Norway Excludes Textron, Barrick Gold From Oil Fund ()

By Vibeke Laroi and Meera Bhatia

Jan. 30 (Bloomberg) -- Norway excluded Textron Inc. and Canadian miner Barrick Gold Corp. from its oil fund, citing the production of cluster weapons and environmental concerns.

The $300 billion fund will be barred from investing in the companies after a recommendation from the Council on Ethics, the Oslo-based Finance Ministry said in a statement today. Textron, the maker of Bell helicopters and Cessna planes, was excluded because of the international treaty banning cluster weapons from 2008, the ministry said.

“The company produces cluster weapons, which are banned,” Finance MinisterKristin Halvorsen said. Barrick was excluded because of “an unacceptable risk of the fund contributing to serious environmental damage,” the ministry said.

Norway set up rules in 2004 to keep the fund from investing in companies involved in human rights abuses, environmental damage, or the production of some weapons. The Finance Ministry decides whether to exclude any of the more than 7,000 companies in which the fund invests, based on recommendations from the ethics council. Nine producers of cluster weapons have been excluded, according to the statement.

Barrick spokesman Vince Borg said the company disagrees with the allegation that investing in the company entails an unacceptable risk of contributing to environmental damage.

Barrick is “managing and mitigating the risks,” he said by phone from Toronto. “We’ve made steady progress in improving the Porgera mine in any respect from providing sustainable economic development to protecting the environment.”

Holdings

A decision to ban companies is made public after the shares are sold. The fund owned Textron shares worth about 249 million kroner ($36 million) before the ministry asked the central bank to sell on October 29. At the end of July, the fund owned shares worth about 1.2 billion kroner in Barrick, which the ministry demanded sold on Sept. 30.

Operations of Barrick, the largest producer of gold with 27 mines, have caused “extensive” environmental damage in several countries, the ministry said. Because of limited resources, the ethics council only investigated Porgera in Papua New Guinea.

“In the opinion of the council, the way the mine is run provides sufficient basis for recommending exclusion,” it said.

The fund has excluded 29 companies, including Wal-Mart Stores Inc., the world’s largest retailer. The five-member ethics council cited alleged labor rights abuses at Wal-Mart suppliers in Africa, Asia and Central America and discrimination in the U.S. against women and employees wanting to form unions.

“Wal-Mart has worked to improve labor and commercial conditions,” John Simley, a company spokesman based in Bentonville, Arkansas, said by phone in December.

Norway, the world’s fifth-largest oil exporter, diverts income from oil and gas production into the fund and invests its money outside Norway to avoid stoking the domestic economy.

To contact the reporter on this story: Vibeke Laroi in Oslo atvlaroi@bloomberg.net