Norway’s state fund blacklists 2 Malaysian companies
Norway’s sovereign wealth fund Government Pension Fund Global (GPFG), the world’s largest ahead of Saudi Arabia’s and Abu Dhabi’s with assets of about $760 billion, has blacklisted two Malaysian companies from investment on allegations of taking part in activities that damage the environment.
The companies are WTK Holdings Bhd and Ta Ann Holdings Bhd.
GPFG on October 15 announced it has sold stakes in the two companies which have extensive logging operations and timber plantations. The decision was based on recommendations from the fund’s Council on Ethics, which conducted an investigation that found “unacceptable risk” of large-scale forest destruction, non-compliance with environmental laws and poor forest management practices.
In the case of WTK, the Council found evidence of logging in breach of regulations outside concession boundaries, in buffer zones along river banks and roads and on steep slopes. It added that destructive WTK logging operations inside primary forests in Borneo may have contributed to the log-jam disaster that made international headlines in 2010 when a 50 kilometer stretch of the Rajang river in Sarawak was blocked by logs.
“The Council finds that WTK does little to reduce the environmental damage associated with its forest operations,” said a report from the Council.
For Ta Ann, the Council documented instances of egregious forest destruction in Borneo, including re-entry logging without required Environmental Impact Assessments. It said that Ta Ann’s measures to limit environmental damage — which include a partnership with the World Wildlife Fund — are falling short.
“Given that the conversion of tropical forests involves the complete, irreversible alteration of affected ecosystems, the scale of the deforestation, and that these operations are being pursued in areas with a particularly rich biodiversity as regards species, habitats and ecosystems, the Council has concluded that the measures implemented by Ta Ann to mitigate the adverse effects are insufficient to secure a material reduction in the risk of severe environmental damage now and in the future.”
The moves come seven months after GPFG disclosed selling off stakes in palm oil companies, including Astra International, Golden Agri-Resorces, Indofood Agri Resources, Kuala Lumpur Kepong, United Plantations and Wilmar International, among others. Most of the firms are based in Malaysia, Indonesia and Singapore. GPFG maintains and increased stakes in palm oil companies that it believes offer better environmental policies.
Since 2009 Norway has been world’s largest financial supporter of rainforest conservation, pledging $522 million per year to the cause. Its sovereign wealth fund — a product of the country’s oil revenue — is independent of that commitment, which falls under its foreign aid budget.
Other companies blacklisted in the same report were China’s Zijin Mining Group, Peru’s Volcan Cia Minera SAA and India’s Zuari Agro Chemicals Ltd, the latter “based on an assessment of the risk of contributing to the worst forms of child labour.”
Norway's sovereign wealth fund Government Pension Fund Global (GPFG), the world's largest ahead of Saudi Arabia's and Abu Dhabi's with assets of about $760 billion, has blacklisted two Malaysian companies from investment on allegations of taking part in activities that damage the environment. The companies are WTK Holdings Bhd and Ta Ann Holdings Bhd. GPFG on October 15 announced it has sold stakes in the two companies which have extensive logging operations and timber plantations. The decision was based on recommendations from the fund’s Council on Ethics, which conducted an investigation that found “unacceptable risk” of large-scale forest destruction, non-compliance...
Norway’s sovereign wealth fund Government Pension Fund Global (GPFG), the world’s largest ahead of Saudi Arabia’s and Abu Dhabi’s with assets of about $760 billion, has blacklisted two Malaysian companies from investment on allegations of taking part in activities that damage the environment.
The companies are WTK Holdings Bhd and Ta Ann Holdings Bhd.
GPFG on October 15 announced it has sold stakes in the two companies which have extensive logging operations and timber plantations. The decision was based on recommendations from the fund’s Council on Ethics, which conducted an investigation that found “unacceptable risk” of large-scale forest destruction, non-compliance with environmental laws and poor forest management practices.
In the case of WTK, the Council found evidence of logging in breach of regulations outside concession boundaries, in buffer zones along river banks and roads and on steep slopes. It added that destructive WTK logging operations inside primary forests in Borneo may have contributed to the log-jam disaster that made international headlines in 2010 when a 50 kilometer stretch of the Rajang river in Sarawak was blocked by logs.
“The Council finds that WTK does little to reduce the environmental damage associated with its forest operations,” said a report from the Council.
For Ta Ann, the Council documented instances of egregious forest destruction in Borneo, including re-entry logging without required Environmental Impact Assessments. It said that Ta Ann’s measures to limit environmental damage — which include a partnership with the World Wildlife Fund — are falling short.
“Given that the conversion of tropical forests involves the complete, irreversible alteration of affected ecosystems, the scale of the deforestation, and that these operations are being pursued in areas with a particularly rich biodiversity as regards species, habitats and ecosystems, the Council has concluded that the measures implemented by Ta Ann to mitigate the adverse effects are insufficient to secure a material reduction in the risk of severe environmental damage now and in the future.”
The moves come seven months after GPFG disclosed selling off stakes in palm oil companies, including Astra International, Golden Agri-Resorces, Indofood Agri Resources, Kuala Lumpur Kepong, United Plantations and Wilmar International, among others. Most of the firms are based in Malaysia, Indonesia and Singapore. GPFG maintains and increased stakes in palm oil companies that it believes offer better environmental policies.
Since 2009 Norway has been world’s largest financial supporter of rainforest conservation, pledging $522 million per year to the cause. Its sovereign wealth fund — a product of the country’s oil revenue — is independent of that commitment, which falls under its foreign aid budget.
Other companies blacklisted in the same report were China’s Zijin Mining Group, Peru’s Volcan Cia Minera SAA and India’s Zuari Agro Chemicals Ltd, the latter “based on an assessment of the risk of contributing to the worst forms of child labour.”
