Monday, December 12, 2011

Profit outweighs ethics for Norwegian ministry: NBC

Monday, 12 December 2011 22:56 Mizzima News

(Mizzima) – The Norwegian Ministry of Finance has rejected the Council of Ethics’ recommendation to exclude PetroChina from the Norwegian Pension Fund’s portfolio due to human rights abuses in Burma, according to a statement by the Norwegian Burma Committee (NBC).

The ministry puts more weight on profit instead of ethics in this case, the statement said. NBC has for several years called on the Council of Ethics to consider companies in the controversial Shwe gas project which includes construction of two parallel pipelines for oil and gas from the west coast of Burma to Yunnan Province in China.

Pipes destined for use in the Shwe pipelines to transport gas and oil to Yunnan Province in China. Photo: Shwe Gas Campaign

The Burmese military is responsible for the security of the project, which entails human rights violations such as forced labour, forced relocation, killings and rape, according to the NBC press statement.

According to the ministry, the case raises fundamental questions about whether a subsidiary company can be responsible for the activities of its parent company.

Inger Lise Husøy, the director of NBC, said PetroChina is a subsidiary to China National Petroleum Corporation (CNPC), which is responsible for the construction of the pipelines. PetroChina is not directly involved in the construction, but in practice CNPC and PetroChina are so closely linked that they should be considered as one company, according to the Council of Ethics.

The council concluded that CNPC’s activities in Burma in practice are lead by PetroChina and that PetroChina therefore contributed to human rights violations in Burma. The ministry on the other hand argued that the company’s link to the assumed violations is too weak.

NBC said the real issue is not about relations between PetroChina and CNPC being too weak, but that the finance ministry is not willing to take corporate social responsibility seriously. The council deserved credit for its recommendation that was based on the ethical realities in the case, said Husøy.

Meanwhile, EarthRights International also called for the Norwegian Council on Ethics and the Ministry of Finance to take action against international companies operating in Burma in violation of Norway’s ethical guidelines. Norway’s government pension fund also holds shares in Daweoo International, Korean Gas Corporation (KOGAS), GAIL (India), and POSCO (Korea), all involved in the offshore Shwe natural gas project as well as the onshore gas pipeline, it said.

It said CNPC holds 51 percent of both the onshore Shwe pipeline and the Burma-China Crude Oil pipeline.

Norway’s investments in companies in Burma’s oil and gas sector increased in 2010 and as of December 31, 2010, it had US $693 million invested in seven companies involved in the Burma-China pipelines, and nearly $5 billion invested in 15 oil companies operated in Burma.

Action by the council could be to recommend the Norwegian Ministry of Finance to exclude these companies from its pension fund.

EarthRights International said it hopes public action on this issue in Norway would encourage other investors to similarly scrutinize their holdings in the oil and gas sector in Burma and ultimately lead to more responsible business practices in the extractive industries in Burma and elsewhere.

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