NORWAY - The NOK1.7trn (€209bn) Norwegian Government Pension Fund - Global has excluded the South Korean Poongsan Corporation from its investment portfolio for producing cluster bombs.

The decision came after a recommendation by the Council on Ethics which is continually screening the fund's investments for violations of its ethical guidelines.

In September the council had informed the ministry that according to information gathered on the Poongsan Corporation's website the company is producing cluster bombs.

An attempt by the Norges Bank, which runs the state pension fund, to receive information from the company on the allegations was unsuccessful. Prior to the disinvestment at the end of November the fund had held shares worth NOK8m in Poongsan.
"According to the Council on Ethics, this company produces cluster munitions, and we cannot participate in the funding of this type of production," Kristin Halvorsen, Norwegian minister of finance, said in a press release.

In summer 2005 the fund had excluded several producers of cluster munitions following a recommendation by the Council on Ethics founded in 2004.

The first exclusion for production of cluster bombs included Alliant Techsystems, European Aeronautic Defence and Space Co. (EADS), EADS Finance BV, General Dynamics Corp., L3 Communications, Lockheed Martin Corp., Raytheon Co. and Thales SA.

Earlier this year, EADS informed the fund that it no longer owns the company TDA, which the council considered to produce cluster bombs, in a joint venture with Thales S.A.

However, EADS remains excluded from the fund's investments for involvement in the production of nuclear bombs, a spokesman for the ministry of finance confirmed.

Meanwhile, the Marriot hotel group has issued a comprehensive policy committing it to fight child prostitution following pressure from AP1 and others.

After allegations that Marriot had been used as a vehicle for child prostitution in Costa Rica in the late 1990s shareholders including the Swedish buffer fund Första AP-Fonden, DnB NOR Asset Management and analysis provider GES Investment Services and others demanded the hotel group to draw up a child protection policy.

In late 2005, the Swedish fund had filed a shareholder resolution for the adoption of a human rights policy. Marriott had then asked the shareholders to be given more time to work on the policy.  

"According to our ownership policy, we have a clear mandate to ensure that fundamental human rights are respected," said AP1 CEO William af Sandeberg.