– The politicians must take responsibility – E24

The Norwegian Oil Fund’s ownership in Israel was the subject of the finance committee in the Storting this week. – I don’t think I get good answers from the finance minister, says Kari Elisabeth Kaski (SV).

The oil fund owns shares in a number of Israeli companies and major arms manufacturers.

This also marked the finance committee’s annual hearing on the activities of the Oil Fund and Folketrygdfondet this week.

Among those who took part in the hearing was Kjell Stephansen from the Palestine Committee. He wants to withdraw the Oil Fund from Israeli companies and arms manufacturers that supply arms to Israel.

– In today’s acute situation where there is war in Gaza, we are still war profiteers until the Ethics Council, perhaps in a year’s time, has managed to get a case through, says Stephansen.

The politicians have left it to Norges Bank to decide which companies are to be banned from the Oil Fund.

With the current system, the Ethics Council can take a long time before it advises Norges Bank’s executive board on which companies they believe should be banned.

– I think the politicians must take responsibility. They cannot just push the responsibility onto the Ethics Council and then sit idly by. They must now ensure that we get the exclusion of companies that contribute to arms sales to Israel and are involved in the occupation, says Stephansen.

– Threatens legitimacy

Both Finance Minister Trygve Slagsvold Vedum, Central Bank Governor Ida Wolden Bache and the Oil Fund’s head Nicolai Tangen answered questions about the fund’s ownership related to Israel and arms stocks during the hearing on Tuesday.

SV and Rødt’s members in the finance committee were not satisfied with the answers.

– I think it’s a bit of a game of pointing. It worries me, says Storting representative Kari Elisabeth Kaski (SV).

Kaski claims that the Oil Fund is invested in companies that produce weapons both for Russia and Israel, and in companies that contribute to the illegal occupation of Palestine.

– I think that threatens the legitimacy of the fund both in Norway and internationally, she says.

– It is policy to be invested in those companies. I don’t think I will get good answers from the finance minister about why it is not possible to tighten the ethical guidelines so that we get out of those companies, says Kaski.

She has previously proposed withdrawing the Oil Fund from all arms production.

At New Year’s, the oil fund owned NOK 15.3 billion worth of shares in Israel, distributed among 76 companies. The largest holdings were in the pharmaceutical company Teva Pharmaceutical, the mineral producer ICL Group, the AI ​​and customer care company Nice and Bank Hapoalim.

The fund also owns shares in arms manufacturers. The Palestine Committee has, among other things, demanded divestment in Raytheon Technologies Corp, Rheinmetall, L3 Harris Technologies, Thales and General Electric.

– Unintelligible

– I think it is completely incomprehensible that you treat Russia’s occupation of Ukraine so differently from Israel, says Marie Sneve Martinussen (R).

After the Russian invasion of Ukraine in 2022, the government decided that the Oil Fund should sell itself off in Russia. During the hearing on Tuesday, the head of the Norwegian Oil Fund confirmed that it would technically be possible for the Norwegian Oil Fund to sell off in Israel, if it received an order from the government to do so.

– I believe we cannot be neutral in a case that is about a possible genocide, says Martinussen.

– What they are saying is that it could be that the Ethics Council is working on this. That may be, but it is now a very long time since the large-scale warfare against Gaza started. We cannot wait another year for the pressure we need for Israel to stop bombing, says Martinussen.

Separates Russia from Israel

Finance Minister Trygve Slagsvold Vedum (Sp) points out that there was broad agreement to sanction Russia when the government decided that the Oil Fund should exit.

– Russia was part of a large, international sanctions regime, says Vedum.

– It can be just as important here that you react to another company from another country. If they possibly contribute to a violation of international law in Israel, and Norges Bank puts its stamp on it, then it has an enormous effect for other investors. So it also helps to raise the ethical standard that we have the system we have, he says.

Vedum emphasizes that the government condemns what he refers to as abuses in Gaza.

– What we see is completely unacceptable. There is absolutely no doubt about it. If there are companies that contribute to it, then they should be excluded, says Vedum.

Cannot drop individual countries

Neither Norges Bank nor the management of the Oil Fund can single-handedly steer clear of shares in an entire country (such as Israel) or an entire industry (such as arms manufacturers).

The Ministry of Finance has decided that Israel is part of the fund’s investment universe, and the fund has limited options to deviate from this.

On the other hand, Norges Bank’s executive board can expel individual companies from the Oil Fund for ethical reasons. But then there must first be advice on that from the Ethics Council, and that can take time.

– After all, we follow our mandate and the benchmark index. And then we have a good framework, we believe, for ethical exclusions. And then we base ourselves on advice from the Ethics Council, says central bank governor and chairman of the Oljefondet Ida Wolden Bache to E24 after the hearing on Tuesday.

In November, the fund completely sold out of Israeli government bonds following increased uncertainty in the market. In contrast to Israeli shares, Israeli fixed-income securities are not included in the benchmark index to which the fund is managed. Therefore, the management of the fund is free to decide whether they want to own Israeli interest-bearing securities

More protests

Recently, there have been a number of protests against the Oil Fund and the government following Israel’s war in Gaza. Several of the demonstrators outside Norges Bank’s investment conference last week were eventually removed by the police.

Norges Bank has previously excluded several companies linked to Israel and Palestine, due to the risk of violations of individuals’ rights in war and conflict. Among these are Elco Ltd, Ashtrom Group Ltd, Danya Cebus Ltd, Shapir Engineering and Mivne Real Estate.

The Ethics Council has previously informed E24 that it continuously assesses companies with activities that have previously provided grounds for exclusion.

In a very few cases, politicians have ordered the Oil Fund to withdraw from individual countries. As of today, the fund is prohibited from investing in Syria, North Korea, Russia and Belarus. Finance Minister Trygve Slagsvold Vedum has also previously ruled out such a move towards Israel.