By Pia A. Gaarder
On Friday the revised national budget is before the parliament, and the ethical guidelines for the Oil Fund will be a large part of it. The Finance Committee has unanimously followed the government’s proposal for ethical guidelines for the Oil Fund in line with the Graver Commission’s position.
Three mechanisms will then enter into legislation in order to introduce some more ethics into the fund: negative screening of certain weapon types, disinvestment from certain companies that commit serious ethical breaches and active ownership in order to influence companies in the right direction.
As NorWatch has previously pointed out, the immediate consequences are less encompassing that one would have thought, but imply that producers of cluster bombs and nuclear weapons will be excluded from the fund.
A minority wants to go even further, and proposes to the parliament that the tobacco industry be excluded entirely from the Oil Fund. The parliament therefore has a theoretical chance to remove Norway’s double morals in this area.
A question of time
NorWatch has reported before that the Oil Fund has invested nearly NOK 4 billion in the international tobacco industry. This is while Norwegian authorities drive a hard campaign against smoking and against the industry’s clear strategy to create tobacco dependency.
Despite the government’s high positioning in the fight against the unhealthy effects of tobacco, it has still not taken aboard the consequences and proposed excluding tobacco from the Oil Fund.
At the end of May, the Norwegian Association of Heart and Lung Patients (LHL) extended a challenge to the Finance Committee to go beyond the parliament and propose a ban on tobacco investments. But LHL’s proposals have not been followed up.
According to the Socialist Left’s (SV) financial spokesman, Øystein Djupedal, the party’s proposal to exclude tobacco has no chance of a majority in the parliament. The proposal only has the support of the Central Party (Senterpartiet).
“No, this race has probably run its course. It’s great that Norway gets ethical guidelines for the Petroleum Fund, but it’s odd that the government could not exclude tobacco as an industry. I still believe that it is a question of time before such an exclusion is applied,” Djupedal tells NorWatch.
No automatic system
After the ethical guidelines are accepted for the Oil Fund’s NOK 915.3 billion, there is no automatic system to implement the new laws. Nothing will happen for a long while with the Oil Fund’s investment universe.
First there will an ethical council established by royal decree with five members. All further implementation of the ethical guidelines presupposes that this council and its secretariat are operative. This does not happen overnight, but the Ministry of Finance reveals that this will happen as quickly as possible and apparently during the last half of 2004.
Thereafter the council will start its work, decide whether they will use external consultants to assist in the screening of the fund, and consider the portfolio. Finally, the council will make recommendations to the Ministry of Finance of specific companies that should be excluded from the Petroleum Fund.
In the best case, one will therefore see the first concrete effects of the new ethical guidelines during 2005.