NORWAY - The ministry of finance has excluded two companies from the investment universe of the NOK 2.090trn (€240bn) Government Pension Fund - Global, over concerns relating to cluster munitions and environmental damage.

Following recommendations from the Council on Ethics for the Government Pension Fund - Global, the government has ordered Norges Bank to sell investments in Textron Inc. Corporation and Barrick Gold Corporation.

The exclusion of Barrick Gold follows the completion of an investigation into suggestions of "severe environmental damage" caused by the Porgera Mine in Papua New Guinea which originally began in October 2005.

The recommendation from the Council on Ethics revealed the Canadian mining company had been accused of causing "extensive environmental degradation" in several countries, so in 2005 took the decision to assess the pension fund's investments in the company, which was then called Placer Dome.

Following Barrick Gold's acquisition of Placer Dome in 2006, the Ethics Council deferred further investigations to see if the new company would make an effort to prevent or reduce the damage caused by using a natural river system to transport and dispose of waste from the mine.

The Council said as this did not happen it resumed its investigations in 2007 and following two enquiries to the company it concluded "Barrick's operation of the Porgera mine entails an unacceptable risk of extensive and irreversible damage to the natural environment".

It noted the company's river disposal practice "is in breach of international norms" and Barrick's claims that the mine does not cause long-term and irreversible damage "carry little credibility" - a view supported a lack of openness and transparency in environmental reporting says the committee, which also warned it believed the firm's "unacceptable practice will continue in the future".

Kristin Halvorsen, finance minister, said: "In its assessment, the Council on Ethics concluded that Barrick Gold Corporation is causing severe environmental damages as a direct result of its operations. I have therefore decided to follow the Council's recommendation on exclusion of Barrick Gold from the investment universe of the fund."

On its website, Barrick Gold says its vision is "to be the world's best gold company by finding, acquiring, developing and producing quality reserves in a safe, profitable and socially-responsible manner".

Meanwhile, figures also showed the pension fund had previously owned Textron shares valued at NOK 249m (€28m), while holdings in Barrick Gold Corporation were valued in July 2008 at NOK 1.248bn (€140m).

Although the pension fund has excluded nine companies that produce cluster munitions since 2005, this has been based on the Council of Ethics definition of what constitutes a cluster weapon.

In its 2005 recommendation the Council decided certain types of cluster munitions - known as 'Advanced Munitions/Sensor Fuzed Weapons' - "should not constitute grounds for recommendation of exclusion".

However following the new international Convention on Cluster Munitions, signed in December 2008, the Council on Ethics has decided to base future exclusions on the definitions provided in the treaty.

In its recommendation it stated: "The convention's technical definition of what constitutes cluster munitions is largely in line with the criteria the Council applied in 2005, but in some areas it is more stringent. This implies that production of munitions which have previously not qualified for recommendation of exclusion may fall inside the treaty's definition of cluster munitions."

After studying information about the relevant cluster weapon on Textron's website and receiving confirmation from the company that some aspects of the current configuration of the weapon do not fulfil the convention's criteria for acceptable munitions, the Council has recommended exclusion of the firm from its pension fund investments.

"The company produces cluster weapons, which are banned pursuant to the Convention on Cluster Munitions. We cannot participate in the funding of this type of production," said Halvorsen.

The decision brings the total number of companies excluded from the fund to 30, the most recent exclusion being Rio Tinto over environmental concerns, announced in September 2008.  (See earlier IPE article: Norway excludes Rio Tinto over environmental damage)


Have Your Say: A spokesman from Textron said: "We share the international community's goal of limiting the impact of war, particularly hazardous unexploded ordnance, on civilian populations."


"We maintain an open dialog with several NGOs and nations of both the Convention on Cluster Munitions and the U.N.'s Convention on Certain Conventional Weapons, sharing technical information to provide greater clarity around the differences in today's technologically advanced cluster munitions, including the Sensor Fuzed Weapon."

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