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Norway is reexamining its investments in several Israeli companies, in particular Elbit Systems. Two representatives of the Council on Ethics of the Norwegian finance ministry visited Israel at the beginning of June, in the wake of growing criticism of Israel in Norway in the months following last winter's Israeli offensive in Gaza. The representatives met with, among others, groups of Palestinians and Israelis who claim that Norway invests in businesses directly involved in the Israeli occupation, which, they say, contradicts its commitment to abide by international law and to a just solution for the area.

The Council on Ethics was established to insure that foreign investments by the Norwegian Government Pension Fund-Global meet its ethical guidelines. At the end of 2008, the fund was invested in about 8,000 international companies, to the tune of 2,275 billion kroner, approximately $365 billion, according to this week's exchange rate.

Of that amount, the Norwegian investment in Israeli companies totaled some 2.67 billion kroner, about $428 million, with another 627 million kroner in bonds, about $100 million. According to the Central Bank of Norway, the investment in Elbit Systems, which manufactures electronic equipment used by military and other security organizations, was 35 million kroner at the end of 2008, about $5.75 million, a little under a third of 1 percent of the company's stock. The year 2008 saw a significant increase in the number of Israeli companies whose stock the Norwegian fund purchased, from eight in January to 41 by December.

Nearly two-thirds of the 41 companies are involved in development and building in the occupied territories, including the parts that were annexed to Jerusalem after the 1967 war. Another 11 international companies in which the Norwegians invest are also involved in the activities of Israeli companies on the other side of the Green Line, according to the "Who Profits from the Occupation" project of the Coalition of Women for Peace.

Earlier call for boycott

The Council on Ethics does not usually confirm or deny reports on the checks it conducts. But the examination of Israeli investments became known because representatives of the council met with the Israeli ambassador to Norway in Oslo before their visit to Israel. According to newspaper reports, Norwegian Finance Minister Kristin Halverson announced at the height of Operation Cast Lead, in Gaza last winter, that the pension fund was obligated to examine its Israeli investments.

The fund's chairwoman, Gro Nystuen, told Haaretz that the Norwegian finance ministry itself published an announcement that investments in Elbit were under scrutiny, information that members of the council are themselves not allowed to volunteer. Finance Minister Halverson is a member of the Socialist Left Party, a partner of the Labor and Center parties in the coalition government. In 2005, when her party was in the opposition, Halverson called for a boycott of Israel. But after voicing a similar statement as a member of the government's ruling coalition, she then recanted, when the government made clear that this was not official Norwegian policy toward Israel. The Socialist Left Party was among the most persistent political forces demanding the implementation of ethical guidelines for government investments.

The representatives' June visit to Israel was also not a routine one. According to Nystuen, taking into consideration that Norway invests in 8,000 companies around the world, out of a potential 80,000, it is not possible to visit each relevant country. She said that one of the representatives was planning in any case to participate in a conference taking place in Israel, and so the examination, based on existing materials in writing, was combined with an on-site visit.

People who met the council representatives during their visit in the country said two major Elbit products - surveillance systems for the separation barrier and pilotless aerial vehicles (drones), both of them causes of the reexamination - were under special scrutiny, even though the drones are not included in the Norwegian category of forbidden weapons.

Erik Hagen, who works for the independent news service Norwatch, assumes that other Israeli companies are also under scrutiny. Norwatch is monitoring whether Norway's foreign business investments match its criteria for human rights, workers rights and protection of the environment. Hagen's previous reports in Norwatch led to the first exclusion recommended by the Council on Ethics - from the American oil-scouting firm formerly known as Kerr-McGee, which was operating in the Sahara, in territory occupied by Morocco.

The Government Pension Fund-Global, originally the Government Petroleum Fund, is meant to insure that Norway's oil income will be available for the welfare of future generations; it began operating in the 1990s. The Council on Ethics was established in 2004, when the fact became known that - although Norway is party to the international demand for a ban on land mines - the fund was invested in a Singaporean company that manufactured mines, and the subject became a matter of public debate in Norway.

The council's members include two lawyers, an economist, a biologist and a philosopher. The council's ethical guidelines do not rule out investment in companies that produce weapons. A prohibition does, however, apply to producers of nuclear or chemical weapons, cluster bombs, land mines, and incendiary weapons of all types, such as napalm.

According to the guidelines, the fund may not invest in companies that "constitute an unacceptable risk of the Fund contributing to serious or systematic human rights violations, such as murder, torture, deprivation of liberty, forced labor, the worst forms of child labor and other forms of child exploitation, serious violations of individuals' rights in situations of war or conflict, severe environmental damages, gross corruption or other particularly serious violations of fundamental ethical norms." The council inspects the nature of the company's products, and does not examine governments' policies in countries where the Fund invests. Since its establishment, the council has recommended excluding some 30 companies and the Norwegian finance ministry adopted the majority of these recommendations.

The council has examined its holdings in Israel twice before: in 2006, when the fund was invested in only five Israeli companies, and in 2008 and 2009, when investments in Israel Electric Corporation bonds came under scrutiny. At that time the council decided there was no reason to withdraw its holdings, for it found no evidence that the electric company was involved as a company in the withholding of electric supply to the Gaza Strip. The examination and recommendation processes are likely to take many months; sometimes they can take as much as a year. If the recommendation is to exclude a company, and the Norwegian finance ministry adopts it, the decision will be made public only after the stocks are sold.