EUROPE - The NOK2.8trn (€352bn) Government Pension Fund Global (GPFG) is planning to exclude two Israeli companies and one Malaysian company, worth a combined NOK15m, from its investment universe.

The Israeli companies were excluded for breaching the fourth Geneva Convention, which states that building settlements on occupied territories is forbidden, while the third company was found to be logging illegally.

The Norwegian minister of finance, Sigbjørn Johnsen, said: "The decision to exclude these companies from the GPFG is based on the Council on Ethics assessment that they are contributing to or are themselves responsible for grossly unethical activity."

The first two companies, Africa Israel Investments, which holds a majority stake in construction company Danya Cebus, were found to be developing settlements in occupied Palestinian territory.

The fund owned share worth NOK7.2m in the company at the end of last year.

Samling Global, a forestry company based in Malaysia, was found by the fund's council of ethics to have "extensive and repeated breaches" of its licence.

A statement from Norway's ministry of finance read: "The recommendation of the Council on Ethics is based on field surveys, satellite image analysis and evaluation of publicly available documentation."

Johnsen added: "The Council on Ethics has assessed Samling Global and concluded the company's forest operations in the rainforests of Sarawak and Guyana contribute to illegal logging and severe environmental damage."

In the case of the Israeli companies, it is the first time the Council of Ethics recommended divesting due to what it deemed serious violations of individuals' rights.

Earlier this year, the fund followed through with its pledge to remove 17 tobacco-producing companies from its roster.

In a related matter, the Swedish AP fonds Ethical Council is in continued talks with Canadian mining company GoldCorp following accusations of human rights abuse at a Guatemalan mine run by a subsidiary.

Following an earlier independent study, the Human Rights Impact Assessment (HRIA) that examined the working conditions in the mine, the company has responded to accusations and committed to take action, Annika Andersson, chairwoman of AP fund's Ethical Council told IPE.

"They've committed to take action on most of the recommendations in the study," said Andersson, who is also AP4's head of corporate governance.

"Our philosophy is to engage with companies with the aim of changing their behaviour, so we will not divest at the moment.

"We've started this engagement process and the HRIA study. Goldcorp has committed themselves to take action according to the recommendations in the study. We will follow this closely."