Norway Cites Ethics, Dumps Stock in Wal-Mart, Freeport-McMoRan

Norway’s Government Pension Fund, Global, invests the nation’s surplus oil wealth in foreign stocks and bonds. Yesterday, it announced that it had sold off its holdings in Wal-Mart and Freeport-McMoRan Copper & Gold, divesting itself of about $430 million in stock by the end of last year. The fund cited ethical shortcomings at both companies. They become the 18th and 19th companies banned by Global.

Finance Minister Kristin Halvorsen said in a statement, “These companies are excluded because, in view of their practices, investing in them entails an unacceptable risk that the fund may be complicit in serious, systematic or gross violations of norms.” The Finance Ministry added, “The recommendation to exclude Wal-Mart cites serious/systematic violations of human rights and labor rights. The recommendation to exclude Freeport is based on serious environmental damage.”

Wal-Mart did not respond when Reuters attempted to discuss the issue, while Freeport denied that it had caused “ extensive, long-term and irreversible” environmental damage to the natural river system in New Guinea, Indonesia by dumping tailings in the river. The company disputes that the tailings were toxi and blames a misunderstanding for the situation.

Global’s portfolio was worth 1.48 trillion Norwegian crowns (US$246.2 billion) at the end of March, managed for the government by Norway’s central bank. Minister Halvorsen said, “It is of great value that others see what we do.” Managing that much money can be a way for a country like Norway to throw its conscience around within the global capital markets.

That said, selling off the stock and banning future investment isn’t all that effective. Stockholder activism could have made a difference in the case of Wal-Mart, less so for Freeport. Buying a larger stake, securing a seat or two on the board and raising hell from within might have had a bigger effect. Right now, all that happened was a brief bit of bad press from the companies. Real change requires more than an act of conscience; it takes a real fight.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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