read full recommendation here.

Mining company excluded from the Government Pension Fund ““ Global due to contribution to serious environmental damage

Based on a recommendation from the Council on Ethics for the Government Pension Fund ““ Global, the Ministry of Finance has excluded the Canadian mining company Barrick Gold Corporation from the Fund. Barrick mines for gold in the Porgera mine in Papua New Guinea. The recommendation is based on the assessment that investing in the company entails an unacceptable risk of the Fund contributing to serious environmental damage.

“Pursuant to the Ethical Guidelines, the Government Pension Fund ““ Global should not invest in companies that cause severe environmental damages. In its assessment, the Council on Ethics concluded that Barrick Gold Corporation is causing severe environmental damages as a direct result of its operations. I have therefore decided to follow the Council on Ethics”™ recommendation on exclusion of Barrick Gold Corporation from the investment universe of the Fund,” says Minister of Finance Kristin Halvorsen.

Barrick Gold is a Canadian mining company and the largest producer of gold in the world, with 27 mines in operation. The Council points out that Barrick Gold”™s mining activities in several countries have been accused of causing extensive environmental damage. Due to limited resources, the Council has restricted its investigation to the Porgera mine in Papua New Guinea, which is run by Porgera Joint Venture, in which Barrick Gold has a 95 per cent stake. In the opinion of the Council, the way this mine is run provides sufficient basis for recommending exclusion.

The Council provides an extensive review of the environmental problems linked to depositing waste in the river. The Council attaches particular importance to the risk of accumulation and build up of heavy metals, especially mercury, in the environment. Pollution from the Porgera mine will potentially have serious negative consequences for human life and health.

The Council concludes:
“In light of the documentation at hand, the Council finds that Barrick”™s operation of the Porgera mine entails an unacceptable risk of extensive and irreversible damage to the natural environment. According to the Council”™s assessment, the company”™s riverine disposal practice is in breach of international norms. In the Council”™s view, the company”™s assertions that its operations do not cause long-term and irreversible environmental damage carry little credibility. This is reinforced by the lack of openness and transparency in the company”™s environmental reporting. Considering the intentions presented by the company with regard to production expansion, the Council finds reason to believe that the company”™s unacceptable practice will continue in the future.”

The Ministry of Finance has considered the matter in light of the Council on Ethics”™ recommendation and has decided to exclude Barrick Gold Corporation from the investment universe of the Government Pension Fund ““ Global, in accordance with the Ethical Guidelines for the fund. In a letter dated 30 September 2008, the Ministry of Finance asked Norges Bank to sell its shares in the company. The shares have now all been sold. At the end of July 2008, the Government Pension Fund ““ Global owned shares worth just under NOK 1 248 million in the company. The decision to sell is made public after the shares have been sold, so as not to affect the sale.

The recommendations from the Council on Ethics for the Government Pension Fund ““ Global are published on the Ministry of Finance”™s website.

Read more about the Council on Ethics for the Government Pension Fund ““ Global atwww.etikkradet.no.

Companies Excluded from the Government Pension Fund ““ Global’s investment Universe.