By Tarjei Leer-Salvesen, Morten Rønning and Harald Eraker
The shareholdings of the Government Petroleum Fund as of 31 December 1998 have been published. 70 billion kroner (9,3 billion USD) have been invested in more than 2000 multinational companies. The share purchases constitute 40% of the Petroleum Fund's total amount, which by the beginning of 1999 had grown to 172 billion kroner.
The survey shows that the money has been invested in companies based in industrialized countries. But the same companies are heavily involved in developing countries through subsidiaries and involvement in various projects.
After having studied the portfolio, NorWatch can conclude that the Petroleum Fund has invested in several companies with bad reputation - we are referring to serious environmental devastation, conflicts with indigenous people and local populations, blameworthy working conditions and involvement in dictatorship countries.
The 37 companies with particularly bad reputation which we report on here, are just some examples from the portfolio. The value of the investments of the Petroleum Fund in these 37 companies amounts to approximately 3 billion kroner. This does not imply that the rest of the companies in the Fund's shareholdings are "clean" when it comes to environmental and human rights matters. Many other companies should be included, but space and time limitations have forced us to leave them out in this context.
There has been given no ethical guidelines for the investments of the petroleum fund, and it is therefore no surprise that the shareholdings include some rather controversial companies. Other Norwegian institutions have tried to do business with various forms of ethical guidelines for some time.
One of them is Storebrand's Environmental Fund. Earlier, the fund owned shares in the disputed, British mining company Rio Tinto and the American environmental criminal Waste Management (WMX). But when NorWatch reported on the negative social and environmental consequences of the two companies, Storebrand withdrew its investments. The Petroleum Fund, on the other hand, has invested in Rio Tinto and WMX.
Similarly, a few years ago the Norwegian Guarantee Institute for Export Credits (GIEK), gave guarantees for Kværner's deliveries of turbines to the controversial dam project Three Gorges in China. Today, after GIEK has introduced environmental guidelines for its activity, Norwegian authorities have expressed that GIEK would probably not have given these guarantees. The Petroleum Fund, however, has invested in companies which are major participants in the Three Gorges project.
Through the needle's eye
The government has announced that it will return to the ethical considerations which the Petroleum Fund must take in the revised national budget in the spring. The question is whether any of the companies which NorWatch has pointed out, will pass through the needle's eye if the Petroleum Fund is instructed to obtain serious ethical guidelines.
A portfolio of 'worst-cases'
Below follows, in alphabetical order, the sample of companies which NorWatch has studied, with a short summary of blameworthy conditions. After the name of the company, the country/countries in which the company is quoted on the Stock Exchange follows in parenthesis, then follows the country/countries in which the company has blameworthy activity, and lastly the value of the Petroleum Fund's investment.
ABB (Switzerland and Sweden)
China and Chile
ABB is contracted to deliver 8 generators to the Three Gorges project in China.
Criticism: a) The dam project will turn 600 kilometres of the river Yangtse into an enormous lake, and will overflow large areas of agricultural land. Approximately 326 towns and villages will be overflowed, many of which possess inestimable historic values. The forced relocation of the inconceivable number of 1.3-1.4 million people has already started.
In addition to the massive movement of people, probably the world's largest as a result of the construction of a hydroelectric power station, the damming up of the river will also threaten some already endangered species of animals. The World Wildlife Fund is, among other things, concerned about the future of the big panda, the Chinese river dolphin, the Chinese alligator, and the Siberian white crane. The Norwegian Ministry of Trade and Industry has expressed that deliveries to the Three Gorges project will not get guarantees from GIEK after the institute recently adopted environmental guidelines.
b) ABB also has deliveries to the Pangue power station on the Bio-Bio river in Chile. NORAD withdrew its loans to the project when the company in charge of the construction did not stick to the agreement on further development of the water course.
ALCAN ALUMINIUM (Canada)
Alcan owns 35% of Utkal Alumina, and in addition it controls the Indian company Indal, which has a 20% share in Utkal Alumina. This makes Alcan the major investor in the bauxite/alumina project in which the Norwegian company Norsk Hydro owns 45%. The project has an investment budget of 13 billion kroner, if both the planned phases are carried out.
