4 Human rights, war and conflict
Section 4 of the guidelines states that “Companies may be excluded or placed under observation if there is an unacceptable risk that the company contributes to or is responsible for:
- a. serious or systematic human rights violations
- b. seriousviolationsofthe rights of individuals in situations of war or conflict […]”
4.1 Serious or systematic human rights abuses
More than 70 of the over 200 cases on which the Council worked in 2023 related to the risk of human rights abuses, and almost half of these related to labour rights. The first recommendation that the Council issued in 2005 related to the infringement of labour rights both in the company’s own operations and in its supply chain. The case related to the use of under-age workers, work that was dangerous or hazardous to health, discrimination and violation of trade union rights. Some time later, the Council assessed several companies working with suppliers that systematically and extensively used child labour in connection with seed production. In 2015, the Council embarked on a systematic examination of working conditions at textiles factories. This involved over 40 factory visits in nine countries, primarily in Asia. Working conditions in many of these factories were extremely poor and there were widespread labour rights violations, despite regular inspections by the factories’ customers.
Labour rights violations are identified through both systematic reviews of businesses where the risk is particularly high and ongoing news monitoring. In 2023, the Council conducted investigations into several companies in certain African countries. These investigations were carried out with the help of consultants and were based on interviews with workers, as well as inspections if the companies allowed. Indications of extremely poor working conditions were found in the companies examined. In particular, the sexual harassment of female workers seemed to be rife.
Working conditions verging on forced labour have also been an issue on which the Council has worked extensively. Migrant workers’ employment terms, particularly those relating to recruitment, may place the individual worker in a situation in which they are forced to accept pay and working conditions that could limit their ability to terminate the employment relationship and, in the worst case, put their life and health in danger. In 2015, the Council started investigating migrant workers’ employment terms and conditions in connection with the construction of facilities for the 2022 FIFA World Cup in Qatar. The Council’s investigations were subsequently extended to other Gulf states. More recently, the Council has focused on the rubber glove industry in Malaysia, with the recruitment of migrant workers for industrial production in Taiwan being investigated in the past year. The Council has also taken a closer look at certain European companies’ use of migrant workers.
In many countries, there is a growing demand for labour which is largely met through the importation of workers from countries in Asia and Africa. Despite greater international attention being paid to migrant workers’ employment terms and conditions, and companies’ increasing tendency to compensate workers for costs relating to recruitment (so-called zero-fees policies), our investigations show that the risk of serious norm violations remains considerable and that one cannot rely on this being picked up on by NGOs or the media. It is therefore necessary for investors to also perform their own due diligence in order to identify companies that are responsible for such norm violations. The Council will therefore continue to work on this issue but will take the risks associated with doing so into account. In some Gulf states, for example, on-site investigations may pose a considerable risk to both the consultants and their informants. In such cases, the Council will rely on risk assessments for companies and business sectors, in accordance with the report to the Storting on the management of the government pension funds (Meld. St. 24 (20–21). Such risk analyses also impact the Council’s assessment of GPFG-invested companies that are accused of contributing to human rights abuses against the Uighur population in China, a topic that the Council has worked on for the past three years. Since it is difficult for the Council to perform its own inquiries into companies in China, its assessments must be based on publicly accessible information. Such information is now less readily available, which makes documenting and assessing Chinese companies’ contribution to human rights abuses more challenging.
The Council focuses especially on the violation of indigenous people’s rights, primarily the abuse of land rights and loss of livelihood, often in connection with the extraction of natural resources and the construction of infrastructure. The portfolio monitoring process shows a growing number of cases relating to the energy transition. The extraction of metals for battery production and the construction of hydropower and wind power generating schemes are examples of projects that are increasingly taking place in areas belonging to indigenous peoples and that may threaten their cultures, livelihoods and, in the worst case, their very existence. The Council is working on several such cases. A combination of inadequate consultation, ignorance and poor process management on the part of the company often leads to serious norm violations.
Thus, in 2023, the Council had about 70 cases under assessment, of which around a third were concluded during the year. Much time is spent obtaining information, commissioning consultant-based assignments, assessing the facts and engaging in dialogues with companies. This is both a material and important aspect of the Council’s work, even though only a few cases culminate in a recommendation.
4.2 Serious violations of the rights of individuals in situations of war or conflict
In recent years, serious armed conflicts have arisen in areas where many GPFG-invested companies operate. The Council has therefore assessed a larger number of companies than previously in relation to the war and conflict criterion. In 2023, this work has addressed companies with operations linked to the military regime in Myanmar, the occupation of the West Bank and the war in Ukraine. The Council has issued recommendations to exclude three companies and terminated the observation of one company. All these companies had operations in Myanmar.
Several of the criteria for exclusion from investment by the GPFG are designed to target companies linked to conflict situations. Further details concerning the Council’s endeavours relating to the assessment of companies’ contribution to norm violations in areas of conflict may be found in Chapter 5.