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 XXI of the series.
Membership in the exclusion universe is also significantly related to the government's perception of the shifting views and political perceptions of the people of Norway. As can first be seen with Singapore Technologies Engineering excluded in 2002 under the grounds of the Ottawa Treaty (1997). There, the Council was asked to see if investment into the company is in violation of Norwegian law international obligations under the basis that it is a signature of the Ottawa Convention, and it was found that it was not, but the Council put forth the guidelines that the production of anti-personnel landmines were in violation of fundamental human rights. Indeed, where the Ethics Council has provided the greatest willingness to break new ground on ethics, in the form of the development of rules and standards for ethics violations, has been in those cases where the Ethics Council has sought to apply domestic political sensibilities to international standards.
That pattern repeated, to a certain extent, with respect to product exclusions. This marked the domestication in law of global movements to ban landmines, and to ban cluster munitions, both issues taken up by the Council. With the first recommendation made in June of 2005 the Council set the foundation for exclusion from the Fund based on the production of these weapons. The global adoption of law in these areas came later. It would not come till three years later in 2008 that the Oslo Convention was adopted and ratified, for example. Once ratified the Council took into account the more explicit terms of the agreement as the cornerstone of their recommendations, giving the Council more legitimacy in the decisions it reached, while leaving interpretation of the agreement and Norway’s obligations open to the Council.
While there is little agreement or global consensus as to the status of Burma, the Council took a proactive stance to ban investments that would in there nature support any aspect of the military junta in that state. It was mentioned, but in the context of the time it can be seen that the decision of the Council was based on attempts by Norway to gather support against the Burmese Government. Other responses to the political pressures put on by various entities in Norway can be seen in the Council’s decision to exclude companies involved in the production of tobacco as well as in response to public sentiment on Wal-Mart’s growing influence around the world and sentiment about Israel’s actions in 2008.
The Ethics Council's tastes for what it is looking for when it looks at companies for exclusion seems to have changed slightly over time. Up till 2010 the only companies excluded on the basis of environmental degradation were companies who had mining operations, specifically in the South Pacific and Russia, this all changed recently with the exclusion of Samling Global and Lingui Development Berhad Ltd. who were excluded on the grounds of illegal logging practices. It is likely that the exclusion universe is more likely to grow with respect to exclusions based on conduct than product based exclusions. It is with conduct exclusions that the Ethics Council's work is likely to produce the most creative application and extension of the Ethics Guidelines and contribute, in a positive way, to responsible investing in ways that may affect global corporate behavior.