4 Observation and exclusion of companies

4.1 List of excluded companies as at 31 December 2024

Serious environmental damage

• Astra International Tbk
• Barrick Gold Corp
• Beijing Tong Ren Tang Chinese Medicine Co Ltd
• Bharat Heavy Electricals Ltd
• China Traditional Chinese Medicine Holdings Co Ltd
• Duke Energy Corp (including the wholly owned subsidiaries listed below)
• Duke Energy Carolinas LLC
• Duke Energy Progress LLC
• Progress Energy Inc
• ElSewedy Electric Co
• Freeport-McMoRan Inc
• Genting Bhd
• GMK Norilskiy Nickel PAO
• Grand Pharmaceutical Group Ltd
• Halcyon Agri Corp Ltd
• Jardine Cycle & Carriage Ltd
• Jardine Matheson Holdings Ltd
• NHPC Ltd
• POSCO Holdings Inc
• Posco International Corp
• Power Construction Group of China Ltd
• Ta Ann Holdings Bhd
• Tianjin Pharmaceutical Da Re Tang Group Corp Ltd
• Tong Ren Tang Technologies Co Ltd
• Vale SA
• Volcan Cia Minera SAA
• WTK Holdings Bhd
• Young Poong Corp
• Yunnan Baiyao Group Co Ltd
• Zijin Mining Group Co Ltd

Serious environmental damage | Serious human rights abuses

• Evergreen Marine Corp Taiwan Ltd
• Korea Line Corp
• Vedanta Ltd

Serious violations of the rights of individuals in situations of war or conflict

• Adani Ports and Special Economic Zone Ltd
• Ashtrom Group Ltd
• Bezeq The Israeli Telecommunication Corp Ltd
• Danya Cebus Ltd
• Elco Ltd
• Electra Ltd/Israel
• GAIL India Ltd
• Korea Gas Corp
• Mivne Real Estate KD Ltd
• Oil & Natural Gas Corp Ltd
• PTT Oil and Retail Business PCL
• PTT PCL
• Shapir Engineering and Industry Ltd
• Shikun & Binui Ltd

Other serious violations of fundamental ethical norms

• Delek Group Ltd
• Elbit Systems Ltd
• Evraz PLC

Gross corruption or other serious financial crimes

• China State Construction Engineering Corp Ltd
• JBS SA
• ZTE Corp

Serious or systematic human rights abuses

• Centrais Eletricas Brasileiras SA (Eletrobras)
• Cognyte Software Ltd
• Formosa Chemicals & Fibre Corp
• Formosa Taffeta Co Ltd
• Honeys Holdings Co Ltd
• Li Ning Co Ltd
• Lu Thai Textile Co Ltd
• Page Industries Ltd
• Prosegur Cia de Seguridad SA
• Zuari Agro Chemicals Ltd

Sale of weapons to states engaged in armed conflict that use the weapons in ways that constitute violations of the international rules on the conduct of hostilities

• AviChina Industry & Technology Co Ltd
• Bharat Electronics Ltd

Sale of weapons or military materiel to states that are subject to investment restrictions on government bonds as described in section 2-1(2)(c) of the Management Mandate for the Government Pension Fund Global

• Weichai Power Co Ltd

Unacceptable greenhouse gas emissions

• Canadian Natural Resources Ltd
• Cenovus Energy Inc
• Imperial Oil Ltd
• Suncor Energy Inc

Production of nuclear weapons

• Airbus SE
• BAE Systems Plc
• Boeing Co
• BWX Technologies Inc
• Fluor Corp
• General Dynamics Corp
• Honeywell International Inc
• Huntington Ingalls Industries Inc
• Jacobs Solutions Inc
• L3Harris Technologies Inc
• Larsen & Toubro Ltd
• Lockheed Martin Corp
• Northrop Grumman Corp
• Safran SA

Production of cluster munitions

• Poongsan Corp
• Textron Inc

Production of tobacco

• Altria Group Inc
• British American Tobacco Malaysia Bhd
• British American Tobacco Plc
• Eastern Co SAE
• Gudang Garam tbk pt
• Hanjaya Mandala Sampoerna Tbk PT
• Huabao International Holdings Ltd
• Imperial Brands Plc
• ITC Ltd
• Japan Tobacco Inc
• KT&G Corp
• Philip Morris Cr AS
• Philip Morris International Inc
• Scandinavian Tobacco Group A/S
• Shanghai Industrial Holdings Ltd
• Turning Point Brands Inc
• Universal Corp/VA
• Vector Group Ltd

