Ethical Guidelines for the Government Pension Fund Global

1
Ethical Guidelines for the Government Pension
Fund - Global

• Exercise of ownership rights (The Central Bank)
• gt to promote long-term financial returns
• Negative screening (The Council on Ethics/MOF)
• gt to prevent ownership of companies that produce
  weapons which through normal use may violate
  fundamental humanitarian principles
• Ad-hoc exclusion (The Council on Ethics/MOF)
• gt Exclude companies where there is an
  unacceptable risk of contributing to gross or
  systematic breaches of ethical norms

2
The Councils Mandate

• Issue recommendations to the Ministry of Finance
  on the exclusion of companies from the Funds
  portfolio
• Because of production of certain weapons
  (negative screening, based on the companys
  production)
• Because of on risk of contributing to serious
  violations of ethical norms (ad hoc exclusion,
  based on the companys conduct)

3

• Negative screening
• The Council shall issue recommendations on
  negative screening of one or several companies on
  the basis of production of weapons that through
  normal use may violate fundamental humanitarian
  principles.
• (Arms which do not distinguish between military
  objectives and civilians
• Chemical weapons, biological weapons, blinding
  laser, incendiary weapons, undetectable
  fragments, AP mines, cluster bombs/munitions,
  nuclear weapons)

4

• Ad hoc exclusion
• Based on an unacceptable risk of contributing to
• Serious or systematic human rights violations,
  such as murder, torture, deprivation of liberty,
  forced labour, the worst forms of child labour
  and other forms of child exploitation
• Grave breeches of individual rights in situations
  of war or conflict
• Severe environmental damages
• Gross corruption
• Other particularly serious violations of
  fundamental ethical norms

5
Negative screening of weapons producers

• Boeing Co.
• Finmeccanica Sp.A.
• Honeywell International Inc.
• Northrop Grumman Corp.
• United Technologies Corp.
• Safran SA
• Alliant Techsystems Inc.
• EADS Co (European Aeronautic Defence and Space
  Company)
• EADS Finance BV
• General Dynamics Corporation
• L3 Communications Holdings Inc.
• Lockheed Martin Corp.
• Raytheon Co.
• Thales SA.
• Singapore Technologies Engineering
• Poongsan Corp.

6
Ad hoc exclusion of companies

• Wal-Mart Stores Inc (complicity in serious or
  systematic violations of human rights standards,
  including labor rights standards)
• Freeport McMoRan Copper Gold Inc
• (Complicity in severe environmental damage)
• (Kerr-McGee Corporation (Originally complicity
  in serious violations of fundamental ethical
  norms, Activity ceased in 2006. ))

7

• All recommendations, as well as the Annual
  Reports for 2005 and 2006 and the Guidelines, are
  available (in Norwegian and English) in full
  text, at
• http//www.etikkradet.no