16/12/2007

Raytheon banished for invovlement in cluster bombs

Norway puts its money where its ethics areLos Angeles Times, CA - 19 Nov 2007First to be banished were companies involved in the manufacture of cluster bombs, land mines and nuclear weapons. In addition to Boeing, these included ...
Rights, corruption and ecological issues factor into choices made by a giant investment fund fed by oil wealth.
By Tom Hundley, Tribune foreign correspondent November 19, 2007

OSLO -- Last year, the Church of Norway asked the Norwegian Government Pension Fund to consider divesting the fund's holdings in Caterpillar Inc. The reason: Caterpillar was selling the Israeli army bulldozers used against Palestinian civilians.Given the avalanche of negative publicity that swamped Wal-Mart Stores Inc.

last summer, when the pension fund dumped its stock in the giant retailer after concluding it was complicit in human rights violations, Caterpillar had reason to be concerned. But the pension fund's council on ethics, which consisted of a philosopher, a human rights lawyer, a product safety expert, an economist and an international law expert, took a long look at Peoria, Ill.-based Caterpillar and gave the U.S. industrial giant a clean bill of health.

Another Illinois company was not so lucky. On the advice of the ethics council, the pension fund last year sold off its shares of Chicago-based Boeing because the aerospace giant makes components for nuclear weapons.All of this might seem like a harmless bit of feel-good Scandinavian moralizing were it not for the fact that the Norwegian Government Pension Fund, worth about $350 billion, is one of the largest piles of investment capital in the world. Nearly triple the size of Vanguard's 500 index fund and rapidly closing in on TIAA-CREF's $400-billion-plus College Retirement Equities fund, Norway's pension fund is the biggest owner of stocks in Europe and has quietly emerged as a global financial force.Its money comes from Norway's vast North Sea oil wealth. As the world's third-largest oil exporter -- only Saudi Arabia and Russia sell more -- Norway rakes in about $1 billion a week. But instead of using it to underwrite a lavish lifestyle for its royal family or wielding it as a political weapon, the Norwegians are quietly amassing a nest egg to pass on to future generations.The fund was established in 1990. By late 2004, when its influence in international markets become impossible to ignore, Norway's legislature established the ethics council and spelled out guidelines that prohibited the fund from owning stock in companies responsible for "violations of fundamental humanitarian principles, serious violations of human rights, gross corruption or severe environmental damage." First to be banished were companies involved in the manufacture of cluster bombs, land mines and nuclear weapons. In addition to Boeing, these included General Dynamics Corp., Raytheon Co., Lockheed Martin Corp. and a host of other mainly U.S.-based defense contractors.

No comments: