Norway oil fund expels two companies

OSLO Fri Jan 30, 2009 7:58am EST

Norway's $300 billion (210 billion pounds) plus sovereign wealth fund has excluded U.S. weapons producer Textron and Canadian mining group Barrick Gold for ethical reasons. This undated file photo shows the Norwegian flag.

Norway's $300 billion (210 billion pounds) plus sovereign wealth fund has excluded U.S. weapons producer Textron and Canadian mining group Barrick Gold for ethical reasons. This undated file photo shows the Norwegian flag.

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OSLO (Reuters) - Norway's $300 billion (210 billion pounds) plus sovereign wealth fund has excluded U.S. weapons producer Textron and Canadian mining group Barrick Gold for ethical reasons.

The finance ministry said on Friday Textron was ejected from the fund, one of the world's biggest investors, because it produced cluster munitions.

"We cannot participate in the funding of this type of production," Finance Minister Kristin Halvorsen said in a statement.

She said Barrick Gold's exclusion was "based on the assessment that investing in the company entails an unacceptable risk of the fund contributing to serious environmental damage."

The Government Pension Fund -- Global, which held 1.25 billion Norwegian crowns (126 million pounds) worth of Barrick Gold stock at the end of July 2008 and 249 million crowns worth of Textron stock at the end of October, has divested its holdings in both companies, the ministry said.

The companies could not be reached for comment.

So far Norway has shut 27 companies out of the fund for ethical reasons, including nine producers of cluster munitions, but also landmine and nuclear arms manufacturers and groups that its ethics council has blamed for damaging the environment or abusing human rights or worker rights.

In December 2008, Norway hosted a conference that agreed a new international ban on cluster munitions, a type of weapon blamed for tens of thousands of civilian casualties around the world in conflicts from Vietnam to Afghanistan.

"The company (Textron) produces cluster weapons, which are banned pursuant to the Convention on Cluster Munitions," Halvorsen said in the statement.

Barrick, the world's largest gold miner, joins South Africa's DRD Gold, India-focused Vedanta Resources and U.S. group Freeport McMorRan among miners removed from Norway's investment fund for environmental reasons.

The ethics council based its recommendation to exclude Barrick on an investigation of its activities at the Porgera mine in Papua New Guinea, the finance ministry said.

"In the opinion of the Council, the way this mine is run provides sufficient basis for recommending exclusion," the ministry said.

(Reporting by John Acher and Wojciech Moskwa; Editing by David Cowell)

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