Criticism: The proposed project will result in the forced relocation of 142 families, and take the land from 1302 families keeping title deeds to that land. In addition, tens of thousands of people will lose access to common resources such as grazing land, and they will have reduced access of water to their land. This has caused massive protests, and in an opinion poll which was carried out before Christmas 1998, 94% of the local population opposed the project. Both the company and the authorities have resorted to violence against the local population, and there are several lawsuits going on against people who have resisted the construction plans. The project is in serious trouble, and it has been postponed by 18 months.
ASARCO INC. (USA)
Asarco is the major owner (54%) of Southern Peru Copper Corp. (SPL), which is Peru's largest mining company, and among the world's ten largest. For 40 years, SPL has won copper from the open-cast mines Cuajone and Toqupala in the southern part of the country.
Criticism: According to the local organisation Labor, the Locumba river is heavily polluted. Almost a mile of beach north of the town Ilo, and almost a mile of beach at the town Ite are also damaged by pollution. The company contributes to severe air pollution in Ilo, which has turned the town into one of the world's most polluted.
SPL's smelting works is being extended, partly with deliveries from the Norwegian company Kværner, and the local population is not satisfied with the way the extension is carried out. The Environmental Impact Assessment for the extension only covers one part of the project, the smelting works, and not the extension of the Cuajone mine. In addition, the analysis has not considered alternative solutions for the extension, and it does not address the possibilities of repairing the environmental damages after the mine is closed.
According to Labor, which works to get the analysis rendered invalid, the local population has not been informed on, nor invited to take part in, the process prior to the presentation of the analysis to the Ministry of Mining and Energy. The company has been taken to court many times, and it has also been criticized by the International Water Court in Amsterdam.
BANK OF SCOTLAND (UK)
The bank is among the lenders (œ5.5 million) to the paper and cellulose giant Barito Pacific's factory PT Tel in Sumatra. PT Tel's cellulose factory will, when it is finished, be one of the largest in Southeast Asia. The factory will produce 500,000 tonnes of cellulose a year. The production will later be increased to 1 million tonnes.
Criticism: The timber, around 2 million m3 per year, is taken from Barito Pacific's timber concession areas of 300,000 hectares. The forests in these areas are already partly felled, and the land has been replanted with acacia and eucalyptus. The factory area of 1250 hectares has also been cleared. These areas former belonged to the inhabitants of the villages Desa Dalam, Muara Niru, Grinam, Tebat Agung and Banyuayu, who were occupied with small scale rubber plantations. The construction work has led to flooding of the rubber plantations, and the owners have lost their trees, according to the London-based organisation Down to Earth, which is working to protect the environment in Indonesia. The local authorities, who were responsible for paying the company's compensation to the local population, kept parts of the money themselves. The compensation did not cover the real losses of the local population. PT Tel's factory will use water from the Lemantang river for its production, and it will also dump production waste into the river. The environmental impact analysis contains little information on waste cleaning. 32 villages are situated along the river, and it is estimated that as many as 100,000 people will be negatively affected by the factory. The river is both a source for drinking and washing water, in addition to being a source for income for fishermen and peasants.
BHP - Broken Hill Proprietary Co. (Australia)
Papua New Guinea and Australia
a) BHP is co-owner and operator of the copper and gold mine Ok Tedi Mining Ltd. in the Western province of Papua New Guinea.
Criticism: The mine has dumped large quantities of hazardous waste into the rivers Fly River and Ok Tedi for many years. This has caused comprehensive environmental problems, and health problems for the indigenous people in the area. A settlement between BHP and 30,000 indigenous people in the area has committed BHP to a process of cleaning up, which will cost them 350 million US$. But much of the damage cannot be restored. Therefore, part of the money will be directed to other programmes to give the population new means of livelihood.
b) BHP wins coal by the Catarct River in the Australian state New South Wales.
Criticism: The activity has had enormous negative consequences for the local environment, according to the Mineral Policy Institute. The main problems are related to the reduced flow of water in the river, emission of inflammable gases, and disturbance of the ground.
BHP's own measures show that the flow of water in the river has been reduced by between 1 and 1.5 million litres per day. The same study showed that the mining activity has caused cracks in the ground, into which the water disappears. Such cracks have also led to the emission of subsoil gases, which have killed vegetation along the riverside, according to studies which have been done. The local population is concerned about the reduced flow of water, which they belive threatens their own need for water.
