Skip to main content

Why are 17 Indian cos, including Sterlite, blacklisted by Norway bank


By Venkatesh Nayak*
Readers may recall the gory incidents that took place at Thoothukudi (Tuticorin) in Tamil Nadu in the southern part of India on 22 May, 2018. Thirteen protesters died on the spot when the police opened fire to disperse an assemblage of thousands of local residents and representatives of civil society groups. They were protesting against the adverse environmental impact of the industrial operations of Sterlite Copper which runs a copper smelter plant in the area. Accusations against the company have ranged from polluting local water resources to plans for expanding the installed capacity of the plant without the necessary environmental clearances.
A ground report published in The Wire recently, mentions the decision taken by Norges Bank a few years ago to not invest funds from Norway’s Government Pension Fund Global (GPFG) in Sterlite “due to an unacceptable risk of complicity in current and future severe environmental damage and systematic human rights violations.”
This decision and the materials provided by the Norwegian Council on Ethics established for the purpose of guiding GPFG investment decisions are all publicly accessible on Norwegian websites. The objective of this email alert is to place in the public domain facts and materials that are publicly available on Norwegian regulatory websites, in order to encourage more informed debate on the developments around the incidents in Thoothukudi. The purpose of this email is not to defame any company but to point out that investor pressure does help improve the track record of at least some errant companies. As on date, GPFG funds are invested in 275 public and private sector enterprises in India and Vedanta/Sterlite is not one of them.

What is Norway’s GPFG?

Norges Bank (NB) is responsible for managing Norway’s Government Pension Fund Global (GPFG). GPFG is described in the following simple terms on NB’s website:

“The Government Pension Fund Global is saving for future generations in Norway. One day the oil will run out, but the return on the fund will continue to benefit the Norwegian population.”
I wish our political leaders displayed similar levels of wisdom with due care for future generations in India.
GPFG comprises of Norway’s earnings from the country’s oil wealth. GPFG is said to be worth Norwegian Kroner 8,436 billion which is equal to USD 1,026 billion or INR 69,285 billion. NB claims to have invested these funds in 9,146 companies operating in 72 countries around the world of which 1.4% are listed companies world-wide and 2.4% are listed in Europe alone. According to the Bank, GPFG funds are invested for the long term.
Some well known global companies in which GPFG has invested are Apple Inc., Microsoft, Nestle and Amazon.com, Novartis and Samsung. This is unlike many other portfolio investors who invest in stocks for the short term seeking to make a quick buck with their billions and often end up ruining small investors’ fortunes and entire national economies. India and SE Asian economies have experienced such predatory investments in the past.

