Norwegian Wealth Fund Investigates Whether Its Portfolio Companies Use Detention Camp Labor in Xinjiang

The head of the Norwegian sovereign wealth fund’s ethics watchdog says the fund will investigate whether companies it invests in have used Uighurs and other Muslim laborers linked to China’s Xinjiang detention camps.

Johan H. Andresen, chairman of the Norwegian wealth fund’s ethics committee, said the fund has begun identifying companies that it says have used workers held in Xinjiang internment camps.

“We are concerned that some of the companies in this fund may be taking advantage of that workforce. This may be a widespread practice,” he said in an interview before the commission released its annual report Wednesday (March 10).

If the commission will make a recommendation on the issue, it will do so in the first half of this year, he said. The recommendations made will be submitted to the board of directors of the central bank, which will make the final decision.

China’s Foreign Ministry said in a statement sent to Reuters that there are no “so-called ‘detention camps'” in Xinjiang.

Beijing denies that forced labor exists in Xinjiang. The Chinese government says it is setting up vocational skills Education and training centers in Xinjiang to help eliminate Islamic extremism and separatism.

The Norwegian central bank usually follows the committee’s recommendations and reprimands the companies involved, but sometimes instead of immediately excluding them from the fund, it puts them on a watch list and gives them a period of Time to come up with a plan to change their behavior or be excluded.

The Norges Bank can also ask the fund’s management to engage directly with the company about its concerns, or it can decide to divest from a company if it believes that the fund’s ownership of the company poses too great a moral hazard.

Norway’s $1.3 trillion sovereign fund is the world’s largest sovereign wealth fund and operates under a code of ethics set by Parliament. It owns 1.5 percent of the world’s 9,100 publicly traded companies and thus has enormous market influence.

The Norwegian Parliament prohibits the fund from investing in companies that produce standards such as nuclear weapons, landmines, tobacco or human rights violations.

Several textile companies have been excluded from the fund, most recently India’s Page Industries, which makes swimwear for the Speedo brand. Page denies any wrongdoing.

Anderson, chairman of the ethics committee, also said that forced labor or modern slavery is also becoming a growing problem and will dominate the committee’s work in the coming years. The commission will commission a report this year from a non-governmental organization to outline the extent of forced labor worldwide.

The Norwegian Wealth Fund has already excluded a number of companies, including security firm G4S, from the fund over the issue of forced labor.

The fund has excluded about 70 companies for various reasons, based on the recommendations of an ethics committee. Another 73 companies were excluded outright by the central bank because of their reliance on coal.

Reuters reported that when the news agency asked whether China would contact Norwegian authorities about the actions taken by the Norwegian wealth fund’s ethics watchdog on the Xinjiang issue, the Chinese Foreign Ministry said it hoped the Norwegian agency would “respect the facts” and not “promote the wrong practice of politicizing economic and trade cooperation. The Chinese Foreign Ministry said it hoped that the Norwegian authorities would “respect the facts” and not “promote the wrong practice of politicizing economic and trade cooperation.