If we search, we find. This is mostly the case for any deep dive into the majority of issues on our table. Over the past year, we have devoted considerable resources to labour rights, sometimes with a focus on forced labour, but we have also worked on companies’ contribution to the infringement of freedom of expression and the violation of human rights through mass surveillance, as well as the rights of indigenous peoples. ["Hvis vi leter, så finner vi" ("If we search, we find") Dette vil være tilfelle ved dypdykk i de fleste tema. Vi har brukt mye ressurser på arbeidstakerrettigheter, tidvis med fokus på tvangsarbeid, men vi har også jobbet med medvirkning til brudd på ytringsfriheten, urfolks rettigheter, og brudd på ulike menneskerettigheter som følge av overvåkning.]
Eli Lund, Executive head of secretariat of the Council on Ethics for the Norwegian Government Pension Fund Global, has recently distributed, in ENGLISH and NORWEGIAN, the Council on Ethics for the Norwegian Government Pension Fund Global Annual Report 2022 [Etikkrådetfor Statens pensjonsfond utland: Årsmelding 2022].
The 2023 Report is interesting in a number of respects:
1. Automation. "In 2022, the Council worked on a total of 206 cases, relating to 193 different companies.
Of these, 81 were opened during the year, while 57 were opened in 2021. The assessment of 79 cases
was concluded during the year." (Annual Report 2022, p. 11). The Ethics Council continues to apply 19th century techniques of administrative authority, here expressed in its quasi-judicial, and quasi-administrative functions, to a set of functions in which the administrative apparatus is itself required to exercise (public) administrative discretion through the penetration of private markets by state organs and the governmentalization of private entities (and state instrumentalities acting in the private sphere). The wisdom of that debate is long over (for the moment), that is the interpenetration of regulatory and markets spheres is an increasing reality where but the issue of utility and efficiency are now more clearly exposed. Here the issue for the Ethics Council and Norges Bank is squarely put: this touches on the nature of a preferred regulatory modality within markets and by states as market actors (in this case in financial markets).
|Pix Credit Casablanca here|
On the one hand, the regulatory preference of the Ethics Council might be traditionally discursive--that is that its principle objective is to develop and deepen the discursive forms of rule making that can then be applied to objects of examination. This is a model grounded in the development and articulation of rules and their application. Rule development and articulation, then are its primary objectives. This is a UTILITY MODEL
. It is grounded on the premise that the construction of an architecture of rules is the primary task of the regulator, whose investigative organs can then enforce selectively but in ways that then serve to leverage enforcement among the vast number of regulatory subjects that the administrative apparatus is unable to reach. And its methodologies are grounded in the traditional forms of prosecution and hearings that are at the heart of the 19th-20th century public administrative model.
On the other hand, the regulatory preference of the Ethics Council might be compliance oriented--that is that its principal object to to maximize the percentage of conforming behavior among those who may be subject to its oversight. The model is grounded on principles of compliance and quality control in the production of objects (economic, social, cultural) and the integrity of the processes by which that is undertaken. The objective is grounded in the core administrative principle of risk
aversion of quality diffusion--prevent-mitigate-remedy. This is an EFFICIENCY MODEL. It is measured
not by the coherent mellifluousness of discourse, but by the percentage
of compliance and the success of accountability measures over the entire
set of regulatory objects.It is undertaken empirically rather than discursively. It is based on the ability to convert qualitative objectives and descriptors into qualitative objects that can be measured, and against which conduct can be assessed. And it s power lies in the ability to align administrative reaction to data based analytics so that real time nudging is achieved. Ratings systems in the West are a crude and early iteration. Automated civil fines and penalties grounded on data analytics is the future.
There is a marked preference for the utility model in the liberal democratic West. Perhaps because it provides the illusion of the primacy of politics and its legitimate expression as law. And that is the problem really. It is in the expression of power through law that the state exhausts itself. It leaves to the arbitrary cultures of administrative discretion to leverage that project, but with respect to which it prefers to turn a relatively blind eye. But it is easy, well worn, and provides a space where those craving some sort of entry into the vectors of power might be sated on partaking of its illusion. And that is the core problemmatique that the 2022 Report exposes
. The Ethics Council, it seems, is quite content to build discursive castles on the web, and to apply them to the extent that it is humanly possible
given the constraints of time and the capacity for a single human agency to act within budget. And that, in the 21st century is the problem. It is time that the architecture of accountability shed its "Downton Abbey" props and move into something more appropriate ot the times.
