Will Norway divest from giant Indian firm because of the Amazon?

In 2010 the Council on Ethics for Norway’s “Government Pension Fund Global” (GPFG) recommended that the GPFG divest its holdings from giant Indian conglomerate Reliance Industries, which last year The Economist magazine described as “India’s biggest private firm (measured by profits).” The justification was the threat that Reliance, as a minority partner in oil exploration in one of the remotest parts of Peru’s Amazon, was considered to pose to indigenous people who live so remotely they are sometimes described, misleadingly, as “uncontacted.” The Council’s recommendation read: There can be no doubt that the exploration activity undertaken by Repsol [the majority partner] and Reliance Industries contributes to increase the risk that indigenous peoples, who may be living in voluntary isolation within the block, will come into contact with outsiders. The Council notes in particular that the exploration phase seems to be particularly harmful to uncontacted peoples. There can thus be no doubt that there is a connection between the companies’ operations and the risk of [serious or systematic human rights] violations taking place. The Council’s main concern about contact was that it would “inevitably” lead to the introduction of diseases such as “influenza, diarrhea or chickenpox.” “There is no scientific disagreement about the fatal consequences that this would have,” the Council stated. “Past experience from other cases where indigenous people in voluntary isolation have been contacted shows that one third to one half of a tribe will probably perish during the first five years following initial contact. In the worst case, the whole tribe may become extinct.” The Council repeated its recommendation in 2012, but it was never acted upon because Repsol - not Reliance, mind - subsequently decided to sell its 55% stake in the operations to UK/French firm Perenco, which the GPFG, the world’s largest sovereign wealth fund, doesn’t invest in. That led the Council to do a u-turn in April 2014, stating that Repsol could “no longer be considered to contribute to possible violations of human rights. . . insofar as it no longer is a partner in the joint venture and the grounds for recommending Repsol’s exclusion [from the GPFG’s “investment universe”] are no longer present.” And Reliance? Preposterously, the u-turn applied to the Indian company too, despite the fact that it retained its share - 10% - and would carry on as a partner to Perenco. The Council stated: As there is currently no exploratory activity taking place in the block, and since the organisation of the new joint venture is as yet unknown, the grounds for Reliance’s exclusion has also changed. The Council on Ethics does not currently recommend the exclusion of the company from the fund. The Council will nevertheless reassess the risk of the company contributing to human rights violations when the new joint venture is established and activity in the block starts anew. However, it appears that Perenco is now gearing up to explore. A brief article in Peruvian newspaper Gestion recently reported that the company plans to spend US$10 million on seismic tests across a 108 km squared area. Asked by the Guardian if it could confirm that, Perenco emailed: Block 39 [or Lot 39, as the concession is called] entails an exploration commitment from the operator. At this stage, the possibility of a survey in certain limited areas of the Block remains a matter of discussion between the relevant parties. As such, it is not appropriate to comment further. What is the Council on Ethics going to do about this? Will it, for the third time, recommend that the GPFG divest from Reliance, whose chairman and managing director, Mukesh Ambani, The Economist called “India’s most powerful tycoon” and “India’s richest man”? If that was to happen, and if such a recommendation was actually to be heeded , Reliance would become just one of four companies blacklisted by Norway for human rights reasons, along with Wal-Mart Stores Inc., Wal-Mart de Mexico SA de CV and China’s Zuari Agro Chemicals. A third partner in Lot 39 - a 745,000 hectare area in the very northern Peruvian Amazon near the border with Ecuador - is Vietnam’s state oil and gas company PetroVietnam, which has a 35% stake. Perenco and PetroVietnam are also joint partners in another concession, Lot 67, which is effectively inside Lot 39 and from which oil has already been produced. A reserve for indigenous people in “isolation” (IPI), as Peruvian law calls people living without regular contact, was proposed for this region more than 10 years ago, but has never been established. Progress made by Peru’s Vice-Ministry for Inter-Culturality towards creating the reserve was set back in 2013 by the then incoming Vice-Minister, Patricia Balbuena Palacios, following an appeal by state oil and gas licensing company Perupetro. The vast majority of the proposed reserve is overlapped by Lot 39 and Lot 67. Perenco has previously claimed that there is “no evidence” of IPI in the Lot 67 region, and asked by the Guardian if it argues the same for the surrounding, much larger Lot 39, the company stated, “All activities on the Block (including regarding indigenous people) are covered by Peru’s existing strict regulations.” Evidence of IPI in the Lot 39 and Lot 67 region has been collected by indigenous organisations and others for many years. The Council on Ethics only made public its 2010 and 2012 recommendations regarding Reliance and Repsol in September 2014. The Council declined to respond to questions from the Guardian, and Reliance could not be reached.