Norwegian oil fund accused of ignoring OECD guidelines
GLOBAL – The Norwegian Bank Investment Management (NBIM), which manages the Norwegian Pension Fund Global on behalf of the Norwegian government, is alleged to have violated the OECD Guidelines for Multinational Enterprises.
It also lacks a strategy for identifying and handling possible violations of human rights in the companies they invest, according to the Norwegian National Contact Point (NCP) for the OECD guidelines for Multinational Enterprises, an independent body that assesses possible violations of these international recognised guidelines for responsible business conduct.
NBIM has refused to cooperate with the Norwegian NCP in its assessment of whether the bank breaches human rights through its investment in the mining company POSCO, of which NBIM owns 0.9%.
POSCO India plans to construct a 12m tonne per annum integrated steel plant with related infrastructure in the Jagatsinghpur District.
The NCP claims this project will lead to the physical and economic displacement of more than 20,000 people, and that NBIM should have used its influence to prevent or mitigate the damage.
But NBIM argued that OECD guidelines did not apply to minority shareholders and for that reason refused to give answers to written questions.
Hans Petter Graver, chairman at the Norwegian NCP and a professor of law, said: "The guidelines do apply – the questions is how they apply for an investor with numerous small shareholder positions.
"It is especially regrettable that the governmental manager of the Norwegian pension fund global, and one of the biggest investors in the world, does not respect the guidelines Norway has signed."
On 9 October 2012, organisations Lok Shakti Abhiyan, KTNC Watch, Fair Green and Global Alliance and Forum for Environment and Development (ForUM) notified a specific instance with the National Contact Points of South Korea, Norway and the Netherlands, respectively, with regard to an alleged breach of the guidelines by the South Korean Pohang Iron and Steel Enterprise (POSCO) and two of its investors – the Dutch pension fund ABP and its pension administrator APG and the Norwegian Government Pension Fund Global.
ABP has chosen to cooperate with the Dutch Contact Point.