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December 23, 2010
Norway's Pension Fund Invests in Companies with Ties to Burma's Military Regime
    by Robert Kropp

Despite ethical guidelines for Norway's pension fund, EarthRights International finds its investments in oil and gas companies in Burma contribute to human rights violations.


More than 70% of the foreign reserves held by the military regime of Burma, considered one of the most corrupt governments in the world, are provided by foreign oil and gas companies, including the US-based Chevron. According to EarthRights International (ERI), "Significant portions of this revenue end up in bank accounts held for the benefit of individuals closely associated with the military regime."

Furthermore, "Unreasonably large military expenditures continue to undercut investments in social and health infrastructures, jeopardizing the country's future development."

In its recently published
report, ERI focuses on the estimated $4.7 billion that Norway's sovereign wealth fund has invested in 15 oil and gas companies, including Chevron, whose operations in Burma continue to provide revenue to the military regime.

ERI's focus on Norway is based on the government's ethical guidelines for investment by its pension fund, which state that companies contributing to serious or systematic human rights violations, or gross corruption, may be excluded from the investment universe. A Council on Ethics provides Norway's Minister of Finance with recommendations regarding investment that is consistent with the guidelines.

The report found evidence that the operations of five foreign oil and gas companies in Burma in which Norway's pension fund holds investments had contributed to "serious, ongoing human rights abuses in connection with the operation and maintenance of the Yadana and Yetagun natural gas pipelines."

In addition, seven companies in the fund's portfolio are involved in the construction of the Shwe oil and gas pipeline project extending from Burma to the Chinese border. The report documents such current human rights abuses as uncompensated land confiscation, and "the military regime's persecution of local people suspected of opposing the projects…on behalf of the companies' interests and investments."

While the report does not recommend that new standards be adopted by Norway's pension fund in response to human rights violations, it does assert that "there is a high likelihood that the Fund is contributing to grave unethical actions in Burma through its holdings in the Fund." ERI concludes its report with the observation that, "By its own standards, the Council is obligated to recommend exclusion or observation of the companies named in this report."

 

 
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