2. ESG Issues. Administrative organs rarely practice what they preach. Preaching is a function of the superior organs crammed down to its objects who are in need of correction, rectification, and training. This makes sense when one understands the masses as the aggregation of productive forces whose care and feeding is necessary for the production of value--including self-actualizing value. Human productive forces, it has been determined, thrive best under conditions of human rights and sustainability--as those are developed and applied by the herd-masters exercising discretion int he service of the larger project of generating national value. The discourse of that valuer maximization has been masked of course, in the language of the autonomous individual and their prerogatives. But autonomy, like free will, is carefully curated and dispensed as a function of placement within hierarchies of social relations.
There is something sadly pious about administrative organs imposing requirements, especially respecting risk and consequences that are human rights and sustainability tinged, in ways that it would not enter the regulator's head to apply to themselves. But that is common among our uncommon administrative organs as they assume the mantle of a European Leninist nomenklatura leading the rest of us to where ever it is they have been instructed to take us by the leading social forces of the nation manifesting themselves within the sort of networked governance elites so recently celebrated by its academic claque.
Still. the 2023 Report reminds us of the importance of applying some of these mechanisms to the work of the Ethics Council itself. Foremost among them are the risk sensitive techniques of ESG analysis, as flawed an underdeveloped as that analytic tool now stands (see, eg "The ESG Wars": Presentation of the University of Dundee (Scotland). In particular, the use of ESG measures for the assessment of the risk of analytical consequences might be quite therapeutic--and at least to might begin to develop practices of consistency in the judgments sometimes undertaken with a serendipitous relation to time and context. Thus for example, an ESG analysis of exclusion choices might be quite useful especially with respect to risk and consequences. And at a minimum it would align the form of the Ethics Council's working style to the expectations developed in the UN Guiding Principles for Business and Human Rights--here the balancing aspects of which might prove most useful (discussed in the context of complicity here).
3. The usual suspects approach to investigation
. While the Report makes so suggestion about patterns of enforcement, it leaves a trail that is worth following.
"'Major Strasser has been shot! Round up the usual suspects!' is the most memorable line from the film Casablanca. While emphasized and lampooned for comic effect, it underscores the fundamental logical problem in the use and abuse of statistics. . . It is the typical path taken by not-especially-competent bureaucrats in face of confusing (i.e. high variance situations): treat every instance as if it is the “usual,” and pretend to not see that the situation is potentially or actually extraordinary — i.e. the variance is very high, even if we don’t know the particulars necessarily. . . While it is easy to mock 'bureaucracy' for this, every organization, every decisionmaking process, is potentially liable to fall into this trap — because we cannot tell why every situation is not average." (Round up the Usual Suspects!).
There is sometimes a sense that wafts up from the Report of the Ethics Council playing Captain Renaud in rounding up the usual suspects for intervention. Yet it may not be a trap it has fallen into but a frame of mind that suggests an inherent bias enhanced by the needs of efficiency in the face of an enforcement model that invites selection of targeting. That ought to come as no surprise. The set up of the Ethics Council makes it virtually impossible both to effectively engage in its mission and to avoid a little bit of profiling, or of strategic (and thus value enhancing) targeting. This may be reinforced by the interpretive leaps the Ethics Council sometimes takes in drawing on an ecology of risk based assumptions (qualitatively derived) to automate (in a manner of speaking) investigation; its fact triggering analytics now streamline analysis but remain confined to the discursive tropes of case based decision making. And there is the trap and the frame of mind: as many now understand--efficiency in the form of profiling--can sometimes reveal prejudices and desires more than it explains the efficacy of investigation and enforcement that moves in particular direction to particular conclusions. To be sure--none of this may be intentional; but the structural incentives make it more likely that the Ethics Council should be more sensitive to structural or submerged bias under the circumstances of its operations.
That brings us back to ESG criteria to measure the extent of the risk of bias under the conditions of resource inadequacy or structural impediments to more broadly targeted enforcement. The Ethics Council has built a jurisprudence on the mechanics of risk--but it has been selective about the way it constitutes and assesses risk. The results can then skew, and that skewing can be increased by resource limitations and a need to prove that one's efforts produce results--decisions to exclude or observe targeted enterprises. And it brings us back to the beginning of these reflections. Under these conditions, Eli Lund's statement-- "Hvis vi leter, så finner vi" ("If we search, we find")--can acquire a perhaps unwelcome meaning. It becomes less clear what the Ethics Council is searching for--or whom--and to what ends.
The Foreword by the Council Chair follows.