Norway's SWF Drops Israeli Companies Citing 'Grossly Unethical' Actions; Africa Israel Says Claims Are Groundless

(August 25, 2010) — Norway’s $446.7 billion Government Pension Fund Global, which invests state profits from sales of Norway’s oil reserves, has excluded two Israeli firms involved in developing settlements, as well as a Malaysian forestry firm, on ethical grounds.

Earlier this week, Finance Minister Sigbjorn Johnsen said in a news release that the fund sold its shares in Israeli companies Africa Israel Investments and subsidiary Danya Cebus, and the Malaysian company Samling Global, according to a release. As of December 31, the fund, which holds more than 1% of all global stocks, owned stocks worth 7.2 million kroner in Africa Israel Investments and 8.1 million kroner in Samling Global.

In a statement, the ministry said that the oil fund has already sold all its holdings in these companies, as the construction of Israeli settlements in occupied areas “is a violation of the Geneva Convention relative to the protection of civilian persons in time of war”. The divestment was recommended by the ministry’s Council on Ethics, which affirmed that Israeli companies were involved in building settlements in occupied Palestinian territory and that Samling Global, a wood and palm oil company, engaged in illegal logging and other offenses.

Ethical guidelines for the fund are set by the government, with investment exclusions now extending to almost 50 companies. The oil fund refuses to invest in companies that produce nuclear weapons or cluster munitions, damage the environment or abuse workers’ rights. Furthermore, Norway’s fund refrains from investing in companies that build in the settlements.

Yet, Africa Israel stated the claims made by the fund are groundless. The firm claims Africa Israel and its subsidiaries have not been involved in real estate development or housing construction in the towns of the West Bank for a long time.