BOUGAINVILLE COPPER LTD. (Australia)
Papua New Guinea
Bougainville Copper owns the copper mine Panguna on the island Bougainville outside Papua New Guinea (PNG).
Criticism: Partly as a consequence of the enormous environmental problems caused by the mining, and partly because of political opposition and conflict with the many who were forcibly relocated by the mine, a conflict which soon resembled a civil war developed. As a result of this war, the mine closed in 1989. Many of the rebels organised in Bougainville Revolutionary Army, and on 17 May 1990 they declared Bougainville independent from PNG. The authorities refused to recognize this, and since the declaration of independence the island has been visited by diplomatic delegations and armed forces alternately. Some time in 1997, two mercenary firms were engaged in the struggle, the British Sandline and the South-African Executive Outcomes. Their mission was to "liberate" the Panguna mine from the rebels. But as the soldiers arrived with their advanced weapons, the PNG army protested against external competition, which created a political crisis in the country. The mercenaries withdrew, and the conflict between the revolutionary army and the government continued. Today, their wish to reopen the Panguna mine of Bougainville Copper Ltd. is perhaps the most important motivation to continue the war. The human rights commission of the United Nations has written a report on the case, in which some of the extensive human rights violations which have been committed are documented.
The Danish chemical firm Cheminova is a producer of, among other things, pesticides.
Criticism: In 1997, the company was strongly criticized for selling pesticides to, among other countries, Nicaragua and Guatemala. 103 people have died in Nicaragua after using parathion, and methyl parathion. Both substances are prohibited in Denmark. In 1997, Danish TV documented how the poison was spread with large atomizers carried by two men, or from planes while workers were on the ground. Cheminova's manager Bjørn Albinus said that he had never seen such irresponsible use of the product. However, Cheminova did not want to suspend the production.
- If we disappear from the market, it will be taken over by producers in China and Mexico, and Cheminova will have no possibilities of selling new pesticides that are more friendly to the environment, Albinus said. In 1996, the company stopped the sale of parathion to developing countries. This is now only sold in the USA, the EU, and Israel. The company is still selling methyl parathion.
C. ITOH & CO. LTD. (Japan)
C. Itoh & Co. Ltd. is, along with Marubeni Corp., Mitsubishi Corp., Mitsui & Co. and Nissho Iwai Corp. (see below), among Japan's 10 largest importers of timber from the Southeast Asian rain forest.
Criticism: Japan is the decidedly largest importer of timber from Southeast Asia's rain forests, mainly from Indonesia, Malaysia (Sabah/Sarawak), and the Philippines. The rain forest in Southeast Asia is the one that is most exposed to deforestation. According to FAO, 3.9 million hectares of forest disappeared annually in the period 1980-90. This equals 1.2% annual deforestation, the world's highest rate for tropical forest. The annual deforestation rate in the region was 1.1% in the period 1990-95. FAO points out that felling of timber, in addition to agricultural activity, is the main reason for the deforestation.
FREEPORT McMORAN COPPER GOLD (USA)
This firm is operator and co-owner of the world's largest gold and copper mine Freeport Indonesia in Irian Jaya. The British mining company Rio Tinto is co-owner (see below).
Criticism: Freeport is infamous internationally. There have been serious and continuous conflicts between the mining company and the local population (mostly indigenous people) since the mine opened in 1967. There have been numerous protests against the mine, and the authorities have sent in the military, which has led to torture and murder. The mine has caused enormous environmental problems: Every day, the oldest part of the mine emits 110,000 tonnes of toxic waste in the Aykwa river. The newest part of the mine on Mount Grasberg makes Freeport the mine that moves the largest quantities of mass in the whole world. 2.5 million hectares of rain forest and indigenous people's areas are affected by pollution, and the authorities have warned the local population against eating sago, which is their staple food.
HASBRO INC. (USA)
The Dor Lok factory in the Southern part of China produces Teletubbies dolls for Hasbro. The Teletubbies dolls are main characters in a BBC-produced children's TV programme, which the Norwegian channel TV2 broadcasts on weekends.
