Friday, February 25, 2011

Part XXV: 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 XXV of the series.

Part XXV: Ethics and a Jurisprudence of Responsible Investment:  The Statistics--Part V
Last set of simple charts.  Still working through their value.  My sense is that this data is useful to provide a clearer sense of the Ethics Council's product.  In graphical form it might easier reveal policies and effects that might either be unarticulated or unconscious.   Because of the strong connection between the quasi judicial findings function of the Ethics Council and the political objectives of the Finance Ministry, it is possible to suggest that policies and presumptions might be better revealed through application.  But again, the most striking feature is the substantial lack of numbers.  On the one hand this suggests that trends and conclusions will be more difficult to suggest with any confidence.  On the other hand, it also suggests the importance of the political in the determinations.  By that I mean that the Ethics Council may be able to leverage the effects of individual decisions (they may have impact beyond the consequences to the specific company targeted).  Each decision may serve as a proxy (and one with a stinger) for the traditional announcement of policy from the state, directed specifically to the capital markets.  This is both efficient and tends to conflate public and private policy by effecting policy through private market mechanics.  You decide.  

The focus of these charts is on the states in which targeted companies were domiciled in a number fo exclusion determination categories.

The only country to have a company excluded for Anti-personnel landmines was Singapore in 2002 with one case.

The only country to have a company excluded for complicity with the Burmese Government was China (PRC) in 2008 with one case.

The only country to have a company excluded for human rights violations was the United States with two cases, one in 2005 the other in 2006.

The only country to have a company recommended for exclusion for corruption was Germany in 2007 with one case.

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