Production of cannabis

• Aurora Cannabis Inc
• Canopy Growth Corp
• Cronos Group Inc
• Tilray Brands Inc

Production of coal or coal-fired energy

• Aboitiz Power Corp
• AES Andes SA
• AES Corp
• AGL Energy Ltd
• ALLETE Inc
• Alliant Energy Corp
• Ameren Corp
• American Electric Power Co Inc
• CESC Ltd
• CEZ AS
• China Coal Energy Co Ltd
• China Power International Development Ltd
• China Resources Power Holdings Co Ltd
• China Shenhua Energy Co Ltd
• Chugoku Electric Power Co Inc/The
• CLP Holdings Ltd
• Coal India Ltd
• CONSOL Energy Inc
• Datang International Power Generation Co Ltd
• DMCI Holdings Inc
• DTE Energy Co
• Electric Power Development Co Ltd
• Electricity Generating PCL
• Emera Inc
• Engie Energia Chile SA
• Evergy Inc
• Exxaro Resources Ltd
• FirstEnergy Corp
• Glencore PLC
• Great River Energy
• Guangdong Electric Power Development Co Ltd
• Gujarat Mineral Development Corp Ltd
• HK Electric Investments & HK Electric Investments Ltd
• Hokkaido Electric Power Co Inc
• Hokuriku Electric Power Co
• Huadian Energy Co Ltd
• Huadian Power International Corp Ltd
• Huaneng Power International Inc
• IDACORP Inc
• Inner Mongolia Yitai Coal Co Ltd
• Korea Electric Power Corp
• Lubelski Wegiel Bogdanka SA
• Malakoff Corp Bhd
• MGE Energy Inc
• New Hope Corp Ltd
• NRG Energy Inc
• NTPC Ltd
• Okinawa Electric Power Co Inc/The
• Otter Tail Corp
• PacifiCorp
• Peabody Energy Corp
• PGE Polska Grupa Energetyczna SA
• Reliance Infrastructure Ltd
• Reliance Power Ltd
• RWE AG
• Sasol Ltd
• SDIC Power Holdings Co Ltd
• Shikoku Electric Power Co Inc
• Tata Power Co Ltd/The
• Tenaga Nasional Bhd
• Tri-State Generation and Transmission Association Inc
• Washington H Soul Pattinson & Co Ltd
• WEC Energy Group Inc
• Whitehaven Coal Ltd
• Xcel Energy Inc
• Yankuang Energy Group Co Ltd

4.2 List of companies under observation

Serious violations of the rights of individuals in situations of war or conflict

• KDDI Corp
• Sumitomo Corp

Serious environmental damage

• Marfrig Global Foods SA

Serious environmental damage | Serious or systematic human rights abuses

• Pan Ocean Co Ltd

Other serious violations of fundamental ethical norms

• Semen Indonesia Persero Tbk PT

Gross corruption or other serious financial crimes

• Bombardier Inc
• Petrofac Ltd

Serious or systematic human rights abuses

• ORLEN SA

Production of coal or coal-fired energy

• Berkshire Hathaway Energy Co
• CMS Energy Corp
• Kyushu Electric Power Co Inc
• MidAmerican Energy Co
• NorthWestern Corp
• OGE Energy Corp
• Pinnacle West Capital Corp
• Tohoku Electric Power Co Inc
• Uniper SE
• Vistra Corp

The list is updated on an ongoing basis and may be found at https://www.nbim.no/no/ansvarlig-forvaltning/etiske-utelukkelser/utelukkelse-av-selskaper/

Published recommendations regarding companies

Tabell 4.1 List of companies about which recommendations were published in 2024

The Council on Ethics publishes its recommendations on its website at the same time as Norges Bank publishes its decision on the case concerned. Below there follows a brief summary of the recommendations published in 2024. The summaries have been drawn from the full recommendations, which may be found at www.etikkradet.no.

Before making a decision to exclude a company or place it under observation, the ethical guidelines require Norges Bank to consider whether the exercise of ownership rights may be a suitable method for reducing the risk of continued norm violations. In one case in 2024, the Bank elected to exercise its ownership rights instead of accepting the Council’s recommendation to exclude the company concerned. The recommendation related to the French company Bolloré SE and its parent company Cie de l’Odét SE. In consequence, Norges Bank will itself follow up these companies and may also decide to exclude them at a later date if the exercise of ownership rights does not give the desired results.

