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Norwegian fund excludes British company

NORWAY - The NOK2trn (€250bn) Norwegian government pension fund has excluded UK mining and metal company Vedanta Resources from its investment universe because of human rights violations and for causing environmental damage.

The Norwegian finance ministry has concluded the exercise of ownership rights would not influence Vedanta's behaviour in a positive direction.

"We cannot hold shares in such a company," said finance minister Kristin Halvorsen. The exclusion also includes two subsidiaries of Vedanta Resources - Sterlite Industries and Madras Aluminium Company.

The ethical council advising the ministry, on how to invest oil revenues which finance the pension fund, found Vedanta "causes serious damages to people and the environment as a direct consequence of their activities in India".

Those violations include dangerous working conditions in the mines and factories, involvement in bribery and corruption, abuse and forced eviction of tribal peoples, as well as irresponsible handling of hazardous waste.

"In the council's view, the company seems to be lacking the interest and will to do anything about the severe and lasting damage that its activities inflict on people and the environment," the council concluded in its letter to the ministry.

It added the violations seem to  "indicate a pattern in the company's practices where such violations are accepted and make up an established part of its business activities".

Its recommendation is based on surveys and investigations conducted or commissioned by Indian authorities, reports from national and international non-governmental organisations, articles in Indian and international newspapers as well as reports commissioned by the ethical council itself.

From 31 December 2006, the Government Pension Fund - Global held shares worth some NOK 81m in the company, amounting to an ownership share of 0.16%.

Vedanta Resources reported a 75.6% year-on-year increase in group revenue to $6.5bn (€4.4bn) for the first half of its financial year ending March 2007.

For a full list of companies excluded by the Norwegian government pension fund go to the homepage of the Norwegian finance ministry.

If you have any comments you would like to add to this or any other story, contact Barbara Ottawa on +44 (0)20 7261 4618 or email barbara.ottawa@ipe.com

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