Some companies with India operations blacklisted from receiving GPFG funds

According to the website of Norges Bank, the following public sector and private sector corporations in India have been excluded from receiving GPFG funds because of their adverse track record relating to environmental damage or human rights violations or engaging in operations that are unacceptable to the ethical principles that inform their investment decisions. Vedanta/Sterlite is one of the companies mentioned on this list.
Public sector corporations excluded from GPFG investment with dates and reasons (as mentioned on GPFG website):
1) BHEL Ltd. (May 2017 – severe environmental damage)
2) Coal India Ltd. (April 2016 – more than 30% operations relate to thermal coal)
3) Gujarat Mineral Development Corporation Ltd. (April 2016 – more than 30% operations relate to thermal coal)
4) NTPC Ltd. ( April 2016 – severe environmental damage)
Some private sector corporations based in India or having operations through subsidiaries or partners in India with dates and reasons (as mentioned on GPFG website:
1) Reliance Infrastructure Ltd. ( April 2016 – more than 30% operations relate to thermal coal )
2) Reliance Power Ltd. ( April 2016 – more than 30% operations relate to thermal coal )
3) The Tata Power Company Ltd. (April 2016 – more than 30% operations relate to thermal coal)
4) Imperial Brands and ITC Ltd. (January 2010 – tobacco production)
5) Zuari Agro Chemicals Ltd. (April 2013- serious violation of human rights – employment of child labour)
6) POSCO (2015 – severe environmental damage)
7) Vedanta Resources Plc and Vedanta Ltd. (2014 – previously included Sesa Sterlite, Sterlite Industries Ltd. and Madras Aluminum Company – severe environmental damage and systematic human rights violation)
8) Cairn Energy Plc (June 2016 – serious violation of fundamental ethical norms. Cairn India has since been taken over by Vedanta Ltd. and is fighting a tax evasion case in the Delhi High Court. The tax authorities had placed on Cairn India a capital gains tax demand of INR 20,495 crores in 2015)
9) ZTE Corp (January 2016 – gross corruption – Indian subsidiary is ZTE Telecom Pvt. Ltd.)
10) Walmart Inc. (June 2006 – complicity in serious or systematic violation of human rights)
11) Philip Morris International (January 2010 – production of tobacco. India operations are through Godfrey Philips Ltd. and K. K. Modi Investment and Financial Services Ltd.)
12) Honeywell International Inc. (January 2006- production of key components of nuclear weapons. Honeywell India is engaged in a range of sectors including aerospace and defence, home and building technologies, safety and productivity solutions among others).
13) BAE Systems (January 2018- production of key components of nuclear weapons. BAE partners with Indian counterparts in the defence industry sector in India)
(Click on the links above to access the reasons for blacklisting these companies.)
According to the Council on Ethics which guides the investment decisions of GPFG, the case against Vedanta’s exclusion is not just its operations in Thoothukudi but also its track record at the refinery near Mettur dam in Tamil Nadu, mining operations in Niyamgiri Odisha, and the refinery in Lanjigarh, Odisha and other operaitons. The decision to blacklist Sterlite and its sister companies was first taken in 2007. Click here for the note prepared by the Council of Ethics recommending exclusion of Vedanta/Sterlite from the GPFG investment universe.
Vedanta is said to have advocated with GPFG/NB against the exclusion, but the decision to exclude them was reconfirmed on the basis of the recommendation received from the Council on Ethics in 2013. I could not find this document on the GPFG website. So I did the next best thing. I placed a request for this document on the Norwegian Government’s electronic records website. The official recommendation to exclude which is in Norwegian is in the first attachment (click HERE for an unofficial translation alongside the original Norwegian text from the official document). The controversy continued until 2017. Related correspondence has been reproduced on the website of Mines and Communities. However, I have not been able to find the original documents on the websites of GPFG/NB or the Council on Ethics.

Norges Bank has invested GPFG funds in 275 Indian public and private sector companies

In fact, despite blacklisting a handful of companies, Norges Bank has invested GPFG funds in 275 Indian companies operating in both the public and private sector. They have invested in the equities of banks such as Allahabad Bank, Andhra Bank, Bank of India, Canara Bank, IDBI Bank, J&K Bank, Punjab National Bank, State Bank of India, UCO Bank, Union Bank of India and Vijaya Bank in the public sector and in private sector banks like Axis Bank, HDFC Bank, ICICI Bank Ltd., Indus Ind Bank and Yes Bank. Some of the well known public sector enterprises in which they have invested include, Bharat Electronics Ltd., BPCL, GAIL India, HPCL, Indraprastha Gas Ltd., NBCC, NHPC, Oil India, ONGC, Power Grid Corporation of India, Shipping Corporation of India, Ltd.
GPFG funds are invested in the sister companies of some of those which have been blacklisted. For example, they have invested in the equities of Reliance Industries Ltd., Reliance Capital Ltd., Reliance Communications Ltd., Tata Consultancy Services, Tata Motors, Tata Steel, Tata Chemicals etc. So it is the business and ethical practices of a specific company that matters to their investment decisions instead of its lineage or umbilical linkage.
Some other well-known private sector companies in which GPFG funds are invested include Adani Ports and SEZ, Apollo Hospitals, Apollo Tyres, Arvind Ltd., Ashok Leyland, Asian Paints, Aurobindo Pharma, Bajaj Auto, Bharti Airtel, Biocon, Bluedart Express, Britannia Industries, Cadila Healthcare, Chennai Superkings Cricket Ltd., Cipla Ltd., Coffee Day, Colgate Palmolive India Ltd., Dabur India, Dr. Reddy’s Laboratories, Godrej Industries, Grasim Industries, DishTV, Idea Cellular, India Bulls, Infosys Ltd., JSW Steel, Larsen & Toubro Ltd., Mahindra Holidays & Resorts Ltd., Mahindra & Mahindra Ltd., Maruti Suzuki Ltd., Monsanto India Ltd. Muthoot Finance Ltd., Piramal Enterprises, Raymond Ltd., Sun Pharmaceutical Industries Ltd., Thermax Ltd., Thomas Cook India Ltd., Titan Co. Ltd., TV18 Broadcast Ltd., United Breweries Ltd., Voltas, Wipro and Zee Entertainment Enterprises Ltd. to name a few (phew!).
Please click on India’s outline on GPFG’s global investment map to view the complete list of companies, the value of investment in each company in NOK and USD terms, the ownership and voting rights in each company. GPFG’s investment in Indian equities was valued at NOK 66.3 billion or USD 8.1 billion at the end of 2017.
For example, the investment in Infosys Ltd. is almost USD 289 million, while it is USD 227 million in SBI, USD 189 million in TCS Ltd., USD 170 million in Tata Motors, USD 169 million in Reliance Industries, USD 149 million in Indus Ind Bank, USD 144 million in Cipla Ltd., USD 130 million in Apollo Tyres, USD 89 million in Adani Ports and SEZ and USD 41 million in TV18, to name a few (double phew!)
Additionally, GPFG has invested in fixed income schemes in India in both the private and public sector entities such as Reliance Industries – USD 94.4 million and Rural Electrification Corporation Ltd – USD 4.8 million. GPFG has invested USD 3.4 billion in Government of India bonds as well.

