News: Norway wealth fund to probe whether firms could be using forced labour from China’s Xinjiang.
OSLO (Reuters) – Norway’s $ 1.3 trillion wealth fund will examine whether companies it invests in may employ the labor of ethnic Uyghurs and other Muslims linked to China’s detention centers in far west of Xinjiang, said the head of the fund’s ethics watchdog.
China’s Foreign Ministry said in a statement to Reuters that there are no so-called “detention centers” in Xinjiang.
The world’s largest sovereign wealth fund, which has massive market influence because it owns 1.5% of the globally listed shares of 9,100 companies, is subject to the ethical guidelines set by parliament.
Johan H. Andresen, chairman of the fund’s ethics council, said the fund had started identifying companies that were alleged to have employed workers detained in detention centers in Xinjiang.
“We fear that some of our companies in the fund could use this manpower. This is possibly a widespread practice, ”he said in an interview prior to the release of the Council’s annual report on Wednesday.
“If we were to make a recommendation, it would be in the first half of this year,” he added. Recommendations are sent to the board of directors of the central bank, which ultimately makes decisions.
The United States has accused China of genocide and crimes against humanity in treating Uighur Muslims in Xinjiang.
China said the complexes it has built in the region, where UN experts and rights groups say more than a million people have been detained in recent years, are offering vocational training to stamp out Islamist extremism and separatism.
Allegations of forced labor and human rights violations in these Xinjiang centers are “unfounded rumors and slander,” the State Department said.
Fact box: Ethical business decisions by the Norwegian wealth fund
China previously said that all of the people who attended the camps graduated and went home. Access to the complexes is restricted and it is not possible to independently check that all camps are closed.
The Norwegian Central Bank usually follows the advice of the council to reprimand companies. Sometimes, however, they are not dismissed immediately, but rather placed on a watchlist to give them a set period of time to develop a plan to change their behavior or to disqualify.
The bank may also ask the fund management team to contact the company directly on the matter and may decide to divest a company if it believes the fund’s involvement is too ethical Represents risk.
Companies to be excluded are not named until the fund has sold the shares in order to prevent the shares from losing value beforehand. The main goal is to eliminate the ethical risk.
The Norwegian fund is prohibited by parliament from investing in companies that manufacture nuclear weapons, land mines or tobacco or that violate human rights, among other things.
Several textile companies were excluded from the fund, most recently the Indian Page Industries, which makes swimwear for the Speedo brand. Page denies wrongdoing.
The council is now turning its attention to companies that make shoes, “a natural extension” of its work in the textile industry, said Andresen, as the production processes are similar.
“We’re still in the early stages,” he said.
Forced labor or modern slavery is also becoming a growing issue that will dominate the work of the council for years to come, he said. The council will commission a report from a non-governmental organization this year to determine the extent of forced labor around the world.
The fund has already excluded companies, including security firm G4S, for these reasons. G4S said at the time it had consulted the council and was making good progress on recruitment and welfare standards.
A total of around 70 companies were excluded from the fund for various reasons based on recommendations by the Ethics Council. Another 73 companies were banned directly from the central bank due to their reliance on coal.
When asked whether China would contact the Norwegian authorities about the Fund’s ethics watchdog work on Xinjiang, the Ministry of Foreign Affairs hoped that the relevant Norwegian institutions would “respect the facts” rather than “on the wrong practice of politicizing economic trade and contribute to cooperation “”.
Additional coverage from the Beijing Newsroom; Editing by Alison Williams and Nick Macfie
Original Source © Reuters