Brief summary of the year’s recommendations

Adani Ports & Special Economic Zone Ltd

Issued 21 November 2023

The Council on Ethics recommends that Adani Ports & Special Economic Zone Ltd (APSEZ) be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to an unacceptable risk that the company is contributing to serious violations of the rights of individuals in situations of war or conflict.

APSEZ is an Indian logistics company that engages, among other things, in vessel management, the operation of ports and port services. APSEZ is part of the Adani group of companies. At the close of 2022, the Government Pension Fund Global (GPFG) owned 0.3 per cent of APSEZ’s shares, worth approx. USD 63.4 million.

APSEZ has been under observation since March 2022 due to its business association with the armed forces in Myanmar in the development of Ahlon International Port Terminal in Yangon. APSEZ had announced that it would pull out of the business in Myanmar. Due to the uncertainty surrounding whether and when it would be possible to accomplish this, the Council recommended that the company be placed under observation.

The Council has reassessed the company following the disclosure that APSEZ had sold its port-related operations in Myanmar to Solar Energy Ltd in May 2023. No information on the buyer is available, and APSEZ has stated that it cannot share any such information on the grounds of confidentiality.

The Council attaches importance to the fact that the company has failed to help shed light on the matter, that no other information is to be found about the company that is said to have acquired APSEZ’s operations in Myanmar, and that APSEZ’s auditor did not have sufficient information to assess whether the sale to Solar Energy was a transaction between related parties. This lack of information means that the Council cannot establish whether APSEZ has links to the enterprise concerned. In a situation in which extremely serious norm violations are taking place, this constitutes an unacceptable risk that the GPFG’s investments in APSEZ may breach its ethical guidelines.

Astra International Tbk PT, Jardine Matheson Holdings Ltd and Jardine Cycle&Carriage Ltd

Issued 12 May 2023

The Council on Ethics recommends that PT Astra International Tbk (Astra) and the parent companies Jardine Cycle & Carriage Ltd (JC&C) and Jardine Matheson Holdings Ltd (Jardines) be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to an unacceptable risk that they are contributing to or are themselves responsible for serious environmental damage. The Council’s recommendation rests on an assessment of the Martabe Gold Mine in Sumatra, which is located within the habitat of the critically endangered Tapanuli orangutan and other endangered species.

Astra has been under observation since October 2015 due to the development of oil palm plantations in Indonesia by one of its subsidiaries, PT Astra Agro Lestari Tbk, and consequent risk of deforestation and loss of biodiversity. The Council recommends that observation pursuant to this issue be discontinued, irrespective of the decision to exclude Astra on the grounds of its involvement in the Martabe Gold Mine.

The recommendation is divided into two parts. The first explains the reasoning for the Council’s recommendation to exclude the above-mentioned companies. The second relates to the Council’s recommendation to discontinue observation of Astra.

Recommendation to exclude

The Council takes the view that parent companies which have a controlling influence over their subsidiaries’ business operations are accountable for the actions of those subsidiaries. Jardines is the parent company of JC&C, which is Astra’s controlling shareholder. Astra is the majority shareholder of PT United Tractors (United Tractors), which, via wholly owned subsidiaries, owns 95 per cent of the mining company PT Agincourt Resources (PTAR) that operates the Martabe Gold Mine.

Astra is listed on the Indonesia Stock Exchange (IDX), Jardines is listed on the London Stock Exchange (LSE), while JC&C is listed on the Singapore Exchange (SGX). At the close of 2022, the GPFG owned 0.19 per cent of the shares in Astra, worth USD 28.4 million. At the same time, the GPFG owned 1.14 per cent of the shares in Jardines, worth USD 168.5 million, and 0.47 per cent of the shares in JC&C, worth USD 39.2 386 million.

The Martabe Gold Mine lies within the confines of the Tapanuli orangutan’s habitat in the Batang Toru Forest in North Sumatra. The Tapanuli orangutan is the most critically endangered of all the great apes. There are fewer than 800 individuals left in this forest, which constitutes the species sole remaining habitat. As such, the survival of the species depends on the preservation of this habitat. The area has been designated a Key Biodiversity Area due to its exceptionally rich biodiversity, including many endemic and endangered species.

