One producer of cluster munitions and two producers of nuclear weapons excluded from the Government Pension Fund - Global

The Ministry of Finance has excluded Hanwha Corporation (a South Korean company), Serco Group Plc (a British company) and GenCorp Inc (an American company) from the Government Pension Fund – Global, pursuant to the Ethical Guidelines for the Fund.

– According to the Council on Ethics, these companies produce cluster munitions and nuclear weapons, respectively, and we cannot participate in the funding of this type of production, says Kristin Halvorsen, the Minister of Finance.

In addition, the Council on Ethics has looked into the activities of Rheinmetall AG (a German company) and concluded that said company does not produce cluster munitions at present. That company is therefore not excluded from the Fund.

Pursuant to Point 4.4 of the Ethical Guidelines, the Council on Ethics shall issue recommendations on negative screening of companies on the basis of production of weapons that through their normal use may violate fundamental humanitarian principles. It follows from NOU:22 2003 (the Graver Report), and the subsequent deliberation of the Guidelines by the Storting (Parliament), that the production of cluster munitions and nuclear weapons falls within the scope of Point 4.4 of the Guidelines.

The Ministry of Finance has previously excluded 7 producers of cluster munitions and 9 producers of nuclear weapons, based on recommendations from the Council on Ethics. More detailed descriptions of cluster munitions and nuclear weapons, as well as a description of which components of such weapons fall within the Guidelines, are to be found in previous recommendations.

In a recommendation of 15 May 2007, the Council on Ethics recommended that Hanwha Corporation and Rheinmetall be excluded from the Fund. Both companies were contacted prior to the recommendation being rendered, and invited to comment on the premises underpinning the decision. Hanwha confirmed by letter that it produces air- and ground-delivered cluster munitions. Rheinmetall AG did not reply to the request from the Council on Ethics until after the recommendation of 15 May had been rendered. The Council concluded, on the basis of the reply from the company and additional investigations carried out by the Council on Ethics, that it had been established that the company no longer produces cluster munitions or parts for cluster munitions. The Council on Ethics rendered, against that background, a new recommendation on 5 September, to the effect that Rheinmetall should not be excluded from the Fund.

The recommendations of 15 November 2007 pertaining to Serco Group Plc and GenCorp Inc result from the Council on Ethics’ review of the small-cap segment, which is currently being phased into the benchmark portfolio of the Fund. GenCorp Inc. and Serco Group Plc have been requested, in letters from Norges Bank, to confirm or deny that they produce weapons that may be characterised as nuclear weapons. GenCorp has not responded. Serco Group has replied to the request, and confirmed that it maintains, under a joint venture with the Atomic Weapons Establishment, the nuclear weapons of the United Kingdom. The Council has based its recommendations on information from the companies, hereunder websites and press releases.

The Ministry of Finance has decided to adopt the Council’s recommendations that Hanwha Corporation, Serco Group Plc and GenCorp Inc should be excluded from the investment universe of the Fund, based on its assessment that the companies produce cluster munitions and nuclear weapons, respectively.

The disposal of shares of the companies has now been completed. This decision is announced retroactively in order to facilitate the implementation of said disposals.

The recommendation from the Council on Ethics is available on the Ministry of Finance website

Read more about the Council on Ethics for the Fund on: http://www.etikkradet.no