KerrMcGee Corporation is again included in the Government Pension Fund - Global

According to a decision from the Ministry of Finance the American company KerrMcGee Corporation (“KerrMcGee”) is no longer excluded from the Norwegian Government Pension Fund – Global. The decision is based on a recommendation from the Council on Ethics for the Fund. In its recommendation, the Council refers to the fact that KerrMcGee has ceased the activities which were the basis for the exclusion of the company in 2005.

- This decision shows the totality of the ethical guidelines for the Government Pension Fund - Global. If the basis for an exclusion no longer applies, the company in question will again be included in the Fund, says Minister of Finance Kristin Halvorsen.

KerrMcGee was excluded from the Fund during summer 2005 because the company’s activities in Western Sahara were considered to constitute a particularly serious violation of fundamental ethical norms according to the Ethical Guidelines Point 4.4. The decision to exclude KerrMcGee was announced on 6 June 2005. In its assessment of the company’s activities the Council on Ethics among other emphasised the fact that the framework of international law, including the UN Charter and the UN Convention on the Law of the Sea, imply that economic activities in Non-Self-Governing Territories may only take place subject to the consent of the local people and shall not adversely affect the economic interests of the peoples of such territories. The framework of international law thus seeks to make it unlawful to benefit economically from exploitation of natural resources, if such exploitation has been based on occupation. The Council further found that the economic activities of Kerr-McGee off shore Western Sahara, on behalf of Morocco, contributed to a possible strengthening of Morocco’s sovereignty claims regarding the territory. The Council on Ethics did not assess whether Morocco’s exploration activities constitute a violation of international law, but based on the rationale behind the general rules of international law relating to this subject matter, the Council found that the economic activities off shore Western Sahara could be considered unethical.

According to the Ethical Guidelines Point 4.6 the Council shall “ …review on a regular basis whether the reasons for exclusion still apply and may against the background of new information recommend that the Ministry of Finance revoke a decision to exclude a company”.

The Council on Ethics has this spring ascertained that KeerMcGee has ceased its activities in the Boujdour field off shore Western Sahara. Thus the company is no longer considered to act in breach of the Ethical Guidelines. Based on this the Council on Ethics recommended on the 24 May this year, that the Ministry of Finance revoke the decision to exclude KerrMcGee from the investment universe of the Pension Fund – Global.

The Ministry of Finance has decided to follow the recommendation of the Council on Ethics to revoke the earlier decision to exclude KerrMcGee. Norges Bank shall have two full months in which to be able to buy shares in companies that are again being included in the investment universe, before this is made public. On 30 June the Ministry of Finance informed Norges Bank that KerrMcGee is no longer excluded from the Fund’s investment universe.