PTAR has operated the Martabe Gold Mine since 2012. It plans to expand the mining area, and the search for new gold deposits further inside the orangutan’s habitat is currently underway. PTAR has told the Council about a number of studies, initiatives and measures to protect biodiversity, including the establishment of a panel of experts to advise on future conservation work and biodiversity offsets. The Council has been unable to assess these measures, due to government restrictions on access to the studies.

For the Council, the decisive factor is that the Tapanuli orangutan is a critically endangered species and that any further reduction in the size of its habitat would, according to many experts, worsen its situation and increase the risk of it becoming extinct. The company’s efforts to preserve these orangutans does not to any great degree seem to be limiting the mine’s expansion or prospecting deeper into the orangutans’ habitat. The Council attaches importance to the fact that the company is planning to significantly increase the mining area during the mine’s lifetime, that new deposits will be exploited if commercially viable, and that the Indonesian authorities have granted permission for mining operations in an area that is as yet undeveloped. The Council considers that, as long as PTAR’s activities result in a reduction in the size of the orangutan’s habitat, the risk of the companies contributing to serious environmental damage will remain unacceptable.

Recommendation to discontinue observation

The Council considers that there is no longer an unacceptable risk of serious environmental damage relating to the development and operation of oil palm plantations by Astra’s subsidiary PT Astra Agro Lestari Tbk (AAL). The Council therefore recommends that observation of Astra be discontinued. AAL operates oil palm plantations in Sumatra, Kalimantan and Sulawesi through 43 subsidiaries.

The Council has submitted observation reports to Norges Bank in 2018, 2019 and 2020.

The Council’s observation of Astra and AAL has focused particularly on how AAL conserves and manages biodiversity and areas of high conservation value (HCV) in its concessions. During the observation period, AAL has not opened up any new areas of peat or forest, and has undertaken to preserve High Carbon Stock (HCS) forests, peat and HCVs. The company’s sustainability strategy, which rests on a policy of zero deforestation, no conversion of peatlands and respect for human rights, has been operationalised through three-year action plans. AAL has introduced systems to prevent forest fires, preserve peatland and avoid deforestation in its supply chain.

During the observation period, the Council has also raised the impact of the company’s operations on the Orang-Rimba people – a semi-nomadic Indigenous people who live in extreme poverty at the margins of the plantation concession operated by one of AAL’s subsidiaries. For several years, AAL has assisted with food aid, health services and the provision of schooling and educational services to improve the families’ living standards. In the last few years, AAL has also initiated processes to improve the more long-term outlook for the Indigenous groups. Although the Council understands that the public authorities and other actors are responsible for finding solutions, it considers that AAL still has an important role to play in these endeavours to safeguard the Orang-Rimba’s living areas and livelihoods.

The Council is aware of reports of conflict between local communities and three of AAL’s subsidiaries, but has not investigated these in further detail. However, the Council presumes that AAL-s new sustainability action plan will underpin intensified efforts to protect biodiversity and strengthen AAL’s endeavours in the area of human rights and conflict resolution.

Bezeq The Israeli Telecommunication Corp Ltd

Issued 30 august 2024

The Council on Ethics recommends that Bezeq The Israeli Telecommunications Corp (Bezeq) be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to an unacceptable risk that the company is contributing to serious violation of the rights of individuals in situations of war or conflict.

Bezeq is an Israeli company that supplies telecommunications services to businesses and private individuals in Israel and the Israeli settlements in the West Bank.

At the close of June 2024, the GPFG owned 0.76 per cent of the company’s shares, worth NOK 252 million. The company is listed on the Tel Aviv Stock Exchange.

The Council notes the company’s assertion that it also provides telecom services to Palestinian areas in the West Bank. However, the Council does not consider this to outweigh the fact that the company, through its physical presence and provision of telecom services to Israeli settlements in the West Bank, is helping to facilitate the maintenance and expansion of these settlements, which are illegal under international law. By doing so, the company is itself contributing to the violation of international law.

With respect to future risk, Bezeq has confirmed to the Council that it has no possibility of terminating its provision of telecom services to the Israeli settlements in the West Bank. It must therefore be considered certain that this part of Bezeq’s operations will continue for the foreseeable future. The company will thereby continue to help support the violation of international law that these settlements constitute.

