"Clean -Up Woman": Norges Bank has announced its decision to end the observation of Kirin Holdings Co, and to extend the observation of Pan Ocean Co Ltd.

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  "A clean up woman is a woman who
Gets all the love we girls leave behind"

 In Betty Wright's  1971 iconic song, "Clean Up Woman" (from her second studio album, I Love the Way You Love (1972); written and produced by Clarence Reid and Willie Clarke),  the question, applied in the lyrics to human relationships, was one of mutuality, especially mutual support and love.

Was making it easy for the clean up woman
To get my man's love, oh yeah
Just making it easy for the clean up woman
To get my baby's love, uh-huh, mhm
I took this man's love and put it on a shelf
And like a fool, I thought I had him all to myself
When he needed love, I was out having fun
But I found out that all I had done
Was made it easy for the clean up woman
To get my man's love, uh-huh
Yeah, that's what I did
I made it easy for the clean up woman
To steal my baby's love, oh yeah

("Clean Up Woman, supra; lyrics;
Source: Musixmatch
Songwriters: Clarence Henry Reid / Willie James Clarke
Clean up Woman lyrics © Emi Longitude Music)

These lyrics, and the underlying message, came to mind as I read through the announcement (and then the supporting documents) that, following advice from the Council on Ethics, Norges Bank decided to end the observation of Kirin Holdings Co, and to extend the observation of Pan Ocean Co Ltd. Both are worth some commentary.

1. Kirin Holdings Co (text of Norges Bank decision here). Norges Bank's decision is quite clear:

The Council on Ethics recommends that the observation of the Japanese company Kirin Holdings Co Ltd be terminated. Kirin is a holding company with several subsidiaries operating primarily in the beverage and pharmaceutical production sectors. In March 2021, Kirin was placed under observation pursuant to the criterion concerning serious violations of the rights of individuals in situations of war and conflict. In Myanmar, the company was a partner in two joint ventures with the military conglomerate Myanmar Economic Holdings Public Company (MEHPCL). The Council on Ethics considered that a business partnership with MEHPCL represented a high risk of contributing to serious abuses by the country’s armed forces. The Council recommended observation of the company because Kirin disclosed that it was considering making changes to its business operations in Myanmar. Kirin has now terminated its partnership with MEHPCL and no longer operates in Myanmar. The Council concludes that the observation of Kirin be ended.

The objectives here are clear and broad in scope: the Myanmar regime is considered to be illegitimate; even if the regime is not illegitimate as a whole, its methods are or can be; that illegitimacy stems from its substantial deleterious effects on human rights and sustainability as applied by those from liberal democratic states considering engaging with that state. It follows that a wall must be built around that regime and its activities. In the style of what is often condemned US embargo regime against Cuba, liberal democracy might deploy similar tactics where the object is conformity to international norms around human rights and sustainability, especially against a regime whose legitimacy also does not conform to liberal democratic political theory.  The object is either to coerce change respecting regime governance habits and policies, or to put enough pressure on the regime that, one way or another, it will collapse in a way that moves the state apparatus closer to a typical contemporary liberal democratic regime (even one with local characteristics).   A key to this informal sanctions regime targets all private economic collectives that seek to facilitate the ability of the regime to function.  The mechanics rely on principles of complicity now broadened to serve as a sanctions style instrument. None of this is inherently wrong. . . .or bad--from the perspective of public policy.  Yet it is worth considering that its essence is centered on the politics of international relations, and that in that conflict, economic regulation, including the use of human rights, are increasingly deployed as instruments of a greater cause. It is the instrumentalization of human rights--applied globally, that invites substantially more robust discussion. More important, perhaps, is the absolutist position taken--in this case with respect to what follows when a ruling apparatus  is determined t be illegitimate as to its establishment or its conduct.

2. Pan Ocean Co Ltd (text of Norges Bank decision here). Norge's Bank decision is also clear here.

The Council on Ethics recommended on June 29, 2017, that Pan Ocean Co Ltd be placed under observation. Pan Ocean is a South Korean shipping company that owns and operates bulk carriers, container ships and tankers. The Council rests its assessment on the fact that Pan Ocean has disposed of obsolete vessels by sending them to be broken up for scrap on the beaches of Bangladesh, a practice known as beaching, where working conditions are extremely poor. The process also causes severe environmental damage. The Council considers that companies which dispose of ships for breakup in this way can be said to contribute to serious human rights violations and severe environmental damage. In its assessment of the likelihood that the company will in future contribute to such norm violations, the Council on Ethics has attached importance to the company’s assurance that it is willing in future to take the method of breakup into account as far as possible when making decisions on the sale of vessels for scrapping. Although the Council does not consider this to be a strongly binding pledge on the part of the company, it nevertheless perceives it as a positive indication of a change in future practice. The Council will re-examine the grounds for observation if at the end of four years the company has not sent any ships for beaching, or before that time if the company issues a more binding pledge that it has ceased this practice. Should the company dispose of any more ships by means of beaching, the Council on Ethics will recommend that it be excluded from investment by the Government Pension Fund Global (GPFG). Norges Bank made public its decision to place the company under observation on January 16, 2018.

 Again, an absolutest position is taken. In this case, it centers on the policy determination that certain methods of ship disposal in certain states is fundamentally incompatible with human rights and sustainability criteria that in Norway have been translated into certain operational benchmarks. Fair enough.  But the effect is to interdict markets.  That provides a nice analogue to the interdiction of government that one finds at the core of the Kirin Holdings Co decision. In Pan Ocean Co the benchmarks scope out the limits of legitimate and suppressed markets for ship scrapping. The best case scenario (like that in Kirin) is abandonment of the interdicted practices, which may mean the abandonment of Bangladesh until this business and its practices of beaching are reformed to meet the requirements of the Fund. Observation, in this case is reduced to a simple event--should the company again insert itself in the beaching market then observation has served its purpose and the company will be excluded. Simple. Effective. And clear. 

3. And that brings me back to the theme of this examination--the Clean Up Woman. That, in turn, shifts the gaze from the trigger-punitive methodologies of the current methodological structures of the Pension Fund Global and its administrators, to its consequences. One, in particular, is worth highlighting. The methodologies of the Norges Bank-Ethics Council system is based on an assumption that the punitive and reactionary approach (including the way that it handles observation status in cases like Pan Ocean Co) will have effect.  And if it does not have effects on its subject, it has substantial positive effect on the integrity of the Pension Fund Global, at least with respect to the alignment of its goals and methods.  And yet, the system from of which the principles and assumptions that underlie and shape the Pension Fund Global do not now comprehensively cover all economic activity. Socialist human rights and sustainability, and the structures of the Belt & Road Initiative now provide an alternative set of premises around which integrity and principles enhancing economic risk assessment may be undertaken. These are, in effect, liberal democracy's "Clean Up Woman." As the Norges Bank and its Ethics Council might one day sing: each "made it easy for the clean up woman To steal my baby's love, oh yeah ("Clean Up Woman, supra; lyrics).