WWF demands clean-up from Minister of Finance, Mr Sigbjoern Johnsen.
From 2010 to 2011 the Norwegian State Pension Fund increased its investments in the British oil company Soco International PLC by almost 73 million Norwegian kroner2 to over 200 million kroner (EUR 27.5 million). This is a company that uses its economic strength and willingness to go into vulnerable areas of conflict, which other companies prefer to avoid, to encourage local authorities to open some of the world’s most highly valued wilderness areas to oil exploration.
WWF, the global conservation organization, has documented that the company is in breach of internationally recognized cultural and environmental policies and guidelines3, operates in violation of international conventions, and has broken local laws. WWF is joined by UNESCO4 and the IUCN5 in condemning of the company’s operations in DRC.
“We notified the Ministry of Finance of Soco’s gross violations in DRC over a year ago. This should have sent their alarm bells ringing. Instead we see their investments increasing by over 50 percent,” says Conservation Director Arild Skedsmo at WWF-Norway. “With this the Norwegian Pension Fund is opening the gates to similar activities in all of the most vulnerable and high-value conservation areas in Africa,” continues Skedsmo. He is referring to the fact that Virunga National Park, located in the mountains shared by DRC, Uganda and Rwanda, where Soco is pushing its interests, is one of the most spectacular pearls in Africa’s fragile network of protected areas.
Virunga National Park – a shining pearl, threatened by oil investments
Virunga was the first national park created on African soil. Here you find a third of the remaining habitat of the world’s last mountain gorillas, made famous by researcher Dian Fossey, who sacrificed her life for the gorillas of these mountains, and the movie “Gorillas in the Mist.” Virunga is home to a huge array of species and habitats, and is a priority area on UNESCO’s list of World Heritage Sites. Virunga is also listed as one of the world’s most important wetlands under the Ramsar Convention.
Accepting that an international oil company pushes into this gem of a wilderness area will create a strong precedent in Africa. It will dramatically increase the risk of unrestrained oil, gas, and mining development in what, until now, have been considered inaccessible, strictly protected areas. The huge investments that have been made to create, protect, and manage Virunga National Park and its surrounding pristine areas, made by major investment banks, the EU, Norway, and numerous NGOs, and amounting to millions of Euro over many years, are now at stake.
In addition, oil development in this area will threaten the livelihoods of over 50,000 people who currently depend on fishing and other sustainable use of the abundant natural resources in the area.
Virunga and the Pension Fund – WWF’s demands
Virunga National Park is protected by both national and international laws and conventions. Still, several oil companies are now putting pressure on the government to gain access to mineral resources within park boundaries. Governance structures and practices in this remote area of DRC are weak, and local authorities are vulnerable to corruption and different forms of influence, both from the various rogue military groups operating in the area, and from resourceful companies that are willing to risk capital and reputation by going into such areas. Laws and regulations are stretched and interpreted broadly, allowing cash to flow from willing investors. “Dear Finance Minister Johnsen, is this really a business our people’s Pension Fund should be supporting?”, asks WWF-Norway.
WWF expects there to be a loud and clear ‘No’ coming from the Finance Minister to this question. Eastern Congo is internationally known as an ultra high-risk area for investments. Money being channeled into this corrupt and largely lawless area by oil companies willing to break international guidelines and conventions will only add fuel to the current conflicts and violence, uproot more local communities, and open the way for faster and even larger scale plundering and destruction of this unique area.
WWF demands to the Minister of Finance and his investment managers are:
First, contact the board and top management of Soco International, and get them to commit to refraining from operations in strictly protected areas and UNESCO World Heritage Sites. This can and should be done by the Fund through its own strategy on ‘active ownership’ of selected companies.
If Soco does not refrain from doing business in protected areas and World Heritage Sites, the Fund must quickly, and with a clear message on why, withdraw its investments in this controversial and highly risk-prone company.
What is being done by the Finance Minister?
WWF has kept an eye on Soco International for several years, and has documented illegalities and actions that are in breach of international conventions6. In February 2011 the organization informed the Finance Minister of a number of unacceptable and dubious actions performed by this company, revealing a pattern of targeted and consistent attempts to get the park opened for oil development. In his reply, the Minister said that the Fund’s Ethical Council was watching the situation in Virunga closely. But since then the Fund has in fact increased its investment in Soco International by over 50%, to over 200 million kroner (EUR 27,5 million).
“This indicates that the Fund is not able to effectively operationalize and follow its own ethical guidelines. Despite sound procedures on paper, the Fund is clearly not able to translate ‘monitoring’ into action towards companies that violate international ethical and environmental standards, or even its own guidelines for investments in conflict areas,” says Arild Skedsmo of WWF-Norway. “The Pension Fund is invested in more than 8,000 companies, and has no effective way to assess whether a company is run in accordance with even the most basic best-practice standards”, Skedsmo continues. “The very least we should expect is that a Fund like this, which claims to be a world leader in ethical standards, at least is able to actively follow-up specific investments made in such conflict-ridden and difficult parts of the world”, he ends.
Source: WWF Norway
1 The Democratic Republic Congo (DRC)
2 From NOK 135,6 million invested in Soco (1,18% of the shares) in 2010 to NOK 208.5 million as of 31 December 2011 (2.27% of the shares).
3 E.g. the ‘Equator Principles’, supported by the World Bank and the International Finance Corporation (IFC).
4 United Nations Educational, Scientific and Cultural Organization.
5 International Union for the Conservation of Nature and Natural Resources.