Advocacy opportunities involving GPFG

Many activists working at the community level to demand accountability for the adverse impact of the operations of domestic and multinational corporations (MNCs) on human rights, public health and environment would do well to think of investors like GPFG/NB as a target for advocacy. For example, in 2006, the Council on Ethics recommended that Monsanto Co. be excluded from its investment universe of GPFG for using child labour in the field of hybrid cotton seeds production in India. Click here to read the recommendaiton. However, the Norwegian Ministry of Finance decided to engage with Monsanto for a limited period through Norges Bank to use its ownership rights to try and get the company to reduce dependence on child labour.
In 2008, the Council on Ethics found that Monsanto had indeed taken tangible steps in this direction and that active ownership through GPFG had paid off unlike any other investor in the company who had paid serious attention to this issue. So the Council on Ethics decided to withdraw its recommendation to exclude Monsanto from the GPFG investment universe. However, according to a 2008 press release published on its website the Council and Norges Bank continue to monitor Monsanto.
This case study shows that environmental and human rights activists can send to the Council on Ethics, evidence of violation of human rights, severe environmental damage or corruption relating to any company operating in India in which NB has invested GPFG funds. When domestic remedies are slow or ineffective, this strategy could be explored. Click here for the contact details of GPFG’s Council on Ethics.

Norwegian Government’s enviable track record of transparency

Norwegian Government is one of the best examples of how transparent a government and its agencies can be if there is political will and a culture of openness that pervades the bureaucracy. South Asian and African countries that have enacted laws to guarantee access to information could do well by emulating the good practices adopted by Norway. Their Government volunteers a wealth of information about its working in the public domain.
In October 2013, the Norwegian Ministry of Finance, on recommendation from the Council on Ethics, decided to exclude Sesa Sterlite from the GPFG’s investment universe (the title and date of receipt of this document are listed on Norwegian Government’s latest version of their Electronic Records Database – e-Innsyn). Until recently it used to be called OEP. Any person may access this database of electronic records held by the national and local governments in Norway and place an order for them just like one would buy a book or any other product from Amazon.com. If the document is not covered by any exemption under Norway’s access to information law, it will be delivered free of charge by email.
I had used this facility in the past and obtained documents relating to India. This time I sought a copy of the 2013 document that the Council of Ethics sent to the Finance Ministry. The Norwegian Ministry of Finance emailed me the document within less than 24 hours of making the online request.
Section 4(1)(b) of India’s Right to Information Act, 2005 requires the Central and the State Governments to create such databases of hard copy and electronic records they hold in custody. Despite making tall claims about being an IT giant to anyone who is willing to listen, they have not deployed this technology to create a database like e-Innsyn. It does not cost the heaven and earth to create one. It does not have to be done in one day either. What is needed is a commitment to comply with a statutory obligation of proactive disclosure, a phased plan of action and some techies to create and maintain such a database.

