13 Observation
Section 6(4) of the ethical guidelines states that: “Observation may be decided when there is doubt as to whether the conditions for exclusion are met or as to future developments, or where observation is deemed appropriate for other reasons.”
Tabell 13.1 Companies under observation at the close of 2022
Company | Criteria | Topic |
|---|---|---|
Adani Ports & Special Economic Zone Ltd | War or conflict | Business association with the armed forces in Myanmar |
Astra International Tbk PT | Severe environmental damage | Deforestation |
Bombardier Inc | Gross corruption | Corruption |
Hyundai Engineering & Construction Co Ltd | Gross corruption | Corruption and bid rigging |
Hyundai Glovis Co Ltd | Environmental damage and Human Rights | Beaching |
Kirin Holdings Ltd Co | War or conflict | Business association with the armed forces in Myanmar |
Marfrig Global Foods SA | Severe environmental damage | Deforestation |
Pan Ocean Co Ltd | Environmental damage and Human Rights | Beaching |
Supermax Corp Bhd | Human Rights | Poor working conditions |
In addition, Norges Bank is responsible for following up a further 13 companies which it has placed under observation at its own initiative with reference to the coal criterion.
The Council on Ethics is responsible for following up companies that have been placed under observation at its recommendation or where Norges Bank has decided that the Council shall observe a company. The Council may, at any time during the observation process, recommend that a company be excluded or that observation be terminated. In 2022, the observation of four companies was terminated. Four new companies were placed under observation during the year. The Council now has nine companies under observation.
During the observation period, the Council normally submits one or more observation reports to Norges Bank on each company which has been placed under observation at the Council’s recommendation. The Council obtains information from open sources but can also investigate matters with the help of consultants. The observation reports are published on the Council’s website in the same place as the original recommendation.
The observation process depends on good cooperation between the companies concerned and the Council. A draft version of the observation report is sent to the companies for their comments before it is submitted to Norges Bank. Meetings are often held with the companies. In 2022, the Council met with three companies that were under observation and was in written communication with a further four companies.
In 2022, no observation report was issued on Astra International, which has been on the observation list on the grounds of its plantation operations since 2015. This was because the Council has recently started examining a different matter relating to the company, which must be assessed in more detail before the Council can submit its report.
Pan Ocean has been under observation since 2018 because it has disposed of ships for break-up by means of beaching. If new ships are broken up in this way, the Council would normally recommend the company’s exclusion. The company did dispose of a ship for beaching in Bangladesh in 2021. Following dialogue with the Council, the company has announced the adoption of a new policy for the disposal and break-up of decommissioned vessels. This policy will ensure that, henceforth, the company’s decommissioned vessels will be disposed of in a responsible manner. In an observation report to Norges Bank, the Council has proposed that the observation period for this company be extended for a further four years.
Four of the companies under observation were placed on the list in 2022. A summary of the recommendations may be found in the previous chapter.