AP Features, November 7th, 2007
The Norwegian government global pension fund has dropped British mining and metals group Vedanta Resources PLC over concern about its environmental and human rights record, the finance minister said Wednesday.
Norway, a major oil and natural gas exporter, sets aside surplus revenue in the Government Pension Fund-Global — formerly the oil fund — currently worth about 2 trillion kroner ($374 billion).
A national Council of Ethics routinely reviews investments by the fund, and, acting on its findings, the finance ministry on Aug. 28 ordered the fund to sell off about 70 million kroner ($13 million) in Vedanta shares.
"Excluding a company from the fund is an expression of our unwillingness to run an unacceptable risk of contributing to grossly unethical activities," Finance Minister Kristin Halvorsen said about the decision.
The council said Vedanta's core business is linked to mining and production of copper, aluminum, and zinc in India, and that it had investigated the environmental, human rights and labor practices of four Indian subsidiaries.
The council said allegations leveled at the company about its environmental damage and complicity in human rights violations, including abuse and eviction of tribal peoples, "are well founded."
It said the company seemed to lack the interest and will to do anything about "the severe and lasting damage."
Alex Pettifer, a spokesman for Vedanta in London, said he could not comment because the Norwegian decision was probably linked to an ongoing court case in India over the company's mining in Orissa.
Vedanta, which also has operations in Australia and Zambia, said on its Web site that it is committed to socially responsible business, and seeks to minimize the environmental impact of its operations. Its business ethics policy includes employee training, equal opportunity, and providing housing, schools, medical and recreations facilities for its staff and their families, it said.
The Norwegian council said its recommendation was based on reports from Indian authorities, the news media and nongovernment groups, as well as its own investigations.
"The violations against the environment and human rights that have been revealed are recurrent ... and have taken place over many years," the council said in its recommendation.
Since the Norwegian government imposed ethical guidelines in 2004, 19 other companies remain excluded from its fund for reasons that include environmental and human rights concerns, as well as development of nuclear weapons.
Vedanta shares were down 0.9 percent to 2,095 pence ($43.67) on the London Stock Exchange.
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