Sunday, February 20, 2011

Part XX: Developing a Coherent Transnational Jurisprudence of Ethical Investing: The Norwegian Sovereign Wealth Fund Ethics Council Model

This Blog Essay site devotes every February to a series of integrated but short essays on a single theme.  The Ruminations Series in 2009 produced a series of aphoristic (ἀφορισμός) essays, meant to provoke thought rather than explain it. The hope was that, built up on each other, the series would provide a matrix of thoughts that together might lead the reader in new directions. Ruminations continue to be produced form time to time.  For 2010, this site introduced a new series--Business and Human Rights.  The series took as its starting point the issues and questions raised by John Ruggie, the United Nations Special Representative of the Secretary-General (SRSG) on business and human rights, in a global online forum
For 2011, this site introduces a new series of integrated essays--Developing a Coherent Transnational Jurisprudence of Ethical Investing: The Norwegian Sovereign Wealth Fund Ethics Council Model.  The object of this series to to consider the work of the Ethics Council of the Norwegian Sovereign Wealth Fund.  The thesis of this series is this:  The Norwegian Sovereign Wealth Fund (NSWF ) investment program is grounded in the application of a set of Ethical Guidelines adopted by the Storting (the Norwegian Legislature) and enforced through an Ethics Council charged with determining whether a company should be excluded from investment by the NSWF.  The work of the Ethics Council has produced the beginnings of a coherent jurisprudence of ethics for corporate investment.  That jurisprudence may contribute significantly both to the development of transnational social norm standards and  affect the way domestic corporate law is understood. This is Part XX of the series.
Income in selected countries in 2006
Adjusted for purchasing power. In thousands of EUR 
From Economic perspectives
Charts, Address by Governor Svein Gjedrem at the meeting of the Supervisory Council of Norges Bank on Thursday, 14 February 2008

Part XX: Ethics and a Jurisprudence of Responsible Investment:  The Statistics--Part II

This continues a first cut statistical analysis of the Ethics Council determinations.  The object is to examine  the Ethics Council determinations in the aggregate, at least at a simple level of analysis, using the available data.   This post includes a number of additional tables.
The prior batch of data considered the aggregate  "face" of the determinations.  This batch of data considers the character of the jurisprudence produced through the Ethics Council's determinations.  

The data suggests a willingness to use international law either as a basis for decision or as the foundation of interpretation, but that Norwegian law played a more important role in exclusion determinations.  More work is required to determine the rate at which international sources were used directly or indirectly, or whether they were used in aid of interpretation fo the Ethics Guidelines or Norwegian substantive law.   Further work is also required relating to whether international soft law played a role. This will be reported shortly.

The evidentiary data is interesting for the sorts of sources of evidence used by the Ethics Council.  While traditional sources were used, the Ethics Council relied heavily on information provided on the company web sites.  these were treated as definitive or at times as admissions against interest.  The Internet, and internet postings, appear not only to be making the collection of information easier, but the availability of information posted by companies also appears to be changing the willingness of quasi judicial organs to accept web posted materials as authoritative evidence.  Another important insight offered by the data goes to sources of evidence other than company postings on its web sires.  Non-governmental actors appear to play a substantial role in the production of evidence used by the Ethics Council.  The ability of companies to meet that evidence becomes more important as the capacity of these non-state actors to produce evidence (information) increases.  

The Ethics Council does appear to be starting to use its own determinations as precedent of sorts.  As we have seen in the descriptive sections, the determinations generated a number of standards and practices that through repeated use, begin to be treated as regulatory in effect.  Though not all cases serve as precedent, it is clear that a number of them have emerged as significant sources of standards and practices applied in later determinations.   

Lastly, though there appears to be a broad range, the Ethics Council has managed to reach a determination within 12 months of the initiation of its work. More work is required to determine whether the time to determination has been increasing or decreasing, and the relationship between type of case (product versus conduct) and the time to determination  That will follow shortly.

Use of international law:
UN: 5
ICJ: 2
Other treaty obligations-
Oslo Convention: 2
Ottawa Treaty: 1
Vienna Convention (1985): 1
Stockholm Convention: 1

 Use of Norway domestic law:
Yes: 11
    Use of Government White Pages or Graver Committee: 11
No: 17

Sources of Evidence (NGP reports, Internet, testimony, written submissions, ect.):
NGP Reports:
Internet: 9
NGO’s: 15
Testimony: 4
Letter from company: 6
Company’s website: 31
Other public sources: 15
Court Cases: 7

Kinds of Evidence Introduced by the Company subject to EC Determination:
Elected not to respond: 11
Letter affirming violation: 8
Letter denying atrocities: 7
Testimony: 1
Never asked: 3
Declined comment: 3
Previously excluded: 1

Time between complaint filed and resolution:
Under 1 Month: 4
1-2 Months: 1
2-3 Months:
3-4 Months:
4-5 Months: 3
5-6 Months: 1
6-8 Months: 1
8-10 Months: 2
10-12 Months: 2
12-16 Months: 1
16-20 Months:
20-24 Months: 1
24-28 Months:
28-32 Months:
32-36 Months: 1
Not Stated: 19

Use of precedent:
General Dynamics et. al. (16 June 2005): 2
Freeport McMoRan (15 February 2006): 5
Total SA (14 November 2005):
Poongsn: 2
Wal-Mart Inc. (15 November 2005): 1
BAE Systems (19 September 2005): 2
Graver Committee: 1

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