Criticism: According to a comprehensive report carried out by Hong Kong-based Asia Monitor Resource Center, the conditions for factory workers are unworthy. The report examines the factories of the toy producers Hasbro, Mattel, McDonalds, Tyco International and Walt Disney Corp. (see below). The factories violate several of the Chinese labour laws. Working days lasts up to 16 hours, which also include night work, salaries are low, they charge the workers one month's salary as a deposit, and the workers are refused to leave their jobs. Trade unions do not exist in most of the factories, they all have a penalty system, few of them have working contracts, and one factory (Hasbro-Teletubbies) has on one occasion been fined for using child labour.
Canada and Indonesia
a) The mining company Inco runs mines many places, among others a nickel mine in Indonesia.
Criticism: Inco's subsidiary (58% share) in Indonesia, PT Inco, started nickel mining on the island Sulawesi in Indonesia as early as 1977. Following several extensions, the company aims to produce 100 million pounds of upgraded nickel ore annually. The mine takes out 20 million tonnes of land mass a year, with considerable consequences for both air and water. Measures of the local population's drinking and washing water have shown large occurrences of E. Coli bacteria. Earlier, the local population had no problems with the quality of the water, but after the increased migration into the mining area and the increased use of water, the water is almost unfit for consumption. Dust from the activity has also caused problems for the local population. Strip-mining of the hills in the area has limited people's opportunities of gathering fruit and other products in the forest.
b) Inco plans to start mining in Labrador, Canada.
Criticism: Inco's plans for nickel, cobalt and copper mines and smelting works, face strong opposition from the Innus and Inuits in Voisey's Bay. The company's environmental impact assessment for the project has been slaughtered, along with the company's analysis of socio-economic consequences, and the plan for safety and environmental surveillance. The project will occupy parts of the indigenous people's traditional area, which is also the native soil of many threatened species of animal worthy of preservation.
MARUBENI CORP. (Japan)
Imports timber from Southeast Asia's rain forests (see C. Itoh & Co. Ltd.)
MATTEL INC. (USA)
Mattel is a major manufacturer of toys (Barbie dolls, among other things). Mattel has its toys produced, among other places, in the following four factories in the Southern part of China: Meitai, Zhongmei, Tri-S and Jifu (see Hasbro Inc.).
The factory Laxo produces toys for McDonalds' children's menus in the Southern part of China (see Hasbro Inc.).
MITSUBISHI CORP. (Japan)
The company imports timber from Southeast Asia's rain forests (see C. Itoh & Co. Ltd.).
MITSUI & CO. (Japan)
The company imports timber from Southeast Asia's rain forests (see C. Itoh & Co. Ltd.).
MOBIL CORP. (USA)
Mobil extracts oil and gas in the Ache province in Sumatra, Indonesia, in partnership with the national oil company Pertamina.
Criticism: The Ache province is one of the most unstable regions in Indonesia, and serious human rights violations were uncovered after the fall of the Suharto regime in the spring 1998. At least 9 mass graves were discovered, and the number of bodies were estimated to over 5,000. In recent years, the area has been invaded by the military, and much of their activity has been closely related to the oil and gas activity in the area.
Last autumn, Mobil's role in Ache was focused upon in the USA. Reports doubted whether the company could possibly be unaware of the butchery of the local population. One of the military posts in the area was built in connection with one of Mobil/Pertamina's plants. To the local management, Mobil contractors also reported on the findings of body parts near the installations of the company, but the local management did not pass this on. Mobil's operations in the Ache province has also had serious negative consequences for the environment due to chemical leaks and accidents. Such effluents have caused health problems for the local population.
In December 1998, four inhabitants in the village Ampeh took the company to court because of what they claim was an illegal take-over of their land in 1977. Mobil built an airport in an area which was used as a graveyard.
MONSANTO CO. (USA)
The company is leading within genetically modified foods, and it is also big within chemical industry.
a) Monsanto Co. produces and markets the growth hormone rBGH (Recominant Bovine Growth Hormone).
Criticism: rBGH, which Monsanto produces by using gene-technology, increases the milk production of cows which have the substance injected. For the cows, this may cause suffering, and the hormone has a so-called marker-gene which is resistant to antibiotics. It is feared that such genes may spread this characteristic to bacteria, and that this in turn may make it difficult to treat certain diseases with antibiotics. In addition, some researchers claim that rGBH increases the risk of cancer for people who drink the milk from these cows. rBGH is prohibited in Canada, in the EU area, Norway, and many other countries.
b) Monsanto invented, and is still one of the main promoters of, the so-called "Terminator technology". This is a sort of genetic technology which can be used on plants to make them sterile. The advantage, for the company, is that farmers become dependent upon the company to buy seed corn for every crop.
