Decisions about active ownership and divestment

The Ministry of Finance has concluded its deliberation of eight recommendations from the Council on Ethics about observation and exclusion of companies from the Government Pension Fund Global's (GPFG) investment universe. In five of the cases the Ministry has decided to follow the Council on Ethics' recommendation to exclude the relevant companies. In three of the cases the Ministry has decided to ask Norges Bank to include the cases in its active ownership activities.

Decisions to exclude five companies
The Ministry of Finance has decided to exclude the companies WTK Holdings Berhad, Ta Ann Holdings Berhad, Zijin Mining Group and Volcan Compañia Minera from the investment universe of the GPFG. The companies are excluded based on an assessment of the risk of severe environmental damage. The Ministry has furthermore decided to exclude the company Zuari Agro Chemicals Ltd. The company is excluded based on an assessment of the risk of contributing to the worst forms of child labour.

The Ministry's decision to exclude the above mentioned companies is made on the basis of the recommendations from the Council on Ethics. The Ministry has not made an independent assessment of every aspect of the individual recommendation in question, but is satisfied that all the recommendations establish with reasonable certainty that investments in the companies above represent an unacceptable risk of violating the Guidelines for observation and exclusion.

Decisions about active ownership
The Ministry of Finance has decided to ask Norges Bank to raise issues about mining related environmental damage with the company AngloGold Ashanti as part of its active ownership efforts. The Council on Ethics has recommended that the company is excluded from the investment universe of the GPFG. The Council says that it has had comprehensive dialogue with the company, and that the company in recent years has introduced standards and implemented measures to improve the situation. Norges Bank has in a letter to the Ministry of Finance announced that it is considering enhancing its active ownership efforts aimed at the mining sector. Norges Bank considers that active ownership can contribute positively in this case. The Bank writes that AngloGold Ashanti has recently taken steps in the right direction, but that a process of active ownership must take place over a minimum of five years. The Ministry will ask Norges Bank to report on the exercise of ownership through the five-year period. At the end of the period the Ministry will ask the Council on Ethics and Norges Bank to assess the situation and the company.

The Council on Ethics has advised that the companies Royal Dutch Shell Plc. and Eni Sp.A.'s operations in the Niger Delta are placed under observation. The Ministry of Finance has decided to ask Norges Bank to include oil spills and the environmental conditions in the Niger Delta in its ownership efforts for a period of between five and ten years. The Ministry will ask Norges Bank to report on its exercise of ownership. The Ministry has therefore decided not to follow the recommendations from the Council on Ethics to place the two companies under observation.

Recommendations from the Council on Ethics about exclusions

Read the recommendations from the Council on Ethics concerning:

• Royal Dutch Shell Plc.
• Eni Sp.A. (summary)
• AngloGold Ashanti

More about the Council on Ethics for the Government Pension Fund Global