Norway’s central bank has excluded Adani Group’s port firm, Adani Ports and Special Economic Zone (APSEZ), from its government pension fund due to ethical concerns, PTI reported. This makes APSEZ the 15th Indian company to face such action, following previous exclusions of companies such as ONGC, GAIL, NTPC, and Vedanta.
Norges Bank, which manages Norway’s sovereign wealth fund, announced on May 15 its decision to exclude Adani Ports and Special Economic Zone (APSEZ) due to the “unacceptable risk that the company contributes to serious violations of individuals’ rights in situations of war or conflict.” APSEZ had been on the central bank’s watch list for potential exclusion from investment since March 2022, owing to its business association with the armed forces in Myanmar.
According to a report by PTI, sources indicated that the Adani Group firm sold the Myanmar asset entirely in May of last year, and there have been no further disclosures regarding that asset, as the company has fully exited.
The Norwegian fund’s Council of Ethics acknowledged APSEZ’s May 2023 disclosure that it had sold its port-related operations in Myanmar to Solar Energy Ltd but stated, “no information on buyer is available, and APSEZ has stated that it cannot share any such information on the grounds of confidentiality.” The Council further said, “Lack of information means that the Council cannot establish whether APSEZ has links to the enterprise concerned. In a situation in which extremely serious norm violations are taking place, this constitutes an unacceptable risk that the Norwegian Government Pension Fund Global’s (GPFG’s) investments in APSEZ may breach its ethical guidelines.”
Norwegian fund exclusion history
The Norwegian Fund began purchasing shares in APSEZ in mid-October, following the May 2023 disclosure. It achieved nearly a 70 percent gain on its initial purchase within six months before exiting in April.
APSEZ now joins more than a dozen Indian firms that have faced similar actions in recent years, according to information on the website of Norges Bank Investment Management. The Norwegian bank excluded ITC in January 2020 due to its production of tobacco. Similar action was taken against Zuari Agro Chemicals in October 2013 over alleged human rights violations, and against Vedanta in January 2014 for “severe environmental damage.”
In April 2016, Coal India, NTPC, Reliance Power, Tata Power, and three other power producers were excluded for their production of coal or coal-based energy. BHEL faced exclusion in May 2017 and January 2023 for environmental damage and sales to states involved in armed conflicts.
The Oil and Natural Gas Corporation (ONGC) was charged with serious violations of individuals’ rights in situations of war or conflict when it was excluded in September 2021, and GAIL faced similar charges in April 2023.