Criticism: This undermines the "farmer's privilege" principle (that the farmer can put away seed corn from his own production). When farmers become dependent upon central deliveries of seed corn, it is a serious threat to food security.
c) The company is the world's largest producer of genetically manipulated soya.
Criticism: Monsanto and other genetic technology firms have opposed labelling genetically manipulated food products. Today, these products are for sale in, among other countries, Norway, but the consumers do not get to know which products. The Directorate for Nature Management recently invented a method of finding out which products contain genetically manipulated ingredients. With regard to long-term environmental consequences of genetically manipulated soya, one still has poor knowledge.
NEWMONT MINING CORP. (USA)
In 1996, Newmont's Indonesian subsidiary Newmont Minahasa Raya PT (NMR) started a gold mine in the Northern part of the island Sulawesi in Indonesia.
Criticism: The company uses the very disputed method of dumping all waste on the sea bed, a method which is prohibited in the company's home country, the USA. More than 600,000 tonnes of stone mass containing cyanide is pumped into the sea every day. In August last year, local fishermen reported on fish death in the area, and they notified the authorities on leaks in the pipeline which takes the waste into the sea. At first, the company denied that they had such leakages, but after submarine inspections by independent bodies revealed that the pipeline was stopped up, and that the waste therefore leaked out closer to the shore, NMR had to close for several weeks to repair the leaks.
NISSHO IWAI CORP. (Japan)
The company imports timber from Southeast Asia's rain forests (see C. Itoh & Co. Ltd.).
NOVARTIS AG (Switzerland)
a) Novartis is one of the world's leading firms within medical research.
Criticism: Novartis has been accused of so-called gene-piracy. On example concerns Norway: A representative of the company took soil samples from the mountain plateau Hardangervidda. The samples contained a rare fungus, which is used in organ transplants. Novartis has now patented this fungus, but the country of origin, Norway, gets no part in the extraordinary incomes which this patent gives the company. The company is also criticized for having patented a natural organism, and for patenting life.
b) Novartis has an extensive agricultural division which, among other things, produces pesticides and genetically manipulated plants.
Criticism: Novartis produces a type of corn that is resistant to the pesticide gluphsinate, and which contains a marker gene which is resistant to antibiotics. This maize is prohibited in Norway, and some EU countries have imposed both a temporary moratorium on planting and on marketing of this type of corn.
Another type of maize which is produced by the company, which Norwegian authorities have not decided whether to allow, has been criticized by environmentalists. This maize produces its own pesticide (BT), and it is also resistant against gluphosinate. The critics say, among other things, that the BT-poison in the maize is unspecific, and that it also affects insects that are not considered noxious. In addition, there is a danger that insect will develop resistance against BT.
OCCIDENTAL PETROLEUM CORP. (USA)
Occidental Petroleum (Oxy) operates in the so-called "Samore" block onshore in Colombia, which containts 1.5 million barrels of oil. Oxy and Royal Dutch Shell are partners in this project.
Criticism: The project has led to a bitter land conflict with the local population, the U'wa people. A comprehensive international campaign has been launched to support the struggle of the U'wa people. Locally, the conflict has become violent. In addition to the military forces of the country, one paramilitary group and two guerrilla groups are active in the area. The prospect of enormous incomes from the activity has escalated the conflict, and the indigenous people, the U'was, have to pay a high price in terms of environmental problems, and of being exposed to violence from many different groups. The violence is not limited to the local population. As late as 4 March 1999, three American environmentalists were murdered during a visit in the area, and many American organisations now demand that an independent fact-finding committee must be admitted to the area to investigate this case.
Guinea and India
a) Pechiney is the operator of the bauxite/alumina company Friguia in Guinea, West Africa. It owns 36.5% of the holding company Frialco (of which Norsk Hydro is also a co-owner), which in turn owns 51% of Friguia. The company extracts the raw material bauxite (concession area 1152 km2) and it produces alumina for the aluminium industry.
