The Norges Bank Executive Board has decided to expunge British steel producer Evraz and Israeli telecoms company Bezeq from the portfolio of Norway’s $1.8 trillion Government Pension Fund Global.. The pension giant is excluding Evraz for allegedly aiding Russia in its war against Ukraine, while Bezeq is accused of helping expand illegal Israeli settlements in the West Bank.
Both decisions were made based on the recommendations of the Council on Ethics, which is an independent body that evaluates whether companies in the GPFG’s portfolio meet its ethical standards.
The Council said in its recommendation to exclude Evraz that the British steel producer has been accused of supplying steel to the Russian arms industry from its Russia-based operations and “rests on the company’s contribution to maintaining Russia’s unlawful war of aggression against Ukraine.” The recommendation noted that after Russia invaded Ukraine in February 2022, Norway’s Ministry of Finance decided that the pension giant exit Russian holdings.
According to the recommendation, Evraz signed a contract to supply steel to Uralvagonzavod, one of the world’s largest producers of combat vehicles. It also cited media reports that Evraz subsidiaries have provided steel, vanadium, and the chemical toluene – which can be used to make ammunition – to state-controlled factories that arm Russian soldiers.
The Council on Ethics reported it has contacted Evraz, but the company did not respond. As of the end of 2023, the GPFG owned 0.96% of the company’s shares. However, the fund has not yet been able to sell the shares “due to sanctions and operational issues.” Trading in shares of Evraz have been suspended since March 2022.
Norges Bank said it also decided to exclude Israeli telecommunication company Bezel for allegedly “helping to facilitate the maintenance and expansion” of Israeli settlements in the West Bank. The recommendation said that by providing telecom services to Israeli settlements in the West Bank, Bezel is “contributing to the violation of international law.”
The Council noted that since the terrorist attack on Israel Oct. 7, 2023, there has been a sharp increase in settler violence, forced relocation, and the arrest of Palestinians in the West Bank. “Much of this may be linked to the Israeli settlements,” the recommendation said. “The Israeli government has also announced plans to expand the settlements and further increase the influx of settlers to the West Bank.”
As of the end of June, the GPFG owned 0.76% of Bezel’s shares.
Meanwhile the central bank’s executive board decided to remove from observation Hyundai Engineering & Construction. The South Korean construction engineering firm had been under observation since July 2021 related to “an unacceptable risk that the company has contributed to or been responsible for gross corruption.”
However, the Council noted that the company has since implemented an anti-corruption system that is mainly aligned with internationally recognized recommendations. “Hence, the risk of gross corruption in the company’s operations is no longer considered unacceptable,” the recommendation said.
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Tags: Bezel, Evraz, Exclusion List, Government Pension Fund Global, GPFG, Hyundai Engineering & Construction, Israeli settlements, Norges Bank Executive Board, Russia, Ukraine, war, West Bank