."

Freeport-McMoRan, based in New Orleans, runs the world's biggest gold mine in Indonesia and one of the largest copper mines there. Freeport's operations on the island of New Guinea have been the target of protests over the disposal of tailings from mining into a river.

"Freeport gives no indication of intending to alter the way the company manages waste in the future or initiating measures that will significantly reduce the damage to the environment," the Finance Ministry said.

Freeport shares fell 17 cents to $52 in afternoon trading in New York, and Wal-Mart shares were down 12 cents at $47.07.

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