Criticism: Red slam waste (contains lye, chemicals, minerals, soil, and water) from the alumina factory has been discherged into the nature without any safety precautions since the early 1960s. A valley has been filled with waste, and three villages have been flooded. The company has a conflict with the local population in the mining area, partly because of forced relocation of people and destruction of agricultural land and grazing areas.
b) The company is a co-owner of the bauxite/alumina project Nalco in Orissa, India.
Criticism: The company has a conflict with the local population (mainly indigenous people and pariahs) because of forced movement of people, lack of compensation, and destruction of agricultural land and grazing areas. There are serious environmental problems related to red slam waste and the ash deposit, and reports on high rates of skin diseases among the local population downstream of the waste deposits.
PLACER DOME INC. (Canada)
Papua New Guinea
The company's Australian subsidiary Placer Pacific operates the goldmine Porgera in Papua New Guinea.
Criticism: Porgera is probably the most polluting mine in Papua New Guinea. Every day, 40,000 tonnes of waste and stone are dumped into the Strickland and Fly rivers. The authorities have declared the first 140 kilometres of the rivers as "sacrifice zone", in which the company is not subject to any restrictions on the heavy metal occurrences. Samples show that the occurrence of heavy metals is up to 3,000 times as high as regulations elsewhere permit. The pollution has resulted in deaths and damages to animals and human beings. The local population has attacked the company's buildings because they are dissatisfied about delayed compensations.
RAUMA OY (Finland)
Rauma's subsidiary Sund's Defibrator delivers large parts of the machinery for PT Tel's factory in Sumatra, including a fibre line worth 64 million US$ (See Bank of Scotland).
RIO TINTO (UK and Australia)
Indonesia, Papua New Guinea, the Philippines and Namibia
Rio Tinto Plc., the world's largest mining company, is involved in mining world wide. The British organisation Partizans is working against Rio Tinto's dubious projects, and the company has faced criticism from a global alliance of trade unions, indigenous people's groups, church and local communities, and environmentalists. Below follows only a small selection of the conflicts which have been provoked by the company:
Criticism: a) Rio Tinto is planning to start a goldmine on the small island Lihir in Papua New Guinea. The plant will dump 89,000 tonnes of waste containing cyanide and 330,000 tonnes of stone into the sea every day. Ecological studies have classified the area as one of the richest marine environments for animals and plants in the world.
b) Rio Tinto's two mines in Kalimantan in Indonesia, Kaltim Prima Coal and Kelian Gold, have both expelled indigenous people in the area in their search for riches. The mines have occupied both rain forest areas and the local population's own small scale plantations. At the same time, the mines have polluted the rivers and the drinking water in the area through discharges of water from the washing process.
c) Rio Tinto has applied for prospecting concessions both in Luzon and Mindanao in the Philippines. The local population has reacted with protests, and asked Rio Tinto to stay away from their areas. Philippine church communities, organisations, and local groups from among others the Subanen people, have declared their opposition against the company's plans in meetings with representatives of the company.
d) Rio Tinto's uranium mine in Namibia, Rössing, has been operated for many years with standards for working conditions far below what is required in the Western world. The Mineworkers' Union confirms that hundreds of employees suffer from lung diseases and cancer. Rio Tinto has opposed a courtcase in England, and claims that lawsuits must take place in Namibia, where the legal protection of the workers is much weaker.
e) Rio Tinto is one of the owners of the Freeport mine in Irian Jaya, Indonesia (see Freeport McMoran). Rio Tinto's subsidiary Bougainville Copper has provoked a regular civil war on the island (see Bougainville Copper).
ROYAL DUTCH PETROLEUM/SHELL (Holland)
Nigeria and Colombia
a) Shell started oil drilling in the Niger Delta as early as 1958, and today the company represents half of the country's oil extraction.
Criticism: Shell's oil activity has led to environmental devastation in the Niger Delta, where among others the Ogonis live. In many places you can no longer fish, hunt or cultivate the land because of the pollution. According to the authorities' own statistics, there were 2500 oil spills in Ogoniland in the period 1986 to 1991. Conflicts with the local population, which have lasted for many years, have resulted in murders, destruction of 20 villages, and 100,000 people living as refugees in their own land. The persecution of Shell's opponents resulted in, among other things, the execution of Ken Saro-Wiwa and other Ogoni activists in 1995, and the persecution of the local population continues.
b) Shell takes part in oil activity onshore in Colombia (see Occidental Petroleum Corp.).
