INTERVIEW-Norway oil fund may sell out of mines that mistreat workers – by Gwladys Fouche (Reuters India – May 29, 2013)

OSLO, May 29 (Reuters) – Norway’s $740-billion sovereign wealth fund, the world’s largest, is examining labour conditions in the mining industry and may sell out of firms that violate workers’ rights, the head of the fund’s ethics council said.

The fund could also divest from companies involved in cattle ranching, if working conditions on farms are exploitative, and from firms implicated in illegal or unregulated fishing.

“Working conditions, slave-like working conditions, … is a very important priority,” said Ola Mestad. “We have been trying to identify different sectors: (one of them) could be mining.”

The fund invests Norway’s revenues from oil and gas production for future generations. It is one of the world’s largest investors with holdings in some 7,500 companies.

It has excluded firms for what it deems to be unethical behaviour based on the advice of its ethics council, an independent body reporting to the finance ministry, which has ultimate responsibility for the fund. The ministry tends to follow the council’s recommendations. The fund also bans investments in some industries – nuclear arms, anti-personnel landmines, cluster bombs and tobacco.

The fund last excluded tobacco producers Schweitzer-Mauduit and Huabao International Holdings earlier this month, citing their involvement in the production of reconstituted tobacco leaf.

The fund has holdings in hundreds of mining firms and has invested heavily in the biggest ones.

The council will also be investigating potential labour abuse in cattle ranching – the raising of livestock on large farms, usually in South America.

Mestad said it was very difficult to investigate labour abuse in those two industries.

“Although there is widespread labour abuse in the world, it is not usually related directly to the multinational companies in which we are invested: it will be in the supply chain,” said the law professor at the University of Oslo.

“So the question of when to attribute (responsibility) to the multinational companies is extremely complicated,” Mestad said in the interview late last week.

This week, a committee set up to safeguard the Organisation for Economic Cooperation and Development’s guidelines for multinational companies said the fund lacks “a strategy for identifying and handling possible violations of human rights in the companies they invest”.

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