Bollore SE og Cie de L’Odet SE

Issued 19 March 2024

The Council on Ethics recommends that the companies Compagnie de l’Odet SE (Cie de l’Odet) and Bolloré SE be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to the risk that the companies are contributing to serious and systematic human rights abuses. This recommendation relates primarily to working conditions at oil palm plantations in Cameroon and their consequences for local communities.

Cie de l’Odet and Bolloré are holding companies listed on the Euronext stock exchange in Paris. At the close of 2023, the GPFG owned 1.15 per cent of the Bolloré’s shares, worth USD 84.5 million. The GPFG owned 0.13 per cent of the shares in Cie de l’Odet, worth USD 14.1 million.

Cie de l’Odet owns 62,19 per cent of the shares in Bolloré. Bolloré has considerable ownership interests in rubber and oil palm plantations in several countries in Africa and Asia, including Société Financière des Caoutchoucs (Socfin), in which Bolloré has a 39.75 per cent shareholding. Socfin controls Socfinaf, which is, in turn, the controlling shareholder of Socapalm. Bolloré has direct and indirect shareholdings in Socfinaf totalling 34.4 per cent.

The Council’s own inquiries into Socapalm’s plantation operations in Cameroon have revealed serious norm violations, including extensive sexual harassment of women by supervisors and security guards at the plantation. The abuses concern both women who work at Socapalm plantations and those who are passing through the plantation or the surrounding areas. More than half of Socapalm’s workforce are contract workers or day labourers. The inquiries showed that almost none of them have an employment contract, they earn less than the legal minimum wage, have their pay docked for social benefits they do not receive, and can be hired and fired at will. For the women, the provision of sexual services has become a way to secure a job or avoid being fired. In addition, Socapalm has extended the plantation to areas belonging to local communities and made it difficult for them to access their properties, which weakens the population’s ability to make a living.

Similar human rights abuses have for many years been reported at several of Socfin’s plantations in Liberia and Sierra Leone. The Council on Ethics considers that Cie de l’Odet and Bolloré are contributing to these norm violations, which are both serious and systematic.

Neither Cie de l’Odet nor Bolloré have provided information in connection with this matter. The companies maintain that they hold minority stakes in Socfin and therefore have no influence over how the plantations are operated. Lack of formal control over the plantations is not decisive for the Council’s assessment. Cie de l’Odet has controlling interest in Bolloré. Bolloré has, and has always had, a material ownership interest in Socfin and Socfinaf. Bolloré’s senior executives have served on Socfin’s board of directors since 1990 and on Socfinaf’s board of directors since 1993. In the Council’s opinion, this indicates that Bolloré should have sufficient influence to improve the situation at the plantations if the company so wished. It seems to the Council as though neither Cie de l’Odet nor Bolloré acknowledge the risk of contributing to serious norm violations relating to the plantation business and therefore does nothing to put an end to them. The Council concludes that this raises the risk that the companies, also in future, will contribute to serious and systematic human rights abuses to an unacceptable level.

Bombardier Inc

Issued 13 March 2024

In March 2022, Norges Bank decided to place Bombardier Inc (Bombardier) under observation for a period of two years due to an unacceptable risk that the company is contributing to or is itself responsible for gross corruption. The Council’s recommendation from October 2021 was based on the fact that Bombardier or its subsidiaries could be linked to allegations or suspicions of corruption in six countries over a period of more than ten years. In its assessment of future risk, the Council attached importance to multiple deficiencies in the company’s follow-up of corruption risk. This included top management’s lack of communication of zero tolerance for corruption, as well as inadequate third-party assessments and follow-up of when corruption was reported.

Bombardier has provided the Council with limited documentation during the observation period to show how the company’s anti-corruption and anti-money laundering systems work in practice. This applies, for example, to due diligence assessments and the follow up of whistleblower reports, which were highlighted in the Council’s original recommendation as major failings. All in all, therefore, the Council considers that the risk attaching to Bombardier’s efforts to prevent, detect and deal with corruption still is not acceptable.

The Council therefore recommends that observation of the company be extended.

China State Construction Engineering Corp Ltd

Issued 25 April 2024

The Council on Ethics recommends that China State Construction Engineering Corp Ltd (CSCEC) be excluded pursuant to the criterion relating to gross corruption or other serious financial crime in the Guidelines for Observation and Exclusion of Companies from the Government Pension Fund Global (GPFG).