SIEMENS AG (Germany)
Delivers, along with Voith and General Electric, 6 turbines and 6 generators to the Three Gorges project in China (see ABB).
India and Colombia
The Swedish firm of contractors Skanska is involved in large projects worldwide, including hydroelectric power projects in India and in Colombia.
a) In the Indian state Jammu-Kashmir, Skanska has entered into an intentional agreement with the authorities to build a power plant in the Gurez valley, together with Norconsult, among others.
Criticism: 25 villages are threatened by flooding, and to begin with, 10,000 people will have to move. The project may threaten the remaining 25,000 of the Dard Shin people. Local environmental groups have also expressed concern about the flora and fauna of the area, which is unique because the valley for long periods of the year is isolated from the surrounding world.
b) Skanska is contractor for the Urra dam in Colombia.
Criticism: The construction work has already ruined the fisheries resources of the river, one of the most important sources of nutrition for local Indian communities. If the dam is completed, large parts of their areas will be overflowed, and their means of livelihood will be destroyed. On 10 November 1998, the Colombian judicial system concluded that the project could not be completed without the consent of the Indians. At the same time, local paramilitary groups, who profit on the construction, have threatened with carrying out violent massacres if the dam is not completed. Amnesty International in the USA launched an urgent campaign on 4 February as a result of paramilitary groups' killings and kidnappings of people in the area.
TEXACO INC. (USA)
From 1972 to 1992, Texaco was engaged in extensive oil extraction in the Ecuadorian part of the Amazon. Within the concession area (which has a size equal to the Norwegian county Akershus), hundreds of wells were drilled, and a network of roads and pipelines were built in the formerly untouched jungle.
Criticism: Texaco has left behind serious environmental problems and destruction of the rainforest and the livelihood of the Indians. Oil spills and chemicals have constantly, and on purpose, been led straight into the nature from open waste dams. An unknown number of leaks from oil pipelines and spraying of oil waste on the roads have contributed in polluting the rainforest. All the gas has been burnt throughout the years. This has led to what the Indians call black rain. The Indians, who have been in conflict with the oil company for many years, have taken Texaco to court. The lawsuit is still going on.
TOTAL PETROLEUM (France)
Total (and Unocal, see below) are engaged in extensive co-operation with the Burmese military junta to extract oil on the Burmese continental shelf.
Criticism: The activity of the companies is in conflict with the request of Nobel Peace Prize laureate Aung San Suu Kyi to boycott the country. It generates enormous incomes to the military junta, and the companies participate in the construction of one of the world's most controversial gas pipelines, which is to lead gas from the Yadana field in Burma across the border to Thailand. Unocal was sued in the USA by 15 Burmese refugees for violation of human rights after having used violence during the construction of the pipeline. The pipeline project has been focused on, not only because of extensive use of violence against demonstrators, but also for forced labour, forced relocation of tribal people, and for comprehensive negative environmental consequences.
TYCO INTERNATIONAL (USA)
The facories Tri-x and Jifu produce toys for Tyco International in the southern part of China (see Hasbro Inc.)
UNION CARBIDE CORP. (USA)
Union Carbide owned and ran a pesticide plant in Bhopal, India. The factory has been closed down.
Criticism: The company is responsible for one of the worst industrial disasters ever. Tons of the toxic gas Methyl Ico Cyanate (MIC) leaked from the plant on 4 December 1984. According to official statistics, more than 3000 people died as a result of the poisoning, either immediately or as a result of after-effects. Those who were in charge of the cremation of dead bodies, say that as many as 15,000 people, a majority of them people from the slum areas around Union Carbide's factory, died instantly. There have been lawsuits going on for years after the accident, and thousands of Bhopal victims are still fighting to get compensation and medical aid.
Unocal participates in oil activity in Burma (see Total).
UPM KYMMENE OY (Finland)
UPM Kymmene has entered into a strategic alliance with the Asian paper and pulp giant April, Indonesia's second largest pulp producer. April's subsidiary Riau Andalan Pulp and Paper (RAPP) in Sumatra produces 615,000 tonnes of pulp a year. RAPP is now constructing the second fibre line in the factory, and is planning to produce 2 million tonnes of pulp in year 2000. UPM Kymmene is also a major shareholder in Rauma (see this).
