Norway Oil Fund Excludes Shipowners
Norway’s central bank has excluded a South Korean LNG shipowner, and three other shipowners, from the country’s Oil Fund because of labour rights violations in Bangladesh and/or Pakistan.
They are among nine companies announced January 16 whose stock will be divested by the $1 trillion sovereign wealth fund.
Korea Line Corporation, which owns and operates LNG tankers and bulk carriers, is being excluded because of its practice of sending decommissioned vessels to be broken up for scrap on the beaches of Bangladesh and Pakistan where working conditions are “extremely poor” and severe environmental damage is caused, according to Norway’s Council on Ethics which advises the central bank. Korea Line charters LNG tankers out to state-run Korea Gas Corp (Kogas) among other companies.
Other shipowners being excluded for similar reasons are Evergreen Marine Corp (Taiwan), Precious Shipping, and Thoresen Thai Agencies, while Pan Ocean has been placed under observation based on the same criteria. Other firms excluded from the Fund January 16 included US engineering firm Fluor over its involvement in making key nuclear weapons components. This week it won a major contract to develop the Shell-operated Penguins oil and gas field in the UK North Sea.
Norway’s Oil Fund was worth some NKr 8,447bn ($1.07 trillion) at January 16 noon Norwegian time. Companies that it has excluded for various ethical reasons are listed here.
UK labor union RMT January 15 meanwhile condemned the sale by Diamond Drilling of three semi-submersible drilling platforms used in the North Sea to a US firm GMS, that is expected to scrap them on the beaches of Bangladesh or India. RMT said the UK government, expected to spend £17bn on North Sea decommissioning by 2025, should ensure infrastructure for scrapping goes to well-run yards, rather than to beaches. It said 52 workers were killed and hundreds injured in shipbreaking in 2016 in Bangladesh, Pakistan and India.
GMS acknowledges on its website that it sends ships for scrapping in those three countries but says it has "recognised the need for a responsible (green) ship recycling programme."