CSCEC is a Chinese construction company with a total workforce of approx. 380,000 people, including subsidiaries, and operations in more than 70 countries worldwide. It is listed on the Shanghai Stock Exchange. The company’s primary business activities include the construction of all types of public buildings, as well as infrastructure, property investment and development, and various forms of engineering activities. At the close of 2023, the GPFG owned 0.03 per cent of the company’s shares, worth NOK 90 million.

CSCEC may be linked to allegations or suspicions of corruption in a number of countries in the period 2004–2021. As far as the Council is aware, neither the company nor any of the company’s employees have so far been convicted in relation to any of the allegations, but the company has on several occasions been banned from tenders or had contracts canceled due to suspicions of financial fraud.

The Guidelines for Observation and Exclusion of Companies from the GPFG are forward-looking, and the issue to be assessed is whether there is an unacceptable risk that the company is contributing to or is itself responsible for gross corruption. In its assessment of future risk, the Council attaches importance to the assessments of authoritative sources with respect to the risk of corruption in the countries and business sector in which CSCEC operates. The Council points out that CSCEC operates in many countries that are ranked very low on international corruption indexes, that the construction industry has long been identified as one of the sectors with the highest corruption risk in the world, and that this risk is also deemed to be high in the BRI where CSCEC is engaged in many projects. The Council also attaches importance to the fact that China was ranked in the lowest category when Transparency International in 2022 assessed the country’s performance in enforcing corruption committed by its own citizens or companies abroad.

Still, most important for the Council’s assessment of future risk is whether the company is implementing measures capable of preventing, detecting and reacting to corruption, and which could indicate that the risk is nevertheless acceptable. The Council has contacted CSCEC and asked it a number of questions, but the company has failed to reply to the Council’s queries. Nor does the company provide any information on such measures on its website or in published reports. The Council refers to the Report to the Storting on the Government Pension Fund in 2008, which states that «a lack of information concerning a company’s behaviour and, not least, a lack of willingness on the part of the company to provide information, may in itself contribute to the risk of it contributing to unethical behaviour being deemed unacceptably high.»

On this basis, and in light of the cases described, the Council considers that the risk of gross corruption linked to CSCEC’s operations is unacceptable and recommends that the company be excluded from investment by the GPFG.

Evraz PLC

Issued 30 August 2024

The Council on Ethics recommends that Evraz PLC (Evraz) be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to an unacceptable risk that the company is contributing to serious violations of fundamental ethical norms. The Council’s recommendation rests on the company’s contribution to maintaining Russia’s unlawful war of aggression against Ukraine.

Evraz is a steel producer, among other things, and engages in mining operations, principally in Russia. Evraz is listed on the London Stock Exchange. At the close of 2023, the GPFG owned 0.96 per cent of the company’s shares, worth NOK 43,766,783.

The Council considers that there is an unacceptable risk that Evraz is contributing to particularly serious violations of fundamental ethical norms by supplying steel to the company UralVagonZavod, which produces combat vehicles for use in the war Russia is waging against Ukraine in violation of international law.

The Council’s recommendation rests on information from a variety of media, official information from British authorities, a court ruling from the UK, as well as information from the company’s website and financial reports. The Council has contacted Evraz to request further information, but the company has failed to respond.

General Dynamics Corp

Issued 25 April 2024

The Council on Ethics recommends that General Dynamics Corp be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to its production of key components of nuclear weapons.

At the close of 2023, the GPFG owned 1.01 per cent of the company’s shares, worth NOK 7.2 billion.

General Dynamics is a US company that operates primarily in the defence sector. The company is listed on the New York Stock Exchange.

The Council’s recommendation relates to the company’s role in the construction of the USA’s strategic submarines.

Hyundai Engineering & Construction Co Ltd

Issued 8 October 2024

In July 2021, Hyundai Engineering & Construction Co Ltd (HDEC) was placed under observation due to the risk that the company was contributing to or was itself responsible for gross corruption. Norges Bank made this decision on the basis of a recommendation issued by the Council on Ethics in April of that year. The original recommendation to place HDEC under observation was prompted by allegations or suspicions of corruption in Algeria, South Korea and Indonesia in the period 2008–2018, as well as the company’s involvement in widespread bid rigging and illegal price

collusion in South Korea between 2005 and 2013. The Council considered that HDEC had not taken the various allegations seriously enough and that much remained to be developed and implemented with respect to the company’s systems and procedures for the prevention and detection of corruption.

