Norway ejects Vedanta Resources from oil fund

Written by:
Subscribe to Oneindia News

OSLO, Nov 7 (Reuters) Norway has dropped British mining and metals group Vedanta Resources from its 0 billion sovereign wealth fund for ethical reasons, blaming it for environmental damage and human rights violations in India.

Norway's Government Pension Fund - Global, commonly known as the ''oil fund'', invests Norway's petroleum wealth in foreign stocks and bonds to save for when the oil and gas run out. It is one of the world's biggest sovereign wealth funds.

At the end of 2006, the oil fund owned Vedanta Resources stock worth about 81 million Norwegian crowns (.16 million), corresponding to a 0.16 percent stake in the company, the finance ministry said.

The shares were sold by the end of October, the ministry said.

Vedanta Resources shares reversed earlier gains to trade down 1.6 percent on the London Stock Exchange at 20.80 pounds by 1222 GMT.

''According to the recommendation (of the ethics council), the Fund runs an unacceptable risk of complicity in present and future severe environmental damage and systematic human rights violations by continuing to invest in the company,'' the finance ministry said in a statement late on Tuesday.

Vedanta Resources' core business is mining and production of copper, aluminium and zinc in India. It also has operations in Australia, Zambia and Armenia.

''Vedanta Resources is accused of having caused environmental damage and contributed to human and labour rights violations,'' the ethics council said in its recommendation to the ministry.

TRIBAL EVICTION CLAIMS ''The Council finds that the allegations levelled at the company regarding environmental damage and complicity in human rights violations, including abuse and forced eviction of tribal peoples, are well founded,'' the council said.

Vedanta said a court case was still pending regarding allegations against the firm. ''We're not able to comment on the specifics because these are issues that are still sub judice,'' a London spokesman for Vedanta said.

''Vedanta is committed to upholding the highest standards in terms of the environment and supports a very broad CSR (corporate social responsibility) programme, which includes education initiatives catering to 10,000 children and healthcare initiatives affecting more than 1 million people,'' he said.

The ethics council said its review extended to Vedanta subsidiaries in India, Sterlite Industries , Madras Aluminium Company , Bharat Aluminium and Vedanta Alumina, though the fund did not have direct holdings in those companies.

The council said it had contacted Vedanta Resources in March asking for its comments on its draft recommendation, and, after an extension, had given it until April 20 to respond. But the company did not respond to its enquiry by May 15.

Last month, thousands of tribal people protested against a Vedanta Resources alumina refinery being set up in the Lanjigarh area of India's Orissa state and vowed to stop the 4 million project.

Norway has excluded a number of arms manufacturers, miners and the world's biggest retailer, Wal-Mart , from the fund for ethical reasons.


Please Wait while comments are loading...