WikiLeaks: For Norway, Oil Wealth and Humanitarianism Go Hand in Hand

Norway oilWe’re honored to have Michael Busch dissecting the latest WikiLeaks document dump for Focal Points. This is the thirty-sixth in the series.

Most variations of international-relations realism include some notion of states sacrificing ethical considerations at the altar of national interest. It’s never been completely clear, of course, whether this is a descriptive claim, or a prescriptive one — whether, in other words, the idea is that states should behave this way, or that they in fact do.

Those pondering this question ought to consider the case of Norway. In a brief but revealing cable included in the vast WikiLeaks “CableGate” trove and published last week by the Norwegian paper Aftenposten, US embassy officials report that the Nordic nation opted to divest its sovereign wealth holdings from companies violating “humanitarian principles” and “fundamental ethical norms.”

In case you are thinking that major global corporations aren’t exactly quaking in their boots at the prospect of divestiture by Norway, think again. Built on the healthy revenues of Norway’s thriving oil sector, the country’s sovereign fund invests its considerable wealth in over 7,000 corporations worldwide. In fact, the fund is the largest single investor in Europe.

To judge from the WikiLeaked cable, the combination of Norway’s financial heft with its righteous ethical stance concerned American diplomats because, well, it disproportionately affects US corporations — specifically, America’s highly profitable and politically influential arms manufacturers.

The cable notes that according to the ethical guidelines governing Norway’s sovereign wealth fund, the country is not to invest in “companies who handle ‘weapons that through their normal use may violate fundamental humanitarian principles’” which Norway’s minister of finance “identified as weapons such a [sic] cluster munitions or nuclear weapons.” According to the cable, “it is as a result of this screening that Norway divested from several American arms manufacturing companies.”

American companies are hardly alone in courting the disapproval of Norway’s ethical watchdogs. According to the embassy dispatch, the Norwegian Ethics Council, the agency tasked with reviewing the behavior of companies, “has determined that if companies build large gas pipelines in Burma they will likely be involved with the Burmese Armed Forces and thus probably undermine human rights. Thus, if a company builds a pipeline in Burma, the stage is set for possible divestiture from that company. The companies at risk include Total, Daewoo and PetroChina.”

And it’s not just the American military-industrial complex or authoritarian regimes that Norway wants nothing to do with. The country also severed ties with a global behemoth of a different kind: Walmart. Norway washed its hands of Sam Walton and friends after determining that the company “is considered to have ‘serious violations of fundamental ethical norms.’” The minister of finance made clear to the Americans and others that “exclusions only happen after the Ethical Council tries and fails to get the company to change its practices.” In the case of Walmart, the cable admits that it was not clear if Walmart ever tried to address Norway’s concerns, but posits that the Norwegians simply might have thought any effort at doing so “would be fruitless.”

In point of fact, Norway did reach out to Walmart, asking for the company’s response to allegations that the world’s largest company “consistently and systematically employs minors in contravention of international rules, that working conditions at many of its suppliers are dangerous or health-hazardous, that workers are pressured into working overtime without compensations, [and] that the company systematically discriminates against women in pay.”

The country’s central bank reported that Walmart never responded.