(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
This was what Kalle Hesstvedt found out at the SV's Storting Secretariat when he recently went closer to the oil fund. When Øystein Djupedal wanted the Minister of Finance's answer to what the government would do with this, Schjøtt-Pedersen answered in the Storting's question hour the same as all governments from Brundtland via Jagland and Bondevik to Stoltenberg have replied: It is impossible to do anything. Ethical requirements for investments cannot be met.
This is precisely what investment funds around the world are increasingly doing. And they do it because the owners demand it.
An increasing number of investment funds make demands on the companies to invest in. They set environmental and health requirements for products and production processes, requirements that companies do not live on armor contacts, requirements for the treatment of employees.
Think profit – and only profit!
The Norwegian Oil Fund, on the other hand, should close its eyes to everything like that. It should only think profit.
The foreign banks and financial companies that manage the Norwegian Petroleum Fund have been explicitly informed that they will not make any demands on companies in which they will invest Norwegian oil money – in addition to the company providing a good enough return. The Norwegian oil money can be freely invested in companies that exploit disorganized labor, that use child labor, that affect the environment and health or that contribute to arms races globally and locally.
The only exception to this main rule is the Storting decision that NOK 1 billion from the Oil Fund should be used for share purchases in companies with an acceptable environmental profile. 1 billion of the 400 managed by the Norwegian Oil Fund.
The Rio Tinto example
The Rio Tinto mining company is on the list of companies in which our oil fund invests. The international "Workers' Union", with 20 million members, has for several years identified Rio Tinto as the major scapegoat in terms of working conditions at mines around the world. Comprehensive documentation has been gathered about how Rio Tinto is crushing trade union organization, affecting communities and spreading environmental degradation wherever the authorities are too weak to make effective demands on the group.
In the US, Rio Tinto has managed to keep most mines "union-free".
- In Australia, Rio Tinto has for a long time tried to crush all trade unions and all forms of collective agreements.
- In the UK, Rio Tinto refused to take responsibility for the large prevalence of cancer both among employees and among the locals around the world's largest tin smelter, Capper Pass.
- The situation is even weaker for workers in Chile, Indonesia and other countries in Asia, Africa and Latin America. In Indonesia, Rio Tinto has led the army to crush all opposition to large-scale migration and environmental destruction.
When shareholders respond
Last spring, a "shareholder uprising" broke out within Rio Tinto. The Wall Street Journal described the campaign behind the uprising as "one of the most ambitious global battles ever launched."
The main professional associations in the USA, Great Britain and Australia were behind the campaign together with the International Federation of Chemical, Energy and Mining Workers, ICEM. Through its own pension funds and by mobilizing support from environmental and human rights organizations to influence other owners (investment funds, banks, insurance companies), it eventually became possible to get almost a fifth of the share capital in Rio Tinto to support the demand that the seven the core conventions of the ILO will commit Rio Tinto across the globe.
These ILO conventions require that employees have the right to organize and negotiate collective agreements, that forced labor and child labor are not used, that there is equal pay between women and men, and that there is no discrimination on the grounds of sex, race or religion.
Retreat from Rio Tinto
The "rebels" lost at the general assembly, but already a few days later Rio Tinto retreated in several current conflicts. In Australia, the group put an end to the dramatic and month-long conflict over the right to collective bargaining – and signaled a willingness to sit down at the negotiating table with the unions that had made every effort to get rid of it.
In the UK, Rio Tinto suddenly acknowledged responsibility for the cancer risk surrounding the Capper Pass tin smelter. The group is fighting the battle through the judiciary to absolve itself of any responsibility – and was suddenly willing to pay compensation to over 200 people.
In Indonesia, Rio Tinto wanted to do something about the enormous environmental damage that follows when sludge from the mining industry is discharged straight into the watercourses.
Socially responsible funds
In the USA, the trade union movement has for a long time allied itself with other environments and contributed to the development of so-called "socially responsible investment funds" (SRI funds).
Such SRI funds approach the stock market in two ways. They partly place the money «socially responsible» in companies that satisfy the fund's requirements for environmental profile, professional and social criteria, etc. And they enter into companies that they will influence from within – from the shareholders' general meeting.
Such SRI funds already account for one-eighth of the total fund capital in the United States.
There is every reason to ask: If American SRI funds can make demands, why can not the Norwegian Petroleum Fund?
A ban list – and a question
Singapore Technologies Engineering (landmines)
General Dynamics (Ammunition with depleted uranium)
Novartis, Monsanto (Genetically Modified Products)
Philip Morris, British American Tobacco, Japan Tobacco (tobacco)
Rio Tinto (environmentally harmful mining)
Nortel, Bank of Tokyo, Mitsubishi (Burma)
In addition, it could be fun to know how those who manage Norwegian oil shares in Rio Tinto, voted at the general meeting in May last year: Did they vote for Rio Tinto to be bound by the ILO conventions – or did they vote against?
The answer from Schjøtt Pedersen
»A lot of work has been done to find ways to take ethical considerations into account in the Petroleum Fund's investments, but it has proved very difficult. Not least, one must assume here that one must have general investment criteria, so that one can easily find out whether a company should be included or not. And then it is the case that Norges Bank and the Ministry of Finance cannot examine each individual company in an investment universe consisting of 20.000 companies – many groups with a very varied business, and many groups where the business changes relatively quickly. And therefore it is difficult at all times to have an overview of what the individual companies in which one has invested have in their activity.
Furthermore, it must also be possible to verify it.
Another important element is that there must be a connection with what we do internally and abroad. And it is thus the case that the Norwegian state has also had investments in companies that run arms production, Kongsberg and Raufoss are important examples of that. "
