By Victoria Klesty
OSLO, Jan 8 (Reuters) - The ethics watchdog for Norway's
huge wealth fund will continue to investigate firms and possibly
recommend additional exclusions from its investment portfolio
depending on treatment of migrant workers, the watchdog's head
said on Wednesday.
In November, the $1.1 trillion fund said it could no longer
invest in Britain's G4S because of "unacceptable risk"
that the security services firm had a hand in violations in
Qatar and the United Arab Emirates.
Large recruitment fees that force workers to spend a
significant part of salary on debt, giving them little chance of
leaving, was a big factor behind the exclusion.
G4S said at the time it had engaged with the fund's Council
on Ethics for three years and was making good progress on
recruitment and welfare standards in the Middle East.
But more companies will now find themselves under scrutiny,
said Johan Andresen, who heads the ethics council for the fund,
which is the world's largest and whose investment decisions are
influential around corporate boardrooms.
"Recruitment is a big problem and one of the factors that
contribute to modern slavery ... We know that this is also an
issue in other parts of the world, for example in Southeast
Asia," Andresen told Reuters at a business conference.
Built since 1996 to save petroleum revenues for future
generations, Norway's sovereign wealth fund is now worth almost
three times annual gross domestic product.
In the interview, Andresen said that while the biggest
problems were in service industries, the fund's watchdog also
looked at construction and manufacturing.
"We believe we do pioneering work in pointing it out and
holding companies accountable for this recruitment practice.
They consider that bit as outsourced to others, but you can't
really outsource recruitment in that manner," he said.
He did not name any companies that could be excluded
following the decision to ban G4S from the portfolio.
The watchdog makes recommendations to exclude companies from
the fund's investments or put them on a watchlist for
monitoring. The board of the Norwegian central bank, which
manages the fund, then decides whether to follow the advice.
"I actually think that our decision has created enough of a
ripple effect for us to see, when we contact companies, that
they may be in a process of changing practice," Andresen said.
"But the aim is not to exclude as many as possible."
Norway's wealth fund operates under ethical guidelines set
by parliament. It has excluded 156 firms so far, including for
producing tobacco and nuclear weapons, causing severe
environmental damage, or deriving more than 30% of revenues from
coal.
(Writing by Terje Solsvik;
Editing by Andrew Cawthorne)
