Biggest sovereign fund excludes Sesa Sterlite on ethical grounds

OSLO Thu Jan 30, 2014 8:49pm IST

A general view shows the open pit of Sesa Sterlite iron ore mine in Codli village in Goa December 9, 2013. REUTERS/Krishna Das/Files

A general view shows the open pit of Sesa Sterlite iron ore mine in Codli village in Goa December 9, 2013.

Credit: Reuters/Krishna Das/Files

Related Topics

Stocks

   

OSLO (Reuters) - Norway's finance ministry has told its $810 billion oil fund, the world's biggest sovereign wealth fund, to stop investing in two Israeli firms and one Indian company on ethical grounds.

The ministry instructed the fund for a second time to exclude Africa Israel Investments (AFIL01.TA) and its construction subsidiary Danya Cebus (DNYA.TA) from its investments and also said it should not invest in Sesa Sterlite (SESA.NS), India's biggest zinc and aluminium maker.

Some 63 firms are on the exclusion list after the decision, including some of the world's biggest miners, tobacco producers and makers of certain weapons such as cluster bombs.

Separately, the finance ministry said it would now allow the wealth fund to buy sovereign bonds issued by Myanmar, after the lifting of international sanctions on the Asian country.

But the fund is now barred from buying sovereign bonds issued by North Korea, Syria and Iran, although none of these countries currently issues sovereign bonds.

Africa Israel Investments and Danya Cebus were first excluded from the fund in 2010 because they were involved in the building of Israeli settlements in the West Bank but the ban was lifted last August.

The government reinstated the exclusion "due to contribution to serious violations of individual rights in war or conflict through the construction of settlements in East Jerusalem", it said in a statement.

Many countries deem Israel's settlements illegal and an obstacle to peacemaking.

"Africa Israel and its subsidiaries operate both in Israel and all over the globe promoting their business activities according to the legislation applicable in all countries where they operate," said Africa Israel Investments spokeswoman Dalia Azar-Malimovka.

"Therefore, we can only express regret over the decision regarding Africa Israel and other major Israeli companies."

Sesa Sterlite, a subsidiary of mining conglomerate Vedanta Resources (VED.L), was also excluded as Vedanta's "relevant operations in India, which are run through the company Sesa Sterlite, present an unacceptable risk of environmental damage and serious violations of human rights".

Sesa Sterlite was not immediately available for comment.

Vedanta was itself excluded from the fund's investment portfolio in 2007.

"The fund runs an unacceptable risk of contributing to severe environmental damages and serious or systematic violations of human rights by continuing to invest in the company," the ministry said when it excluded Vedanta.

The fund, which invests Norway's surplus oil revenues, is not allowed to invest in firms involved in severe environmental damage, "serious and systematic human rights violation", such as forced labour, the worst forms of child labour, murder or torture.

(Reporting by Gwladys Fouche; editing by Keiron Henderson)

FILED UNDER:
  • Most Popular
  • Most Shared

Insight

REUTERS SHOWCASE

Border Talks

Border Talks

India names Ajit Doval as special envoy for China border talks.  Full Article 

WTO Deal

WTO Deal

U.S. seeks to step up India trade talks  Full Article 

Phone Masts

Phone Masts

American Tower to buy Bharti Nigeria phone masts for $1.1 billion  Full Article 

Infrastructure Plan

Infrastructure Plan

India targets private cash to build railways to its ports.  Full Article 

Shadow Banking

Shadow Banking

Reserve Bank planning more measures for NBFCs.  Full Article 

Auto Sector

Auto Sector

Hyundai Motor, Kia Motors lift 2014 global sales target on China, emerging markets  Full Article 

Oil Prices

Oil Prices

Some fund managers see oil falling to $60 without OPEC cut.  Full Article 

Project Shelved

Project Shelved

Jindal Steel shelves $10 bln project after coal setback.  Full Article 

Market Eye

Market Eye

Sensex, Nifty rise to record after China, ECB stimulus boosts risk appetite.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage