Norway says oil fund reluctant to blacklist states

By Aasa Christine Stoltz

OSLO, June 18 (Reuters) - Norway's $400 billion sovereign wealth fund is unlikely to rule out investing in countries that abuse human rights unless such sanctions are adopted as foreign policy, the Norwegian finance minister said on Wednesday.

So far the Norwegian government and its wealth fund have banned investments in Myanmar, which is subject to extensive international sanctions.

Finance Minister Kristin Halvorsen said that further bans on entire countries were unlikely though she was open to discuss the matter in an ongoing review of the fund's ethical guidelines.

"We (the state) do not boycott Saudi Arabia or Israel or any other countries that we know are abusing human rights, so in the last round it was concluded that it would not be natural for the pension fund to do so either," Halvorsen told Reuters.

The Government Pension Fund -- Global, commonly known as the "oil fund", invests Norway's oil and gas wealth in foreign stocks and bonds to save for future generations when the black gold runs out.

The finance ministry has excluded some 25 companies from the fund for violating human rights, harming the environment or producing cluster bombs or nuclear weapons. It bases the exclusions on recommendations from an ethics council.

Human rights activists have criticised the fund for buying bonds of countries such as Saudi Arabia, Colombia and Sri Lanka, known for violating human rights, and say the same rules should apply to investing in countries as to investing in stocks.

This year the ministry of finance is carrying out an extensive review of the ethical guidelines adopted in 2004.