Criticism: Since 1995, RAPP has cleared at least 20,000 hectares of rainforest every year. When the production is increased, the pace of the destruction of the rainforest will multiply. RAPP's concessions include areas which have traditionally been used by the local population. Destruction of such areas is in conflict with Indonesian laws, which secures the local populations right to the areas. However, the laws also secure the authorities' proprietary right to all forest.
In July 1996, the inhabitants of the village Desiki took their case against RAPP to the national human rights commission. The inhabitants had made an agreement to rent land from a local palm oil plantation. RAPP later claimed that they had the right to use the areas. The inhabitants complained that they had not been consulted about the construction of the new factory, that the company had taken the areas illegally, and that RAPP paid too low compensation for the areas. In February this year, the two parties made an agreement on compensation.
Friends of the Earth (FoE) in Finland has taken the initiative for an international campaign which aims to hinder the Finnish company's co-operation with April. FoE argues against such a collaboration because of April's/RAPP's ruining of the rainforest, the company's illegal acquisition of the areas of the local population, and the impossible situation for the trade unions in Indonesia.
WALT DISNEY CORP. (USA)
The factory Laxo produces dolls (among others Mickey Mouse) for Walt Disney in the southern part of China (see Hasbro Inc.).
Australia and the Philippines
a) WMC operates the copper, uranium, gold and silver mine Olympic Dam in the Australian state South Australia.
Criticism: WMC's activities in South Australia conflict with the interests of the indigenous people in the area. Both access to water and the historical traditions of the mound springs are threatened by the enormous water consumption of the company. Olympic Dam is Australia's biggest consumer of groundwater from sub-soil reservoirs. The Arabanna people demand rights to a large area in the north-western part of the state from the authorities, by the National Native Title Tribunal. The land demand does not include the mine area itself, but the areas from which the mining company pump the groundwater. Local authorities have criticized the company for big leaks from the deposit of radioactive waste.
b) WMC has the right to prospect for minerals in an area of 99,387 hectares on the Philippine island Mindanao.
Criticism: WMC's activities in the Philippines have met massive local opposition. The local population have launched protests and blockades in order to prevent the company from entering their traditional areas. Philippine military forces have been used to stop local protests.
The Australian Mineral Policy Institute, which works with problems related to mining, criticise WMC's activity in relation to indigenous people, the environment, working conditions, and financial matters in their report "Glossy reports, grim reality".
The Government Petroleum Fund
The Government Petroleum Fund, usually called the Oil Fund, is actually a bank account in the Central Bank of Norway. The Fund is regulated by a law of 22 June 1990, and by regulations from the Ministry of Finance. Formally, no money was transferred to the Oil Fund until 1996. The leader of the Fund is Knut Kjær, who is reporting to the Director General of the Central Bank.
The incomes of the Oil Fund are defined as "the flow of cash from the petroleum activity which is transferred from the national budget and the profits of the property of the Fund". By the end of 1998, this sum amounted to 171.8 billion Norwegian kroner (23 billion USD). The profits of 1998 were 9.3%.
The "reference portfolio" shows how the money is distributed (if not quite accurately). The portfolio shows that 40% of the Fund's means are invested in shares, while 60% are placed in bonds. The shares are to be distributed 30% in companies which are quoted on the Stock Exchange in America, 50% in companies which are quoted on the Stock Exchange in Europe, and 20% in companies in Asia. The bond investments are made according to the same distribution. It is important to note that the Fund's guidelines allow variations from the reference portfolio.
The Petroleum Fund has, by the end of 1998, invested money in 2093 different companies. The guidelines do not include environmental or human rights matters. However, it is explicitly said that the Norwegian Central Bank must not "make use of proprietary rights related to shares unless it is necessary to secure the financial interests of the Fund". The Fund cannot own more than 1% of the total value of a company. In 1998, the Fund's largest single investment was 831 millions kroner in the Swiss company Novartis, which is dealt with in this newsletter.
When the revised national budget for 1999 is presented, the Norwegian government has announced that it will present environmental guidelines for the Government Petroleum Fund. So far, it has not been decided whether these guidelines will apply to the entire Fund, or only a selected part of the portfolio. According to the government, guidelines which cover human rights will be difficult to implement. There is no official time schedule for the possible presentation of such guidelines.
Norwatch Newsletter 5/99