Norway's Pension Fund Pulls Investment in Norilsk Nickel
Yet another mining company has been rejected by Norway's huge state Pension Fund, for causing unacceptable, and lasting, environmental damage.
Norilsk Nickel, the world's biggest nickel producer, is the first eastern European miner to be excluded by the Fund - joining a list of the disgraced which already includes Barrick, Freeport, Rio Tinto and Vedanta.
Reasons for the Norilsk disinvestment are provided in full at: http://www.regjeringen.no/upload/FIN/Statens%20pensjonsfond/recommendation_norilsk.pdf
Below, we outline MAC's own contributions to making a case against Norilsk. We point out that both BHP Billiton and Rio Tinto have provided significant material support to the Russian company, since 2006.
Norway Pension Fund Pulls Investment In Norilsk Nickel
20 November 2009
London - Norway's Finance Ministry said Friday it has excluded Russia's Norilsk Nickel (GMKN.RS) from the country's vast global pension fund portfolio on the grounds it has breached the fund's environmental guidelines.
"The [fund's] council on ethics finds it probable that Norilsk's operations are contributing to extensive environmental damage that will have effects far into the future," the ministry said.
"This is deemed to be in breach of the ethical guidelines for the Fund," it added. The decision was made after an assessment of Norilsk Nickel's Polar Division on the Taymyr Peninsula in Siberia which showed many years of heavy sulfur dioxide and heavy metals emissions have inflicted "extensive, lasting damage on the environment."
Effects on forest, vegetation and waters surrounding Norilsk's operations there can be seen, the ethics council said.
"The [ethics] council finds that the emissions from the company are the direct cause of forest death and other serious visible damage to the natural environment," it said. Meanwhile there has also been a human cost, it said, with health problems and illnesses
among persons subjected to prolonged exposure to SO2, nickel and heavy metals.
Information was obtained by the council from a wide range of sources, including the company, Russian authorities and United Nations and World Bank studies.
Norway's finance ministry said Norilsk Nickel responded to an enquiry from the ethics council acknowledging the severe environmental damage and saying it believed an action plan to reduce emissions to 2015 is a success. But the council said the targets are unrealistic, and it "does not regard it as probable that the extensive emissions reductions that are necessary to reduce serious harm to the environment and human health will take place in the near future."
It has therefore sold its stake in the company as of Oct. 31 2009.
Finance Ministry Web site: www.regjeringen.no
-By Elizabeth Adams, Dow Jones Newswires; +44 (0) 20 7842 9386; email@example.com
(END) Dow Jones Newswires
MAC BACKGROUND NOTE:
Both Rio Tinto and BHP Billiton have important partnerships with Norilsk Nickel: http://www.minesandcommunities.org/article.php?a=108
Rio Tinto linked up with the Russian company in early 2006, at which point London Calling commented (on this website):
"By offering a mighty hand to the Russian glove, Rio Tinto could reverse any recent (if often illusory) gains made in promoting its brand of corporate social responsibility.
"The price it paid for its 1995 stake in the Grasberg mine wasn't to be measured simply in monetary terms. After climbing into the mountain with Freeport, it rained down detritus, not only on the people and rivers of West Papua, but ultimately on its own reputation.
Is it going to repeat the same morally disastrous mistake?"
Just four months later, BHP followed Rio Tinto by brokering its own deal with Norilsk.
In late 2006, The Blacksmith Institute included Norilsk's Russian sites among its " World's Ten Most Polluted Places". In support of this indictment, Blacksmith cited a 2003 report, authored by Nostromo Research ( "Norilsk's Nickel Nightmare") which declared that:
"The Norilsk complex is Russia's worst ambient air polluter and the biggest single source of sulphur dioxide (SO2) poisoning anywhere in the world. Surely the time is ripe for a campaign to clean up its act?" [Winter 2003-2004 issue of Taiga News, Taiga Rescue Network, Sweden. See: http://www.minesandcommunities.org/article.php?a=108
In response to this report, Paul Mitchell, then secretary general of the International Council on Mining and Metals (ICMM), wrote:
"We recognise and understand that [Norilsk's pollution] is a big problem. We understand that the Finnish government has provided money for pollution... Fundamentally this is a problem for the Russian government to enforce pollution control. It is not possible for external parties to do this...[T]he nickel production operations must continue because otherwise there will be no funding stream to pay for rehabilitation and ongoing anti-pollution measures. If the plant is closed, there will be no money..." [Taiga News, ibid].
Clearly, Norway's Council on Ethics, which advises its Pension Fund on disinvestment, does not have Mr Mitchells' confidence in Norilsk's promise to clean up its unacceptable acts; nor in the Russian government's willingness to enforce the regulations.