Pia A. Gaarder
Published in English 11 August 2009
The Norwegian Government Pension Fund has bought shares in four of COSCO Group’s seven stock-exchange-listed companies – that is, China COSCO Holdings Co Ltd (107,057,916 Norwegian kroner or 12.3 million euro), COSCO Corp Singapore Ltd, Singapore (22,540,371 Norwegian kroner or 2.6 million euro, COSCO International Holdings Ltd, Hong Kong (4,776,303 Norwegian kroner or 0.55 million euro), and COSCO Pacific Ltd, Hong Kong (39,431,505 Norwegian kroner or 4,5 million euro).
In other words, altogether 173,800 million Norwegian kroner or almost 20 million euro are invested in the Chinese shipping group.*
On COSCO Group’s web pages - official name China Ocean Shipping (Group) Company (COSCO) - we are informed that the bulk carrier Full City was built in 1995, that it is 167.2 meter long, can reach a speed of 14.3 knots, and sails under Panamanian colours. Full City is part of a fleet of 550 modern ships that the group “owns and operates” . According to Reuters , the ship is operated by the Hong Kong-based subsidiary COSCO International Holdings Limited. On its web page The Norwegian Coastal Administration writes that the ship has Chinese agents and is operates by the Hong-Kong-based "COSCO" shipping company. According to Lloyd’s Register-Fairplay data on Bloomberg is China Ocean Shipping Group the beneficial owner of Full City.
The group that owns the wrecked ship, which has polluted beaches from Larviksfjorden in the east to Grimstad in the west, is already highly controversial. Last year Norwatch reported that COSCO Group was strongly criticised for its attempt to transport arms to Zimbabwe and also revealed that the ship that transported the arms was partly covered by the Norwegian insurance company Assuranceforeningen Skuld. The shipping company is China’s largest, and, according to the organisation TransArms, COSCO Group is the most important shipping company for Chinese arms export.
The group has for several years been involved in controversial transport to undemocratic regimes. According to TransArms, the director of COSCO Group was in 1995 the head of a subsidiary that transported arms to the regime in civil-war-ravaged Burundi.
Despite the company’s frayed reputation, the Pension Fund has, in the course of 1 year, increased its investment in the group by 44.8%, from 13,8 million euro to 20 million euro (or from 120 million to 173.8 million Norwegian kroner).
COSCO is state-owned, but several of the group’s subsidiaries are stock-exchange-listed. The four Pension Fund companies have specialised in a series of services within shipping: logistics, container and terminal leasing, assurance, brokerage, sale of equipment, delivery of spare parts, communication, navigation equipment, ship repair, and so forth. There are supposed to be more than 47 different subsidiaries in Asia; in addition, COSCO has registered almost as many companies in the rest of the world. To a large extent the companies work for each other.
- The bulk carrier Full City ran aground right after midnight on Friday, 31 July 2009, outside Langesund in Telemark, Norway.
- The ship was carrying up to 1000 m3 heavy oil (of the type IF 180) and 120 tonnes light oil.
- The ship is registered in Panama but is listed as part of the fleet owned and operated by the Chinese shipping group COSCO.
- How the COSCO-group in practice has arranged the ownership of their ships, a question which is important in insurance questions, seems to be very complicated. The Norwegian business daily, Dagens Næringsliv, writes in an article that the ownership of the Panama-based company "Roc Maritime", listed as the owner of "Full City", is unknown.
According to Transarms.org was nearly all of the 50 major armed conflicts and civil wars fought during the 1990s and early 2000s involving Developing Countries, “South” of the ideal border that divides the affluent from the poor economies. None of these conflicts could have lasted for years and could continue to be fought today without the constant supply of arms and ammunition from the arsenals of the main arms manufacturing countries. Read more at transarms.org.
* The figures are based on the portfolio as of 31 December 2008. The Pension Fund’s portfolio is only made known once a year.
Earlier Norwatch article about COSCO in English:
20 May 2008: Global Compact Clears Ill-Reputed Companies