afrol News: Oil exploration off Sahara stirs debate on ethical investments


Western Sahara & Morocco 
Oil exploration off Sahara stirs debate on ethical investments

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afrol News, 17 February - The main shareholders of the Norwegian oil exploration company TGS-Nopec are considering to divest due to the spreading impression the investment is "unethical". The first investment bank already has sold out because of the disputed explorations off Western Sahara, and more might follow.

- TGS-Nopec is involved in oil exploration despite the pronounced wished of the recognised representatives of the Saharawi people, says Ronny Hansen from the Norwegian Support Committee for Western Sahara. He is heading a campaign to make the company withdraw from the territory that has been occupied by Morocco since 1975.

This information campaign has so far made a large number of small and medium sized shareholders divest from TGS-Nopec. This includes prominent and normal individuals, communal pension funds in several of Norway's major cities, NGOs, church institutions and some of the country's leading newspapers.

The rates on the TGS share have stumbled during the last year. It however remains unsure whether the sell-off by small and medium sized shareholders has been decisive as the company also has experienced cutback in revenues. The fear the bigger shareholders may divest from the company - if one sells, more will follow - still has made the TGS share a fragile investment object.

The Norwegian company was given a strong warning of what was going on last week as the first investment bank withdrew from TGS-Nopec on an ethical basis. Swedish-owned Banco, which is managed by ethical guidelines, announced it would sell its 13,000 shares in the company, with a total value of 720,000 Norwegian kroner (euro 100,000).

Banco Managing Director Bente Thomassen announced that the decision had been made after a study by the company's ethical investment council, because TGS-Nopec "has not shown enough attention concerning operations in occupied territories and areas with civil war." The divestment was to happen "as soon as possible."

In the same way as other shareholders before them, Banco is selling its shares in TGS-Nopec losing money. The TGS shares are worth less than one third of their price only one year ago.

The announcement by Banco came only one week after Norwegian Deputy Foreign Minister Vidar Helgesen especially mentioned TGS-Nopec as an example of blameworthy business practices at a conference of businesses' social responsibilities. "According to our view, Norwegian business should restrain itself when it comes to activities in localities disputed by international law," said Mr Helgesen, after having questioned the legality of TGS-Nopec's activities off Western Sahara.

- The government however has no formal reason to instruct businesses or other institutions running by business principles, such as the Public Pensions Fund, not to engage in these," added the Deputy Minister.

The Norwegian Public Pensions Fund holds 7 percent of the shares in TGS-Nopec and is thereby its biggest external shareholder. The Fund has been under intensive pressure from politicians and NGOs to divest. The example set by Banco and the advice presented by Mr Helgesen has even increased this pressure on the state-owned fund.

The Public Pensions Fund has also been particularly emphasised by the Norwegian Sahara Support Committee's campaign to have TGS-Nopec withdraw its activities from Western Sahara. In a letter to the Fund's Director, Tore Lindholt, the Support Committee underlines that "only by divesting can the Public Pensions Fund show it doesn't agree with TGS-Nopec's assessments in this case. In the opposite case, we consider the Public Pensions Fund to give its approval of the questionable ethical standards of TGS-Nopec."

- We don't want our pensions to be funded by an illegal occupation, says Mr Hansen of the Support Committee. He says the Committee is constantly in contact with the Fund and Storebrand, an insurance company, which is the second largest shareholder in TGS-Nopec. None of the two main shareholders will exclude the possibility that they may divest from TGS-Nopec within short time, says Mr Hansen.

This week, the Support Committee and several Norwegian MP are handing over more than 600 protest signatures against TGS-Nopec's engagement in Western Sahara to the company's Finance Director, Arne Helland. The signers include individuals, political parties, several MPs and a large number of Norwegian NGOs.

- We hope that TGS-Nopec now will understand the seriousness of the matter, emphasises Mr Hansen. "By now, all shareholders the Support Committee has contacted, with one exception, have followed our advice to sell their shares," he says.

- We also hope that small and medium size shareholders now see the signs of time, when it comes to the further development of the TGS shares, Mr Hansen adds with a smile.



 

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