24 August, 2010

The Ecologist

The Norwegian government has sold its investment in one Malaysian logging and palm oil company but remains a big shareholder in another accused of destroying rainforest and orang-utan habitats

The Norwegian government is under pressure to sell its investments in Sinar Mas, a controversial palm oil and timber group, which has admitted illegally clearing high conservation value forest.

The country’s oil assets have made it one of the biggest investors in the world, with a fund of more than $450 billion managed by the state-owned Norges Bank Investment Management (NBIM).

It manages these funds on ethical grounds and this week said it had sold its investments in Malaysian firm Samling Global, accusing the company of illegal logging and saying there was an ‘unacceptable risk of contributing to current and future severe environmental damage.’

Samling has been accused of illegally sourcing timber from a wildlife sanctuary, ignoring the rights of indigenous groups, and corruption.

The state-owned fund has also previously excluded the British-owned mining company Vedanta Resources, which the Indian government found guilty of violating the human rights of the local communities.

However, Norway remains one of the biggest shareholders in the controversial Indonesian logging and palm oil group Sinar Mas, with, according to its most recent published accounts, a holding of more than $16m in Sinar Mas’ palm oil arm, Golden Agri Resources.

Sinar Mas has been caught clearing orang-utan habitats and carbon-rich peatlands despite repeated promises to clean up its act. An independent audit of its activities recently found it was clearing land for palm oil plantations before it had received permits or even made conservation assessments.

Hypocrisy

Only last week, Norway made its first $30m payment of a $1 billion commitment to Indonesia to help protect its rainforest saying it wanted to ‘support efforts’ to reduce deforestation.

Greenpeace said it was hypocritical of the Norwegian government to be handing over millions of dollars to protect Indonesia’s rainforest while at the same time ‘profiting from its destruction’ through investments in Sinar Mas. It called on the Norwegian government to clean out the other ‘skeleton’ in its investment fund.

Neither the NBIM or the Norwegian government said it could comment on decisions to exclude specific companies until after they have been made public. It said any decision would be based on recommendations from the Council of Ethics.

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