Throughout the observation period, the Council has had the impression that HDEC’s efforts to prevent, detect and deal with corruption have steadily improved, and the Council’s assessment now is that the company seems to have put in place an anti-corruption system that, in most areas, aligns with internationally recognised recommendations. Also, during the observation period, the Council has not uncovered any new allegations of corruption relating to the company’s business.

Hence, the Council no longer considers the risk of gross corruption in the company’s business operations to be unacceptable and recommends that observation of HDEC be discontinued.

L3Harris Technologies Inc

Issued 19 December 2023

The Council on Ethics for the Norwegian Government Pension Fund Global (GPFG) recommends that L3Harris Technologies Inc (L3Harris) be excluded from investment by the GPFG due to the company’s production of key components for nuclear weapons. At the close of 2022, the GPFG owned 0.84 per cent of the company’s shares, worth NOK 3.2 billion. In addition, the GPFG owned NOK 94 million in bonds issued by the company.

Larsen & Toubro Ltd

Issued 25 April 2024

The Council on Ethics recommends that Larsen & Toubro Ltd (L&T) be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to the company’s production of key components of nuclear weapons.

At the close of 2023, the GPFG owned 0.81 per cent of the company’s shares, worth NOK 4.92 billion. L&T is an Indian company, listed on the Delhi Stock Exchange (DSE).

The company has operations in multiple business sectors, including building & construction, oil & gas, electricity generation, minerals & metals, precision engineering, naval shipbuilding and the production of heavy machinery.

The Council’s recommendation relates to the company’s role in the construction of India’s strategic submarines.

Mativ Inc

Issued 24 April 2024

Mativ Inc (formerly Schweitzer-Mauduit International Inc) was excluded from investment by the Norwegian Government Pension Fund Global (GPFG) in 2013 due to its production of tobacco. Since the company is no longer involved in such production, the Council on Ethics recommends that the company’s exclusion be revoked.

Prosegur Cia de Seguridad SA

Issued 25 April 2024

The Council on Ethics recommends that Prosegur Cia de Seguridad SA (Prosegur) be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to an unacceptable risk that the company is contributing to serious human rights abuses. Prosegur is a Spanish company which, among other things, provides security services in several Latin American countries. The recommendation is based on accusations of violence that can endanger life and health, and abuse of tribal people’s rights in Brazil.

At the close of 2023, the GPFG owned 0.67 per cent of Prosegur’s shares, worth NOK 72 million. Prosegur is listed on stock exchanges in Madrid and Barcelona.

Prosegur operates in 31 countries and employs around 150,000 people. Security services in Brazil are provided by the wholly owned subsidiary Segurpro, which employs 35,000 people. Among Segurpro’s customers are the mining company Vale and the palm oil producer Agropalma.

In 2022, a security guard employed by Segurpro shot and killed a man suspected of stealing from Vale’s railway. In 2020, masked security guards equipped with rubber bullets, tear gas and batons attacked around 150 people belonging to families who were residing illegally on Vale’s property. 20 people were injured. Brazil’s prosecuting authorities have stated that this action violated the right to personal integrity. In 2020, they recommended that Vale replace Segurpro as its security company.

In the period 2021–2023, during guard duty for Agropalma, Segurpro’s security guards prevented tribal people from visiting their ancient grave sites, fishing in the Acará river and travelling into the town they depend on for purchasing supplies and seeking medical attention. Brazilian prosecuting authorities have stated that this violates the rights of these tribal peoples. In 2022, they recommended that Agropalma rein in Segurpro’s activities.

The Council notes that Prosegur has established governing instruments and reporting systems that are intended to ensure respect for human rights. Since the company does not perceive recommendations from the prosecuting authorities as alerts of human rights abuses, the Council considers that these systems are of limited significance. When the company sets such a high threshold for addressing the risk of human rights abuses, it is difficult to both identify risks and establish adequate initiatives to mitigate them.

Since the company continues to perform the assignments mentioned above, and also operates in numerous countries in which there are land disputes and serious antagonism between commercial companies and local populations, the Council presumes that new situations may arise involving a considerable risk of human rights abuses. Given that the company has not substantiated that its systems for identifying and managing such risks are adequate, the Council deems the risk that Prosegur will contribute to serious human rights abuses in future to be unacceptable.

Supermax Corp Bhd

Issued 26 June 2024

In February 2022, the Council on Ethics recommended that Malaysian company Supermax Corp Bhd be excluded from the Norwegian Government Pension Fund Global (GPFG) due to an unacceptable risk that the company was contributing to human rights abuses. In June the same year, Norges Bank decided to place Supermax under observation.