End Note

The quick research behind this email alert was inspired by the piece published on The Wire about the aftermath of the Thoothukudi tragedy. Yes, I read articles published on this digital media platform, irrespective of the derision with which some “the country wants to know” choirboys of the establishment refer to it. Articles such as The Wire’s give real food for thought and guide towards action. Shouting matches of the kind telecast on several 24×7 private satellite TV news channels are best relegated to stadiums and fish markets.

*Programme coordinator, Access to Information Programme, Commonwealth Human Rights Initiative, New Delhi

Comments

TRENDING

Abrogation of Art 370: Increasing alienation, relentless repression, simmering conflict

One year after the abrogation by the Central Government of Art. 370 in Kashmir, what is the situation in the Valley. Have the promises of peace, normalcy and development been realised? What is the current status in the Valley? Here is a detailed note by the People’s Union for Civil Liberties , “Jammu & Kashmir: One Year after Abrogation of Art. 370: Increasing Alienation, Relentless Repression, Simmering Conflict”:

Repeated failure to appoint Chief, other commissioners undermining RTI Act

By Anjali Bhardwaj, Amrita Johri* The post of the Chief Information Commissioner of the Central Information Commission (CIC) has fallen vacant with the retirement of Bimal Julka with effect from August 27, 2020. This is the fifth time in the last six years that the Commission has been rendered headless. Four posts of information commissioners are also vacant in the CIC. Currently more than 35,000 appeals and complaints are pending in the commission resulting in citizens having to wait for months, even years for their cases to be disposed, thereby frustrating peoples’ right to know. Since May 2014, not a single commissioner of the CIC has been appointed without citizens having to approach courts. The failure of the government to make timely appointments of commissioners is a flagrant violation of the directions of the Supreme Court. In its February 2019 judgment, the apex court had categorically stated that if the CIC does not have a Chief Information Commissioner or required strength

Sunil Gavaskar, G Viswanath rated Andy Roberts best fast bowler they ever faced

By Harsh Thakor  The West Indies pace quartet or battery of the 1970’s and 1980’s truck terror to deliver a knockout punch, like never in cricket history. One was reminded of bomber raiding an airbase or a combing operation. Andy Roberts was the pioneer in orchestrating or propelling the most fiery and lethal pace bowling attack ever in the history of the game. Simply the godfather of Modern West Indies fast bowlers. He spearheaded the pack from the mid 1970’s .Without Andy the talent of Michael Holding, Joel Garner and Colin Croft would never have blossomed.Michael Holding credits Andy for shaping his great bowling career, by infusing vital elements.

Adivasi land rights question in Telugu states: Digitization process without transparency?

By Dr Palla Trinadha Rao  This paper examines whether the Land Records Modernization Program initiated by the successive governments in Telugu States is beneficial to tribals in the Scheduled Areas in the light of special protective Land laws that are in force there. Digitization process or regularization of land records or land surveys without transparency will result in disempowerment of Adivasis. This can be tested in the case of Adivasis in the Scheduled Areas of Telugu States. British colonialism, through its land revenue policy and elaborate exploitative bureaucratic structure, made land alienable on a large scale especially in tribal areas. 1 Land and the forest produce remain the main source of tribals’ livelihood; but availability of land is restricted by forest reservation on the one hand, and non-tribal encroachment on the other. 2 In the Andhra Area, there were certain laws including the Agency Tracts Interest and Land Transfer Act, 1917 that existed before the inaugurati

Ultimate champion in crisis, arguably best ever skipper: Created history in Aussie cricket

By Harsh Thakor  In the history of cricket few cricketers knit and propelled a cricket team or had such profound influence on the game as Ian Chappell. Ian Chappell was responsible for converting a bunch of talented individuals into a world beating side, giving a dramatic turn to Australian cricket. Few cricketers ever led such a renaissance.

