Norges Bank Investment Management (NBIM) announced it is putting Italian shipbuilder Fincantieri under observation over alleged human rights violations, while ending its observation of Polish energy group Orlen after its earlier media ownership stopped being a concern.
The manager of Norway’s NOK20trn (€1.7trn) Government Pension Fund Global (GPFG) said it had made both decisions on recommendations from the fund’s Council on Ethics.
The GPFG had investments of NOK463m in Fincantieri at the end of last year, and NOK59m in Orlen.
NBIM said its board had decided to put Fincantieri under observation for two years “due to an unacceptable risk that the company contributes to serious or systematic human rights violations”, in reference to the GPFG’s conduct-based criterion in its guidelines.
The council said a series of legal proceedings had revealed that several thousand people employed by subcontractors at Fincantieri’s shipyards had been subjected to “grossly exploitative working conditions”.
“The Council accords weight to the fact that these practices have, in particular, impacted immigrants who are dependent on employment contracts to obtain residence permits in Italy,” it said.
Although it said Fincantieri’s new initiatives might lower the risk of labour rights violations at its shipyards, the council said there was still a lot of uncertainty.
Regarding Orlen, whose largest shareholder is the Polish state, NBIM said the company had been under observation since February 2023 due to an unacceptable risk it contributed to serious or systematic human rights violations in relation to its acquisition of the newspaper publisher Polska Press.
“According to the Council on Ethics, the company has since implemented several changes indicating that there is no longer an unacceptable risk of the company contributing to restricting press and freedom of expression,” NBIM said.
In response to the decision by NBIM, Orlen said that since taking office, its chief executive officer, Ireneusz Fąfara, had criticised the previous management’s decision to acquire Polska Press, and vowed to take steps to secure Orlen’s removal from the Norges Bank watchlist.
Fąfara said the company was pleased with Norges Bank’s decision. “Orlen is regaining investor trust, which has been one of my top priorities since day one,” he said.
“It is also a clear confirmation that the steps taken by the current management to restore proper standards of corporate governance are putting the company back on the right track,” Fąfara added.
IPE has contacted Fincantieri for comment.
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