At the close of 2023, the Fund’s shareholding in the company was worth USD 2,480.

Supermax is a Malaysian company that produces rubber and latex gloves. The Council’s recommendation was based on reports of extremely poor living and working conditions for migrant workers at the company’s production facilities in Malaysia.

During the observation period, Supermax reported that it has implemented numerous measures to improve conditions for migrant workers. In September 2023, furthermore, the US authorities lifted import restrictions on Supermax’s products because the conditions that had led to the company being blacklisted due to the risk of forced labour had been rectified.

The US authorities’ rescinding of import restrictions on the company’s products combined with the company’s disclosures about the measures it had implemented, could indicate that conditions for workers at Supermax’s production facilities have improved.

The Council recommends that its observation of Supermax be discontinued.

Tianjin Pharmaceutical Da Re Tang Group Corp Ltd

Issued 25 April 2024

The Council on Ethics recommends to exclude Tianjin Pharmaceutical Da Re Tang Group Corp Ltd (Da Ren Tang) from the Government Pension Fund Global (GPFG) due to an unacceptable risk that the company contributes to serious environmental damage. The Council on Ethics’ assessment focuses on the companies’ use of ingredients based on body parts of threatened animal species in the production of Traditional Chinese Medicine (TCM).

At the close of 2023, the GPFG owned shares in Da Ren Tang valued at approximately 2.2 mill USD corresponding to an ownership interest of 0.14 per cent.

Da Ren Tang develops, manufactures and markets TCM products. The Council’s investigation shows that the company manufactures a number of products which include animal parts from threatened species. This pertains to leopard bones, pangolin scales and musk from musk deer. The products are advertised on the company and its subsidiaries’ websites.

The Council has focused on species listed on the IUCN Red List of Threatened Species, i.e., critically endangered, threatened or vulnerable species, as well as species listed in Annex 1 of the Convention on International Trade in Endangered and Vulnerable Species (CITES). The Council is of the view that companies, whose activities contribute to species becoming extinct, are depleting biodiversity. By producing medicines with ingredients that include the body parts of threatened species, there is a risk of the company contributing to irreversible and severe environmental damage.

In light of the extensive illegal trade in threatened species, the Council places emphasis on the fact that the company does not disclose information regarding traceability of purchases or where the animals originate from. The Council finds that the lack of such information and lack of transparency in the company’s practices constitute an unacceptable risk that the threatened species the company uses in its products may originate from illegal sources.

Due to lack of information, the Council is unable to quantify the company’s contribution to environmental damage. Since the quantity of body parts of threatened wildlife used, the provenance and stockpiles of these and how these are replenished are not known, the Council finds that the question of the company’s contribution is a matter of whether the company uses endangered species in its production or not. When the activities themselves constitute a risk of species becoming extinct, there is also a risk that the company contributes to the depletion of biodiversity and serious environmental damage.

Da Ren Tang has not publicly announced a specific goal to stop using threatened species in its production of TCM. The Council therefore considers the risk that the company will continue to contribute to severe environmental damage to be unacceptable.

Turning Point Brands Inc

Issued 13 March 2024

The Council on Ethics recommends that Turning Point Brands Inc be excluded from the investment universe of the Government Pension Fund Global (GPFG) due to this company’s production of tobacco products.

Weichai Power Co Ltd

Issued 19 December 2023

The Council on Ethics recommends that Weichai Power Co Ltd (WP) be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to an unacceptable risk that the company is contributing to the sale of weapons or military materiel to states that are subject to investment restrictions on government bonds as described in section 2-1(2)(c) of the Management Mandate for the Government Pension Fund Global.

WP is a Chinese company producing, among other things, engines for use in heavy vehicles.

WP is listed in Beijing. At the close of 2022, the GPFG owned 0.46 per cent of the company’s shares, worth NOK 553 million.

This recommendation is inter alia based on information from Chinese and Belarusian authorities, as well as from companies with which WP has formed joint ventures. Although the Council has contacted WP to obtain additional information, the company has not replied to the Council’s queries.

The Council considers that there is an unacceptable risk that WP is contributing to the sale of military materiel to the authorities in Russia and Belarus. This constitutes grounds for recommending that WP be excluded from investment by the GPFG.