Largest democracy in world has become weakest at hands of fascist Hindutva forces

Note on “The Nazification of India”, a report released By Justice For All: *** This report, the Nazification of India, compares how Hindutva ideology not only is inspired by Nazis and Fascists of Europe, but their treatment of the Muslim minority closely follows developments that resulted in pushing Jews to the gas chambers. Situation is indeed quite alarming. The report says that the largest democracy in the world has become the weakest at the hands of the fascist Hindutva ideology. India today is ruled not just by a political party the Bharatiya Janata Party (BJP), but its mother organization the Rashtriya Swayamsevak Sangh (RSS). Because the BJP’s government policies are linked to extra-legal enforcement by RSS paramilitary street power, this report has coined the term “The BJP-RSS regime” to reflect their intrinsic links and collaborative relationship. The Nazification of India report marks the anniversary of the Gujarat pogroms of 2002 against Muslims which propelled the BJP-RSS

BSF's unconstitutional, whimsical order violates life, livelihood of Dalits, minorities

Kirity Roy, Secretary, Banglar Manabadhikar Suraksha Mancha (MASUM), writes to the Chairman, National Human Rights Commission: *** I want to attract your attention towards the illegitimate restrictions on the life and livelihood of the villagers of Paschim Sahebganj village under Dinhata - II Block and Sahebganj police station in Cooch Behar district of West Bengal by the Border Security Force personnel attached with Dharala Border Out Post under 138 Battalion BSF. The population of Paschim Sahebganj village is around 1480, where almost 75 percent of the villagers belong from Hindu Scheduled Caste (Dalit) and 25 percent from minority Muslim backgrounds.The main occupation of the villagers is agriculture. About 260 acres of cultivable land in the village that belongs to the villagers is located outside the border fencing, which is heavily guarded by the Border Security Force (BSF). The BSF regulates the ingress and egress of the villagers to their fields through the fencing gates that a

Varanasi social worker who has devoted her life for the ultra-poor and the marginalized

Passion Vista and its partners profile Founder and Managing Trustee Shruti Nagvanshi as  someone whom women leaders look up to: *** Shruti Nagvanshi, a social worker and human rights activist based in Varanasi, Uttar Pradesh, has devoted her life to reaching out to the ultra-poor and marginalized communities in India. Born in Dashashwmedh, Varanasi on 2 January 1974, she married Dr Lenin Raghuvanshi on 22 February 1992 and has a son, Kabeer Karunik, a Business management Graduate who is also a national level snooker player.

An approach to lake/pond restoration by Ramveer Tanvar, Pond Man of India

By Monami Bhattacharya*, Mansee Bal Bhargava**  Lakes/ ponds are often referred to as an elixir of life, a living ecosystem that adds incremental value to the larger biota. Across the tropical landscape of the country lakes/ ponds are a common sight. Lakes/ponds have always shaped the life and livelihood of those dwelling in and around it. The dependence of the local population on these natural resources of water is noticeable since time immemorial. However, they are fading fast in both rural and urbanscapes from the popular parlance with the advance of humanity. It has been a popular notion to value land more than the waterscape and hence these nurturers of life are under stress in several areas. In many instances, these once beautiful waterscapes referred as the ‘Eye of the Earth’ are mostly now only dilapidated garbage dump yards emitting foul smell with no sign of a healthy ecosystem.

Urban crisis: Impact of erosion of democratic framework on Indian cities

By IMPRI Team  On 13th February, 2023, IMPRI Impact and Policy Research Institute, New Delhi in collaboration with ActionAid Association India arranged a book launch followed by lecture series under the title “India’s G20 Presidency & the Urban Agenda for the Developing Countries”. The event was held in Indian International Centre (IIC) Annex, New Delhi. The event began with the book inauguration session, under the honorary presence of Mr Sitaram Yechury, former Rajya Sabha member and General Secretary, CPI (M), accompanied by Mr Sandeep Chachra, executive director, ActionAid Association India. Session 1 | Book Launch: ‘Cities in Transition’ by Mr Tikender Singh Panwar The book launched was “Cities in Transition”, written by Mr Tikender Singh Panwar, former Deputy Mayor, Shimla and a Senior Fellow at IMPRI. Beginning with brief remarks on his book, Mr Panwar outlined the basic subject matter and the purpose behind writing the book, which he considers as a by-product of his experien