June 15, 2020 / 1:09 PM / 2 months ago

Norway wealth fund must have wider human rights view when blacklisting firms: commission

OSLO (Reuters) - Norway’s $1 trillion wealth fund could blacklist more companies from its investments, including those that make machine-controlled weapons, if proposals on Monday to modify its mandate are adopted, the head of a government-appointed commission said.

FILE PHOTO: A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche/File Photo

The fund should have a wider definition of corruption and of human rights abuses when considering whether to exclude a company from its investments on those grounds, the group said.

It should also stop investing in firms that manufacture lethal autonomous weapons, a new type of weaponry often nicknamed “killer robots”, because the machine, rather than a person, decides whether to fire on a target.

“We signal that all human rights breaches, if they are gross and systematic, will be assessed,” the head of the commission, Ola Mestad, told reporters. “For the corruption risk criterion, gross economic crime should now be included.”

“This will probably lead to more exclusions,” if the recommendations were adopted by parliament, Mestad later told Reuters.

The proposals will be sent for hearing, with the government planning its own proposals for next spring.

The fund does not invest in companies that produce tobacco and nuclear weapons or cause severe environmental damage, among other things.

As the fund holds about 1.5% of globally listed shares, its decisions are closely watched and often followed by other investors.

In May the fund excluded some of the world’s biggest commodities firms from its portfolio for their use and production of coal and relinquished its investments in four Canadian oil firms for producing an “unacceptable” amount of greenhouse gas.

The commission also recommended creating a new reason for excluding a company: if it sold weapons to a state involved in an armed conflict where there is an “unacceptable” risk the weapons are used in military operations violating international humanitarian law. The breach must be “serious and systematic”.

“Yemen is a conflict for which this could be on the agenda,” said Mestad.

Editing by David Evans

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