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The Ethical Council Deceived

The Advisory Council on Ethics of the Norwegian Government Pension Fund and several other socially conscious investors have been deceived. The Ethical Council based its recommendation not to exclude Total from the Pension Fund on reports that are now being slaughtered. According to the organisation EarthRights, Total has deliberately spread misleading information about the conditions in Burma.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
The Advisory Council on Ethics of the Norwegian Government Pension Fund and several other socially conscious investors have been deceived. The Ethical Council based its recommendation not to exclude Total from the Pension Fund on reports that are now being slaughtered. According to the organisation EarthRights, Total has deliberately spread misleading information about the conditions in Burma.


By Pia A. Gaarder and Erik Hagen
(English translation of this article was published on 13 Oct 2009)

In the autumn of 2005 the Norwegian Ministry of Finance announced that the French petroleum company Total would not be excluded from the Norwegian government’s pension fund. The Ministry was following the recommendation of the Pension Fund’s Advisory Council on Ethics, which believed that Total’s behaviour in Burma did not give grounds for withdrawal. The decision was met with great disappointment and criticism but has remained standing. Today Total is the fifth largest company in the portfolio, and the Pension Fund has invested 11.3 billion Norwegian kroners (1.3 billion euros) in the company.

One of the main sources in the Ethical Council’s grounds for not excluding Total was the American organisation The Collaborative for Development Action (CDA). After sharp criticism for its Burma involvement, CDA was engaged by Total to examine the effects of Total’s involvement locally and nationally in Burma. The criticism of Total (and also Chevron) is especially attached to the Yadana pipeline, which has become one of the most important sources of income for keeping the Burma junta alive. Total has never denied knowing about the forced labour and the abuse of the civilian population or being partly responsible.

Consequently, it was a great help when the independent non-profit organisation CDA concluded that the human rights infringements were more or less absent in the pipeline area where the oil company operated. The company’s presence thus appeared almost to be a guarantee against the military regime’s abuse of the civilian population, which otherwise is well documented.

Slaughters the Report
Two large reports from the environmental and human rights organisation EarthRights International (ERI) now show that CDA’s conclusion are, at best, naïve. The brutal abuse of the civilian population continues in the pipeline corridor too. Photographs and interviews with hundreds of villagers document forced labour, murder, and restricted freedom of movement.
In addition, EarthRights shows that CDA’s investigation had such great methodological flaws that the result was given in advance.

CDA is criticised for being extremely naïve and for lacking a method for carrying out reliable investigations under such difficult circumstances as in the military dictatorship of Burma.
Total, for its part, is accused of telling lies, of having manipulated facts, and, furthermore, of having distorted CDA’s naïve presentation of the conditions along the pipeline.

Total is also supposed to have deliberately lied and claimed that both ILO and CDA confirmed that there no longer exists forced labour in the pipe trench areas. But in its report EarthRights wrote that this is false and that the two organisations never declared that forced labour has been eradicated in the pipeline area.

Forced labour is supposed to be dominant and to continue along the pipeline, and, moreover, in the whole pipeline area. EarthRights International’s documentation shows – according to the report – that human rights infringements in connection with the Yadana project continue and are carried out systematically.

"EarthRights International's documentation indicates that human rights abuses connected to the Yadana Project are ongoing and systematic, that the companies are responsable for these crimes, and that Total and Chevron have misrepresented their impacts in Burma," the report states.

Methodological Flaws
EarthRights shows that it would have been impossible for CDA to document anything at all criticisable in the course of the few days they inspected the area.

CDA has since 2002 visited Burma and the pipeline villages five times. During each of the Burma visits CDA spent only 2 to 5 days in the area. The rest of the time was spent in the capital, Rangoon.

During all the visits to the pipeline area, CDA’s inspectors were escorted by representatives from the oil company, and they made use of interpreters that Total had furnished.

Thereafter, CDA is supposed to have interviewed the villagers openly, in groups, and Total employees and Burmese intelligence officers were close by and could hear everything that was said.

The villagers have told EarthRights that Burmese intelligence officers visited the villages in advance of CDA’s visit and ordered them to be careful of what they told the foreigners.

“We did not say everything we knew clearly to these foreigners because we had been warned by the soldiers in advance,” one of the pipeline’s neighbours stated in the EarthRights report.

Not surprisingly, CDA could consequently conclude that they never heard anything negative about Total’s presence and that abuses of the civilian population did not occur in the pipe trench where Total was present.

The Advisory Council on Ethics Criticised
Consequently, CDA’s findings were very meagre. And these findings constituted an important argument in the considerations of the Advisory Council on Ethics.

”Available information on present conditions in the pipeline corridor suggests that abuses against the civilian population in the areas included in Total’s social development programme are insignificant,” the Ethical Council wrote in its conclusion, drawing to a decisive extent on CDA.

In an appendix to the EarthRights report the Norwegian Ethics Council is in fact mentioned specifically:

"It thus appears that the COuncil on Ethics relied on and was misinformed by the flawed assessments conducted by CDA. This result is a serious and illustrative example of how the misinformation of CDA has a real impact on concerned stakeholders," ERI wrote in its report.

The organisation also reported that it is “curious” that the Ethical Council in 2005 came to the conclusion that there appears to be a general agreement, also within the NGO circles, that human rights violations no longer constitute a significant feature in the pipeline area today.

Will Study the ERI Reports
“It is correct that in the recommendation we refer to CDA, but we refer to EarthRights, BurmaCampaign and Burma experts too. We also based this on many more sources than just CDA,” Gro Nystuen, Head of the Ethical Council, wrote in an e-mail to Norwatch.

“Will the documentation that ERI has presented entail that the Council will re-examine the case?” Norwatch asked.

“We are of course always receptive to new information; we have already spoken with EarthRights about this and will naturally read their report thoroughly,” Nystuen answered.

In light of EarthRights’ reports, Norwatch has again gone through the Ethical Council’s recommendations from November of 2005. It is true that BurmaCampaign and EarthRights also were sources in the recommendation, but these sources did not tend in the same direction as CDA.

If one peels off everything in the recommendation that is not relevant because the Ethical Council believes they are conditions that lie outside the exclusion mechanism in the Pension Fund’s guidelines, it seems as if the Ethical Council’s recommendation hinges on CDA’s dubious report.

Read also: Pension Fund Banks behind Burma Junta Accounts

The French oil company Total is the Pension Fund’s fifth largest shareholding, at 11.3 billion Norwegian kroners (1.3 billion euros). The Pension Fund has invested more money only in Royal Dutch Shell, Nestlé, BP and Exxon Mobil.

The environmental and human rights organisation EarthRights International recently published two large reports on Burma:

One report, “The Human Rights, Environmental, and Financial Impacts of Total and Chevron’s Yadana Gas Project in Military-Ruled Burma (Myanmar)”, takes up abuses of the civilian population – also in the pipeline areas – and the financial aspects of Total’s and Chevron’s presence in Burma.

The other report, “Getting It Wrong: Flawed “Corporate Social Responsibility” and Misrepresentations Surrounding Total and Chevron’s Yadana Gas Pipeline in Military-Ruled Burma (Myanmar)” only takes up CDA’s methods and procedures when they wrote their five reports on the conditions in Burma.

Both EarthRights-reports can be downloaded here.

CDA has contacted Norwatch. Their reply to EarthRights here.