Oil Company sorted out suspicions of corruption

02.12.2009

Hess, the oil company, is being reinstated in KLP’s investment portfolio following solid anti-corruption efforts. Another two companies are being excluded in December.

Hess has been excluded from KLP’s investment programme on suspicion of corruption in Equatorial Guinea. In a survey conducted by the US Senate on the business carried out by six US oil companies in Equatorial Guinea, Hess is criticized for having systematically paid several hundred million dollars over many years to the President of Equatorial Guinea, his relatives and members of his government as part of the contracts for shared production in Equatorial Guinea.

”Hess are now able to refer to a solid anti-corruption effort and a commitment to the Extractive Industries Transparency Initiative (EITI) programme on corruption, in Equatorial Guinea at global and local levels. The dialogue with the company and other stakeholders confirms their substantial commitment to preventing corruption and influencing the authorities in Equatorial Guinea”, says Jeanett Bergan, Manager for responsible investments at KLP Kapitalforvaltning.

Problems being actively sorted out
KLP is also seeing improvements at companies that are still excluded. One example of this is Wesfarmers, the fertilizer company, which KLP excluded two years ago as a result of that company’s importation of phosphates from West Sahara, which is occupied by Morocco. In 2002 the UN declared that all extraction of natural resources in West Sahara was illegal. During dialogue with the Company it now shows that it wants to actively sort out the problem and invest in new technology in order to become less dependent on this type of phosphate from the area concerned. The Company confirmed this at a meeting with Ilmarinen, the Finnish pension fund, last summer. KLP cooperates with Ilmarinen from Finland and Folksam from Sweden on influencing several companies while representing greater power as owners.

Excluded
As a result of the latest exclusions from the Norwegian Government Pension - Global (Statens pensjonsfond – Utland) KLP has also decided to exclude Elbit and Norilsk Nickel. However, these companies are outside KLP’s investment universe since they are not part of the reference index KLP uses.

Elbit delivers an electronic surveillance system that is part of the separation barrier built by the Israeli authorities against the West Bank. Norilsk Nickel’s Polar Division in Siberia has emitted large volumes of sulphur dioxide, nickel and heavy metals for many years. The emissions have led to vegetation up to 200 kilometres from the plants having been destroyed or considerably damaged.

The Facts
KLP has now excluded 46 companies from its investment portfolios. Ten companies have been excluded for having violated human rights, four have violated their employees’ international rights and seven have committed serious environmental sins. In addition, 19 companies have been excluded for having produced arms, and eight companies have been excluded for producing tobacco. None are currently excluded because of corruption.

For further information please visit www.klp.no, or contact

Jeanett Bergan, Manager of responsible investments at KLP Kapitalforvaltning:
Tel: +47 92 03 85 89 or send an e-mail to: jeanett.bergan@klp.no

Tel: Heidi Finskas, Adviser on responsible investments at KLP Kapitalforvaltning:
Tel: +47 45 88 04 60 or send an e-mail to: heidi.finskas@klp.no

Ole Jacob Frich, Executive Vice President, Communication, at KLP:
Tel. +47 22 03 78 96 /++47 90 91 55 23 or send an e-mail to: ole.jacob.frich@klp.no

Related files

• SRI report Dec 2009 (920 kb)