Norway’s huge sovereign wealth fund – Norwegian Government Pension Fund Global (GPFG) – is excising more businesses from its NOK13.2tn (€1.23tn) portfolio for supplying Myanmar’s military junta, now banning one Chinese and one Indian stock in which it had a total of €32.2m invested a year ago.
Norges Bank announced late yesterday that it is excluding Chinese state-owned AviChina Industry & Technology and Indian government-owned Bharat Electronics from the Norwegian oil fund because of “unacceptable risk” the firms are selling weapons to Myanmar.
According to data on the website of Norges Bank Investment Management (NBIM), the GPFG had holdings in the two companies worth NOK173m and NOK195m, respectively, at the end of 2021, totalling NOK368m (€32.2m).
The GPFG’s Council on Ethics said in a statement it was recommending the firms be excluded based on an unacceptable risk that they were responsible for the sales of weapons to states in armed conflicts, “where the weapons are used in ways that constitute serious and systematic breaches of the international rules on the conduct of hostilities”.
Norges Bank, the Norwegian central bank which runs the GPFG through its subsidiary NBIM, said the council’s recommendation stated that AviChina was thought to have sold light combat aircraft to Myanmar’s government in December.
It added that Bharat Electronics supplied military equipment to the armed forces in Myanmar, with the producer of aviation and defence electronics delivering equipment developed to remotely control weapons from inside an armoured vehicle.
The council said it was reported that such vehicles were used in attacks on civilians, and that the specific type of light aircraft sold by AviChina, the K-8, had previously been used in combat in Myanmar.
Norges Bank said the blacklistings were based on recommendations from the Council on Ethics of 23 August 2022, adding that although its own executive board had not assessed all aspects of the advice, but was satisfied the exclusion criteria had been fulfilled.
IPE has contacted AviChina and Bharat Electronics for comment.
In December, NBIM banned two linked Thai oil and gas companies from the SWF’s portfolio because of cooperations with the Myanmar military junta, in which it had portfolio holdings worth over €100m at the end of 2021.
Citing reports from several UN bodies, the Council on Ethics said in its recommendation to Norges Bank last August that both before and after the February 2021 coup by the armed forces in Myanmar, the country’s military had “perpetrated extremely serious abuses against the civilian population, relating in part to ongoing armed conflicts in the country”.