Norway's KLP Pension Fund Drops Glencore Over Western Sahara Oil

  • Glencore oil exploration violates `fundamental ethical norms'
  • Norway's largest pension fund previously excluded Total SA

KLP, Norway’s largest life insurer, said it will sell shares of Glencore Plc and no longer invest in the Swiss resource company because its oil-exploration activities off the coast of Western Sahara risk violating “fundamental ethical norms.”

It’s “difficult to conclude” that companies including Glencore can engage in oil exploration off the coast of Western Sahara “in a manner consistent with international law,” the Oslo-based pension fund manager said in a statement on its website.

Oil exploration by Glencore and others offshore of Western Sahara has been criticized by non-governmental organizations, including Switzerland’s Berne Declaration, because parts of the disputed North African territory have been occupied by Morocco in a decades-long conflict. Morocco, which has been present ever since Spain withdrew in 1975, claims centuries-old historic rights over Western Sahara, a territory the size of Colorado and often described as Africa’s last colony.

A spokesman for Baar, Switzerland-based Glencore declined to comment.

KLP, which has 513 billion Norwegian krone ($58 billion) of assets under management, owned almost 3.8 million Glencore shares as of Sept. 30, worth about $4.5 million at today’s prices, according to data compiled by Bloomberg. KLP has previously excluded France’s Total SA from the list of companies it invests in because of similar operations offshore from Western Sahara, it said.

Avoiding Investments

“We are saying your intention is obviously to extract resources and we think that is, in any case, unethical,” Jeanett Bergan, head of responsible investments at KLP, said in a phone interview.

KLP said Tuesday it would avoid investments in 12 companies, including Duke Energy, because they derive 30 percent or more of their revenues from coal-based activities.

Those are among 20 additional companies the Norwegian pension fund manager will exclude from investment, it said on Tuesday. Another four companies will be added to a list of eligible investments. These included Mexico’s Cemex SAB de CV, which had previously owned a stake in a quarry located in occupied territory in the West Bank, according to KLP. Cemex sold the interest this summer, the pension fund said.

Another now eligible for investment was Wesfarmers Ltd. of Australia, which had been excluded in 2007 for importing phosphate from Western Sahara. Wesfarmers no long needs or purchases phosphate from Western Sahara, KLP said.

Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.

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