NORWAY DUMPS VEDANTA RESOURCES FROM OIL FUND
Reuters
Wed Nov 7, 2007 10:41 AM GMT
OSLO, Nov 7 (Reuters) – Norway has dropped British mining and metals
group Vedanta Resources (VED.L: Quote, Profile , Research) from its
$350 billion oil fund at the recommendation of the fund’s ethics
council, which blamed it for environmental damage and human rights
violations, the finance ministry said.
Norway’s Government Pension Fund – Global, commonly known as the "oil
fund", invests Norway’s petroleum wealth in foreign stocks and bonds
to save for when the oil and gas run out. It is one of the world’s
biggest sovereign wealth funds.
At the end of 2006, the oil fund owned Vedanta Resources stock worth
about 81 million Norwegian crowns ($15.16 million), corresponding to
a 0.16 percent stake in the company, the finance ministry said.
The shares have all been sold, the ministry said.
"According to the recommendation (of the ethics council), the
Fund runs an unacceptable risk of complicity in present and future
severe environmental damage and systematic human rights violations
by continuing to invest in the company," the finance ministry said
in a statement late on Tuesday.
Vedanta Resources’ core business is mining and production of copper,
aluminium and zinc in India. It also has operations in Australia,
Zambia and Armenia.
"Vedanta Resources is accused of having caused environmental damage
and contributed to human and labour rights violations," the ethics
council said in its recommendation to the ministry.
"The Council finds that the allegations levelled at the company
regarding environmental damage and complicity in human rights
violations, including abuse and forced eviction of tribal peoples,
are well founded," the council said.
A Vedanta Resources spokesman said the company had no immediate
comment.
Vedanta Resources shares traded up 0.9 percent on the London stock
exchange at 21.32 pounds on the London Stock Exchange by 1032 GMT.
The council said its review extended to Vedanta subsidiaries in
India, Sterlite Industries (STRL.BO: Quote, Profile , Research),
Madras Aluminium Company (MSAL.BO: Quote, Profile , Research), Bharat
Aluminium and Vedanta Alumina, though the fund did not have direct
holdings in those companies.
The council said it had contacted Vedanta Resources in March asking for
its comments on its draft recommendation, and, after an extension,
had given it until April 20 to respond. But the company did not
respond to its enquiry by May 15.
Last month, thousands of tribal people protested against a Vedanta
Resources alumina refinery being set up in the Lanjigarh area of
India’s Orissa state and vowed to stop the $874 million project.
Norway has earlier excluded a number of arms manufacturers, miners
and the world’s biggest retailer, Wal-Mart (WMT.N: Quote, Profile ,
Research), from the fund for ethical reasons. (Reporting by John Acher,
additional reporting by Eric Onstad, editing by Will Waterman)