For a government so often associated with the promotion of universal human rights (just think of Liu Xiaobo's Nobel Prize last week for his "long and non-violent struggle for fundamental human rights in China"), it may come as a shock to hear that Norway is complicit in human rights abuses in Burma (Myanmar) -- shocking but true.
What is most perplexing about Norway's complicity is that this oil rich, socially progressive country is known to have the world's most responsible, transparent, and ethical investment policy. Other countries and socially responsible investors actually look to Norway to benchmark their own policies. The world's second largest exporter of gas and sixth largest exporter of oil (providing Europe with much of its hydrocarbon needs and profiting greatly in the process), Norway is literally the world's best at managing vast natural resource wealth; both in its returns for the people of Norway (over $33 billion last quarter alone), and for the responsible nature of its investments.
This all makes my reason for being in Oslo right now something of an oddity. I'm here to launch a new 40-page report, entitled Broken Ethics: The Norwegian Government's Investments in Oil and Gas Companies Operating in Burma (Myanmar), exposing that Norway has $4.7 billion of its own oil wealth invested in 15 oil and gas companies in Burma. All of the companies are associated with serious and foreseeable human rights abuses, while also enriching the country's repressive military rulers.
Investing in companies operating in Burma is not alone ethically problematic for Norway, despite that Burma is a no-go zone for Norwegian companies, including StatOil, the very firm that generated Norway's massive wealth. The problem in this case is that the Norwegian Pension Fund-Global, the world's second largest sovereign wealth fund, invests in companies that are contributing to severe human rights abuses in Burma, as documented through clandestine investigations by my colleagues and I over the last several years. This puts the Fund in violation of its own standards.
Norway's system to guard against this type of complicity started in 1990, when the Ministry of Finance created the Fund as a repository of the peoples' excess oil and gas wealth, which would be invested in stocks and bonds in global capital markets. In 2002, the Norwegian government appointed a committee to examine the ethics of those investments, which eventually resulted in the creation of the Ethical Guidelines, a clear set of rules to determine whether the Fund's holdings in companies are ethical. In 2004, the government responded to pressure and appointed the Council on Ethics as an independent body to assess whether the Fund's investments are in line with the Guidelines.
The Council's job is complex but straight forward. First, it considers whether there is a connection between a company's operations and violations of human rights, environmental, or other ethical standards. If a connection exists, then the Council considers whether there is an unacceptable risk that the company's operations will contribute to ongoing or future violations. If the risk is clear and present, then the Council is mandated to recommend that the Norwegian Ministry of Finance either exclude the company from the Fund or put it under observation.
Dissatisfied with the Council's inaction thus far, our new report essentially screened 15 companies for the Council and found that the Fund's holdings in the companies put it in violation of the Ethical Guidelines.
The companies named in the report are some of the world's biggest, hailing from eight countries, including the US (Chevron), France (Total), South Korea (Daewoo International), China (PetroChina), India (GAIL), and Thailand (PTT/PTTEP).
New firsthand testimonies from villagers in Burma within the last few years describe forced labor on gas pipeline-related infrastructure, threats, harassment, imprisonment, torture, and targeted extrajudicial killings of villagers who were deemed a "security" threat to areas around gas pipelines. Uncompensated land confiscation is also common. These abuses and others are all committed by the Burmese Army in service to the oil companies and their projects. Some of these projects also stand to exacerbate ethnic tensions when they pass through Shan State, where an ethnically-charged civil war is looming.
At the core of our new report is a cautionary tale not only for Norwegians but for investors of the world. The moral is that if you're knowingly invested in companies contributing to human rights abuses, you're complicit. But like Norway, you can avoid that complicity. You can sell your shares in the problematic company; you can get involved in shareholder activism to change corporate behavior from within; or you can manage your portfolio through any number of socially responsible investment firms, investing only in companies that satisfy filters of your choice.
Time will tell how Norway will respond, but the bottom line remains: To accept investment returns at the expense of basic human rights is ethically indefensible.
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more